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Content
*SECURITIES CONTRACTS (REGULATION) RULES, 1957 In exercise of the powers conferred by section 30 of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the Central &o'ern(ent hereby (a)es the following rules, the sa(e ha'ing been pre'iously published as re*uired by sub+section (3) of the said section, na(ely ,Short title. 1. .hese rules (ay be called the Securities Contracts (Regulation) Rules, !"/0 Defi itio !. ". In these rules, unless the context otherwise re*uires,(a) 1for(2 (eans a for( appended to these rules3 (b) 1the Act2 (eans the Securities Contracts (Regulation) Act, !"# ($% of !"#)3 (c) 1&o'ern(ent co(pany2 (eans a co(pany in which not less than fifty+one per cent of the share capital is held by the Central &o'ern(ent or by any State &o'ern(ent or &o'ern(ents or partly by the Central &o'ern(ent and partly by one or (ore State &o'ern(ents ; 4(d) 1public2 (eans persons other than 5 (i) the pro(oter and pro(oter group3 (ii) subsidiaries and associates of the co(pany0 E#$l% %tio & 6or the purpose of this clause the words 1pro(oter2 and 1pro(oter group2 shall ha'e the sa(e (eaning as assigned to the( under the Securities and 7xchange 8oard of India (Issue of Capital and 9isclosure Re*uire(ents) Regulations, %00!3: %4(da) ;public sector co(pany; (eans a body corporate constituted by an Act of <arlia(ent or any State =egislature and includes a go'ern(ent co(pany,: 4(e) 1public shareholding2 (eans e*uity shares of the co(pany held by public and shall exclude shares which are held by custodian against depository receipts issued o'erseas0: A$$li'%tio for re'o( itio . ). An application under section 3 of the Act for recognition of a stoc) exchange shall be (ade to the 34Securities and 7xchange 8oard of India: in 6or( A0
* The!e R*le! h%+e ,ee *$-%te- ,%!e- o the R*le! % - A.e -.e t! %+%il%,le o the /e,!ite of the De$%rt.e t of E'o o.i' Aff%ir!0 htt$&11fi .i . i'.i 1l%/1i -e#.%!$ % - %+%il%,le %.e -.e t otifi'%tio !. Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 % Inserted by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3 Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
2ee! for %$$li'%tio . 3. ( ) .here shall be paid in respect of e'ery application under rule 3 a fee of rupees fi'e hundred0 (%) .he a(ount of the fee shall be deposited in the nearest &o'ern(ent treasury or the nearest branch of the State 8an) of India, 4ro+i-e- that at 8o(bay, Calcutta, ?adras, 9elhi and @anpur, the a(ount shall be deposited in the Reser'e 8an) of India0 (3) .he a(ount of the fee so deposited shall be credited to the receipt head 1A=BI?iscellaneous-Cther fees, fines and forfeitures20 Do'*.e t! to ,e file- %lo ( /ith the %$$li'%tio % - $%rti'*l%r! it !ho*l- 'o t%i . 5. 7'ery application shall be acco(panied by four copies of the rules (including the
(e(orandu( and articles of association where the applicant stoc) exchange is an incorporated body) and bye+laws of the stoc) exchange applying for recognition as specified in section 3 of the Act and the receipt granted by the &o'ern(ent treasury, or as the case (ay be, the State 8an) of India or the Reser'e 8an) of India, in respect of the a(ount of the fee deposited and shall contain clear particulars as to the (atters specified in the Annexure to 6or( A0 $54o/er to .%6e i 7*irie! % - '%ll for i for.%tio . 5A. 8efore granting recognition to a stoc) exchange under section $ of the Act, the "4Securities and 7xchange 8oard of India: (ay (a)e such in*uiries and re*uire such further infor(ation to be furnished, as it dee(s necessary, relating to the infor(ation furnished by the stoc) exchange in the Annexure to its application in 6or( A0: 2or. of re'o( itio . 8. .he recognition granted to a stoc) exchange shall be in 6or( 8 and be subDect to the following conditions, na(ely ,(a) that the recognition unless granted on a per(anent basis, shall be for such period not less than one year as (ay be specified in the recognition3 (b) that the stoc) exchange shall co(ply with such conditions as are or (ay be prescribed or i(posed under the pro'isions of the Act and these rules fro( ti(e to ti(e0
$ Inserted
by &SR 0!# dated $00/0 !#/, w0e0f0 %%00/0 !#/ for 1Central &o'ern(ent2 by the Securities Contracts (Regulation)(A(end(ent )Rules, !!#, w0e0f0 %30 %0 !!#0
" Substituted
Re e/%l of re'o( itio . 7. ( ) .hree (onths before the expiry of the period of recognition, a recognised stoc) exchange desirous of renewal of such recognition (ay (a)e an application to the #4Securities and 7xchange 8oard of India: in 6or( A0 (%) .he pro'isions of rule 3, rule $, rule ", rule "A and rule # shall apply in relation to renewal of recognition as they apply in relation to grant of recognition except that the fee payable in respect of an application for renewal of recognition shall be rupees two hundred0 9*%lifi'%tio ! for .e.,er!hi$ of % re'o( i!e- !to'6 e#'h% (e. :. .he rules relating to ad(ission of (e(bers of a stoc) exchange see)ing recognition shall inter alia pro'ide that , (1) Eo person shall be eligible to be elected as a (e(ber if(a) he is less than twenty+one years of age3 (b) he is not a citiFen of India3 pro'ided that the go'erning body (ay in suitable cases relax this condition with the prior appro'al of the !4Securities and 7xchange 8oard of India:3 (c) he has been adDudged ban)rupt or a recei'ing order in ban)ruptcy has been (ade against hi( or he has been pro'ed to be insol'ent e'en though he has obtained his final discharge3 (d) he has co(pounded with his creditors unless he has paid sixteen annas in the rupee3 (e) he has been con'icted of an offence in'ol'ing fraud or dishonesty3 (f) he is engaged as principal or e(ployee in any business other than that of securities /4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability unless he underta)es on ad(ission
to se'er his connection with such business , >44ro+i-e- that no (e(ber (ay conduct business in co((odity deri'ati'es, except by setting up a separate co(pany which shall co(ply with the regulatory re*uire(ents, such as, networth, capital ade*uacy, (argins and exposure nor(s as (ay be specified by the 6orward ?ar)et Co((ission, fro( ti(e to ti(e ,
# Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, w0e0f0 %30 %0 !!#0 / Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 > Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 <rior to its substitution, the pro'iso as a(ended by Securities Contracts (Regulation) (A(end(ent) Rules, !!# w0e0f0 %30 %0 !!#, read as under, 1<ro'ided that the Securities and 7xchange 8oard of India (ay, for reasons sufficient in the opinion of the said 8oard, per(it a recogniFed stoc) exchange to suspend the enforce(ent of this clause for a specified period on condition that the applicant is not associated with or is a (e(ber of or subscriber to or shareholder or debenture holder in or connected through a partner or e(ployee with any other organisation, institution, association, co(pany or corporation in India where forward business of any )ind whether in goods or co((odities or otherwise is carried on or is not engaged as a principal or e(ployee ion any such business02
4ro+i-e- f*rther that nothing herein shall be applicable to any corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to ()) of the pro'iso to sub+rule ($)0:3 (g) !4GGG: (h) he has been at any ti(e expelled or declared a defaulter by any other stoc) exchange3 (i) he has been pre'iously refused ad(ission to (e(bership unless a period of one year has elapsed since the date of such reDection0 (2) Eo person eligible for ad(ission as a (e(ber under sub+rule ( ) shall be ad(itted as a (e(ber unless ,(a) he has wor)ed for not less than two years as a partner with, or an authorised assistant or authorised cler) or re(isier or apprentice to, a (e(ber3 or (b) he agrees to wor) for a (ini(u( period of two years as a partner or representati'e (e(ber with another (e(ber and to enter into bargains on the floor of the stoc) exchange and not in his own na(e but in the na(e of such other (e(ber 3 or (c) he succeeds to the established business of a deceased or retiring (e(ber who is his father, uncle, brother or any other person who is, in the opinion of the go'erning body, a close relati'e , 4ro+i-e- that the rules of the stoc) exchange (ay authorise the go'erning body to wai'e co(pliance with any of the foregoing conditions if the person see)ing ad(ission is in respect of (eans, position, integrity, )nowledge and experience of business in securities, considered by the go'erning body to be otherwise *ualified for (e(bership0 (3) Eo person who is a (e(ber at the ti(e of application for recognition or subse*uently ad(itted as a (e(ber shall continue as such if(a) he ceases to be a citiFen of India , 4ro+i-e- that nothing herein shall affect those who are not citiFens of India but who were (e(bers at the ti(e of such application or were ad(itted subse*uently under the pro'isions of clause (b) of sub+rule ( ) of this rule,
subDect to their co(plying with all other re*uire(ents of this rule3 (b) he is adDudged ban)rupt or a recei'ing order in ban)ruptcy is (ade against hi( or he is pro'ed to be insol'ent3 (c) he is con'icted of an offence in'ol'ing fraud or dishonesty3 (d) 04G G G: (e) 4G G G: (f) he engages either as principal or e(ployee in any business other than that of securities %4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability, pro'ided that! C(itted 0 Ibid0
by &SR 0/0(7) dated "0
0 !>>
Ibid0
% Inserted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(i) the go'erning body (ay, for reasons, to be recorded in writing, per(it a (e(ber to engage hi(self as principal or e(ployee in any such business, if the (e(ber in *uestion ceases to carry on business on the stoc) exchange either as an indi'idual or as a partner in a fir(, (ii) in the case of those (e(bers who were under the rules in force at the ti(e of such application per(itted to engage in any such business and were actually so engaged on the date of such application, a period of three years fro( the date of the grant of recognition shall be allowed for se'ering their connection with any such business, 34(iii) nothing herein shall affect (e(bers of a recognised stoc) exchange which are corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to (k) of the pro'iso to sub+rule ($)0: (4) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section 3%% of the said Act3 (ii) a (aDority of the directors of such co(pany are shareholders of such co(pany and also (e(bers of that stoc) exchange3 and (iii) the directors of such co(pany, who are (e(bers of that stoc) exchange, ha'e ulti(ate liability in such co(pany , 4ro+i-e- that where the $4Securities and 7xchange 8oard of India: (a)es a reco((endation in this regard, the go'erning body of a stoc) exchange shall, in relaxation of the re*uire(ents of this clause, ad(it as (e(ber the following corporations "4,bodies corporate:, co(panies or institutions, na(ely ,(a) the Industrial 6inance Corporation, established under the Industrial 6inance Corporation Act, !$> ( " of !$>)3 (b) the Industrial 9e'elop(ent 8an) of India, established under the Industrial 9e'elop(ent 8an) Act, !#$ ( > of !#$)3 (c) the =ife Insurance Corporation of India, established under the =ife Insurance Corporation Act, !"# (3 of !"#)3 (d) the &eneral Insurance Corporation of India constituted under the &eneral Insurance Corporation (Eationalisation) Act, !/% ("/ of !/%)3 (e) the Hnit .rust of India, established under the Hnit .rust of India Act,
!#3 ("% of !#3)3
ibid0 <rior to its substitution, sub+clause (iii) read as under, 1(iii) nothing herein shall affect (e(bers of a recogniFed stoc) exchange per(itted under the pro'iso to clause (f) of sub+rule( ) to suspend the enforce(ent of the aforesaid clause, for so long as such suspension is effecti'e, except that no (e(ber of such exchange shall engage in forward business of any )ind whether in goods or co((odities or otherwise and , if actually so engaged on the date of such application , he shall se'er his connection with any such business within a period of three years fro( the date of the grant of recognition02 $ Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# " Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
3 Substituted,
(f) the Industrial Credit and In'est(ent Corporation of India, a co(pany registered under the Co(panies Act, !"# ( of !"#)3 (g) the subsidiaries of any of the corporations or co(panies specified in (a) to (f) and any subsidiary of the State 8an) of India or any nationalised ban) set up for pro'iding (erchant ban)ing ser'ices, buying and selling securities and other si(ilar acti'ities0 #4(h) any ban) included in the Second Schedule to the Reser'e 8an) of India Act, !3$ (% of !3$)3 (i) the 7xport I(port 8an) of India, established under the 7xport I(port 8an) of India Act, !> (%> of !> )3 (j) the Eational 8an) for Agriculture and Rural 9e'elop(ent, established under the Eational 8an) for Agriculture and Rural 9e'elop(ent Act, !> (# of !> )3 and (k) the Eational Iousing 8an), established under the Eational Iousing 8an) Act, !>/ ("3 of !>/)0: (4A) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall also be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section % of the said Act3 (ii) such co(pany underta)es to co(ply with such financial re*uire(ents and nor(s as (ay be specified by the Securities and 7xchange 8oard of India for the registration of such co(pany under sub+section ( ) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (iii) /4G G G: (iv) the directors of the co(pany are not dis*ualified fro( being (e(bers of a stoc) exchange under >4clause ( ) 4except sub+clause (b) and sub+clause (f) thereof: or clause (3) 4except sub+clause (a) and sub+clause (f) thereof:: and the 9irectors of the co(pany had not held the offices of the 9irectors in any co(pany which had been a (e(ber of the stoc) exchange and had been declared defaulter or expelled by the stoc) exchange3 and (v) not less than two directors of the co(pany are persons who possess a (ini(u( two yearsJ experience , (a) in dealing in securities3 or (b) as portfolio (anagers3 or (c) as in'est(ent consultants0 (5) Khere any (e(ber of a stoc) exchange is a fir(, the pro'isions of sub+rules ( ), (3) and ($), shall, so far as they can, apply to the ad(ission or continuation of any
partner in such fir(0
# Inserted, / C(itted
ibid0 by &SR /$! (7), dated %0 00 !!$ > Substituted by &SR /!0(7), dated 0/0 0 !!$
Co tr%'t! ,et/ee .e.,er! of re'o( i!e- !to'6 e#'h% (e. 9. All contracts between the (e(bers of a recognised stoc) exchange shall be confir(ed in writing and shall be enforced in accordance with the rules and bye+laws of the stoc) exchange of which they are (e(bers0 !5No.i ee! of the Se'*ritie! % - E#'h% (e ;o%r- of I -i%< o the (o+er i ( ,o-ie! of re'o( i!e- !to'6 e#'h% (e!. 1=. .he %04Securities and 7xchange 8oard of India: (ay no(inate one or (ore persons not exceeding three in nu(ber, as (e(ber or (e(bers of the go'erning body of e'ery recognised stoc) exchange0 Such (e(ber or (e(bers shall enDoy the sa(e status and powers as other (e(bers of the go'erning body0 O,li(%tio of the (o+er i ( ,o-> to t%6e -i!'i$li %r> %'tio %(%i !t % .e.,er if !o -ire'te- ,> the % 5Se'*ritie! % - E#'h% (e ;o%r- of I -i%<. 11. After recei'ing the report of the result of an en*uiry (ade under clause (b) of subsection (3) of section # of the Act, the % 4Securities and 7xchange 8oard of India: (ay ta)e such action as they dee( proper and, in particular, (ay direct the go'erning body of the stoc) exchange to ta)e such disciplinary action against the offending (e(ber, including fine, expulsion, suspension or any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney, as (ay be specified by the % 4Securities and 7xchange 8oard of India:3 notwithstanding anything to the contrary contained in the rules or bye+laws of the stoc) exchange concerned, the go'erning body shall gi'e effect to the directions of the % 4Securities and 7xchange 8oard of India: in this behalf and shall not in any (anner co((ute, re'o)e or (odify the action ta)en in pursuance of such directions, without the prior appro'al of the % 4Securities and 7xchange 8oard of India:0 .he % 4Securities and 7xchange 8oard of India: (ay, howe'er, either of its own (otion or on the representation of the (e(ber concerned, (odify or withdraw its direction to the go'erning body0 A*-it of %''o* t! of .e.,er!. 1". 7'ery (e(ber shall get his accounts audited by a chartered accountant whene'er such audit is re*uired by the % 4Securities and 7xchange 8oard of India:0 ?ith-r%/%l of re'o( itio . 1). .he written notice referred to in section " of the Act shall be in 6or( C0
! Substituted %0 Ibid0 %
by 60 Eo0 L3/LS7L!$, dated %#0 00 !!$0
Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> re'o( i!e- !to'6 e#'h% (e. 13. 7'ery recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years, (1) ?inute boo)s of the (eetings of(a) (e(bers3 (b) go'erning body3 (c) any standing co((ittee or co((ittees of the go'erning body or of the
general body of (e(bers0 (2) Register of (e(bers showing their full na(es and addresses0 Khere any (e(ber of the stoc) exchange is a fir(, full na(es and addresses of all partners shall be shown0 (3) Register of authorised cler)s0 (4) Register of re(isiers of authorised assistants0 (5) Record of security deposits0 (6) ?argin deposits boo)0 (7) =edgers0 (8) Mournals0 (9) Cash boo)0 (10) 8an) pass+boo)0 ;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> .e.,er of % re'o( i!e- !to'6 e#'h% (e. 15. ( ) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years , (a) Register of transactions ( a!da boo))0 (b) ClientsJ ledger0 (c) &eneral ledger0 (d) Mournals0 (e) Cash boo)0 (f) 8an) pass+boo)0 (g) 9ocu(ents register showing full particulars of shares and securities recei'ed and deli'ered0 (2) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following docu(ents for a period of two years, (a) ?e(berJs contract boo)s showing details of all contracts entered into by hi( with other (e(bers of the sa(e exchange or counterfoils or duplicates of (e(os of confir(ation issued to such other (e(bers0 (b) Counterfoils or duplicates of contract notes issued to clients0 (c) Kritten consent of clients in respect of contracts entered into as principals0 @% er of i 7*ir> i rel%tio to the %ff%ir! of the (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e or the %ff%ir! of % > .e.,er of the !to'6 e#'h% (e i rel%tio to the !to'6 e#'h% (e. 18. ( )(a) .he person or persons appointed by the %%4Securities and 7xchange 8oard of India: to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act shall hereafter in this rule be referred to as the Nin*uiring authorityJ3 (b) where the in*uiring authority consists of two or (ore persons, one of the( shall be appointed as the chair(an or senior (e(ber thereof3 (c) the in*uiring authority shall hand o'er a state(ent of issues to be in*uired into to the go'erning body or the (e(ber concerned, as the case (ay be, who will be gi'en a reasonable opportunity to state their or his side of the case3 (d) if any witness is called for exa(ination, an opportunity shall be pro'ided to the go'erning body or the (e(ber whose affairs are being in*uired into, as the case (ay be, to cross+exa(ine such witness3 (e) where the in*uiring authority consists of (ore than one person, the 'iews of the
(aDority shall be dee(ed to represent the findings of such authority and, in the e'ent of an e*uality of 'otes, the chair(an or senior (e(ber shall ha'e a casting 'ote3 (f) the in*uiring authority shall sub(it its report in writing to the %%4Securities and 7xchange 8oard of India: within the period specified in the order of appoint(ent3 (g) te(porary absence fro( any hearing or hearings of any (e(ber of the in*uiring authority shall not 'itiate its proceedings0 (%) Khere the %%4Securities and 7xchange 8oard of India: has directed the go'erning body of a stoc) exchange to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act, the go'erning body concerned shall appoint one or (ore (e(bers thereof to (a)e the in*uiry and the pro'isions of sub+rule ( ) shall apply "!tati# "!tandi# to such in*uiry0 S*,.i!!io of % *%l re$ort. 17. ( ) 7'ery recognised stoc) exchange shall before the 3 st day of Manuary in each year or within such extended ti(e as the %34Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, allow, furnish the %34Securities and 7xchange 8oard of India: annually with a report about its acti'ities during the preceding calendar year, which shall inter alia contain detailed infor(ation about the following (atters , (a) changes in rules and bye+laws, if any3 (b) changes in the co(position of the go'erning body3 (c) any new sub+co((ittees set up and changes in the co(position of existing ones3
%% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# %3 Ibid0
(d) ad(issions, re+ad(issions, deaths or resignations of (e(bers3 (e) disciplinary action against (e(bers3 (f) arbitration of disputes (nature and nu(ber) between (e(bers and non+(e(bers3 (g) defaults3 (h) action ta)en to co(bat any e(ergency in trade3 (i) securities listed and de+listed3 and (j) securities brought on or re(o'ed fro( the forward list0 (%) 7'ery recognised stoc) exchange shall within one (onth of the date of the holding of its annual general (eeting, furnish the %$4Securities and 7xchange 8oard of India: with a copy of its audited balance+sheet and profit and loss account for its preceding financial year0 S*,.i!!io of $erio-i'%l ret*r !. 17A. 7'ery recognised stoc) exchange shall furnish the %$4Securities and 7xchange 8oard of India: periodical returns relating to(i) the official rates for the securities enlisted thereon3 (ii) the nu(ber of shares deli'ered through the clearing house3 (iii) the (a)ing+up prices3 (iv) the clearing house progra((es3 (v) the nu(ber of securities listed and de+listed during the pre'ious three (onths3 (vi) the nu(ber of securities brought on or re(o'ed fro( the forward list during the pre'ious three (onths3 and (vii) any other (atter as (ay be specified by the %$4Securities and 7xchange 8oard of India:0 @% er of $*,li'%tio of ,>e0l%/! for 'riti'i!..
1:. .he bye+laws to be (ade, a(ended or re'ised under the Act shall be published for criticis( in accordance with the pro'isions of section %3 of the &eneral Clauses Act, >!/ both in the &aFette of India and Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate0 Re7*ire.e t! /ith re!$e't to the li!ti ( of !e'*ritie! o % re'o( i!e- !to'6 e#'h% (e. 19. ( ) A public co(pany as defined under the Co(panies Act, !"#, desirous of getting its securities listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars ,
%$ Ibid0
(a) ?e(orandu( and articles of association and, in the case of a debenture issue, a copy of the trust deed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any securities for subscription or sale during the last fi'e years0 (d) Copies of balance+sheets and audited accounts for the last fi'e years, or in the case of new co(panies, for such shorter period for which accounts ha'e been (ade up0 (e) A state(ent showing(i) di'idends and cash bonuses, if any, paid during the last ten years (or such shorter period as the co(pany has been in existence, whether as a pri'ate or public co(pany), (ii) di'idends or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents with or between ,(i) 'endors andLor pro(oters, (ii) underwriters and sub+underwriters, (iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents with(i) (anaging agents and secretaries and treasurers, (ii) selling agents, (iii) (anaging directors and technical directors, (iv) general (anager, sales (anager, (anager or secretary0 (h) Certified copy of e'ery letter, report, balance+sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering securities for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents0 (j) A brief history of the co(pany since its incorporation gi'ing details of its acti'ities including any reorganisation, reconstruction or a(alga(ation, changes in its capital structure, (authorised, issued and subscribed) and debenture borrowings, if
any0 (k) <articulars of shares and debentures issued-(i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s including an option for the issue of any )ind of the securities granted to any person0 (") Certified copies of%"4(i) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3: (ii) agree(ents, if any, with the Industrial 6inance Corporation, Industrial Credit and In'est(ent Corporation and si(ilar bodies0 (n) <articulars of shares forfeited0 ($) A list of highest ten holders of each class or )ind of securities of the co(pany as on the date of application along with particulars as to the nu(ber of shares or debentures held by and the address of each such holder0 (%) <articulars of shares or debentures for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0 (%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant co(pany shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer, (ii) that the fully paid shares will be free fro( all lien, while in the case of partly paid shares, the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such shares, (iii) that any a(ount paid+up in ad'ance of calls on any share (ay carry interest but shall not entitle the holder of the share to participate in respect thereof, in a di'idend subse*uently declared, (iv) there will be no forfeiture of unclai(ed di'idends before the clai( beco(es barred by law, (v) that option or right to call of shares shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the securities of a co(pany which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0
%" Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 <rior to its substitution, sub+clause (i), read as under, 1(i) letters of consent of the Controller of Capital Issues02
%#4(b)
(i) At least twenty fi'e per cent0 of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent3 or (ii) At least ten per cent of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and
allotted to public in ter(s of an offer docu(ent if the post issue capital of the co(pany calculated at offer price is (ore than four thousand crore rupees, <ro'ided that the re*uire(ent of post issue capital being (ore than four thousand crore rupees shall not apply to a co(pany whose draft offer docu(ent is pending with the Securities and 7xchange 8oard of India on or before the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, if it satisfies the conditions prescribed in clause (b) of sub+rule % of rule ! of the Securities Contracts (Regulation) Rules, !"# as existed prior to the date of such co((ence(ent, %/4<ro'ided further that the co(pany, referred to in sub clause (ii), shall increase its public shareholding to at least twenty fi'e per cent, within a
%# Substituted
by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, clause (b) as a(ended by the A(end(ent Rules, %00 , w0e0f0 0/00#0%00 , read as under, 1(b) At least 0 per cent of each class or )ind of securities issued by a co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted subDect to the following conditions, (a) (ini(u( %0 la)h securities (excluding reser'ations, fir( allot(ent and pro(otersJ contribution) was offered to the public3 (b) the siFe of the offer to the public, i&e&' the offer price (ultiplied by the nu(ber of securities offered to the public was (ini(u( Rs0 00 crores3 and (c) the issue was (ade only through boo) building (ethod with allocation of #0 per cent of the issue siFe to the *ualified institutional buyers as specified by the Securities and 7xchange 8oard of India, 4ro+i-e- that if a co(pany does not fulfil the conditions, it shall offer at least %" per cent of each class or )ind of securities to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted, 4ro+i-e- f*rther that a recognised stoc) exchange (ay relax any of the conditions with the pre'ious appro'al of the Securities and 7xchange 8oard of India, in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#), and subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*6or the purpose of this clause, it is hereby clarified that where any part of the securities sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental 6ire and &eneral Insurance Co(pany =i(ited and the Hnited 6ire and &eneral Insurance Co(pany =i(ited or Hnit .rust of India, the total subscription to the securities, whether by one or (ore of such bodies, shall not for( part of the 0 per cent or %" per cent of the securities, as the case (ay be, to be offered to the public02 %/ Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 <rior to its substitution, second pro'iso, read as under, 1<ro'ided further that the co(pany, referred in sub+clause (ii), shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of atleast fi'e per
period of three years fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India0: %>4GGG:: %!4(c) Eotwithstanding anything contained in clause (b), a public sector co(pany, shall offer and allot at least ten per cent, of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares to public in ter(s of an offer docu(ent0: (3) A co(pany applying for listing shall, as a condition precedent, underta)e inter alia(a) (i) that letters of allot(ent will be issued si(ultaneously and that, in the e'ent
of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been posted, (ii) that letters of right will be issued si(ultaneously, (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the securities to which they relate, (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right, (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or di'idend on the securities will be calculated, (b) to issue, when so re*uired, receipts for all securities deposited with it whether for registration, sub+di'ision, exchange or for other purposes 3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of certificates and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (bb) to issue, when so re*uired, consolidation and renewal certificates in deno(inations of the (ar)et unit of trading to split certificates, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3
cent per annu( beginning fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India,2 %> C(itted, ibid <rior to its o(ission, third pro'iso, read as under, 1<ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase beings its public shareholding to the le'el of twenty fi'e per cent in that year02 %! Inserted, ibid0
(c) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders, and (ii) to 'erify when the co(pany is unable to issue certificates or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (d) on production of the necessary docu(ents by shareholders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or certificate of
the Controller of 7state 9uty or si(ilar other docu(ent has been duly exhibited to and registered by the co(pany3 (e) to issue certificates in respect of shares or debentures lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance certificates within the sa(e period where the transfer is acco(panied by a larger certificate3 (f) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a di'idend or the issue of right or bonus share will be considered3 (g) to reco((end or declare all di'idends andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all di'idends andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (h) to notify the stoc) exchange of any (aterial change in the general character or nature of the co(panyJs business3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (anaging agent or secretaries and treasurers, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued, copies of all other notices and circulars sent to the shareholders including proceedings of ordinary and extraordinary general (eetings of the co(pany and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the shareholders of any new issue of securities whether by way of right, pri'ilege bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited securities or the issue of securities held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of di'idend or issue of right or bonus shares or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s (or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its shareholders or debentureholders) and specifying the purpose or purposes for which the transfer boo)s are to be closed (or the record is to be ta)en)3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority subDect to which the issue is proposed to be (ade ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after each annual general (eeting of at least ten principal holders of each class of security of the
co(pany along with particulars as to the nu(ber of shares or debentures held by, and address of, each such holder3 (+) to grant to shareholders the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e not being less than four wee)s within which to record, exercise, or renounce such rights, pri'ileges and benefits and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3 (r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any securities listed on the exchange, (ii) of the intention to (a)e a drawing of such securities, inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing of the balance) for the drawing, (iii) of the a(ount of securities outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the shareholders to apprise the position of the co(pany and to a'oid the establish(ent of a false (ar)et in the shares of the co(pany3 (t) (t)that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 304($) An application for listing shall be necessary in respect of the following, (a) all new issues of any class or )ind of securities of a co(pany to be offered to the public3 (b) all further issues of any class or )ind of securities of a co(pany if such class or )ind of securities of the co(pany are already listed on a recognised stoc) exchange0: (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the securities of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 3 44ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any security, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and its orders shall be carried out by the stoc) exchange0: 3%4(#) A recognised stoc) exchange (ay, either at its own discretion or shall in
accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore or re+ad(it to dealings any securities suspended or withdrawn fro( the list0: 334(#A) 7xcept as otherwise pro'ided in these rules or per(itted by the Securities and 7xchange 8oard of India under sub+rule (/), all re*uire(ents with respect to listing
30 Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, sub+rule ($), read as under, 1($) A fresh application for listing will be necessary in respect of all new issues desired to be dealt in, pro'ided that, where such new securities are identical in all respects with those already listed, ad(ission to dealings will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new issues0 7xplanation, Shares are identical in all respects only if(a) they are of the sa(e no(inal 'alue and the sa(e a(ount per share has been called up3 (b) they are entitled to di'idend at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the di'idend payable on each share will a(ount to exactly the sa(e su(, net and gross3 and (c) they carry the sa(e rights in all other respects02 3 Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%0000 7arlier, the second pro'iso was a(ended by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 3% Substituted by the Securities Contracts (Regulation) (A(end(ent), %000, w0e0f0 0>00>0%0000 7arlier, subrule (#) was a(ended by the Securities Contracts (Regulation) (A(end(ent), !!#, w0e0f0 %30 %0 !!#0 33 Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!0>0%0 00 <rior to its substitution, sub+rule (#A) as a(ended by the Securities Contracts
prescribed by these rules shall, so far as they (ay be, also apply to a public sector co(pany0: 3$4GGG: (/) .he 3"4Securities and 7xchange 8oard of India: (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect to listing prescribed by these rules0 3#4Co ti *o*! Li!ti ( Re7*ire.e t. 19A. ( ) 7'ery listed co(pany 3/4other than public sector co(pany: shall (aintain public shareholding of at least twenty fi'e per cent0, 3>4<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent, on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall increase its public shareholding to at least twenty fi'e per cent, within a period of three years fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India0 7xplanation, 6or the purposes of this sub+rule, a co(pany whose securities has been listed pursuant to an offer and allot(ent (ade to public in ter(s of sub+clause (ii) of clause (b) of sub+rule (%) of rule !, shall (aintain (ini(u( twenty fi'e per cent, public shareholding fro( the date on which the public shareholding in the co(pany reaches the le'el of twenty fi'e percent in ter(s of said sub+clause0: (%) Khere the public shareholding in a listed co(pany falls below twenty fi'e per cent0 at any ti(e, such co(pany shall bring the public shareholding to twenty fi'e per cent0
(Regulations)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 and &SR % (7) w0e0f0 0!0030 !!", read as under, 1(#A) All the re*uire(ents with respect to listing and continuous listing prescribed by these rules, shall so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature ,2 3$ C(itted by the Securities Contracts (Regulation)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its o(ission, pro'iso, as substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#,
w0e0f0 %30 %0 !!# and inserted by &SR %! (7) dated %/0030 !!", read as under, 1<ro'ided that a recognised stoc) exchange (ay relax the re*uire(ent of offer to public for subscription of atleast twenty+fi'e percent of the each class or )ind of securities issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e02 3" Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent), Rules, !!#, w0e0f0 %30 %0 !!#0 3# Inserted by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 3/ Inserted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3> Substituted, ibid0 <rior to substitution, pro'isos, read as under, 1<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of at least fi'e per cent per annu( beginning fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India, <ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase brings its public shareholding to the le'el of twenty fi'e per cent in that year02
within a (axi(u( period of twel'e (onths fro( the date of such fall in the (anner specified by the Securities and 7xchange 8oard of India0: 3!4(3) Eotwithstanding anything contained in this rule, e'ery listed public sector co(pany shall (aintain public shareholding of at least ten per cent0, <ro'ided that a listed public sector co(pany+ (a) which has public shareholding below ten per cent, on the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of three years fro( the date of such co((ence(ent3 (b) whose public shareholding reduces below ten per cent, after the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of twel'e (onths fro( the date of such reduction,0: $04Re7*ire.e t! /ith re!$e't to the li!ti ( of * it! or % > other i !tr*.e t of % Colle'ti+e I +e!t.e t S'he.e o % re'o( i!e- !to'6 e#'h% (e. "=. ( ) A Collecti'e In'est(ent ?anage(ent Co(pany (CI?C) which is desirous of getting its any collecti'e in'est(ent sche(e listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars , (a) Certificate of incorporation, (e(orandu( and articles of association of the co(pany and the copy of the trust deed of the sche(e intended to be listed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any unit or other instru(ent for subscription or sale during the last fi'e years, or in the case of a new co(pany, such shorter period during which the co(pany has been in existence0 (d) Copies of balance sheets and audited accounts for the last fi'e years, or in the case of a new co(pany, for such co(pleted financial year for which accounts ha'e been (ade up0 (e) A state(ent showing,-
(i) returns and cash bonuses, if any, paid during the last ten years (or such shorter period as the co(pany has been in existence whether as a pri'ate or public co(pany)3 (ii) returns or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents pertaining to each sche(e of the co(pany with or between,(i) 'endors andLor pro(oters3 (ii) underwriters and sub+underwriters3
3! Inserted $0 Inserted
by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 0 by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%000
(iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents pertaining to each sche(e of a co(pany with(i) selling agents and other ser'ice pro'iders3 (ii) (anaging directors and technical directors3 (iii) general (anager, sales (anager, (anager or secretary0 (h) Certified copies of e'ery letter, report, balance sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering units or any other instru(ents of the sche(e for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents pertaining to such sche(e0 (j) A brief history of the Co(pany since its incorporation gi'ing details of its acti'ities including any re+organisation, reconstruction or a(alga(ation, changes in its capital structure (authorised, issued and subscribed) and debenture borrowings, if any, and the perfor(ance of other collecti'e in'est(ent sche(es of the co(pany0 (k) <articulars of units of the sche(e andLor shares, debentures of the co(pany issued (i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s granted to any person pertaining to such sche(e0 (") Certified copies of(i) certificate of registration granted by the Securities and 7xchange 8oard of India3 (ii) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3 (iii) agree(ents, if any, with any public financial institution as specified in section $A of the Co(panies Act, !"# ( of !"#)0 (n) A list of the highest ten holders of units of each sche(e of the co(pany as on the date of application along with particulars as to the nu(ber of units held by and the address of each such holder0 ($) <articulars of units of the sche(e for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any
particular case call for such further particulars or docu(ents as it dee(s proper0 (%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer of units of a particular sche(e3 (ii) that the fully paid units issued under the sche(e will be free fro( all lien, while in the case of partly paid units the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such units3 (iii) that any a(ount paid+up in ad'ance of calls on any units (ay carry interest but shall not entitle the holder of the unit to participate in respect thereof, in a return subse*uently declared3 (iv) there will be no forfeiture of unclai(ed returns before the clai( beco(es barred by law3 (v) that option or right to call of units shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the units of a sche(e which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0 (b) At least twenty+fi'e per cent of the units or any other instru(ent of a sche(e issued by the co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and not (ore than ninety days, and that applications recei'ed in pursuance of such offer were allotted fairly and unconditionally , 4ro+i-e- that a recognised stoc) exchange (ay relax this re*uire(ent, with the pre'ious appro'al of the Securities and 7xchange 8oard of India in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#) and subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*Khere any part of the units or any other instru(ents sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely, the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental Insurance Co(pany =i(ited and the Hnited Insurance Co(pany =i(ited, or Hnit .rust of India, the total subscription to the units or any other instru(ent, whether by one or (ore of such bodies, shall not for( part of the twenty+fi'e per cent of the units or any other instru(ent to be offered to the public0 (3) A co(pany applying for listing of a sche(e shall, as a condition precedent, underta)e, inter alia,(a) (i) that letters of allot(ent of units or any other instru(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to that effect will be inserted in the press
so that it will appear on the (orning after the letters of allot(ent ha'e been posted3 (ii) that letters of right will be issued si(ultaneously3 (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and, exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the units or any other instru(ent to which they relate3 (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right3 (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or return on the units or any other instru(ent will be calculated3 (b) to issue, when so re*uired, receipts for all units and any other instru(ent deposited with it whether for registration, sub+di'ision, exchange or for other purposes3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of units and any other instru(ent and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (c) to issue, when so re*uired, consolidation and renewal units or any other instru(ent in deno(inations of the (ar)et unit of trading, to split units or any other instru(ent, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3 (d) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders3 and (ii) to 'erify when the co(pany is unable to issue units or any other instru(ents or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (e) on production of the necessary docu(ents by unit holders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or si(ilar other docu(ent has been duly exhibited to and registered by the co(pany3 (f) to issue certificates in respect of units or any other instru(ent lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance units or any other instru(ent within the sa(e period where the transfer is acco(panied by a larger unit or any other instru(ent certificate3 (g) to ad'ise the stoc) exchange of the date of the board (eeting at which the
declaration or reco((endation of a return or the issue or right or bonus units or any other instru(ent will be considered3 (h) to reco((end or declare all returns andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all returns andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts of such sche(e as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued copies of all other notices and circulars sent to the unitLother instru(ent holders regarding any i(portant de'elop(ent or resolutions passed by the co(pany affecting the perfor(ance of the sche(e and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the unitLany other instru(ent holders, of any new issue of unitsLother instru(ents whether by way of right, pri'ilege, bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited unitsLother instru(ents or the issue of unitsLother instru(ents held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of unit capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of returns or issue of right or bonus unitsLany other instru(ents in the sche(e or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its unitLother instru(ent holders and specifying the purpose or purposes for which the transfer boo)s are to be closed or the record is to be ta)en3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority, subDect to which the issue is proposed to be (ade, ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after the preparation of annual accounts of at least ten principal holders of each class of unitsLany other instru(ents of the co(pany along with particulars as to the nu(ber of unitsLany other instru(ent held by, and address of, each such holder3 (+) to grant to unitLany other instru(ent holders of the sche(e the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e, not being less than four wee)s, within which to record, exercise, or renounce such rights, pri'ileges and benefits, and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc)
exchange agrees otherwise3 (r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any unitLother instru(ent listed on the exchange3 (ii) of the intention to (a)e a drawing of such unitLother instru(ent inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing off the balance) for the drawing3 (iii) of the a(ount of unitsLother instru(ents outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the unitLany other instru(ent holders to appraise the position of the sche(e and to a'oid the establish(ent of a false (ar)et in the unitsLany other instru(ents of the co(pany3 (t) that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 ($) A fresh application for listing will be necessary in respect of all new sche(es desired to be dealt in , 4ro+i-e- that, where such new unitsLother instru(ents are identical in all respects with those already listed, ad(ission to dealing will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new sche(es0 ()%lanati$n0-HnitsLany other instru(ents are identical in all respects only if(a) they are issued under the sa(e sche(e3 (b) they are of the sa(e no(inal 'alue and the sa(e a(ount per unitLother instru(ents has been called up3 (c) they are entitled to returns at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the return payable on each unitLother issue will a(ount to exactly the sa(e su(, net and gross3 and (d) they carry the sa(e rights in all other respects0 (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the unitsLother instru(ents of a sche(e of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 4ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any unitLother instru(ent of a collecti'e in'est(ent sche(e, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply
to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and thereupon the orders of the Securities Appellate .ribunal shall be carried out by the stoc) exchange0 (#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore or read(it to dealings any unitsLother instru(ents suspended or withdrawn fro( the list0 (/) All the re*uire(ents with respect to listing prescribed by these rules, shall, so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature , 4ro+i-e- that a recognised stoc) exchange (ay relax the re*uire(ent of offer to the public for subscription of at least twenty+fi'e per cent of the units or any other instru(ent of a collecti'e in'est(ent sche(e issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 (>) .he Securities and 7xchange 8oard of India (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect of listing prescribed by these rules0: $ 4Deli!ti ( of !e'*ritie!. "1. A recogniFed stoc) exchange (ay, without preDudice to any other action that (ay be ta)en under the Act or under any other law for the ti(e being in force, delist any securities listed thereon on any of the following grounds in accordance with the regulations (ade by the Securities and 7xchange 8oard of India, na(ely,(a) the co(pany has incurred losses during the preceding three consecuti'e years and it has negati'e networth3 (b) trading in the securities of the co(pany has re(ained suspended for a period of (ore than six (onths3 (c) the securities of the co(pany ha'e re(ained infre*uently traded during the preceding three years3 (d) the co(pany or any of its pro(oters or any of its director has been con'icted for failure to co(ply with any of the pro'isions of the Act or the Securities and 7xchange 8oard of India Act, !!% or the 9epositories Act, !!# (%% of !!#) or rules, regulations, agree(ents (ade thereunder, as the case (ay be and awarded a penalty of not less than rupees one crore or i(prison(ent of not less than three years3 (e) the addresses of the co(pany or any of its pro(oter or any of its directors, are not )nown or false addresses ha'e been furnished or the co(pany has changed its registered office in contra'ention of the pro'isions of the Co(panies Act, !"# ( of !"#)3 or
$
Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %00>, w0e0f0 000#0%00!
(f) shareholding of the co(pany held by the public has co(e below the (ini(u( le'el applicable to the co(pany as per the listing agree(ent under the Act and the co(pany has failed to raise public holding to the re*uired le'el within the ti(e specified by the recogniFed stoc) exchange , 4ro+i-e- that no securities shall be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0
(%) If the securities is delisted under clause ( ), (a) the co(pany, pro(oter and director of the co(pany shall be Dointly and se'erally liable to purchase the outstanding securities fro( those holders who wish to sell the( at a fair price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India, under the Act3 and (b) the said securities shall be delisted fro( all recogniFed stoc) exchanges0 (3) A recogniFed stoc) exchange (ay, on the re*uest of the co(pany, delist any securities listed thereon in accordance with the regulations (ade under the Act by Securities and 7xchange 8oard of India, subDect to the following conditions, na(ely ,(a) the securities of the co(pany ha'e been listed for a (ini(u( period of three years on the recogniFed stoc) exchange3 (b) the delisting of such securities has been appro'ed by the two+third of public shareholders3 and (c) the co(pany, pro(oter andLor the director of the co(pany purchase the outstanding securities fro( those holders who wish to sell the( at a price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India under the Act, 4ro+i-e- that the condition at (c) (ay be dispensed with by Securities and 7xchange 8oard of India if the securities re(ain listed at least on the Eational Stoc) 7xchange of India =i(ited or the 8o(bay Stoc) 7xchange =i(ited0: FORM A ( ee Rules 3 and /) A$$li'%tio for re'o( itio 1re e/%l of re'o( itio of % !to'6 e#'h% (e * -er !e'tio ) of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 .o 00000000000000000000000000000000000000 00000000000000000000000000000000000000 !bject,*A%%licati$n f$r rec$gniti$n-rene.al $f rec$gniti$n $f a #t$ck e)change !nder #ecti$n 3 $f the ec!ritie# /$ntract# (0eg!lati$n) Act' 1956& Sir, <ursuant to the $%4Securities and 7xchange 8oard of India: Eotification Eo0 00000000000000000000000000 00000000000000000 dated 000000000000000000000000000000000LCertificate of recognition dated0000000000000000000000000000000KeLI on behalf of 000000000000000000 (na(e and address of stoc) exchange) being a stoc) exchange as defined in section % of the Securities Contracts
$% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
(Regulation) Act, !"# hereby apply for recognitionLrenewal of recognition for the purposes of the said Act in respect of contracts in securities0 ". 6our copies of the rules, (e(orandu( and articles of association relating in general to the constitution and (anage(ent of the stoc) exchange and four copies of the bye+laws for the regulation and control contracts in securities are enclosed0 ). All the necessary infor(ation re*uired in the Annexure to this 6or( is enclosed0 Any additional infor(ation will be furnished as and when called for by the $34Securities and 7xchange 8oard of India:0 3. KeLI on behalf of the said stoc) exchange hereby underta)e to co(ply with the re*uire(ents of section $ of the said Act and such other conditions and ter(s as (ay be contained in the certificate of recognition or be prescribed or i(posed subse*uently0
5. .reasury Receipt Eo0 000000dated000000for Rs000000000000is attached0 Oours faithfully, Signature of applicant ANNEAURE TO 2OR@ BAC Part I - General 0 Ea(e of the applicant stoc) exchange0 %0 Address0 30 9ate of establish(ent0 $0 Is your exchange a Doint stoc) co(pany (state whether public or pri'ate) registered under the Indian Co(panies Act or an association for profit or otherwise P If it is organised on so(e other basis, this (ay be stated0 "0 &i'e details of your capital structure and attach three copies of the audited balance sheets and profit and loss account of the 7xchange for the preceding three years0 Part II - Membership #0 State the nu(ber of (e(bers at the ti(e of application0 Also specify how (any are inacti'e0 /0 State whether there is any pro'ision, resolution or con'ention for li(iting the nu(ber of (e(bers and whether in pursuance thereof you ha'e fixed a ceiling on the nu(ber of (e(bers that you would ta)e0 >0 9o you insist on any (ini(u( *ualifications and experience before enrolling new (e(bers P If so gi'e details0 !0 State the different classes of (e(bers, if any, the nu(ber thereof and the pri'ileges enDoyed by each class0 Khat is the procedure followed by your exchange for the ad(ission of different classes of new (e(bers P 00 Khat are the rates of your annual subscription in respect of the different classes of (e(bers P 0 9o you collect any security deposit fro( your (e(bers P If so, gi'e details and also state the (anner in which such deposits are utilised and the rate of interest allowed, if any0
$3 Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
%0 9o you collect any ad(ission or entrance fees fro( your (e(bers or fro( partners of fir(s who are (e(bers P If so, how (uch P 30 9o you insist on your (e(bers and partners of fir(s who are (e(bers di'esting the(sel'es of other acti'ities either as principal or as e(ployee P $0 9o your rules per(it fir(s to beco(e (e(bers P If so, is it incu(bent on (e(bers to see) the appro'al of the go'erning body before ad(itting new partners P State the conditions, if any, laid down in your rules for the ad(ission of such partners0 "0 If your rules do not per(it of fir(s being enrolled as (e(bers, do you per(it indi'idual (e(bers to for( a partnership P State the procedure followed for the recognition of such partnership0 #0 9o you per(it (e(bers to wor) in partnership with non+(e(bers P If so, how far such non+(e(bers subDect to the control of the stoc) exchange P Part III - Governing Body /0 Khat is the present strength of your go'erning body P &i'e details of the constitution, powers of (anage(ent, election and tenure of office of (e(bers of the go'erning body, and the (anner in which its business is transacted0
>0 Are any trade or co((ercial interest represented on your go'erning body P If so, gi'e details of interests represented0 !0 9o you associate shareholders of in'estors associations with the (anage(ent of your exchange P If so, state the (anner in which it is done0 %00 Are there any &o'ern(ent representati'es on your go'erning body P If so, furnish their na(es0 % 0 9o your rules pro'ide for the direct election by (e(bers of any other bodies or co((ittees, apart fro( the go'erning body P If so, gi'e details of their constitution, tenure, powers and functions0 %%0 9o you ha'e any pro'ision for the appoint(ent of standing or ad h$c subco((ittees of the go'erning body P If so, furnish details of the (ethod of their appoint(ent, ter(s of office, powers and functions0 %30 &i'e the designations, powers and duties of principal office+bearers of your exchange0 Are any of these office+bearers in the pay of the stoc) exchange P If so, gi'e details as to the (ode of their appoint(ent, tenure of office and re(uneration0 Part IV - Trading %$0 9o you ha'e a trading ring P If not, how do you carry on the business P &i'e details0 %"0 State the different )inds of contracts in use on your exchange e&g&' spot, ready and forward0 State the period of deli'ery and pay(ent in each case0 %#0 &i'e details of business hours for each type of contract0 %/0 &i'e details of the scale of bro)erage and other charges, if any, prescribed by your exchange0 %>0 9o you prescribe standard for(s of contract for the use of your (e(bers P Attach three copies of each such contract for(0 %!0 9o you classify your (e(bers into bro)ers and Dobbers P If so, specify the bye+law under which this is done0 300 9o you ha'e a syste( of registration of re(isiers andLor authorised cler)s P If so, gi'e details as to their *ualifications, obligations and rights, etc0 3 0 9o you ha'e any regulations regarding dealings by (e(bers on their own account whether in the nature of 1aravani (day+to+day) or otherwise P 3%0 9o you ha'e any pro'isions for regulating the 'olu(e of business done by any indi'idual (e(ber other than through a syste( of (argins P If so, gi'e details0 330 Khat pro'isions ha'e you (ade for periodical settle(ent of contracts and differences thereunder, the deli'ery of, and pay(ent for securities and the passing of deli'ery orders P 3$0 9o you ha'e a clearing house for the settle(ent of contracts P If so, gi'e details of its organisation and (anage(ent0 3"0 If you ha'e clearing house, what returns do the (e(bers of your exchange sub(it regarding the transactions cleared through such clearing house P 9oes the exchange as) for any regular returns in respect of transactions settled outside the clearing house P Sub(it three copies of for(s used in this connection0 3#0 Iow do you fix, alter or postpone the dates of settle(ent P 3/0 Iow do you deter(ine and declare (a)ing+up prices P 3>0 9o you ha'e any arrange(ents for (a)ing or recording of bargains P 3!0 Ia'e you any arrange(ents for recording and publishing (ar)et rates including opening, closing, highest and lowest rates P
$00 Khat pro'isions ha'e you (ade for regulating-(a) the entering into contracts, their perfor(ance and rescission, including contracts , (i) between (e(bers, (ii) between a (e(ber and his constituent, and (iii) between a (e(ber and a non+(e(ber3 (b) the conse*uences of breach, default or insol'ency on the part of (e(bers whether acting as buyers, sellers or inter(ediaries 3 and (c) 2havala#3 and other (atters relating to conduct of business of (e(bers in the exchange P $ 0 9o you prescribe (argin re*uire(ents P If yes, gi'e details0 $%0 9o you prescribe (axi(u( and (ini(u( prices for securities P If so, how and under what conditions0 $30 9o you pro'ide any safeguards for the pre'ention of Nbulls*ueeFesJ and 3 NbearraidsJ and for (eeting e(ergencies in trade P &i'e details0 $$0 Khat are the (easures adopted by you to regulate or prohibit ad'ertising or issue of circulars by your (e(bers P $"0 Khat are the disciplinary power with the go'erning body to enforce due co(pliance by (e(bers of the rules and bye+laws of the exchange and generally to ensure proper standard of business conduct P $#0 9o you re*uire (e(bers to supply such infor(ation or explanation and to produce such boo)s relating to their business as your go'erning body (ay re*uire P $/0 9o you publish any statistics in regard to business done on the exchange including the transactions settled through the clearing house, if (aintained P In particular, ha'e you e'ol'ed any (achinery for co(puting the 'olu(e of transactions in the different )inds of contracts per(itted on your exchange P &i'e details0 $>0 9o you ha'e any bye+laws contra'ention of which (a)es a contract 'oid P Part V - Miscellaneo s $!0 9o you ha'e any (achinery for arbitration of disputes between (e(bers andLor between (e(bers and their constituents P &i'e details0 "00 Khat are the conditions subDect to which securities are listed for dealings on your exchange P " 0 Khat are your re*uire(ents for ad(itting securities to forward+trading P "%0 9o you ha'e the right to prohibit, withdraw or suspend dealings in a listed security P If so, under what circu(stances is this right exercised P "30 Khat pro'isions ha'e you (ade for the le'y and reco'ery of fees, fines and penalties P FORM B ( ee rules # and /) $$5The Se'*ritie! % - E#'h% (e ;o%r- of I -i%< 4e. 5elhi' the 20&&&&&&&&&&&&& Eo0 000000000000000000000000000000000000.he $"4Securities and 7xchange 8oard of India:, ha'ing considered the application for recognitionLrenewal of recognition (ade under section 3 of the Securities Contracts (Regulation) Act, !"# by000000000000000000000000000000 (na(e and address of exchange) and being satisfied that it would be in the interest of the trade and also in the public interest so to do, hereby grants, in exercise of the powers conferred by section $ of the Securities Contracts (Regulation) Act, !"# recognition to the said exchange under section $ of the said Act for 0000000000000000000 yearLyears ending 0000000000000000000000%0 0000000on a per(anent basis in respect of contracts in securities subDect to the conditions stated herein below or as (ay be prescribed or i(posed hereafter0
Seal of the $#48oard: Signature of Cfficer Note&-Application for renewal of recognition shall be (ade so as to reach the Central &o'ern(ent not less than three (onths before the expiry of the period0 (.his certificate, will also ha'e to be published as a Eotification in the &aFette of India and also in the Cfficial &aFette of the State in which principal office of the recognised stoc) exchange is situate)0 $/5FORM ! ( ee rule 3) Noti'e to !ho/ '%*!e %(%i !t the /ith-r%/%l of re'o( itio .I7 S7CHRI.I7S AE9 7ACIAE&7 8CAR9 C6 IE9IA 6!"bai' the&&&&&&&&&&& .o 0000000000000000000000000000000000000000000000000000000000000000000000000000000000
$$ Substituted
for 1&o'ern(ent of India, ?inistry of 6inance2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 $" Substituted for 1Central &o'ern(ent2, ibid0 $# Substituted for 1?inistry2, ibid0 $/ Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#
0000000000000000000000000000000000000000000000000000000000000000000000000000000000 (na(e and address of the exchange) Oou are hereby called upon to show cause on or before 0000000000000000000000000000000000000 at the office of 0000000000000000000000000000000000000000000000000000 ( designation of the officer) why the recognition granted to you under the ?inistry of 6inanceLthe Securities and 7xchange 8oard of India, Eotification Eo0 0000000000000000000000000000 dated 000000000000000000000000000000000000000 and Certificate Eo0 00000000000000000000000000000 dated 000000000000000000000000000000 should not be withdrawn for the reasons gi'en in the annexure to this notice0 8y order and in the na(e of the Securities and 7xchange 8oard of India0 Seal of the Securities and 7xchange 8oard of India0 Notifi'%tio & 4$& 576' dated 217271957&
SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< SECTIONS
80(9:6:4A0; 1. Short title, extent and co((ence(ent ". 9efinitions 0(/<=4: (5 1</> (?/@A4=( ). Application for recognition of stoc) exchanges 3. &rant of recognition to stoc) exchanges0 3A. Corporatisation and de(utualisation of stoc) exchanges 3;. <rocedure for corporatisation and de(utualisation 5. Kithdrawal of recognition 8. <ower of Central &o'ern(ent to call for periodical returns or direct in*uiries to be (ade 7. Annual reports to be furnished to Central &o'ern(ent by stoc) exchanges 7A. <ower of recognised stoc) exchange to (a)e rules restricting 'oting rights, etc :. <ower of Central &o'ern(ent to direct rules to be (ade or to (a)e rules :A. Clearing corporation 9. <ower of recognised stoc) exchanges to (a)e bye+laws 1=. <ower of Securities and 7xchange 8oard of India to (a)e or a(end byelaws of recognised stoc) exchanges 11. <ower of Central &o'ern(ent to supersede go'erning body of a recognised stoc) exchange 1". <ower to suspend business of recognised stoc) exchanges0 1"A. <ower to issue directions 1). Contracts in notified areas illegal in certain circu(stances 1)A. Additional trading floor 13. Contracts in notified areas to be 'oid in certain circu(stances 15. ?e(bers (ay not act as principals in certain circu(stances 18. <ower to prohibit contracts in certain cases 17. =icensing of dealers in securities in certain areas 17A. <ublic issue and listing of securities referred to in sub+clause ( ie) of clause (h) of section % 1:. 7xclusion of spot deli'ery contracts fro( sections 3, $, " and / 1:A. Contracts in deri'ati'e 19. Stoc) exchanges other than recognised stoc) exchanges prohibited "=. <rohibition of options in securities "1. Conditions for listing "1A. 9elisting of securities "". Right of appeal against refusal of stoc) exchanges to list securities of public co(panies ""A. Right of appeal to Securities Appellate .ribunal against refusal of stoc) exchange to list securities of public co(panies "";. <rocedure and powers of Securities Appellate .ribunal ""C. Right to legal representation ""D. =i(itation ""E. Ci'il court not to ha'e Durisdiction
""2. Appeal to Supre(e Court 8(4A91:( A45 80</(5A0( "). <enalties ")A. <enalty for failure to furnish infor(ation, return, etc0 ");. <enalty for failure by any person to enter into an agree(ent with clients ")C. <enalty for failure to redress in'estorsJ grie'ances ")D. <enalty for failure to segregate securities or (oneys of client or clients ")E. <enalty for failure to co(ply with pro'ision of listing conditions or delisting conditions or grounds ")2. <enalty for excess de(aterialisation or deli'ery of unlisted securities ")G. <enalty for failure to furnish periodical returns, etc0 ")D. <enalty for contra'ention where no separate penalty has been pro'ided ")0I. <ower to adDudicate ")E. 6actors to be ta)en into account by adDudicating officer ")EA. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! ")E;. Re'o+er> of %.o* t! ")F. Crediting su(s realised by way of penalties to Consolidated 6und of India ")L. Appeal to Securities Appellate .ribunal ")@. Cffences ")N. Co(position of certain offences ")0O. <ower to grant i((unity "3. Cffences by co(panies "5. Certain offences to be cogniFable "8. CogniFance of offences by courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! 6: /(99A4(<A "7. .itle to di'idends "7A. Right to recei'e inco(e fro( collecti'e in'est(ent sche(e "7;. Right to recei'e inco(e fro( (utual fund ":. Act not to apply in certain cases "9. <rotection of action ta)en in good faith "9A. <ower to delegate )=. <ower to (a)e rules )1. <ower of Securities and 7xchange 8oard of India to (a)e regulations SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< 53th Se$te.,er, 1958< A A't to $re+e t * -e!ir%,le tr% !%'tio ! i !e'*ritie! ,> re(*l%ti ( the ,*!i e!! of -e%li ( therei , 14***: ,> $ro+i-i ( for 'ert%i other .%tter! 'o e'te- there/ith. 87 it enacted by <arlia(ent in the Se'enth Oear of the Republic of India as follows ,
80(9:6:4A0; Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities Contracts (Regulation) Act, !"#0 (%) It extends to the whole of India0
Kords 1by prohibiting options and2 o(itted by the Securities =aws (A(end(ent) Act, !!", Sec0 >, w0e0f0 %"+0 + !!".
(3) It shall co(e into force on such date% as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 Defi itio !. ". In this Act, unless the context otherwise re*uires,(a) 1contract2 (eans a contract for or relating to the purchase or sale of securities3 3 4(aa) 1corporatisation2 (eans the succession of a recognised stoc) exchange, being a body of indi'iduals or a society registered under the Societies Registration Act, >#0 (% of >#0), by another stoc) exchange, being a co(pany incorporated for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities carried on by such indi'iduals or society3 (ab) 1de(utualisation2 (eans the segregation of ownership and (anage(ent fro( the trading rights of the (e(bers of a recognised stoc) exchange in accordance with a sche(e appro'ed by the Securities and 7xchange 8oard of India3: $4"4(ac): 1deri'ati'e2 includes(A) a security deri'ed fro( a debt instru(ent, share, loan, whether secured or unsecured, ris) instru(ent or contract for differences or any other for( of security3 (B) a contract which deri'es its 'alue fro( the prices, or index of prices, of underlying securities3: (b) 1&o'ern(ent security2 (eans a security created and issued, whether before or after the co((ence(ent of this Act, by the Central &o'ern(ent or a State &o'ern(ent for the purpose of raising a public loan and ha'ing one of the for(s specified in clause (2) of section % of the <ublic 9ebt Act, !$$ ( > of !$$)3 (c) 1(e(ber2 (eans a (e(ber of a recognised stoc) exchange3 (d) 1option in securities2 (eans a contract for the purchase or sale of a right to buy or sell, or a right to buy and sell, securities in future, and includes a teji' a "andi' a teji "andi' a galli' a put, a call or a put and call in securities3 (e) 1prescribed2 (eans prescribed by rules (ade under this Act3
% %0+%+
!"/ vide SRC "%>, dated #+0%+ !"/, published in the &aFette of India, 7xtra0, <t0 II, Sec0 3, p0 "$!, dated #+0%+ !"/0 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 $ Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000 " Clause (aa) renu(bered as clause (ac) by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0
(f) 1recognised stoc) exchange2 (eans a stoc) exchange which is for the ti(e
being recognised by the Central &o'ern(ent under section $3 (g) 1rules2, with reference to the rules relating in general to the constitution and (anage(ent of a stoc) exchange, includes, in the case of a stoc) exchange which is an incorporated association, its (e(orandu( and articles of association3 64(ga) 1sche(e2 (eans a sche(e for corporatisation or de(utualisation of a recognised stoc) exchange which (ay pro'ide for(i) the issue of shares for a lawful consideration and pro'ision of trading rights in lieu of (e(bership cards of (e(bers of a recognised stoc) exchange3 (ii) the restrictions on 'oting rights3 (iii) the transfer of property, business, assets, rights, liabilities, recognitions, contracts of the recognised stoc) exchange, legal proceedings by, or against, the recognised stoc) exchange, whether in the na(e of the recognised stoc) exchange or any trustee or otherwise and any per(ission gi'en to, or by, the recognised stoc) exchange3 (iv) the transfer of e(ployees of a recognised stoc) exchange to another recognised stoc) exchange3 (v) any other (atter re*uired for the purpose of, or in connection with, the corporatisation or de(utualisation, as the case (ay be, of the recognised stoc) exchange3: /4>4(gb): 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (h) 1securities2 include(i) shares, scrips, stoc)s, bonds, debentures, debenture stoc) or other (ar)etable securities of a li)e nature in or of any incorporated co(pany or other body corporate3 !4(ia) deri'ati'e3 (ib) units or any other instru(ent issued by any collecti'e in'est(ent sche(e to the in'estors in such sche(es3:
# Inserted / Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (Second A(end(ent) Act, !!!, Sec %, w0e0f0 #+ %+ !!!0 > Clause (ga) renu(bered as clause (gb) by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 ! Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000
04(ic) security receipt as defined in clause ( Cg) of section % of the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%3: 114(id) units or any other such instru(ent issued to the in'estors under any (utual fund sche(e3: %47xplanation0-6or the re(o'al of doubts, it is hereby declared that ;securities; shall not include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(bined benefit ris) on the life of the persons and in'est(ent by such
persons and issued by an insurer referred to in clause (!) of section % of the Insurance Act, !3> ($ of !3>)3: 35(ie) any certificate or instru(ent (by whate'er na(e called), issued to an in'estor by any issuer being a special purpose distinct entity which possesses any debt or recei'able, including (ortgage debt, assigned to such entity, and ac)nowledging beneficial interest of such in'estor in such debt or recei'able, including (ortgage debt, as the case (ay be3 <
0 Inserted by the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%, Sec0 $ and Schedule, w0r0e0f0 % +#+%00%0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0e0f0 %+ 0+%00$0 % Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, Sec $, w0r0e0f0 0!+0$+%0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, read as under , ;CIA<.7R BI ?ISC7==AE7CHS #0 Dalidati$n&-Eotwithstanding anything contained in any Dudg(ent, decree or order of any Court, .ribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly, any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 0e%eal and #aving#&*( ) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0; 3 Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec %, w0e0f0 %>+"+ %00/0
$4(ii) &o'ern(ent securities3 (iia) such other instru(ents as (ay be declared by the Central &o'ern(ent to be securities3 and: (iii) rights or interest in securities3 "4(i) 1spot deli'ery contract2 (eans a contract which pro'ides for,(a) actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e
town or locality3 (b) transfer of the securities by the depository fro( the account of a beneficial owner to the account of another beneficial owner when such securities are dealt with by a depository3: #4(j) 1stoc) exchange2 (eans(a) any body of indi'iduals, whether incorporated or not, constituted before corporatisation and de(utualisation under sections $A and $8, or (b) a body corporate incorporated under the Co(panies Act, !"# ( of !"#) whether under a sche(e of corporatisation and de(utualisation or otherwise, for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0: /4I ter$ret%tio of 'ert%i /or-! % - e#$re!!io !. "A. Kords and expressions used herein and not defined in this Act but defined in the Co(panies Act, !"# ( of !"#) or the Securities and 7xchange 8oard of India
$ Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, for sub+clause (ii), w0r0e0f0 30+0 + !!%0 " Substituted by the 9epositories Act, !!#, Sec 30 and Schedule, <t0 III, w0r0e0f0 %0+0!+ !!" . <rior to its substitution, clause (i) read as under , N(i) 1spot deli'ery contract2 (eans a contract which pro'ides for the actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e town or locality3J # Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (j) read as under ,N(j) 1stoc) exchange2 (eans any body of indi'iduals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0J / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
Act, !!% ( " of !!%) or the 9epositories Act, !!# (%% of !!#) shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts0: 0(/<=4: (5 1</> (?/@A4=( A$$li'%tio for re'o( itio of !to'6 e#'h% (e!. ). ( ) Any stoc) exchange, which is desirous of being recognised for the purposes of this Act, (ay (a)e an application in the prescribed (anner to the Central &o'ern(ent01: (%) 7'ery application under sub+section ( ) shall contain such particulars as (ay be prescribed, and shall be acco(panied by a copy of the bye+laws of the stoc) exchange for the regulation and control of contracts and also a copy of the rules relating in general to the constitution of the stoc) exchange and in particular, to(a) the go'erning body of such stoc) exchange, its constitution and powers of (anage(ent and the (anner in which its business is to be transacted3 (b) the powers and duties of the office bearers of the stoc) exchange3 (c) the ad(ission into the stoc) exchange of 'arious classes of (e(bers, the *ualifications for (e(bership, and the exclusion, suspension, expulsion and
re+ad(ission of (e(bers therefro( or thereinto3 (d) the procedure for the registration of partnerships as (e(bers of the stoc) exchange in cases where the rules pro'ide for such (e(bership3 and the no(ination and appoint(ent of authorised representati'es and cler)s0 Gr% t of re'o( itio to !to'6 e#'h% (e!. 3. ( ) If the Central &o'ern(ent ! is satisfied, after (a)ing such in*uiry as (ay be necessary in this behalf and after obtaining such further infor(ation, if any, as it (ay re*uire,(a) that the rules and bye+laws of a stoc) exchange applying for registration are in confor(ity with such conditions as (ay be prescribed with a 'iew to ensure fair dealing and to protect in'estors3 (b) that the stoc) exchange is willing to co(ply with any other conditions (including conditions as to the nu(ber of (e(bers) which the Central &o'ern(ent, after consultation with the go'erning body of the stoc) exchange and ha'ing regard to the area ser'ed by the stoc) exchange and its standing and the nature of the securities dealt with by it, (ay i(pose for the purpose of carrying out the obDects of this Act3 and
> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 ! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
(c) that it would be in the interest of the trade and also in the public interest to grant recognition to the stoc) exchange3 it (ay grant recognition to the stoc) exchange subDect to the conditions i(posed upon it as aforesaid and in such for( as (ay be prescribed0 (%) .he conditions which the Central &o'ern(ent %0 (ay prescribe under clause (a) of sub+section ( ) for the grant of recognition to the stoc) exchanges (ay include, a(ong other (atters, conditions relating to,(i) the *ualifications for (e(bership of stoc) exchanges3 (ii) the (anner in which contracts shall be entered into and enforced as between (e(bers3 (iii) the representation of the Central &o'ern(ent on each of the stoc) exchange by such nu(ber of persons not exceeding three as the Central &o'ern(ent (ay no(inate in this behalf3 and (iv) the (aintenance of accounts of (e(bers and their audit by chartered accountants whene'er such audit is re*uired by the Central &o'ern(ent0 (3) 7'ery grant of recognition to a stoc) exchange under this section shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office as of the stoc) exchange is situate, and such recognition shall ha'e effect as fro( the date of its publication in the &aFette of India0 % ($) Eo application for the grant of recognition shall be refused except after gi'ing an opportunity to the stoc) exchange concerned to be heard in the (atter3 and the reasons for such refusal shall be co((unicated to the stoc) exchange in writing0 %% (") Eo rules of a recognised stoc) exchange relating to any of the (atters specified in sub+section (%) of section 3 shall be a(ended except with the appro'al of the
Central &o'ern(ent0%3 "35Cor$or%ti!%tio % - -e.*t*%li!%tio of !to'6 e#'h% (e!. 3A. Cn and fro( the appointed date, all recognised stoc) exchanges (if not corporatised and de(utualised before the appointed date) shall be corporatised and de(utualised in accordance with the pro'isions contained in section $8 ,
%0 <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 % <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %% <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %3 <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 %$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
4ro+i-e- that the Securities and 7xchange 8oard of India (ay, if it is satisfied that any recognised stoc) exchange was pre'ented by sufficient cause fro( being corporatised and de(utualised on or after the appointed date, specify another appointed date in respect of that recognised stoc) exchange and such recognised stoc) exchange (ay continue as such before such appointed date0 ()%lanati$n&*6or the purposes of this section, 1appointed date2 (eans the date which the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, appoint and different appointed dates (ay be appointed for different recognised stoc) exchanges0: "554ro'e-*re for 'or$or%ti!%tio % - -e.*t*%li!%tio . 3;. ( ) All recognised stoc) exchanges referred to in section $A shall, within such ti(e as (ay be specified by the Securities and 7xchange 8oard of India, sub(it a sche(e for corporatisation and de(utualisation for its appro'al , 4ro+i-e- that the Securities and 7xchange 8oard of India, (ay, by notification in the Cfficial &aFette, specify na(e of the recognised stoc) exchange, which had already been corporatised and de(utualised, and such stoc) exchange shall not be re*uired to sub(it the sche(e under this section0 (%) Cn receipt of the sche(e referred to in sub+section ( ), the Securities and 7xchange 8oard of India (ay, after (a)ing such en*uiry as (ay be necessary in this behalf and obtaining such further infor(ation, if any, as it (ay re*uire and if it is satisfied that it would be in the interest of the trade and also in the public interest, appro'e the sche(e with or without (odification0 (3) Eo sche(e under sub+section (%) shall be appro'ed by the Securities and 7xchange 8oard of India if the issue of shares for a lawful consideration or pro'ision of trading rights in lieu of (e(bership card of the (e(bers of a recognised stoc) exchange or pay(ent of di'idends to (e(bers ha'e been proposed out of any reser'es or assets of that stoc) exchange0 ($) Khere the sche(e is appro'ed under sub+section (%), the sche(e so appro'ed shall be published i((ediately by(a) the Securities and 7xchange 8oard of India in the Cfficial &aFette3 (b) the recognised stoc) exchange in such two daily newspapers circulating in India, as (ay be specified by the Securities and 7xchange 8oard of India,
and upon such publication, notwithstanding anything to the contrary contained in this Act or any other law for the ti(e being in force or any agree(ent, award, Dudg(ent, decree or other instru(ent for the ti(e being in force, the sche(e shall ha'e effect and be binding on all persons and authorities including all (e(bers, creditors, depositors and e(ployees of the recognised stoc) exchange and on all
%" Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
persons ha'ing any contract, right, power, obligation or liability with, against, o'er, to, or in connection with, the recognised stoc) exchange or its (e(bers0 (") Khere the Securities and 7xchange 8oard of India is satisfied that it would not be in the interest of the trade and also in the public interest to appro'e the sche(e under sub+section (%), it (ay, by an order, reDect the sche(e and such order of reDection shall be published by it in the Cfficial &aFette , 4ro+i-e- that the Securities and 7xchange 8oard of India shall gi'e a reasonable opportunity of being heard to all the persons concerned and the recognised stoc) exchange concerned before passing an order reDecting the sche(e0 (#) .he Securities and 7xchange 8oard of India (ay, while appro'ing the sche(e under sub+section (%), by an order in writing, restrict(a) the 'oting rights of the shareholders who are also stoc) bro)ers of the reognised stoc) exchange3 (b) the right of shareholders or a stoc) bro)er of the recognised stoc) exchange to appoint the representati'es on the go'erning board of the stoc) exchange3 (c) the (axi(u( nu(ber of representati'es of the stoc) bro)ers of the recognised stoc) exchange to be appointed on the go'erning board of the recognised stoc) exchange, which shall not exceed one+fourth of the total strength of the go'erning board0 (/) .he order (ade under sub+section (#) shall be published in the Cfficial &aFette and on the publication thereof, the order shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#), or any other law for the ti(e being in force, ha'e full effect0 (>) 7'ery recognised stoc) exchange, in respect of which the sche(e for corporatisation or de(utualisation has been appro'ed under sub+section (%), shall, either by fresh issue of e*uity shares to the public or in any other (anner as (ay be specified by the regulations (ade by the Securities and 7xchange 8oard of India %#, ensure that at least fifty+one per cent of its e*uity share capital is held, within twel'e (onths fro( the date of publication of the order under sub+section (/), by the public other than shareholders ha'ing trading rights , 4ro+i-e- that the Securities and 7xchange 8oard of India (ay, on sufficient cause being shown to it and in the public interest, extend the said period by another twel'e (onths0:
ee Securities Contracts (Regulation) (Stoc) 7xchanges and Clearing Corporations) Regulations, %0 %, w0e0f0 %0+0#+%0 % notified vide &aFette Eotification Eo0 =A9+ ERCL&EL%0 %+ 3L0/L 3"$#, 7xtra0, <t0 III, Section $, dtd %0+0#+%0 %0
%#
?ith-r%/%l of re'o( itio .
5. %/4( ): If the Central &o'ern(ent%> is of opinion that the recognition granted to a stoc) exchange under the pro'isions of this Act should, in the interest of the trade or in the public interest, be withdrawn, the Central &o'ern(ent (ay ser'e on the go'erning body of the stoc) exchange a written notice that the Central &o'ern(ent is considering the withdrawal of the recognition for the reasons stated in the notice and after gi'ing an opportunity to the go'erning body to be heard in the (atter, the Central &o'ern(ent (ay withdraw, by notification in the Cfficial &aFette, the recognition granted to the stoc) exchange , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Central &o'ern(ent (ay, after consultation with the stoc) exchange, (a)e such pro'ision as it dee(s fit in the notification of withdrawal or in any subse*uent notification si(ilarly published for the due perfor(ance of any contracts outstanding on that date0 %!4(%) Khere the recognised stoc) exchange has not been corporatised or de(utualised or it fails to sub(it the sche(e referred to in sub+section ( ) of section $8 within the specified ti(e therefor or the sche(e has been reDected by the Securities and 7xchange 8oard of India under sub+section (") of section $8, the recognition granted to such stoc) exchange under section $, shall, notwithstanding anything to the contrary contained in this Act, stand withdrawn and the Central &o'ern(ent shall publish, by notification in the Cfficial &aFette, such withdrawal of recognition , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Securities and 7xchange 8oard of India (ay, after consultation with the stoc) exchange, (a)e such pro'isions as it dee(s fit in the order reDecting the sche(e published in the Cfficial &aFette under sub+section (") of section $80: 4o/er of Ce tr%l Go+er .e t to '%ll for $erio-i'%l ret*r ! or -ire't i 7*irie! to ,e .%-e. 8. ( ) 7'ery recognised stoc) exchange shall furnish to the 304Securities and 7xchange 8oard of India: such periodical returns relating to its affairs as (ay be prescribed0
%/ Section
" renu(bered as sub+section ( ) by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 %> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 30 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(%) 7'ery recognised stoc) exchange and e'ery (e(ber thereof shall (aintain and preser'e for such periods not exceeding fi'e years such boo)s of account, and other docu(ents as the Central &o'ern(ent, after consultation with the stoc) exchange concerned, (ay prescribe in the interest of the trade or in the public interest, and such boo)s of account, and other docu(ents shall be subDect to inspection at all reasonable ti(es 3 4by the Securities and 7xchange 8oard of India:0 (3) Kithout preDudice to the pro'isions contained in sub+sections ( ) and (%), the
3%4Securities
and 7xchange 8oard of India:, if it is satisfied that it is in the interest of the trade or in the public interest so to do, (ay, by order in writing,(a) call upon a recognised stoc) exchange or any (e(ber thereof to furnish in writing such infor(ation or explanation relating to the affairs of the stoc) exchange or of the (e(ber in relation to the stoc) exchange as the 334Securities and 7xchange 8oard of India: (ay re*uire3 or (b) appoint one or (ore persons to (a)e an in*uiry in the prescribed (anner in relation to the affairs of the go'erning body of a stoc) exchange or the affairs of any of the (e(bers of the stoc) exchange in relation to the stoc) exchange and sub(it a report of the result of such in*uiry to the 3$4Securities and 7xchange 8oard of India: within such ti(e as (ay be specified in the order or, in the case of an in*uiry in relation to the affairs of any of the (e(bers of a stoc) exchange, direct the go'erning body to (a)e the in*uiry and sub(it its report to the 3"4Securities and 7xchange 8oard of India:0 ($) Khere an in*uiry in relation to the affairs of a recognised stoc) exchange or the affairs of any of its (e(bers in relation to the stoc) exchange has been underta)en under sub+section (3),(a) e'ery director, (anager, secretary or other officer of such stoc) exchange3 (b) e'ery (e(ber of such stoc) exchange3 (c) if the (e(ber of the stoc) exchange is a fir(, e'ery partner, (anager, secretary or other officer of the fir(3 and (d) e'ery other person or body of persons who has had dealings in the course of business with any of the persons (entioned in clauses ( a), (b) and (c), whether directly or indirectly3
Substituted for ;by the Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3% Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 33 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3" Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
3
shall be bound to produce before the authority (a)ing the in*uiry all such boo)s of account, and other docu(ents in his custody or power relating to or ha'ing a bearing on the subDect+(atter of such in*uiry and also to furnish the authorities within such ti(e as (ay be specified with any such state(ent or infor(ation relating thereto as (ay be re*uired of hi(0 )8A *%l re$ort! to ,e f*r i!he- to Ce tr%l Go+er .e t ,> !to'6 e#'h% (e!. 7. 7'ery recognised stoc) exchange shall furnish the Central &o'ern(ent with a copy of the annual report, and such annual report shall contain such particulars as (ay be prescribed0 )754o/er of re'o( i!e- !to'6 e#'h% (e to .%6e r*le! re!tri'ti ( +oti ( ri(ht!, et'. 7A. ( ) A recognised stoc) exchange (ay (a)e rules or a(end any rules (ade by it
to pro'ide for all or any of the following (atters, na(ely ,(a) the restriction of 'oting rights to (e(bers only in respect of any (atter placed before the stoc) exchange at any (eeting3 (b) the regulation of 'oting rights in respect of any (atter placed before the stoc) exchange at any (eeting so that each (e(ber (ay be entitled to ha'e one 'ote only, irrespecti'e of his share of the paid+up e*uity capital of the stoc) exchange3 (c) the restriction on the right of a (e(ber to appoint another person as his proxy to attend and 'ote at a (eeting of the stoc) exchange3 (d) such incidental, conse*uential and supple(entary (atters as (ay be necessary to gi'e effect to any of the (atters specified in clauses ( a), (b) and (c)0 (%) Eo rules of a recognised stoc) exchange (ade or a(ended in relation to any (atter referred to in clauses (a) to (d) of sub+section ( ) shall ha'e effect until they ha'e been appro'ed by the Central &o'ern(ent 3> and published by that &o'ern(ent in the Cfficial &aFette and, in appro'ing the rules so (ade or a(ended, the Central &o'ern(ent (ay (a)e such (odifications therein as it thin)s fit, and on such publication, the rules as appro'ed by the Central &o'ern(ent shall be dee(ed to ha'e been 'alidly (ade, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#)0:
3# <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 3/ Inserted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec %, w0e0f0 0>+ %+ !"!0 3> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
4o/er of Ce tr%l Go+er .e t )9 to -ire't r*le! to ,e .%-e or to .%6e r*le!. :. ( ) Khere, after consultation with the go'erning bodies of stoc) exchanges generally or with the go'erning body of any stoc) exchange in particular, the Central &o'ern(ent is of opinion that it is necessary or expedient so to do, it (ay, by order in writing together with a state(ent of the reasons therefor, direct recognised stoc) exchanges generally or any recognised stoc) exchange in particular, as the case (ay be, to (a)e any rules or to a(end any rules already (ade in respect of all or any of the (atters specified in sub+section (%) of section 3 within a period of $04two (onths: fro( the date of the order0 (%) If any recognised stoc) exchange fails or neglects to co(ply with any order (ade under sub+section ( ) within the period specified therein, the Central &o'ern(ent (ay (a)e the rules for, or a(end the rules (ade by, the recognised stoc) exchange, either in the for( proposed in the order or with such (odifications thereof as (ay be agreed to between the stoc) exchange and the Central &o'ern(ent0 (3) Khere in pursuance of this section any rules ha'e been (ade or a(ended, the rules so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette or &aFettes of the State or States in which the principal office or offices of the recognised stoc) exchange or exchanges is or are situate, and, on the publication thereof in the &aFette of India, the rules so (ade or a(ended shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# (
of !"#), or in any other law for the ti(e being in force, ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange or stoc) exchanges, as the case (ay be0 315Cle%ri ( 'or$or%tio . :A. ( ) A recognised stoc) exchange (ay, with the prior appro'al of the Securities and 7xchange 8oard of India, transfer the duties and functions of a clearing house to a clearing corporation, being a co(pany incorporated under the Co(panies Act, !"# ( of !"#), for the purpose of(a) the periodical settle(ent of contracts and differences thereunder3 (b) the deli'ery of, and pay(ent for, securities3 (c) any other (atter incidental to, or connected with, such transfer0 (%) 7'ery clearing corporation shall, for the purpose of transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( ),
3! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 $0 Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec !, w0e0f0 %"+ 0 + !!"0 $ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0
(a)e bye+laws and sub(it the sa(e to the Securities and 7xchange 8oard of India for its appro'al0 (3) .he Securities and 7xchange 8oard of India (ay, on being satisfied that it is in the interest of the trade and also in the public interest to transfer the duties and functions of a clearing house to a clearing corporation, grant appro'al to the byelaws sub(itted to it under sub+section (%) and appro'e the transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( )0 ($) .he pro'isions of sections $, ", #, /, >, !, 0, and % shall, as far as (ay be, apply to a clearing corporation referred to in sub+section ( ) as they apply in relation to a recognised stoc) exchange0: 4o/er of re'o( i!e- !to'6 e#'h% (e! to .%6e ,>e0l%/!. 9. ( ) Any recognised stoc) exchange (ay, subDect to the pre'ious appro'al of the $%4Securities and 7xchange 8oard of India:, (a)e bye+laws for the regulation and control of contracts0 (%) In particular, and without preDudice to the generality of the foregoing power, such bye+laws (ay pro'ide for , (a) the opening and closing of (ar)ets and the regulation of the hours of trade3 (b) a clearing house for the periodical settle(ent of contracts and differences thereunder, the deli'ery of and pay(ent for securities, the passing on of deli'ery orders and the regulation and (aintenance of such clearing house3 (c) the sub(ission to the $34Securities and 7xchange 8oard of India: by the clearing house as soon as (ay be after each periodical settle(ent of all or any of the following particulars as the $$4Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, re*uire, na(ely ,(i) the total nu(ber of each category of security carried o'er fro( one settle(ent period to another3 (ii) the total nu(ber of each category of security, contracts in respect of
which ha'e been s*uared up during the course of each settle(ent period3 (iii) the total nu(ber of each category of security actually deli'ered at each clearing3
$% Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(d) the publication by the clearing house of all or any of the particulars sub(itted to the $"4Securities and 7xchange 8oard of India: under clause ( c) subDect to the directions, if any, issued by the $#4Securities and 7xchange 8oard of India: in this behalf3 (e) the regulation or prohibition of blan) transfers3 (f) the nu(ber and classes of contracts in respect of which settle(ents shall be (ade or differences paid through the clearing house3 (g) the regulation, or prohibition of b!dla# or carry+o'er facilities3 (h) the fixing, altering or postponing of days for settle(ents3 (i) the deter(ination and declaration of (ar)et rates, including the opening, closing highest and lowest rates for securities3 (j) the ter(s, conditions and incidents of contracts, including the prescription of (argin re*uire(ents, if any, and conditions relating thereto, and the for(s of contracts in writing3 (k) the regulation of the entering into, (a)ing, perfor(ance, recession and ter(ination, of contracts, including contracts between (e(bers or between a (e(ber and his constituent or between a (e(ber and a person who is not a (e(ber, and the conse*uences of default or insol'ency on the part of a seller or buyer or inter(ediary, the conse*uences of a breach or o(ission by a seller or buyer, and the responsibility of (e(bers who are not parties to such contracts3 (l) the regulation of taravani business including the placing of li(itations thereon3 (") the listing of securities on the stoc) exchange, the inclusion of any security for the purpose of dealings and the suspension or withdrawal of any such securities, and the suspension or prohibition of trading in any specified securities3 (n) the (ethod and procedure for the settle(ent of clai(s or disputes, including settle(ent by arbitration3 ($) the le'y and reco'ery of fees, fines and penalties3 (%) the regulation of the course of business between parties to contracts in any capacity3 (+) the fixing of a scale of bro)erage and other charges3 (r) the (a)ing, co(paring, settling and closing of bargains3 (#) the e(ergencies in trade which (ay arise, whether as a result of pool or syndicated operations or cornering or otherwise, and the exercise of powers in
$" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%,
Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $# Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
such e(ergencies, including the power to fix (axi(u( and (ini(u( prices for securities3 (t) the regulation of dealings by (e(bers for their own account3 (!) the separation of the functions of Dobbers and bro)ers3 (v) the li(itations on the 'olu(e of trade done by any indi'idual (e(ber in exceptional circu(stances3 (.) the obligation of (e(bers to supply such infor(ation or explanation and to produce such docu(ents relating to the business as the go'erning body (ay re*uire0 (3) .he bye+laws (ade under this section (ay(a) specify the bye+laws the contra'ention of which shall (a)e a contract entered into otherwise than in accordance with the bye+laws 'oid under sub+section ( ) of section $3 (b) pro'ide that the contra'ention of any of the bye+laws shall render the (e(ber concerned liable to one or (ore of the following punish(ents, na(ely ,(i) fine, (ii) expulsion fro( (e(bership, (iii) suspension fro( (e(bership for a specified period, (iv) any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney0 ($) Any bye+laws (ade under this section shall be subDect to such conditions in regard to pre'ious publication as (ay be prescribed, and, when appro'ed by the $/4Securities and 7xchange 8oard of India:, shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and shall ha'e effect as fro( the date of its publication in the &aFette of India , 4ro+i-e- that if the $>4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+law should be (ade i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0
$/ Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $> Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4o/er of 395Se'*ritie! % - E#'h% (e ;o%r- of I -i%< to .%6e or %.e - ,>e0l%/! of re'o( i!e- !to'6 e#'h% (e!. 1=. ( ) .he "04Securities and 7xchange 8oard of India: (ay, either on a re*uest in writing recei'ed by it in this behalf fro( the go'erning body of a recognised stoc) exchange or on its own (otion, if it is satisfied after consultation with the go'erning body of the stoc) exchange that it is necessary or expedient so to do and after recording its reasons for so doing, (a)e bye+laws for all or any of the (atters specified in section ! or a(end any bye+laws (ade by such stoc) exchange under that section0
(%) Khere in pursuance of this section any bye+laws ha'e been (ade or a(ended the bye+laws so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and on the publication thereof in the &aFette of India, the bye+laws so (ade or a(ended shall ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange concerned0 (3) Eotwithstanding anything contained in this section, where the go'erning body of a recognised stoc) exchange obDects to any bye+laws (ade or a(ended under this section by the " 4Securities and 7xchange 8oard of India: on its own (otion, it (ay, within "%4two (onths: of the publication thereof in the &aFette of India under subsection (%), apply to the "34Securities and 7xchange 8oard of India: for re'ision thereof, and the "$4Securities and 7xchange 8oard of India: (ay, after gi'ing an opportunity to the go'erning body of the stoc) exchange to be heard in the (atter, re'ise the bye+laws so (ade or a(ended, anywhere any bye+laws so (ade or a(ended are re'ised as a result of any action ta)en under this sub+section, the byelaws so re'ised shall be published and shall beco(e effecti'e as pro'ided in subsection (%)0 ($) .he (a)ing or the a(end(ent or re'ision of any bye+laws under this section shall in all cases be subDect to the condition of pre'ious publication ,
$! Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "0 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 " Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "% Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec %0, w0e0f0 %"+ 0 + !!"0 "3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4ro+i-e- that if the ""4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+laws should be (ade, a(ended or re'ised i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0 4o/er of Ce tr%l Go+er .e t 58 to !*$er!e-e (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e. 11. ( ) Kithout preDudice to any other powers 'ested in the Central &o'ern(ent under this Act, where the Central &o'ern(ent is of opinion that the go'erning body of any recognised stoc) exchange should be superseded, then, notwithstanding anything contained in any other law for the ti(e being in force, in the Central &o'ern(ent (ay ser'e on the go'erning body a written notice that the Central &o'ern(ent is considering the supersession of the go'erning body for the reasons specified in the notice and after gi'ing an opportunity to the go'erning body to be
heard in the (atter, it (ay, by notification in the Cfficial &aFette, declare the go'erning body of such stoc) exchange to be superseded, and (ay appoint any person or persons to exercise and perfor( all the powers and duties of the go'erning body, and, where (ore persons than one are appointed, (ay appoint one of such persons to be the chair(an and another to be the 'ice+chair(an thereof0 (%) Cn the publication of a notification in the Cfficial &aFette under sub+section ( ), the following conse*uences shall ensue, na(ely,(a) the (e(bers of the go'erning body which has been superseded shall, as fro( the date of the notification of supersession, cease to hold office as such (e(bers3 (b) the person or persons appointed under sub+section ( ) (ay exercise and perfor( all the powers and duties of the go'erning body which has been superseded3 (c) all such property of the recognised stoc) exchange as the person or persons appointed under sub+section ( ) (ay, by order in writing, specify in this behalf as being necessary for the purpose of enabling hi( or the( to carry on the business of the stoc) exchange, shall 'est in such person or persons0 (3) Eotwithstanding anything to the contrary contained in any law or the rules or bye+laws of the recognised stoc) exchange the go'erning body of which is superseded under sub+section ( ), the person or persons appointed under that subsection shall hold office for such period as (ay be specified in the notification published under that sub+section and the Central &o'ern(ent (ay fro( ti(e to ti(e, by li)e notification, 'ary such period0
"" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "# <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0
($) .he Central &o'ern(ent (ay at any ti(e before the deter(ination of the period of office of any person or persons appointed under this section call upon the recognised stoc) exchange to re+constitute the go'erning body in accordance with its rules and on such re+constitution all the property of the recognised stoc) exchange which has 'ested in, or was in the possession of, the person or persons appointed under sub+section ( ), shall re+'est or 'est, as the case (ay be, in the go'erning body so re+constituted , 4ro+i-e- that until a go'erning body is so re+constituted, the person or persons appointed under sub+section ( ) shall continue to exercise and perfor( their powers and duties0 4o/er57 to !*!$e - ,*!i e!! of re'o( i!e- !to'6 e#'h% (e!. 1". If in the opinion of the Central &o'ern(ent an e(ergency has arisen and for the purpose of (eeting the e(ergency the Central &o'ern(ent considers it expedient so to do, it (ay, by notification in the Cfficial &aFette, for reasons to be set out therein, direct a recognised stoc) exchange to suspend such of its business for such period not exceeding se'en days and subDect to such conditions as (ay be specified in the notification, and, if, in the opinion of the Central &o'ern(ent, the interest of
the trade or the public interest re*uires that the period should be extended, (ay, by li)e notification extend the said period fro( ti(e to ti(e , 4ro+i-e- that where the period of suspension is to be extended beyond the first period, no notification extending the period of suspension shall be issued unless the go'erning body of the ">4recognised stoc) exchange: has been gi'en an opportunity of being heard in the (atter0 "!54o/er to i!!*e -ire'tio !. 1"A. If, after (a)ing or causing to be (ade an in*uiry, the Securities and 7xchange 8oard of India is satisfied that it is necessary(a) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (b) to pre'ent the affairs of any recognised stoc) exchange or clearing corporation, or such other agency or person, pro'iding trading or clearing or settle(ent facility in respect of securities, being conducted in a (anner detri(ental to the interests of in'estors or securities (ar)et3 or (c) to secure the proper (anage(ent of any such stoc) exchange or clearing corporation or agency or person, referred to in clause ( b),
"/ <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 "> Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 "! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0
it (ay issue such directions,(i) to any stoc) exchange or clearing corporation or agency or person referred to in clause (b) or any person or class of persons associated with the securities (ar)et3 or (ii) to any co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 8=5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< /<410A/1 A45 <81:<4 :4 (/A0:1:( Co tr%'t! i otifie- %re%! ille(%l i 'ert%i 'ir'*.!t% 'e!. 1). If the Central &o'ern(ent# is satisfied, ha'ing regard to the nature or the 'olu(e of transactions in securities in any #%4State or States or area: that it is necessary so to do, it (ay, by notification in the Cfficial &aFette, declared this section to apply to such #34State or States or area:, and thereupon e'ery contract in such #$4State or States or area: which is entered into after the date of the notification otherwise than #"4between (e(bers of a recognised stoc) exchange or recognised stoc) exchanges: in such ##4State or States or area: or through or with such (e(ber shall be illegal ,
#0 I #
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 #% Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #3 Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #$ Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$ for ;between (e(bers of a recognised stoc) exchange; & ## Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0
#/54ro+i-e-
that any contract entered into between (e(bers of two or (ore recognised stoc) exchanges in such State or States or area, shall(i) be subDect to such ter(s and conditions as (ay be stipulated by the respecti'e stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India3 (ii) re*uire prior per(ission fro( the respecti'e stoc) exchanges if so stipulated by the stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India0: #>4A--itio %l tr%-i ( floor. 1)A. A stoc) exchange (ay establish additional trading floor with the prior appro'al of the Securities and 7xchange 8oard of India in accordance with the ter(s and conditions stipulated by the said 8oard0 ()%lanati$n , 6or the purposes of this section, 1additional trading floor2 (eans a trading ring or trading facility offered by a recognised stoc) exchange outside its area of operation to enable the in'estors to buy and sell securities through such trading floor under the regulatory fra(ewor) of that stoc) exchange0: Co tr%'t! i otifie- %re%! to ,e +oi- i 'ert%i 'ir'*.!t% 'e!. 13. ( ) Any contract entered into in any State or area specified in the notification under section 3 which is in contra'ention of any of the bye+laws specified in that behalf under clause (a) of sub+section (3) of section ! shall be 'oid , (i) as respects the rights of any (e(ber of the recognised stoc) exchange who has entered into such contract in contra'ention of any such bye+law, and also (ii) as respects the rights of any other person who has )nowingly participated in the transaction entailing such contra'ention0 (%) Eothing in sub+section ( ) shall be construed to affect the right of any person other than a (e(ber of the recognised stoc) exchange to enforce any such contract or to reco'er any su( under or in respect of such contract if such person had no )nowledge that the transaction was in contra'ention of any of the bye+laws specified in clause (a) of sub+section (3) of section !0 @e.,er! .%> ot %'t %! $ri 'i$%l! i 'ert%i 'ir'*.!t% 'e!. 15. Eo (e(ber of a recognised stoc) exchange shall in respect of any securities enter into any contract as a principal with any person other than a (e(ber of a recognised stoc) exchange, unless he has secured the consent or authority of such
#/ Inserted #> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (A(end(ent) Act, !!", Sec % , w0e0f0 %"+0 + !!"0
person and discloses in the note, (e(orandu( or agree(ent of sale or purchase that he is acting as a principal , 4ro+i-e- that where the (e(ber has secured the consent or authority of such person otherwise than in writing he shall secure written confir(ation by such person or such consent or authority within three days fro( the date of the contract , 4ro+i-e- f*rther that no such written consent or authority of such person shall be necessary for closing out any outstanding contract entered into by such person in accordance with the bye+laws, if the (e(ber discloses in the note, (e(orandu( or agree(ent of sale or purchase in respect of such closing out that he is acting as a principal0 4o/er89 to $rohi,it 'o tr%'t! i 'ert%i '%!e!. 18. ( ) If the Central &o'ern(ent is of opinion that it is necessary to pre'ent undesirable speculation in specified securities in any State or area, it (ay, by notification in the Cfficial &aFette, declare that no person in the State or area specified in the notification shall, sa'e with the per(ission of the Central &o'ern(ent, enter into any contract for the sale or purchase of any security specified in the notification except to the extent and in the (anner, if any, specified therein0 (%) All contracts in contra'ention of the pro'isions of sub+section ( ) entered into after the date of notification issued thereunder shall be illegal0 Li'e !i ( of -e%ler! i !e'*ritie! i 'ert%i %re%!. 17. ( ) SubDect to the pro'isions of sub+section (3) and to the other pro'isions contained in this Act, no person shall carry on or purport to carry on, whether on his own behalf or on behalf of any other person, the business of dealing in securities in any State or area to which section 3 has not been declared to apply and to which the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, declare this section to apply, except under the authority of a /04licence granted by the Securities and 7xchange 8oard of India: in this behalf0 (%) Eo notification under sub+section ( ) shall be issued with respect to any State or area unless the Central &o'ern(ent is satisfied, ha'ing regard to the (anner in which securities are being dealt with in such State or area, that it is desirable or
#! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 <owers are exercisable by R8I also 'ide &o'ern(ent of India Eotification Eo0 >3 (7), 9ated 0 +03+%000 in relation to any contracts in go'ern(ent securities, (oney (ar)et securities etc0 /0 Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% for ;licence granted by the Central &o'ern(ent;0
expedient in the interest of the trade or in the public interest that such dealings should be regulated by a syste( of licensing0 (3) .he restrictions i(posed by sub+section ( ) in relation to dealings in securities shall not apply to the doing of anything by or on behalf of a (e(ber of any recognised stoc) exchange0
7154*,li'
i!!*e % - li!ti ( of !e'*ritie! referre- to i !*,0'l%*!e ( ie) of 'l%*!e (h)
of !e'tio ". 17A. ( ) Kithout preDudice to the pro'isions contained in this Act or any other law for the ti(e being in force, no securities of the nature referred to in sub+clause (ie) of clause (h) of section % shall be offered to the public or listed on any recognised stoc) exchange unless the issuer fulfils such eligibility criteria and co(plies with such other re*uire(ents as (ay be specified by regulations (ade by the Securities and 7xchange 8oard of India0 (%) 7'ery issuer referred to in sub+clause (ie) of clause (h) of section % intending to offer the certificates or instru(ents referred therein to the public shall (a)e an application, before issuing the offer docu(ent to the public, to one or (ore recognised stoc) exchanges for per(ission for such certificates or instru(ents to be listed on the stoc) exchange or each such stoc) exchange0 (3) Khere the per(ission applied for under sub+section (%) for listing has not been granted or refused by the recognised stoc) exchanges or any of the(, the issuer shall forthwith repay all (oneys, if any, recei'ed fro( applicants in pursuance of the offer docu(ent, and if any such (oney is not repaid within eight days after the issuer beco(es liable to repay it, the issuer and e'ery director or trustee thereof, as the case (ay be, who is in default shall, on and fro( the expiry of the eighth day, be Dointly and se'erally liable to repay that (oney with interest at the rate of fifteen per cent per annu(0 7xplanation0-In rec)oning the eighth day after another day, any inter'ening day which is a public holiday under the Eegotiable Instru(ents Act, >> (%# of >> ), shall be disregarded, and if the eighth day (as so rec)oned) is itself such a public holiday, there shall for the said purposes be substituted the first day thereafter which is not a holiday0 ($) All the pro'isions of this Act relating to listing of securities of a public co(pany on a recognised stoc) exchange shall, (utatis (utandis, apply to the listing of the securities of the nature referred to in sub+clause (ie) of clause (h) of section % by the issuer, being a special purpose distinct entity0 <
Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec 3, w0e0f0 %>+0"+ %00/0
/
E#'l*!io of !$ot -eli+er> 'o tr%'t! fro. !e'tio ! 1), 13, 15 % - 17. 1:. ( ) Eothing contained in sections 3, $, " and / shall apply to spot deli'ery contracts0 (%) Eotwithstanding anything contained in sub+section ( ), if the Central &o'ern(ent/% is of opinion that in the interest of the trade or in the public interest it is expedient to regulate and control the business of dealing in spot deli'ery contracts also in any State or area (whether section 3 has been declared to apply to that State or area or not), it (ay, by notification in the Cfficial &aFette, declare that the pro'isions of section / shall also apply to such State or area in respect of spot deli'ery contracts generally or in respect of spot deli'ery contracts for the sale or purchase of such securities as (ay be specified in the notification, and (ay also specify the (anner in which, and the extent to which, the pro'isions of that section
shall so apply0 /34Co tr%'t! i -eri+%ti+e. 1:A. Eotwithstanding anything contained in any other law for the ti(e being in force, contracts in deri'ati'e shall be legal and 'alid if such contracts are(a) traded on a recognised stoc) exchange3 (b) settled on the clearing house of the recognised stoc) exchange, in accordance with the rules and bye+laws of such stoc) exchange0: Sto'6 e#'h% (e! other th% re'o( i!e- !to'6 e#'h% (e! $rohi,ite-. 19. ( ) Eo person shall, except with the per(ission of the Central &o'ern(ent, organise or assist in organising or be a (e(ber of any stoc) exchange (other than a recognised stoc) exchange) for the purpose of assisting in, entering into or perfor(ing any contracts in securities0 (%) .his section shall co(e into force in any State or area on such date as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 4rohi,itio of o$tio ! i !e'*ritie!. "=. 734GGGGG:
/% <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 /3 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec 3, w0e0f0 %%+%+%0000 /$ C(itted by the Securities =aws (A(end(ent) Act, !!", Sec %%, w0e0f0 %"+0 + !!"0 <rior to o(ission, section %0 read as under , 1%00 8r$hibiti$n $f $%ti$n# in #ec!ritie#&-( ) Eotwithstanding anything contained in this Act or in any other law for the ti(e being in force, all options in securities entered into after the co((ence(ent of this Act shall be illegal0
9: 1:4= <E (/A0:1:( 754GGG: /#4Co -itio ! for li!ti (. "1. Khere securities are listed on the application of any person in any recognised stoc) exchange, such person shall co(ply with the conditions of the listing agree(ent with that stoc) exchange&: 775Deli!ti ( of !e'*ritie!. "1A. ( ) A recognised stoc) exchange (ay delist the securities, after recording the reasons therefor, fro( any recognised stoc) exchange on any of the ground or grounds as (ay be prescribed under this Act , 4ro+i-e- that the securities of a co(pany shall not be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) A listed co(pany or an aggrie'ed in'estor (ay file an appeal before the Securities Appellate .ribunal against the decision of the recognised stoc) exchange delisting the securities within fifteen days fro( the date of the decision of the recognised stoc) exchange delisting the securities and the pro'isions of sections %%8 to %%7 of this Act, shall apply, as far as (ay be, to such appeals , 4ro+i-e- that the Securities Appellate .ribunal (ay, if it is satisfied that the co(pany was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding one (onth0:
(%) Any option in securities which has been entered into before such co((ence(ent and which re(ains to be perfor(ed, whether wholly or in part, after such co((ence(ent shall, to that
extent, beco(e 'oid02 /" Kords 18O <H8=IC CC?<AEI7S2 o(itted by the Securities =aws (A(end(ent) Act, !!!, Sec $, w0e0f0 %%+0%+%0000 /# Substituted by the Securities =aws (A(end(ent) Act, !!", Sec 33, w0e0f0 %"+0 + !!" . <rior to substitution, section % read as under , 1% 0 8$.er t$ c$"%el li#ting $f #ec!ritie# bF %!blic c$"%anie#& -Eotwithstanding anything contained in any other law for the ti(e being in force, if the Securities and 7xchange 8oard of India is of opinion, ha'ing regard to the nature of the securities issued by any public co(pany as defined in the Co(panies Act, !"# ( of !"#), or to the dealings in the(, that it is necessary or expedient in the interest of the trade or in the public interest so to do, it (ay re*uire the co(pany, after gi'ing it an opportunity of being heard in the (atter, to co(ply with such re*uire(ents as (ay be prescribed with respect to the listing of its securities on any recognised stoc) exchange02 // Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec >, w0r0e0f0 %+ 0+%00$0
7:5Ri(ht
of %$$e%l %(%i !t ref*!%l of !to'6 e#'h% (e! to li!t !e'*ritie! of $*,li' 'o.$% ie!. 79"". Khere a recognised stoc) exchange acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any public co(pany >04or collecti'e in'est(ent sche(e:, the co(pany > 4or sche(e: shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( ) of section /3 of the Co(panies Act, !"# ( of !"#) (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Central &o'ern(ent (ay, on sufficient cause being shown, allow, appeal to the Central &o'ern(ent against such refusal, o(ission or failure, as the case (ay be, and thereupon the Central &o'ern(ent (ay, after gi'ing the stoc) exchange an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange, or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Central &o'ern(ent sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Central &o'ern(ent: , >%44ro+i-e- that no appeal shall be preferred against refusal, o(ission or failure, as the case (ay be, under this section on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!0: :)5Ri(ht of %$$e%l to Se'*ritie! A$$ell%te Tri,* %l %(%i !t ref*!%l of !to'6 e#'h% (e to li!t !e'*ritie! of $*,li' 'o.$% ie!.
/> Substituted
by .he Co(panies (A(end(ent) Act, !/$ (Act Eo0 $ of !/$), Sec $%, w0e0f0 0 + 0%+ !/"0 /! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the
&aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 >0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%00003 Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 > Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%0000 >% Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec $, w0e0f0 #+ %+ !!!0 >3 Sections %%A, %%8, %%C, %%9, %%7 and %%6 inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!!& 7arlier section %%A was inserted by .he
""A. ( ) Khere a recognised stoc) exchange, acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any co(pany, the co(pany shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( A) of section /3 of the Co(panies Act, !"# ( of !"#), (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Securities Appellate .ribunal (ay, on sufficient cause being shown, allow, appeal to the Securities Appellate .ribunal ha'ing Durisdiction in the (atter against such refusal, o(ission or failure, as the case (ay be, and thereupon the Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange, an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange3 or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Securities Appellate .ribunal sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Securities Appellate .ribunal0 (%) 7'ery appeal under sub+section ( ) shall be in such for( and be acco(panied by such fee as (ay be prescribed0 (3) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 ($) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: :354ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. "";. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of
Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec %, w0e0f0 /+ 0 + !>#, and o(itted by the 9epositories Act, !!#, Sec 30 and Sch0, <t0III, w0r0e0f0 %0+0!+ !!"0 >$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath 3 (b) re*uiring the disco'ery and production of docu(ents 3 (c) recei'ing e'idence on affida'its 3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents 3 (e) re'iewing its decisions 3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte ; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0: :55Ri(ht to le(%l re$re!e t%tio . ""C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of sub+section ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of subsection ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of
>" Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
!"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, vakil or an attorney of any Iigh Court, and includes a pleader in practice0: :85Li.it%tio . ""D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0: :75Ci+il 'o*rt ot to h%+e G*ri!-i'tio .
""E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0: ::5A$$e%l to S*$re.e Co*rt. ""2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order, 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: 8(4A91:( A45 80</(5A0( 4e %ltie!. "). ( ) Any person who+
># Inserted >/ Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & >> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec !, w0r0e0f0 %+ 0+%00$0 7arlier section %%6 as inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", read as under,+ 1""2. A$$e%l to Di(h Co*rt.+Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order , 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
(a) without reasonable excuse (the burden of pro'ing which shall be on hi() fails to co(ply with any re*uisition (ade under sub+section ($) of section #3 or (b) enters into any contract in contra'ention of any of the pro'isions contained in section 3 or section #3 or (c) contra'enes the pro'isions contained in >!5section / or section /A<, or section !3 or 90 4(d) enters into any contract in deri'ati'e in contra'ention of section >A or the rules (ade under section 303: (e) owns or )eeps a place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act and )nowingly per(its such place to be used for such purposes3 or (f) (anages, controls, or assists in )eeping any place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act or at which contracts are recorded or adDusted or rights or liabilities arising out of contracts are adDusted, regulated or enforced in any (anner whatsoe'er3 or (g) not being a (e(ber of a recognised stoc) exchange or his agent authorised as
such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section / wilfully represents to or induces any person to belie'e that contracts can be entered into or perfor(ed under this Act through hi(3 or (h) not being a (e(ber of a recognised stoc) exchange or his agent authorised as such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section /, can'asses, ad'ertises or touts in any (anner either for hi(self or on behalf of any other persons for any business connected with contracts in contra'ention of any of the pro'isions of this Act3 or (i) Doins, gathers or assists in gathering at any place other than the place of business specified in the bye+laws of a recognised stoc) exchange any person or persons for (a)ing bids or offers or for entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act3 ! 4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which
>! Inserted
by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec $, w0e0f0 %>+0"+ %00/ for ;section /;0 !0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec #, w0e0f0 %%+0%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 ! Substituted for 1shall, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0
(ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: (%) Any person who enters into any contract in contra'ention of the pro'isions contained in section " !%4or who fails to co(ply with the pro'isions of !34section % or section % A: or with the orders of: or section %% !$4or with the orders of the Securities Appellate .ribunal: !"4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 9854e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. ")A. Any person, who is re*uired under this Act or any rules (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to a recognised stoc) exchange, fails to furnish the sa(e within the ti(e specified therefor in the listing agree(ent or conditions or bye+laws of the recognised stoc) exchange, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to (aintain boo)s of account or records, as per the listing agree(ent or conditions, or bye+laws of a recognised stoc) exchange, fails to (aintain the sa(e, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0:
9754e
%lt> for f%il*re ,> % > $er!o to e ter i to % %(ree.e t /ith 'lie t!. ");. If any person, who is re*uired under this Act or any bye+laws of a recognised stoc) exchange (ade thereunder, to enter into an agree(ent with his client, fails to enter into such an agree(ent, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0:
!% Substituted
for 1or who fails to co(ply with the orders of the Securities and 7xchange 8oard of India under section % 2 by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 <rior to !!", ;Securities and 7xchange 8oard of India under section % or Central &o'ern(ent under section %%; were substituted for ;Central &o'ern(ent under section % or section %%; vide .he Schedule, <art II of Securities and 7xchange 8oard of India Act, !!%, w0e0f0 30+0 + !!%0 !3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec #, w0e0f0 #+ %+ !!!0 !" Substituted for 1shall, on con'iction, be punishable with fine which (ay extend to one thousand rupees2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !# Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$ & !/ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$0
9:54e
%lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. ")C. If any stoc) bro)er or sub+bro)er or a co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, after ha'ing been called upon by the Securities and 7xchange 8oard of India or a recognised stoc) exchange in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e stipulated by the Securities and 7xchange 8oard of India or a recognised stoc) exchange, he or it shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 9954e %lt> for f%il*re to !e(re(%te !e'*ritie! or .o e>! of 'lie t or 'lie t!. ")D. If any person, who is registered under section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%) as a stoc) bro)er or sub+bro)er, fails to segregate securities or (oneys of the client or clients or uses the securities or (oneys of a client or clients for self or for any other client, he shall be liable to a penalty not exceeding one crore rupees0: 1==54e %lt> for f%il*re to 'o.$l> /ith $ro+i!io of li!ti ( 'o -itio ! or -eli!ti ( 'o -itio ! or (ro* -!. ")E. If a co(pany or any person (anaging collecti'e in'est(ent sche(e or (utual fund, fails to co(ply with the listing conditions or delisting conditions or grounds or co((its a breach thereof, it or he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0: 1=154e %lt> for e#'e!! -e.%teri%li!%tio or -eli+er> of * li!te- !e'*ritie!. ")2. If any issuer de(aterialises securities (ore than the issued securities of a co(pany or deli'ers in the stoc) exchanges the securities which are not listed in the recognised stoc) exchange or deli'ers securities where no trading per(ission has been gi'en by the recognised stoc) exchange, he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0:
!> Inserted !! Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 00 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0
%+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0
1="54e
%lt> for f%il*re to f*r i!h $erio-i'%l ret*r !, et'. ")G. If a recognised stoc) exchange fails or neglects to furnish periodical returns to the Securities and 7xchange 8oard of India or fails or neglects to (a)e or a(end its rules or bye+laws as directed by the Securities and 7xchange 8oard of India or fails to co(ply with directions issued by the Securities and 7xchange 8oard of India, such recognised stoc) exchange shall be liable to a penalty which (ay extend to twenty+fi'e crore rupees0: 1=)54e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. ")D. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or articles or bye+ laws or the regulations of the recognised stoc) exchange or directions issued by the Securities and 7xchange 8oard of India for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 1=354o/er to %-G*-i'%te. ")0I. ( ) 6or the purpose of adDudging under sections %3A, %38, %3C, %39, %37, %36, %3& and %3I, the Securities and 7xchange 8oard of India shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0: 1=552%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. ")E. Khile adDudging the *uantu( of penalty under section %3+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3
0% Inserted 03 Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec 0$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0" Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 , w0r0e0f0 , w0r0e0f0 , w0r0e0f0
%+ %+ %+ %+
0+%00$0 0+%00$0 0+%00$0 0+%00$0
(b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0: 1=85 Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!.
")EA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 1"A or !e'tio ")0I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%tefor the %lle(e- -ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re %! !$e'ifie,> the ;o%r- * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")L %(%i !t % > or-er $%!!e- ,> the ;o%ror %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 1=75Re'o+er> of %.o* t!. ")E;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 1"A or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H
0# I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30"==7) 0/ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %!
.%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - ThirS'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")L of thi! A't. (") The re'o+er> offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ())Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 0'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 1"A, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1),(") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 1=:5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. ")F. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: 1=95A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")L. ( ) Any person aggrie'ed, by the order or decision of the recogniFed stoc) exchange or the adDudicating officer or any order (ade by the Securities and 7xchange 8oard of India under section $8, (ay prefer an appeal before the Securities Appellate .ribunal and the pro'isions of sections %%8, %%C, %%9 and %%7 of this Act, shall apply, as far as (ay be, to such appeals0 (%) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order or decision is recei'ed by the
appellant and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 (3) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 ($) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the parties to the appeal and to the concerned adDudicating officer0 (") .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: 11=5Offe 'e!. ")@. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws
0> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 0! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
(ade thereunder, for which no punish(ent is pro'ided elsewhere in this Act, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 1115Co.$o!itio of 'ert%i offe 'e!. ")N. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0: 11"54o/er to (r% t i..* it>. ")0O. ( ) .he Central &o'ern(ent (ay, on reco((endation by the Securities and 7xchange 8oard of India, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation,
4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that the reco((endation of the Securities and 7xchange 8oard of India under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under
% Inserted
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
this Act to which such person would ha'e been liable, had not such i((unity been granted0: Offe 'e! ,> 'o.$% ie!. "3. ( ) Khere an offence has been co((itted by a co(pany, e'ery person who, at the ti(e when the offence was co((itted, was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence, and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any gross negligence on the part of any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer of the co(pany, shall also be dee(ed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n0-6or the purpose of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals, and 34(b) 1director2, in relation to(i) a fir(, (eans a partner in the fir(3 (ii) any association of persons or a body of indi'iduals, (eans any (e(ber controlling the affairs thereof0: $4(3) .he pro'isions of this section shall be in addition to, and not in derogation of, the pro'isions of section %%A0: Cert%i offe 'e! to ,e 'o( iL%,le. "5. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, >!> (" of >!>) ", any offence punishable under #4GGG: section %3 shall be dee(ed to be a
cogniFable offence within the (eaning of that Code0
3 Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec /, w0e0f0 %%+%+%0000 <rior to its substitution, sub+clause (b) read as under, N(b) 1director2, in relation to a fir(, (eans a partner in the fir(0J $ Inserted by .he Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec 3, w0e0f0 /+0 + !>#0
iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central &o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or a recognised stoc) exchange or by any person0 >5(")********< 1195E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
ee now the Code of Cri(inal <rocedure, !/3 (% of !/$) 1sub+section ( ) of2 o(itted by the Securities =aws (A(end(ent) Act, %00$, w0e0f0 %+ 0+%00$0 / Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$ & <rior to its substitution section %# read as under ,1%#0 G!ri#dicti$n t$ trF $ffence# !nder thi# Act&-Eo court inferior to that of a presidency (agistrate or a (agistrate of the first class shall ta)e cogniFance of or try any offence punishable under this Act02 > O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JEo court inferior to that of a Court of Session shall try any offence punishable under this Act .K ! I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
" # Kords
/4Co(
A$$e%l % - Re+i!io . "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt. "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel% $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io !. "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< 6: /(99A4(<A Title to -i+i-e -!. "7. ( ) It shall be lawful for the holder of any security whose na(e appears on the boo)s of the co(pany issuing the said security to recei'e and retain any di'idend declared by the co(pany in respect thereof for any year, notwithstanding that the said security has already been transferred by hi( for consideration, unless the transferee who clai(s the di'idend fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the co(pany with the co(pany for being registered in his na(e within fifteen days of the date on which the di'idend beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the di'idend3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security and other docu(ents relating to
the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a co(pany to pay any di'idend which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the co(pany as the holder of the security in respect of which the di'idend has beco(e due3 or (b) the right of the transferee of any security to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security in the na(e of the transferee0 %04Ri(ht to re'ei+e i 'o.e fro. 'olle'ti+e i +e!t.e t !'he.e. "7A. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, whose na(e appears on the boo)s of the collecti'e in'est(ent sche(e issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e declared by the collecti'e in'est(ent sche(e in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e fro( the transfer or has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the collecti'e in'est(ent sche(e with the collecti'e in'est(ent sche(e for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec >, w0e0f0 %%+%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the collecti'e in'est(ent sche(e3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a collecti'e in'est(ent sche(e to pay any inco(e fro( units or other instru(ents issued by the collecti'e in'est(ent sche(e which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the collecti'e in'est(ent sche(e as the holder of the security being
units or other instru(ents issued by the collecti'e in'est(ent sche(e in respect of which the inco(e in respect of units or other instru(ents issued by the collecti'e sche(e has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security being units or other instru(ents issued by the collecti'e in'est(ent sche(e in the na(e of the transferee0: % 4Ri(ht to re'ei+e i 'o.e fro. .*t*%l f* -. "7;. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by any (utual fund, whose na(e appears on the boo)s of the (utual fund issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the (utual fund declared by the (utual fund in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the (utual fund, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the (utual fund fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the (utual fund with the (utual fund for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the (utual fund beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the (utual fund3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the (utual fund, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a (utual fund to pay any inco(e fro( units or other instru(ents issued by the (utual fund which has beco(e due to any person, whose na(e is for the ti(e being registered in the boo)s of the (utual fund as the holder of the security being units or other instru(ents issued by the (utual fund in respect of which the inco(e in respect of units or other instru(ents issued by the (utual fund has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the (utual fund, to enforce against the transferor or any other person, his rights, if any, in relation to the transfer in any case where the (utual fund has refused to register the transfer of the security being units or other instru(ents issued by the (utual fund in the na(e of the transferee0:
1""5A't
ot to %$$l> i 'ert%i '%!e!. ":. ( ) .he pro'isions of this Act shall not apply to(a) the &o'ern(ent, the Reser'e 8an) of India, any local authority or any corporation set up by a special law or any person who has effected any transaction with or through the agency of any such authority as is referred to in this clause3 (b) any con'ertible bond or share warrant or any option or right in relation thereto, in so far as it entitles the person in whose fa'our any of the foregoing has been issued to obtain at his option fro( the co(pany or other body corporate, issuing the sa(e or fro( any of its shareholders or duly appointed agentsJ shares of the co(pany or other body corporate, whether by con'ersion of the bond or warrant or otherwise, on the basis of the price agreed upon when the sa(e was issued0 (%) Kithout preDudice to the pro'isions contained in sub+section ( ), if the Central &o'ern(ent %3 is satisfied that in the interests of trade and co((erce or the
%% Substituted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec 3, w0e0f0 0>+ %+ !"!0
econo(ic de'elop(ent of the country it is necessary or expedient so to do, it (ay, by notification in the Cfficial &aFette, specify any class of contracts as contracts to which this Act or any pro'ision contained therein shall not apply, and also the conditions, li(itations or restrictions, if any, subDect to which it shall not so apply0: 4rote'tio of %'tio t%6e i (oo- f%ith. "9. Eo suit, prosecution or other legal proceeding whatsoe'er shall lie in any court against the go'erning body or any (e(ber, office bearer or ser'ant of any recognised stoc) exchange or against any person or persons appointed under subsection ( ) of section for anything which is in good faith done or intended to be done in pursuance of this Act or of any rules or bye+laws (ade thereunder0 %$44o/er to -ele(%te. "9A. .he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers (except the power under section 30) exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India or the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)0: 4o/er to .%6e r*le!. )=. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for the purpose of carrying into effect the obDects of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for,(a) the (anner in which applications (ay be (ade, the particulars which they should contain and the le'y of a fee in respect of such applications 3 (b) the (anner in which any in*uiry for the purpose of recognising any stoc) exchange (ay be (ade, the conditions which (ay be i(posed for the grant of such recognition, including conditions as to the ad(ission of (e(bers if the
%3 <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %$ Inserted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% and Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec !, w0e0f0 %%+0%+%0000 <rior to its substitution, section %!A read as under , 1%!A0 8$.er t$ delegate&*.he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India02
stoc) exchange concerned is to be the only recognised stoc) exchange in the area3 and the for( in which such recognition shall be granted3 (c) the particulars which should be contained in the periodical returns and annual reports to be furnished to the Central &o'ern(ent3 (d) the docu(ents which should be (aintained and preser'ed under section # and the periods for which they should be preser'ed3 (e) the (anner in which any in*uiry by the go'erning body of a stoc) exchange shall be (ade under section #3 (f) the (anner in which the bye+laws to be (ade or a(ended under this Act shall before being so (ade or a(ended be published for criticis(3 (g) the (anner in which applications (ay be (ade by dealers in securities for licences under section /, the fee payable in respect thereof and the period of such licences, the conditions subDect to which licences (ay be granted, including conditions relating to the for(s which (ay be used in (a)ing contracts, the docu(ents to be (aintained by licensed dealers and the furnishing of periodical infor(ation to such authority as (ay be specified and the re'ocation of licences for breach of conditions3 %"4(h) the re*uire(ents which shall be co(plied with(A) by public co(panies for the purpose of getting their securities listed on any stoc) exchange3 (B) by collecti'e in'est(ent sche(e for the purpose of getting their units listed on any stoc) exchange3: %#4GGG: %/4(ha) the grounds on which the securities of a co(pany (ay be delisted fro( any recognised stoc) exchange under sub+section ( ) of section % A3 (hb) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under sub+section (%) of section % A and the fees payable in respect of such appeal3 (hc) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3
%" Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec 0, w0e0f0 %%+0%+%0000 <rior to its substitution, clause (h) read as under , 1(h) the re*uire(ents which shall be co(plied with by public co(panies for the purpose of getting their securities listed on any stoc) exchange32 %# .he word ;and; o(itted by .he Securities Contracts (Regulation) A(end(ent Act, !>", Sec $, w0e0f0 /+0 + !>#0 %/ Substituted for clause (ha) by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 7arlier clause (ha), as a(ended by the Securities =aws (A(end(ent) Act, !!!, read as
under ,1(ha) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3 and2
(hd) the (anner of in*uiry under sub+section ( ) of section %3+I3 (he) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3= and the fees payable in respect of such appeal3: (i) any other (atter which is to be or (ay be prescribed0 %>4(3) 7'ery rule (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule0: 1"954o/er of Se'*ritie! % - E#'h% (e ;o%r- of I -i% to .%6e re(*l%tio !. )1. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 305(%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,%> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 <rior to its substitution, sub+section (3), as a(ended by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!", read as under , 1(3) 7'ery rule (ade under this section shall, as soon as (ay be, after its publication in the Cfficial &aFette, be laid before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e session aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule02 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0 7arlier it was repealed by the Repealing and A(ending Act, !#0, Sec % and 6irst Sch0 w0e0f0 %>+ %+ !#00 30 Substituted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec ", w0e0f0 %>+ 0"+%00/0 <rior to substitution it read as under , 1(%) In particular and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for the (anner in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section02
(a) the (anner, in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of
publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section3 (b) the eligibility criteria and other re*uire(ents under section /A0 < (3) 7'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the regulation or both Iouses agree that the regulation should not be (ade, the regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that regulation0:
DE4OSITORIES ACT, 1998 SECTIONS /@A81(0 : 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS ). Certificate of co((ence(ent of business by depositories /@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS 3. Agree(ent between depository and participant 5. Ser'ices of depository 8. Surrender of certificate of security 7. Registration of transfer of securities with depositories :. Cptions to recei'e security certificate or hold securities with depository 9. Securities in depositories to be in fungible for( 1=. Rights of depositories and beneficial owner 11. Register of beneficial owner 1". <ledge or hypothecation of securities held in a depository 1). 6urnishing of infor(ation and records by depository and issuer 13. Cption to opt out in respect of any security 15. Act > of >! to apply to depositories 18. 9epositories to inde(nify loss in certain cases 17. Rights and obligations of depositories, etc0 /@A81(0 :: EN9UIRM AND INS4ECTION 1:. <ower of 8oard to call for infor(ation and en*uiry 19. <ower of 8oard to gi'e directions in certain cases 19A. <enalty for failure to furnish infor(ation, return, etc0 19;. <enalty for failure to enter into an agree(ent 19C. <enalty for failure to redress in'estorsJ grie'ances
19D. <enalty for delay in de(aterialisation or issue of certificate of securities 19E. <enalty for failure to reconcile records 192. <enalty for failure to co(ply with directions issued by 8oard under section ! of the Act 19G. <enalty for contra'ention where no separate penalty has been pro'ided 19D. <ower to adDudicate 190I. 6actors to be ta)en into account by adDudicating officer 190IA. Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (! 190I;. Re'o+er> of %.o* t! 190E. Crediting su(s realised by way of penalties to Consolidated 6und of India /@A81(0 D 4ENALTM "=. Cffences "1. Cffences by co(panies /@A81(0 D: @ISCELLANEOUS "". CogniFance of offences by courts ""A. Co(position of certain offences "";. <ower to grant i((unity ""C. E!t%,li!h.e t of S$e'i%l Co*rt! ""D. Offe 'e! tri%,le ,> S$e'i%l Co*rt! ""E. A$$e%l % - re+i!io ""2. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""G. Tr% !itio %l 4ro+i!io ! "). Appeals ")A. Appeal to Securities Appellate .ribunal ")A. Appeal to Securities Appellate .ribunal ");. <rocedure and powers of Securities Appellate .ribunal ")C. Right to =egal Representation ")D. =i(itation ")E. Ci'il court not to ha'e Durisdiction ")2. Appeal to Supre(e Court "3. <ower of Central &o'ern(ent to (a)e rules "5. <ower of 8oard to (a)e regulations "8. <ower of depositories to (a)e bye+laws "7. Rules and regulations to be laid before <arlia(ent ":. Application of other laws not barred "9. Re(o'al of difficulties )=. A(end(ents to certain enact(ents )1. Repeal and sa'ing /@(5A9( A?7E9?7E. .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0: DE4OSITORIES ACT, 1998 5"" O2 1998< 51=th A*(*!t, 1998< An Act to provide $or reg lation o$ depositories in sec rities and $or matters connected there%ith or incidental thereto& B( it enacted bF 8arlia"ent in the E$rtF7#eventh ;ear $f the 0e%!blic $f :ndia a# f$ll$.# ,*
/@A81(0 : 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the 9epositories Act, !!#0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the %0th day of Septe(ber, !!"0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 1beneficial owner2 (eans a person whose na(e is recorded as such with a depository3 (b) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 3 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (c) 1bye+laws2 (eans bye+laws (ade by a depository under section %#3 (d) 1Co(pany =aw 8oard2 (eans the 8oard of Co(pany =aw Ad(inistration constituted under section 07 of the Co(panies Act, !"# ( of !"#)3 (e) 1depository2 (eans a co(pany for(ed and registered under the Co(panies Act, !"# ( of !"#), and which has been granted a certificate of registration under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (f) 1issuer2 (eans any person (a)ing an issue of securities3 (g) 1participant2 (eans a person registered as such under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (h) 1prescribed2 (eans prescribed by rules (ade under this Act3 (i) 1record2 includes the records (aintained in the for( of boo)s or stored in a co(puter or in such other for( as (ay be deter(ined by regulations3 (j) 1registered owner2 (eans a depository whose na(e is entered as such in the register of the issuer3 (k) 1regulations2 (eans the regulations (ade by the 8oard3 4(ka) 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (l) 1security2 (eans such security as (ay be specified by the 8oard3 (") 1ser'ice2 (eans any ser'ice connected with recording of allot(ent of securities or transfer of ownership of securities in the record of a depository0 (%) Kords and expressions used herein and not defined but defined in the Co(panies Act, !"# ( of !"#), or the Securities Contracts (Regulation) Act, !"# ($% of !"#), or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), shall ha'e the (eanings respecti'ely assigned to the( in those Acts0 /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS Certifi'%te of 'o..e 'e.e t of ,*!i e!! ,> -e$o!itorie!. ). ( ) Eo depository shall act as a depository unless it obtains a certificate of co((ence(ent of business fro( the 8oard0 (%) A certificate granted under sub+section ( ) shall be in such for( as (ay be specified by the regulations0 (3) .he 8oard shall not grant a certificate under sub+section ( ) unless it is satisfied that the depository has ade*uate syste(s and safeguards to pre'ent (anipulation of records and transactions , 4ro+i-e- that no certificate shall be refused under this section unless the depository concerned has been gi'en a reasonable opportunity of being heard0
Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
/@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS A(ree.e t ,et/ee -e$o!itor> % - $%rti'i$% t. 3. ( ) A depository shall enter into an agree(ent with one or (ore participants as its agent0 (%) 7'ery agree(ent under sub+section ( ) shall be in such for( as (ay be specified by the bye+laws0 Ser+i'e! of -e$o!itor>. 5. Any person, through a participant, (ay enter into an agree(ent, in such for( as (ay be specified by the bye+laws, with any depository for a'ailing its ser'ices0 S*rre -er of 'ertifi'%te of !e'*rit>. 8. ( ) Any person who has entered into an agree(ent under section " shall surrender the certificate of security, for which he see)s to a'ail the ser'ices of a depository, to the issuer in such (anner as (ay be specified by the regulations0 (%) .he issuer, on receipt of certificate of security under sub+section ( ), shall cancel the certificate of security and substitute in its records the na(e of the depository as a registered owner in respect of that security and infor( the depository accordingly0 (3) A depository shall, on receipt of infor(ation under sub+section (%), enter the na(e of the person referred to in sub+section ( ) in its records, as the beneficial owner0 Re(i!tr%tio of tr% !fer of !e'*ritie! /ith -e$o!itor>. 7. ( ) 7'ery depository shall, on receipt of inti(ation fro( a participant, register the transfer of security in the na(e of the transferee0 (%) If a beneficial owner or a transferee of any security see)s to ha'e custody of such security the depository shall infor( the issuer accordingly0 O$tio ! to re'ei+e !e'*rit> 'ertifi'%te or hol- !e'*ritie! /ith -e$o!itor>. :. ( ) 7'ery person subscribing to securities offered by an issuer shall ha'e the option either to recei'e the security certificates or hold securities with a depository0 (%) Khere a person opts to hold a security with a depository, the issuer shall inti(ate such depository the details of allot(ent of the security, and on receipt of such infor(ation the depository shall enter in its records the na(e of the allottee as the beneficial owner of that security0 Se'*ritie! i -e$o!itorie! to ,e i f* (i,le for.. 9. ( ) All securities held by a depository shall be de(aterialised and shall be in a fungible for(0 %4(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#), shall apply to a depository in respect of securities held by it on behalf of the beneficial owners&: Ri(ht! of -e$o!itorie! % - ,e efi'i%l o/ er. 1=. ( ) Eotwithstanding anything contained in any other law for the ti(e being in force, a depository shall be dee(ed to be the registered owner for the purposes of effecting transfer of ownership of security on behalf of a beneficial owner0 (%) Sa'e as otherwise pro'ided in sub+section ( ), the depository as a registered owner shall not ha'e any 'oting rights or any other rights in respect of securities held by it0 (3) .he beneficial owner shall be entitled to all the rights and benefits and be subDected to all the liabilities in respect of his securities held by a depository0 Re(i!ter of ,e efi'i%l o/ er. 11. 7'ery depository shall (aintain a register and an index of beneficial owners in the
(anner pro'ided in sections "0, " and "% of the Co(panies Act, !"# ( of !"#)0 4le-(e or h>$othe'%tio of !e'*ritie! hel- i % -e$o!itor>. 1". ( ) SubDect to such regulations and bye+laws, as (ay be (ade in this behalf, a beneficial owner (ay with the pre'ious appro'al of the depository create a pledge or hypothecation in respect of a security owned by hi( through a depository0 (%) 7'ery beneficial owner shall gi'e inti(ation of such pledge or hypothecation to the depository and such depository shall thereupon (a)e entries in its records accordingly0 (3) Any entry in the records of a depository under sub+section (%) shall be e'idence of a pledge or hypothecation0 2*r i!hi ( of i for.%tio % - re'or-! ,> -e$o!itor> % - i!!*er. 1). ( ) 7'ery depository shall furnish to the issuer infor(ation about the transfer of securities in the na(e of beneficial owners at such inter'als and in such (anner as (ay be specified by the bye+laws0 (%) 7'ery issuer shall (a)e a'ailable to the depository copies of the rele'ant records in respect of securities held by such depository0 O$tio to o$t o*t i re!$e't of % > !e'*rit>.
% Substituted
by the 9epositories Related =aws (A(end(ent) Act, !!/, Sec %%, w0e0f0 "+0 + !!/0 <rior to its substitution sub+section (%) read as under , 1(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#) shall apply to the securities held by a depository on behalf of the beneficial owners02
13. ( ) If a beneficial owner see)s to opt out of a depository in respect of any security he shall infor( the depository accordingly0 (%) .he depository shall on receipt of inti(ation under sub+section ( ) (a)e appropriate entries in its records and shall infor( the issuer0 (3) 7'ery issuer shall, within thirty days of the receipt of inti(ation fro( the depository and on fulfil(ent of such conditions and on pay(ent of such fees as (ay be specified by the regulations, issue the certificate of securities to the beneficial owner or the transferee, as the case (ay be0 A't 1: of 1:91 to %$$l> to -e$o!itorie!. 15. .he 8an)ersJ 8oo)s 7'idence Act, >! shall apply in relation to a depository as if it were a ban) as defined in section % of that Act0 De$o!itorie! to i -e. if> lo!! i 'ert%i '%!e!. 18. ( ) Kithout preDudice to the pro'isions of any other law for the ti(e being in force, any loss caused to the beneficial owner due to the negligence of the depository or the participant, the depository shall inde(nify such beneficial owner0 (%) Khere the loss due to the negligence of the participant under sub+section ( ) is inde(nified by the depository, the depository shall ha'e the right to reco'er the sa(e fro( such participant0 Ri(ht! % - o,li(%tio ! of -e$o!itorie!, et'. 17. ( ) SubDect to the pro'isions of this Act, the rights and obligations of the depositories, participants and the issuers whose securities are dealt with by a depository shall be specified by the regulations0 (%) .he eligibility criteria for ad(ission of securities into the depository shall be specified by the regulations0 /@A81(0 :D EN9UIRM AND INS4ECTION 4o/er of ;o%r- to '%ll for i for.%tio % - e 7*ir>. 1:. ( ) .he 8oard, on being satisfied that it is necessary in the public interest or in the interest of in'estors so to do, (ay, by order in writing,-
(a) call upon any issuer, depository, participant or beneficial owner to furnish in writing such infor(ation relating to the securities held in a depository as it (ay re*uire3 or (b) authorise any person to (a)e an en*uiry or inspection in relation to the affairs of the issuer, beneficial owner, depository or participant, who shall sub(it a report of such en*uiry or inspection to it within such period as (ay be specified in the order0 (%) 7'ery director, (anager, partner, secretary, officer or e(ployee of the depository or issuer or the participant or beneficial owner shall on de(and produce before the person (a)ing the en*uiry or inspection all infor(ation or such records and other docu(ents in his custody ha'ing a bearing on the subDect+(atter of such en*uiry or inspection0 4o/er of ;o%r- to (i+e -ire'tio ! i 'ert%i '%!e!. 19. Sa'e as pro'ided in this Act, if after (a)ing or causing to be (ade an en*uiry or inspection, the 8oard is satisfied that it is necessary(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any depository or participant being conducted in the (anner detri(ental to the interests of in'estors or securities (ar)et, it (ay issue such directions,(a) to any depository or participant or any person associated with the securities (ar)et3 or (b) to any issuer, as (ay be appropriate in the interest of in'estors or the securities (ar)et0 )5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< $44e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 19A. Any person, who is re*uired under this Act or any rules or regulations or bye+laws (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to the 8oard, fails to furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations or bye+laws, fails to file return or furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0
3I $ Inserted
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the Securities =aws (A(end(ent) Act, %00$, Sec0 /, w0r0e0f0 %+ 0+%00$0
4e %lt> for f%il*re to e ter i to % %(ree.e t. 19;. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and is re*uired under this Act or any rules or regulations (ade thereunder, to enter into an agree(ent, fails to enter into such agree(ent, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0
4e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 19C. If any depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such depository or participant or issuer or its agents or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for -el%> i -e.%teri%li!%tio or i!!*e of 'ertifi'%te of !e'*ritie!. 19D. If any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to de(aterialise or issue the certificate of securities on opting out of a depository by the in'estors, within the ti(e specified under this Act or regulations or bye+laws (ade thereunder or abets in delaying the process of de(aterialisation or issue the certificate of securities on opting out of a depository of securities, such issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to re'o 'ile re'or-!. 19E. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to reconcile the records of de(aterialised securities with all the securities issued by the issuer as specified in the regulations, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to 'o.$l> /ith -ire'tio ! i!!*e- ,> ;o%r- * -er !e'tio 19 of the A't. 192. If any person fails to co(ply with the directions issued by the 8oard under section !, within the ti(e specified by it, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 19G. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations or bye+laws (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0 4o/er to %-G*-i'%te. 19D. ( ) 6or the purpose of adDudging under sections !A, !8, !C, !9, !7, !6 and !&, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the
sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. 190I. Khile adDudging the *uantu( of penalty under section !I, the adDudicating officer shall ha'e due regard to the following factors, na(ely,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 55 Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (!. 190IA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 19, !e'tio 19D, %! the '%!e .%> ,e, .%> file % %$$li'%tio i /riti ( to the ;o%r$ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e-ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h
"I
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re !$e'ifie- ,> the ;o%r* -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")A %(%i !t % > or-er $%!!e- ,> the ;o%r- or the %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 85 Re'o+er> of %.o* t!. 190I;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 19 or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6
%''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hilor !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C!
#I
!erte- ,> The Se'*ritie! L%/! (A.e- .e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
.o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")A of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 19, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 19E. All su(s realiFed by way of penalties under this Act shall be credited to the Consolidated 6und of India0: /@A81(0 D 4ENALTM /4Offe 'e!. "=. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws (ade thereunder, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0
/ Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 >, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %0 read as under,1%00 <ffence#0- Khoe'er contran'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or any regulations or bye+laws (ade thereunder shall be punishable with i(prison(ent for a ter( which (ay extend to fi'e years, or with fine or with both02
(%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with
fine, which (ay extend to twenty+fi'e crore rupees, or with both0: Offe 'e! ,> 'o.$% ie!. "1. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n&-6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and (b) 1director2, in relation to a fir(, (eans a partner in the fir(0 /@A81(0 D: @ISCELLANEOUS >4Co( iL% 'e of offe 'e! ,> 'o*rt!. "". ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central
> Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 !, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %% read as under,1%%0 /$gniCance $f $ffence# bF c$!rt#&*( ) Eo Court shall ta)e cogniFance of any offence punishable under this Act or any regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the 8oard0 (%) Eo court inferior to that of a ?etropolitan ?agistrate or a Dudicial ?agistrate of the first class shall try any offence punishable under this Act02
&o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or by any person0 !5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < Co.$o!itio of 'ert%i offe 'e!. ""A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "";. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any
penalty under this Act with respect to the alleged 'iolation , 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity , 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0: 1=5 E!t%,li!h.e t of S$e'i%l Co*rt!. ""C. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>.
! <rior
to o(ission, Sub+section(%) read 1Eo court inferior to that of a Court of Session shall try any offence punishable under this Act02 0 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. ""D. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-. A$$e%l % - Re+i!io ""E. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""2. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197).
(") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erioof ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! ""G. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< A$$e%l!. "). ( ) Any person aggrie'ed by an order of the 8oard (ade 4before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!: under this Act, or the regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor , 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0 (3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed , 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 %4A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")A. ( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!, under this Act, or the regulations (ade thereunder, 34or by an order (ade by an adDudicating officer under this Act: (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 $5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 8oard is recei'ed by the person referred to in sub+section ( ) and it shall be in such for( and be acco(panied by such fee as (ay be prescribed ,
Substituted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 $, w0e0f0 #+ %+ !!! for ;an order of the 8oard (ade;0 % Sections %3A to %36 inserted by the Securities =aws (Second A(end(ent) Act, !!! , Sec0 ", w0e0f0 #+ %+ !!!& 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %0, w0r0e0f0 %+ 0+%00$0 $ 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JNo %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-e ,> the ;o%r- /ith the 'o !e t of the $%rtie!.K
4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0
($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 (") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. ");. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3 (e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte; (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 Ri(ht to le(%l re$re!e t%tio . ")C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or an attorney of any Iigh Court, and
includes a pleader in practice0 Li.it%tio . ")D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 Ci+il 'o*rt ot to h%+e G*ri!-i'tio . ")E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "4A$$e%l to S*$re.e Co*rt. ")2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order ,
" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 % , w0r0e0f0 %+ 0+%00$0 <rior to its substitution, Section %36, as inserted by Securities =aws (Second A(end(ent) Act, !!!, w0e0f0 #+ %+ !!!, read as under,1%360 A%%eal t$ @igh /$!rt&-Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0:: 4o/er of Ce tr%l Go+er .e t to .%6e r*le!. "3. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for carrying out the pro'isions of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,164(a) the (anner of in*uiry under sub+section ( ) of section !I3 (aa) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %33: (b) the for( in which an appeal (ay be preferred under sub+section (3) of section %3 and the fees payable in respect of such appeal 3 (c) the procedure for disposing of an appeal under sub+section ($) of section %33 /4(d) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3A and the fees payable in respect of such appeal0: 4o/er of ;o%r- to .%6e re(*l%tio !. "5. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the 8oard (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for(a) the for( in which record is to be (aintained under clause ( i) of sub+section ( ) of section %3 (b) the for( in which the certificate of co((ence(ent of business shall be issued under
sub+section (%) of section 33 (c) the (anner in which the certificate of security shall be surrendered under sub+section ( ) of section #3 (d) the (anner of creating a pledge or hypothecation in respect of security owned by a beneficial owner under sub+section ( ) of section %3 (e) the conditions and the fees payable with respect to the issue of certificate of securities under sub+section (3) of section $3
# Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %%, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (a) read as under,1(a) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %332 / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 #, w0e0f0 #+ %+ !!!0
(f) the rights and obligations of the depositories, participants and the issuers under subsection ( ) of section /3 (g) the eligibility criteria for ad(ission of securities into the depository under sub+section (%) of section /0 4o/er of -e$o!itorie! to .%6e ,>e0l%/!. "8. ( ) A depository shall, with the pre'ious appro'al of the 8oard, (a)e bye+laws consistent with the pro'isions of this Act and the regulations0 (%) In particular, and without preDudice to the generality of the foregoing power, such byelaws shall pro'ide for(a) the eligibility criteria for ad(ission and re(o'al of securities in the depository3 (b) the conditions subDect to which the securities shall be dealt with3 (c) the eligibility criteria for ad(ission of any person as a participant3 (d) the (anner and procedure for de(aterialisation of securities3 (e) the procedure for transactions within the depository3 (f) the (anner in which securities shall be dealt with or withdrawn fro( a depository3 (g) the procedure for ensuring safeguards to protect the interests of participants and beneficial owners3 (h) the conditions of ad(ission into and withdrawal fro( a participant by a beneficial owner3 (i) the procedure for con'eying infor(ation to the participants and beneficial owners on di'idend declaration, shareholder (eetings and other (atters of interest to the beneficial owners3 (j) the (anner of distribution of di'idends, interest and (onetary benefits recei'ed fro( the co(pany a(ong beneficial owners3 (k) the (anner of creating pledge or hypothecation in respect of securities held with a depository3 (l) inter #e rights and obligations a(ong the depository, issuer, participants, and beneficial owners3 (") the (anner and the periodicity of furnishing infor(ation to the 8oard, issuer and other persons3 (n) the procedure for resol'ing disputes in'ol'ing depository, issuer, co(pany or a beneficial owner3 ($) the procedure for proceeding against the participant co((itting breach of the regulations and pro'isions for suspension and expulsion of participants fro( the depository and cancellation of agree(ents entered with the depository3 (%) the internal control standards including procedure for auditing, re'iewing and (onitoring0
(3) Khere the 8oard considers it expedient so to do, it (ay, by order in writing, direct a depository to (a)e any bye+laws or to a(end or re'o)e any bye+laws already (ade within such period as it (ay specify in this behalf0 ($) If the depository fails or neglects to co(ply with such order within the specified period, the 8oard (ay (a)e the bye+laws or a(end or re'o)e the bye+laws (ade either in the for( specified in the order or with such (odifications thereof as the 8oard thin)s fit0 R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t. "7. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. ":. .he pro'isions of this Act shall be in addition to, and not in derogation of, any other law for the ti(e being in force relating to the holding and transfer of securities0 Re.o+%l of -iffi'*ltie!. "9. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as appear to it to be necessary or expedient for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of a period of two years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 A.e -.e t! to 'ert%i e %'t.e t!. )=. 40e%ealed bF 0e%ealing H A"ending Act' 20010: Re$e%l % - !%+i (. )1. ( ) .he 9epositories (.hird) Crdinance, !!# (Crd0 %> of !!#), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 /@(5A9( 4 ee section 30: A?7E9?7E.S .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0:
SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 SECTIONS !'APT"R I 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions !'APT"R II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA
). 7stablish(ent and incorporation of 8oard 3. ?anage(ent of the 8oard 5. .er( of office and conditions of ser'ice of Chair(an and (e(bers of the 8oard 8. Re(o'al of (e(ber fro( office 7. ?eetings 7A. ?e(ber not to participate in (eetings in certain cases :. Bacancies, etc0, not to in'alidate proceedings of 8oard 9. Cfficers and e(ployees of the 8oard !'APT"R III TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD 1=. .ransfer of assets, liabilities, etc0, of existing Securities and 7xchange 8oard to the 8oard !'APT"R IV 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 11. 6unctions of 8oard 11A. 8oard to regulate or prohibit issue of prospectus, offer docu(ent or ad'ertise(ent soliciting (oney for issue of securities 11AA. Collecti'e in'est(ent sche(e 11;. <ower to issue directions 11C. In'estigation 11D. Cease and desist proceedings !'APT"R V REGISTRATION CERTI2ICATE 1". Registration of stoc) bro)ers, sub+bro)ers, share transfer agents, etc0
%
!'APT"R VA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 1"A. <rohibition of (anipulati'e and decepti'e de'ices, insider trading and substantial ac*uisition of securities or control !'APT"R VI 2INANCE, ACCOUNTS AND AUDIT 1). &rants by the Central &o'ern(ent 13. 6und 15. Accounts and audit !'APT"R VIA 4ENALTIES AND ADEUDICATION 15A. <enalty for failure to furnish infor(ation, return, etc & 15;. <enalty for failure by any person to enter into agree(ent with clients 15C. <enalty for failure to redress in'estorsJ grie'ances 15D. <enalty for certain defaults in case of (utual funds 15E. <enalty for failure to obser'e rules and regulations by an asset (anage(ent co(pany 152. <enalty for default in case of stoc) bro)ers 15G. <enalty for insider trading 15D. <enalty for non+disclosure of ac*uisition of shares and ta)eo'ers 15DA. <enalty for fraudulent and unfair trade practices 15D;. <enalty for contra'ention where no separate penalty has been pro'ided
150I. <ower to adDudicate 15E. 6actors to be ta)en into account by the AdDudicating Cfficer 15EA. Crediting su(s realised by way of penalties to Consolidated 6und of India 15E;. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! !'APT"R VIB ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL 15F. 7stablish(ent of Securities Appellate .ribunals 15L. Co(position of Securities Appellate .ribunal 15@. Qualification for appoint(ent as <residing Cfficer or ?e(ber of Securities Appellate .ribunal
3
15N. .enure of office of <residing Cfficer and other (e(bers of Securities Appellate .ribunal 150O. Salary and allowances and other ter(s and conditions of ser'ice of <residing Cfficers 154. 6illing up of 'acancies 159. Resignation and re(o'al 15R. Crders constituting Appellate .ribunal to be final and not to in'alidate its proceedings 15S. Staff of the Securities Appellate .ribunal 15T. Appeal to the Securities Appellate .ribunal 15U. <rocedure and powers of the Securities Appellate .ribunal 15I. Right to legal representation 15?. =i(itation 15A. <residing Cfficer, (e(bers and staff of Securities Appellate .ribunals to be public ser'ants 15M. Ci'il Court not to ha'e Durisdiction 15N. Appeal to Supre(e Court !'APT"R VII @ISCELLANEOUS 18. <ower of Central &o'ern(ent to issue directions 17. <ower of Central &o'ern(ent to supersede the 8oard 1:. Returns and reports 19. 9elegation "=. Appeals "=A. 8ar of Durisdiction "1. Sa'ings "". ?e(bers, officers and e(ployees of the 8oard to be public ser'ants "). <rotection of action ta)en in good faith "3. Cffences "3A. Co(position of certain offences "3;. <ower to grant i((unity "5. 7xe(ption fro( tax on wealth and inco(e "8. CogniFance of offences by Courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! "7. Cffences by co(panies
":. 4C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!":
$
":A. Re'o+er> of %.o* t! "9. <ower to (a)e rules )=. <ower to (a)e regulations )1. Rules and regulations to be laid before <arlia(ent )". Application of other laws not barred )). 4Repealed by Repealing R A(ending Act, %00 : )3. <ower to re(o'e difficulties )5. Repeal and sa'ing .I7 SCI79H=7 4Repealed by Repealing R A(ending Act, %00 : SECURITIES AND EACDANGE ;OARD O2 INDIA ACT, 199" 515 O2 199"< 53th A$ril, 199"< A A't to $ro+i-e for the e!t%,li!h.e t of % ;o%r- to $rote't the i tere!t! of i +e!tor! i !e'*ritie! % - to $ro.ote the -e+elo$.e t of, % - to re(*l%te, the !e'*ritie! .%r6et % - for .%tter! 'o e'te- there/ith or i 'i-e t%l thereto B( it enacted bF 8arlia"ent in the E$rtF7third ;ear $f the 0e%!blic $f :ndia a# f$ll$.# , CDA4TER I 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities and 7xchange 8oard of India Act, !!%0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the 30th day of Manuary, !!%0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 33 (b) 1Chair(an2 (eans the Chair(an of the 8oard3 4(ba) 1collecti'e in'est(ent sche(e2 (eans any sche(e or arrange(ent which satisfies the conditions specified in section AA3: (c) 1existing Securities and 7xchange 8oard2 (eans the Securities and 7xchange 8oard of India constituted under the Resolution of the &o'ern(ent of India in the 9epart(ent of 7cono(ic Affairs Eo0 ($$) S7L>#, dated the %th day of April, !>>3 (d) 16und2 (eans the 6und constituted under section $3 (e) 1(e(ber2 (eans a (e(ber of the 8oard and includes the Chair(an3 (f) 1notification2 (eans a notification published in the Cfficial &aFette3 (g) 1prescribed2 (eans prescribed by rules (ade under this Act3
Inserted by the Securities =aws (A(end(ent) Act, !!!, w0e0f0 %%+%+%0000
"
(h) 1regulations2 (eans the regulations (ade by the 8oard under this Act3 4(ha) 1Reser'e 8an)2 (eans the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)3: (i) 1securities2 has the (eaning assigned to it in section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#)0 %4(%) Kords and expressions used and not defined in this Act but defined in the Securities Contracts (Regulation) Act, !"# ($% of !"#) 34or the 9epositories Act, !!#:, shall ha'e the (eanings respecti'ely assigned to the( in that Act:0 CDA4TER II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA E!t%,li!h.e t % - i 'or$or%tio of ;o%r-.
). ( ) Kith effect fro( such date as the Central &o'ern(ent (ay, by notification, appoint, there shall be established, for the purposes of this Act, a 8oard by the na(e of the Securities and 7xchange 8oard of India0 (%) .he 8oard shall be a body corporate by the na(e aforesaid, ha'ing perpetual succession and a co((on seal, with power subDect to the pro'isions of this Act, to ac*uire, hold and dispose of property, both (o'able and i((o'able, and to contract, and shall, by the said na(e, sue or be sued0 (3) .he head office of the 8oard shall be at 8o(bay0 ($) .he 8oard (ay establish offices at other places in India0 @% %(e.e t of the ;o%r-. 3. ( ) .he 8oard shall consist of the following (e(bers, na(ely,(a) a Chair(an3 (b) two (e(bers fro( a(ongst the officials of the $4?inistry: of the Central &o'ern(ent dealing with 6inance "4and ad(inistration of the Co(panies Act, !"# ( of !"#):3 (c) one (e(ber fro( a(ongst the officials of #4the Reser'e 8an):3 /4(d) fi'e other (e(bers of who( at least three shall be the whole+ti(e (e(bers,: to be appointed by the Central &o'ern(ent0
Inserted by the Securities =aws (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0 <rior to its substitution, sub+section (%) reads as under, 1(%) Kords and expressions used and not defined in this Act but defined in the Capital Issues (Control) Act, !$/ or the Securities Contracts Regulation Act, !"# shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts02 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 $ Substituted for 1?inistries2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1and law2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act !3$ (% of !3$)2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 / Substituted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, clause (d) read as, 1(d) two other (e(bers20
% Substituted
#
(%) .he general superintendence, direction and (anage(ent of the affairs of the 8oard shall 'est in a 8oard of (e(bers, which (ay exercise all powers and do all acts and things which (ay be exercised or done by the 8oard0 (3) Sa'e as otherwise deter(ined by regulations, the Chair(an shall also ha'e powers of general superintendence and direction of the affairs of the 8oard and (ay also exercise all powers and do all acts and things which (ay be exercised or done by that 8oard0 ($) .he Chair(an and (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be appointed by the Central &o'ern(ent and the (e(bers referred to in clauses ( b) and (c) of that sub+section shall be no(inated by the Central &o'ern(ent and the 4Reser'e 8an): respecti'ely0 (") .he Chair(an and the other (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be persons of ability, integrity and standing who ha'e shown capacity in dealing with proble(s relating to securities (ar)et or ha'e special )nowledge or experience of law, finance, econo(ics, accountancy, ad(inistration or in any other discipline which, in the opinion of the Central &o'ern(ent, shall be useful to the 8oard0 Ter. of offi'e % - 'o -itio ! of !er+i'e of Ch%ir.% % - .e.,er! of the ;o%r-. 5. ( ) .he ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers referred to in clause (d) of sub+section ( ) of section $ shall be such as (ay be prescribed0 (%) Eotwithstanding anything contained in sub+section ( ), the Central &o'ern(ent shall ha'e the right to ter(inate the ser'ices of the Chair(an or a (e(ber appointed under clause ( d) of
sub+section ( ) of section $, at any ti(e before the expiry of the period prescribed under subsection ( ), by gi'ing hi( notice of not less than three (onths in writing or three (onthsJ salary and allowances in lieu thereof, and the Chair(an or a (e(ber, as the case (ay be, shall also ha'e the right to relin*uish his office, at any ti(e before the expiry of the period prescribed under sub+section ( ), by gi'ing to the Central &o'ern(ent notice of not less than three (onths in writing0 Re.o+%l of .e.,er fro. offi'e. 8. %4G G G: .he Central &o'ern(ent shall re(o'e a (e(ber fro( office if he(a) is, or at any ti(e has been, adDudicated as insol'ent3 (b) is of unsound (ind and stands so declared by a co(petent court3 (c) has been con'icted of an offence which, in the opinion of the Central &o'ern(ent, in'ol'es a (oral turpitude3 (d) 34G G G: (e) has, in the opinion of the Central &o'ern(ent, so abused his position as to render his continuation in office detri(ental to the public interest , 4ro+i-e- that no (e(ber shall be re(o'ed under this clause unless he has been gi'en a reasonable opportunity of being heard in the (atter0
Substituted for 1Reser'e 8an) of India2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 )2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 C(itted, by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to o(ission clause (d) read read as, 1(d) is appointed as a director of a co(pany20
% 1(
/
@eeti (!. 7. ( ) .he 8oard shall (eet at such ti(es and places, and shall obser'e such rules of procedure in regard to the transaction of business at its (eetings (including *uoru( at such (eetings) as (ay be pro'ided by regulations0 (%) .he Chair(an or, if for any reason, he is unable to attend a (eeting of the 8oard, any other (e(ber chosen by the (e(bers present fro( a(ongst the(sel'es at the (eeting shall preside at the (eeting0 (3) All *uestions which co(e up before any (eeting of the 8oard shall be decided by a (aDority 'otes of the (e(bers present and 'oting, and, in the e'ent of an e*uality of 'otes, the Chair(an, or in his absence, the person presiding, shall ha'e a second or casting 'ote0 4@e.,er ot to $%rti'i$%te i .eeti (! i 'ert%i '%!e!. 7A. Any (e(ber, who is a director of a co(pany and who as such director has any direct or indirect pecuniary interest in any (atter co(ing up for consideration at a (eeting of the 8oard, shall, as soon as possible after rele'ant circu(stances ha'e co(e to his )nowledge, disclose the nature of his interest at such (eeting and such disclosure shall be recorded in the proceedings of the 8oard, and the (e(ber shall not ta)e any part in any deliberation or decision of the 8oard with respect to that (atter0: I%'% 'ie!, et'., ot to i +%li-%te $ro'ee-i (! of ;o%r-. :. Eo act or proceeding of the 8oard shall be in'alid (erely by reason of(a) any 'acancy in, or any defect in the constitution of, the 8oard3 or (b) any defect in the appoint(ent of a person acting as a (e(ber of the 8oard3 or (c) any irregularity in the procedure of the 8oard not affecting the (erits of the case0 Offi'er! % - e.$lo>ee! of the ;o%r-. 9. ( ) .he 8oard (ay appoint such other officers and e(ployees as it considers necessary for the efficient discharge of its functions under this Act0 (%) .he ter( and other conditions of ser'ice of officers and e(ployees of the 8oard appointed under sub+section ( ) shall be such as (ay be deter(ined by regulations0 CDA4TER III
TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD Tr% !fer of %!!et!, li%,ilitie!, et'., of e#i!ti ( Se'*ritie! % - E#'h% (e ;o%r- to the ;o%r-. 1=. ( ) Cn and fro( the date of establish(ent of the 8oard,(a) any reference to the existing Securities and 7xchange 8oard in any law other than this Act or in any contract or other instru(ent shall be dee(ed as a reference to the 8oard3 (b) all properties and assets, (o'able and i((o'able, of, or belonging to, the existing Securities and 7xchange 8oard, shall 'est in the 8oard3
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
>
(c) all rights and liabilities of the existing Securities and 7xchange 8oard shall be transferred to, and be the rights and liabilities of, the 8oard3 (d) without preDudice to the pro'isions of clause (c), all debts, obligations and liabilities incurred, all contracts entered into and all (atters and things engaged to be done by, with or for the existing Securities and 7xchange 8oard i((ediately before that date, for or in connection with the purpose of the said existing 8oard shall be dee(ed to ha'e been incurred, entered into, or engaged to be done by, with or for, the 8oard3 (e) all su(s of (oney due to the existing Securities and 7xchange 8oard i((ediately before that date shall be dee(ed to be due to the 8oard3 (f) all suits and other legal proceedings instituted or which could ha'e been instituted by or against the existing Securities and 7xchange 8oard i((ediately before that date (ay be continued or (ay be instituted by or against the 8oard3 and (g) e'ery e(ployee holding any office under the existing Securities and 7xchange 8oard i((ediately before that date shall hold his office in the 8oard by the sa(e tenure and upon the sa(e ter(s and conditions of ser'ice as respects re(uneration, lea'e, pro'ident fund, retire(ent and other ter(inal benefits as he would ha'e held such office if the 8oard had not been established and shall continue to do so as an e(ployee of the 8oard or until the expiry of the period of six (onths fro( that date if such e(ployee opts not to be the e(ployee of the 8oard within such period0 (%) Eotwithstanding anything contained in the Industrial 9isputes Act, !$/ ( $ of !$/), or in any other law for the ti(e being in force, absorption of any e(ployee by the 8oard in its regular ser'ice under this section shall not entitle such e(ployee to any co(pensation under that Act or other law and no such clai( shall be entertained by any court, tribunal or other authority0 CDA4TER II 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 2* 'tio ! of ;o%r-. 11. ( ) SubDect to the pro'isions of this Act, it shall be the duty of the 8oard to protect the interests of in'estors in securities and to pro(ote the de'elop(ent of, and to regulate the securities (ar)et, by such (easures as it thin)s fit0 (%) Kithout preDudice to the generality of the foregoing pro'isions, the (easures referred to therein (ay pro'ide for(a) regulating the business in stoc) exchanges and any other securities (ar)ets3 (b) registering and regulating the wor)ing of stoc) bro)ers, sub+bro)ers, share transfer agents, ban)ers to an issue, trustees of trust deeds, registrars to an issue, (erchant ban)ers, underwriters, portfolio (anagers, in'est(ent ad'isers and such other inter(ediaries who (ay be associated with securities (ar)ets in any (anner3 4(ba) registering and regulating the wor)ing of the depositories, %4participants:, custodians of securities, foreign institutional in'estors, credit rating agencies and such other inter(ediaries as the 8oard (ay, by notification, specify in this behalf3: (c) registering and regulating the wor)ing of 4'enture capital funds and collecti'e
in'est(ent sche(es:, including (utual funds3
% Inserted
Inserted by Securities =aws (A(end(ent) Act !!", w0r0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+!+ !!"0
!
(d) pro(oting and regulating self+regulatory organisations3 (e) prohibiting fraudulent and unfair trade practices relating to securities (ar)ets3 (f) pro(oting in'estorsJ education and training of inter(ediaries of securities (ar)ets3 (g) prohibiting insider trading in securities3 (h) regulating substantial ac*uisition of shares and ta)e o'er of co(panies3 (i) calling for infor(ation fro(, underta)ing inspection, conducting in*uiries and audits of the %4stoc) exchanges, (utual funds, other persons associated with the securities (ar)et:, inter(ediaries and self+regulatory organisations in the securities (ar)et3 34(ia) '%lli ( for i for.%tio % - re'or-! fro. % > $er!o i 'l*-i ( % > ,% 6 or % > other %*thorit> or ,o%r- or 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l or St%te A't /hi'h, i the o$i io of the ;o%r-, !h%ll ,e rele+% t to % > i +e!ti(%tio or i 7*ir> ,> the ;o%r- i re!$e't of % > tr% !%'tio i !e'*ritie! 3: $5(i,) '%lli ( for i for.%tio fro., or f*r i!hi ( i for.%tio to, other %*thoritie!, /hether i I -i% or o*t!i-e I -i%, h%+i ( f* 'tio ! !i.il%r to tho!e of the ;o%r-, i the .%tter! rel%ti ( to the $re+e tio or -ete'tio of +iol%tio ! i re!$e't of !e'*ritie! l%/!, !*,Ge't to the $ro+i!io ! of other l%/! for the ti.e ,ei ( i for'e i thi! re(%r-& 4ro+i-e- th%t the ;o%r-, for the $*r$o!e of f*r i!hi ( % > i for.%tio to % > %*thorit> o*t!i-e I -i%, .%> e ter i to % %rr% (e.e t or %(ree.e t or * -er!t% -i ( /ith !*'h %*thorit> /ith the $rior %$$ro+%l of the Ce tr%l Go+er .e tH< (j) perfor(ing such functions and exercising such powers under the pro'isions of "4G G G: the Securities Contracts (Regulation) Act, !"# ($% of !"#), as (ay be delegated to it by the Central &o'ern(ent3 (k) le'ying fees or other charges for carrying out the purposes of this section3 (l) conducting research for the abo'e purposes3 #4(la) calling fro( or furnishing to any such agencies, as (ay be specified by the 8oard, such infor(ation as (ay be considered necessary by it for the efficient discharge of its functions3: (") perfor(ing such other functions as (ay be prescribed0 /4(%A) Kithout preDudice to the pro'isions contained in sub+section (%), the 8oard (ay ta)e (easures to underta)e inspection of any boo), or register, or other docu(ent or record of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard
Substituted for 1collecti'e in'est(ent sche(es2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % Substituted for 1stoc) exchanges and2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 S*,!tit*te- for J'%lli ( for i for.%tio % - re'or- fro. % > ,% 6 or % > other %*thorit> or ,o%ror 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l, St%te or 4ro+i 'i%l A't i re!$e't of % > tr% !%'tio i !e'*ritie! /hi'h i! * -er i +e!ti(%tio or i 7*ir> ,> the ;o%r-K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). E%rlier Se'tio 11(")(i%) /%! i !erte- ,> the SE;I (A.e -.e t) A't, "==" /.e.f. "901=0"=="0 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. =80=)0 199:) " .he words 1the Capital Issues (Control) Act, !$/ (%! of !$/) and2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
0
has reasonable grounds to belie'e that such co(pany has been indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et0: 4(3) Eotwithstanding anything contained in any other law for the ti(e being in force while exercising the powers under %4clause (i) or clause (ia) of sub+section (%) or sub+ section (2A):, the 8oard shall ha'e the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(i) the disco'ery and production of boo)s of account and other docu(ents, at such place and such ti(e as (ay be specified by the 8oard3 (ii) su((oning and enforcing the attendance of persons and exa(ining the( on oath3 (iii) inspection of any boo)s, registers and other docu(ents of any person referred to in section %, at any place3: 34(iv) inspection of any boo), or register, or other docu(ent or record of the co(pany referred to in sub+section (%A)3 (v) issuing co((issions for the exa(ination of witnesses or docu(ents0: $4($) Kithout preDudice to the pro'isions contained in sub+sections ( ), (%), (%A) and (3) and section 8, the 8oard (ay, by an order, for reasons to be recorded in writing, in the interests of in'estors or securities (ar)et, ta)e any of the following (easures, either pending in'estigation or in*uiry or on co(pletion of such in'estigation or in*uiry, na(ely,(a) suspend the trading of any security in a recognised stoc) exchange3 (b) restrain persons fro( accessing the securities (ar)et and prohibit any person associated with securities (ar)et to buy, sell or deal in securities3 (c) suspend any office+bearer of any stoc) exchange or self+regulatory organisation fro( holding such position3 (d) i(pound and retain the proceeds or securities in respect of any transaction which is under in'estigation3 (e) attach, after passing of an order on an application (ade for appro'al by the Mudicial ?agistrate of the first class ha'ing Durisdiction, for a period not exceeding one (onth, one or (ore ban) account or accounts of any inter(ediary or any person associated with the securities (ar)et in any (anner in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder , 4ro+i-e- that only the ban) account or accounts or any transaction entered therein, so far as it relates to the proceeds actually in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder shall be allowed to be attached3 (f) direct any inter(ediary or any person associated with the securities (ar)et in any (anner not to dispose of or alienate an asset for(ing part of any transaction which is under in'estigation , 4ro+i-e- that the 8oard (ay, without preDudice to the pro'isions contained in sub+section (%) or sub+section (%A), ta)e any of the (easures specified in clause ( d) or clause (e) or clause (f), in respect of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard has reasonable grounds to belie'e that such co(pany has been
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1clause (i) of sub+section (%)2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 3 Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 $ Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
% Substituted
indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et , 4ro+i-e- f*rther that the 8oard shall, either before or after passing such orders, gi'e an
opportunity of hearing to such inter(ediaries or persons concerned0: 15(5) The %.o* t -i!(or(e-, $*r!*% t to % -ire'tio i!!*e- * -er !e'tio 11; or !e'tio 1"A of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 or !e'tio 19 of the De$o!itorie! A't, 1998, %! the '%!e .%> ,e, !h%ll ,e 're-ite- to the I +e!tor 4rote'tio % - E-*'%tio 2* e!t%,li!he- ,> the ;o%r- % - !*'h %.o* t !h%ll ,e *tiliLe- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< %4;o%r- to re(*l%te or $rohi,it i!!*e of $ro!$e't*!, offer -o'*.e t or %-+erti!e.e t !oli'iti ( .o e> for i!!*e of !e'*ritie!. 11A. ( ) Kithout preDudice to the pro'isions of the Co(panies Act, !"# ( of !"#), the 8oard (ay, for the protection of in'estors,(a) specify, by regulations(i) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (ii) the (anner in which such (atters shall be disclosed by the co(panies3 (b) by general or special orders(i) prohibit any co(pany fro( issuing prospectus, any offer docu(ent, or ad'ertise(ent soliciting (oney fro( the public for the issue of securities3 (ii) specify the conditions subDect to which the prospectus, such offer docu(ent or ad'ertise(ent, if not prohibited, (ay be issued0 (%) Kithout preDudice to the pro'isions of section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the 8oard (ay specify the re*uire(ents for listing and transfer of securities and other (atters incidental thereto0: 34Colle'ti+e i +e!t.e t !'he.e. 11AA. ( ) Any sche(e or arrange(ent which satisfies the conditions referred to in subsection (%) $5or !*,0!e'tio ("A)< shall be a collecti'e in'est(ent sche(e0 "44ro+i-e- th%t % > $ooli ( of f* -! * -er % > !'he.e or %rr% (e.e t, /hi'h i! ot re(i!tere- /ith the ;o%r- or i! ot 'o+ere- * -er !*,0!e'tio ()), i +ol+i ( %
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 7arlier S0 A was inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" for S0 A0 <rior to its substitution, S0 A read as under,+ 1 A0 ?atters to be disclosed by the co(panies0+ Kithout <reDudice to the <ro'isions of the Co(panies Act , !"# ( of !"#), the board (ay , for the protection of in'estors, specify, by regulations,+ (a) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (b) the (anner in which such (atters, shall be disclosed by the co(panies02 3 Inserted by S78I (A(end(ent) Act !!!, w0e0f0 %%+%+%0000 $I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% Substituted
%
'or$*! %.o* t of o e h* -re- 'rore r*$ee! or .ore !h%ll ,e -ee.e- to ,e % 'olle'ti+e i +e!t.e t !'he.e.< (%) Any sche(e or arrange(ent (ade or offered by any 5$er!o < under which,(i) the contributions, or pay(ents (ade by the in'estors, by whate'er na(e called, are pooled and utiliFed for the purposes of the sche(e or arrange(ent3 (ii) the contributions or pay(ents are (ade to such sche(e or arrange(ent by the in'estors with a 'iew to recei'e profits, inco(e, produce or property, whether (o'able or i((o'able, fro( such sche(e or arrange(ent3 (iii) the property, contribution or in'est(ent for(ing part of sche(e or arrange(ent, whether identifiable or not, is (anaged on behalf of the in'estors3
(iv) the in'estors do not ha'e day+to+day control o'er the (anage(ent and operation of the sche(e or arrange(ent0 "5("A)< A > !'he.e or %rr% (e.e t .%-e or offere- ,> % > $er!o !%ti!f>i ( the 'o -itio ! %! .%> ,e !$e'ifie- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< (3) Eotwithstanding anything contained in sub+section (%) 35or !*,0!e'tio ("A)<, any sche(e or arrange(ent(i) (ade or offered by a co+operati'e society registered under the Co+operati'e Societies Act, ! % (% of ! %) or a society being a society registered or dee(ed to be registered under any law relating to co+operati'e societies for the ti(e being in force in any State3 (ii) under which deposits are accepted by non+ban)ing financial co(panies as defined in clause (f) of section $"+I of the Reser'e 8an) of India Act, !3$ (% of !3$)3 (iii) being a contract of insurance to which the Insurance Act, !3> ($ of !3>), applies3 (iv) pro'iding for any Sche(e, <ension Sche(e or the Insurance Sche(e fra(ed under the 7(ployees <ro'ident 6und and ?iscellaneous <ro'isions Act, !"% ( ! of !"%)3 (v) under which deposits are accepted under section ">A of the Co(panies Act, !"# ( of !"#)3 (vi) under which deposits are accepted by a co(pany declared as a Eidhi or a (utual benefit society under section #%0A of the Co(panies Act, !"# ( of !"#)3 (vii) falling within the (eaning of Chit business as defined in clause ( d) of section % of the Chit 6und Act, !>% ($0 of !>%)3 (viii) under which contributions (ade are in the nature of subscription to a (utual fund3 35(i#) !*'h other !'he.e or %rr% (e.e t /hi'h the Ce tr%l Go+er .e t .%>, i 'o !*lt%tio /ith the ;o%r-, otif>H< shall not be a collecti'e in'est(ent sche(e0: "54o/er to i!!*e -ire'tio !. 11;. Sa'e as otherwise pro'ided in section , if after (a)ing or causing to be (ade an en*uiry, the 8oard is satisfied that it is necessary,S*,!tit*te- for J'o.$% >K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) 3I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
%I
3
(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any inter(ediary or other persons referred to in section % being conducted in a (anner detri(ental to the interest of in'estors or securities (ar)et3 or (iii) to secure the proper (anage(ent of any such inter(ediary or person, it (ay issue such directions,(a) to any person or class of persons referred to in section %, or associated with the securities (ar)et3 or (b) to any co(pany in respect of (atters specified in section A, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 15E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< %4I +e!ti(%tio . 11C. ( ) Khere the 8oard has reasonable ground to belie'e that-
(a) the transactions in securities are being dealt with in a (anner detri(ental to the in'estors or the securities (ar)et3 or (b) any inter(ediary or any person associated with the securities (ar)et has 'iolated any of the pro'isions of this Act or the rules or the regulations (ade or directions issued by the 8oard thereunder, it (ay, at any ti(e by order in writing, direct any person (hereafter in this section referred to as the In'estigating Authority) specified in the order to in'estigate the affairs of such inter(ediary or persons associated with the securities (ar)et and to report thereon to the 8oard0 (%) Kithout preDudice to the pro'isions of sections %3" to %$ of the Co(panies Act, !"# ( of !"#), it shall be the duty of e'ery (anager, (anaging director, officer and other e(ployee of the co(pany and e'ery inter(ediary referred to in section % or e'ery person associated with the securities (ar)et to preser'e and to produce to the In'estigating Authority or any person authorised by it in this behalf, all the boo)s, registers, other docu(ents and record of, or relating to, the co(pany or, as the case (ay be, of or relating to, the inter(ediary or such person, which are in their custody or power0 (3) .he In'estigating Authority (ay re*uire any inter(ediary or any person associated with securities (ar)et in any (anner to furnish such infor(ation to, or produce such boo)s, or registers, or other docu(ents, or record before hi( or any person authorised by it in this behalf as it (ay consider necessary if the furnishing of such infor(ation or the production of such boo)s, or registers, or other docu(ents, or record is rele'ant or necessary for the purposes of its in'estigation0 ($) .he In'estigating Authority (ay )eep in its custody any boo)s, registers, other docu(ents and record produced under sub+section (%) or sub+section (3) for six (onths and thereafter
% Inserted
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
$
shall return the sa(e to any inter(ediary or any person associated with securities (ar)et by who( or on whose behalf the boo)s, registers, other docu(ents and record are produced , 4ro+i-e- that the In'estigating Authority (ay call for any boo), register, other docu(ent and record if they are needed again , 4ro+i-e- f*rther that if the person on whose behalf the boo)s, registers, other docu(ents and record are produced re*uires certified copies of the boo)s, registers, other docu(ents and record produced before the In'estigating Authority, it shall gi'e certified copies of such boo)s, registers, other docu(ents and record to such person or on whose behalf the boo)s, registers, other docu(ents and record were produced0 (") Any person, directed to (a)e an in'estigation under sub+section ( ), (ay exa(ine on oath, any (anager, (anaging director, officer and other e(ployee of any inter(ediary or any person associated with securities (ar)et in any (anner, in relation to the affairs of his business and (ay ad(inister an oath accordingly and for that purpose (ay re*uire any of those persons to appear before it personally0 (#) If any person fails without reasonable cause or refuses(a) to produce to the In'estigating Authority or any person authorised by it in this behalf any boo), register, other docu(ent and record which is his duty under sub+section (%) or sub+section (3) to produce3 or (b) to furnish any infor(ation which is his duty under sub+section (3) to furnish3 or (c) to appear before the In'estigating Authority personally when re*uired to do so under sub+section (") or to answer any *uestion which is put to hi( by the In'estigating Authority in pursuance of that sub+section3 or (d) to sign the notes of any exa(ination referred to in sub+section (/), he shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with
fine, which (ay extend to one crore rupees, or with both, and also with a further fine which (ay extend to fi'e la)h rupees for e'ery day after the first during which the failure or refusal continues0 (/) Eotes of any exa(ination under sub+section (") shall be ta)en down in writing and shall be read o'er to, or by, and signed by, the person exa(ined, and (ay thereafter be used in e'idence against hi(0 4(:) ?here i the 'o*r!e of % i +e!ti(%tio , the I +e!ti(%ti ( A*thorit> h%! re%!o to ,elie+e th%t % > $er!o or e ter$ri!e, %! the '%!e .%> ,e, to /ho. % oti'e * -er !*,!e'tio ()) h%! ,ee i!!*e- or .i(ht ,e i!!*e-, 0 (%) h%! o.itte- or f%ile- to $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! %! re7*irei the oti'eH or (,) /o*l- ot $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! /hi'h !h%ll ,e *!ef*l for, or rele+% t to, the i +e!ti(%tio H or (') /o*l- -e!tro>, .*til%te, %lter, f%l!if> or !e'rete the i for.%tio or -o'*.e t! *!ef*l for, or rele+% t to, the i +e!ti(%tio ,
S*,!tit*te- for JKhere in the course of in'estigation, the In'estigating Authority has reasonable ground to belie'e that the boo)s, registers, other docu(ents and record of, or relating to, any inter(ediary or any person associated with securities (ar)et in any (anner, (ay be destroyed, (utilated, altered, falsified or secreted, the In'estigating Authority (ay (a)e an application to the Mudicial ?agistrate of the first class ha'ing Durisdiction for an order for the seiFure of such boo)s, registers, other docu(ents and record K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
"
the , the Ch%ir.% .%>, %fter ,ei ( !%ti!fie- th%t it i! e'e!!%r> to -o !o, %*thoriLe the I +e!ti(%ti ( A*thorit> or % > other offi'er of the ;o%r- (the offi'er !o %*thoriLe- i %ll '%!e! ,ei ( herei %fter referre- to %! the %*thori!e- offi'er), to0 (i) e ter % - !e%r'h, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft /here !*'h i for.%tio or -o'*.e t! %re e#$e'te- or ,elie+e- to ,e 6e$tH (ii) ,re%6 o$e the lo'6 of % > -oor, ,o#, lo'6er, !%fe, %l.ir%h or other re'e$t%'le for e#er'i!i ( the $o/er! 'o ferre- ,> !*,0'l%*!e (i), /here the 6e>! thereof %re ot %+%il%,leH (iii) !e%r'h % > $er!o /ho h%! (ot o*t of, or i! %,o*t to (et i to, or i! i , the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft, if the %*thoriLe- offi'er h%! re%!o to !*!$e't th%t !*'h $er!o h%! !e'rete- %,o*t hi! $er!o % > !*'h ,oo6! of %''o* t or other -o'*.e t!H (i+) re7*ire % > $er!o /ho i! fo* - to ,e i $o!!e!!io or 'o trol of % > ,oo6! of %''o* t or other -o'*.e t!, .%i t%i e- i the for. of ele'tro i' re'or-, to $ro+i-e the %*thori!e- offi'er the e'e!!%r> f%'ilit> to i !$e't !*'h ,oo6! of %''o* t or other -o'*.e t!. "#planation0 2or the $*r$o!e of thi! !*,0'l%*!e, the e#$re!!io Jele'tro i' re'or-K !h%ll h%+e the .e% i ( %!!i( e- to it i 'l%*!e (t) of !*,0!e'tio (1) of !e'tio " of the I for.%tio Te'h olo(> A't, "===. (+) !eiLe % > !*'h ,oo6! of %''o* t or other -o'*.e t! fo* - %! % re!*lt of !*'h !e%r'hH (+i) $l%'e .%r6! of i-e tifi'%tio o % > ,oo6! of %''o* t or other -o'*.e t! or .%6e or '%*!e to ,e .%-e e#tr%'t! or 'o$ie! therefro.H (+ii) re'or- o o%th the !t%te.e t of % > $er!o /ho i! fo* - to ,e i $o!!e!!io or i 'o trol of the i for.%tio or -o'*.e t! referre- to i !*,0'l%*!e! (i), (iii) % - (i+).< 4(9) The ;o%r- .%> .%6e re(*l%tio ! i rel%tio to % > !e%r'h or !eiL*re * -er thi! !e'tio H % - i $%rti'*l%r, /itho*t $reG*-i'e to the (e er%lit> of the fore(oi ( $o/er, !*'h re(*l%tio ! .%> $ro+i-e for the $ro'e-*re to ,e follo/e- ,> the %*thori!e- offi'er0
(%) for o,t%i i ( i (re!! i to % > ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft to ,e !e%r'he- /here free i (re!! thereto i! ot %+%il%,leH
1 S*,!tit*te-
,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) for the follo/i (& JAfter 'o !i-eri ( the %$$li'%tio % - he%ri ( the I +e!ti(%ti ( A*thorit>, if e'e!!%r>, the @%(i!tr%te .%>, ,> or-er, %*thori!e the I +e!ti(%ti ( A*thorit>O (a) to e ter, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the $l%'e or $l%'e! /here !*'h ,oo6!, re(i!ter!, other -o'*.e t! % - re'or- %re 6e$tH (b) to !e%r'h th%t $l%'e or tho!e $l%'e! i the .% er !$e'ifie- i the or-erH % (c) to !eiLe ,oo6!, re(i!ter!, other -o'*.e t! % - re'or-, it 'o !i-er! e'e!!%r> for the $*r$o!e! of the i +e!ti(%tio & 4ro+i-e- th%t the @%(i!tr%te !h%ll ot %*thori!e !eiL*re of ,oo6!, re(i!ter!, other -o'*.e t! % re'or-, of % > li!te- $*,li' 'o.$% > or % $*,li' 'o.$% > ( ot ,ei ( the i ter.e-i%rie! !$e'ifie* -er !e'tio 1") /hi'h i te -! to (et it! !e'*ritie! li!te- o % > re'o( i!e- !to'6 e#'h% (e * le!! !*'h 'o.$% > i -*l(e! i i !i-er tr%-i ( or .%r6et .% i$*l%tio .K
#
(,) for e !*ri ( !%fe '*!to-> of % > ,oo6! of %''o* t or other -o'*.e t! or %!!et! !eiLe-.< ( 0) .he In'estigating Authority shall )eep in its custody the boo)s, registers, other docu(ents and record seiFed under this section for such period not later than the conclusion of the in'estigation as it considers necessary and thereafter shall return the sa(e to the co(pany or the other body corporate, or, as the case (ay be, to the (anaging director or the (anager or any other person, fro( whose custody or power they were seiFed 5***<, 4ro+i-e- that the In'estigating Authority (ay, before returning such boo)s, registers, other docu(ents and record as aforesaid, place identification (ar)s on the( or any part thereof0 ( ) Sa'e as otherwise pro'ided in this section, e'ery search or seiFure (ade under this section shall be carried out in accordance with the pro'isions of the Code of Cri(inal <rocedure, !/3 (% of !/$) relating to searches or seiFures (ade under that Code0 Ce%!e % - -e!i!t $ro'ee-i (!. 11D. If the 8oard finds, after causing an in*uiry to be (ade, that any person has 'iolated, or is li)ely to 'iolate, any pro'isions of this Act, or any rules or regulations (ade thereunder, it (ay pass an order re*uiring such person to cease and desist fro( co((itting or causing such 'iolation, 4ro+i-e- that the 8oard shall not pass such order in respect of any listed public co(pany or a public co(pany (other than the inter(ediaries specified under section %) which intends to get its securities listed on any recognised stoc) exchange unless the 8oard has reasonable grounds to belie'e that such co(pany has indulged in insider trading or (ar)et (anipulation0: CDA4TER I REGISTRATION CERTI2ICATE Re(i!tr%tio of !to'6 ,ro6er!, !*,0,ro6er!, !h%re tr% !fer %(e t!, et'. 1". ( ) Eo stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et shall buy, sell or deal in securities except under, and in accordance with, the conditions of a certificate of registration obtained fro( the 8oard in accordance with the %4regulations: (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et i((ediately before the establish(ent of the 8oard for which no registration certificate was
necessary prior to such establish(ent, (ay continue to do so for a period of three (onths fro( such establish(ent or, if he has (ade an application for such registration within the said period of three (onths, till the disposal of such application,
The /or-! P% - i for. the @%(i!tr%te of !*'h ret*r P, o.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) % Substituted for 1rules2 by Securities =aw (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0
/
44ro+i-e- f*rther that any certificate of registration, obtained i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", shall be dee(ed to ha'e been obtained fro( the 8oard in accordance with the regulations pro'iding for such registration0 ( A) Eo depository, %4participant,: custodian of securities, foreign institutional in'estor, credit rating agency, or any other inter(ediary associated with the securities (ar)et as the 8oard (ay by notification in this behalf specify, shall buy or sell or deal in securities except under and in accordance with the conditions of a certificate of registration obtained fro( the 8oard in accordance with the regulations (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a depository, 34participant,: custodian of securities, foreign institutional in'estor or credit rating agency i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to buy or sell securities or otherwise deal with the securities (ar)et until such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300 ( 8) Eo person shall sponsor or cause to be sponsored or carry on or caused to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es including (utual funds, unless he obtains a certificate of registration fro( the 8oard in accordance with the regulations, 4ro+i-e- that any person sponsoring or causing to be sponsored, carrying or causing to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es operating in the securities (ar)et i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to operate till such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300:
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0
% Inserted
>
4()%lanati$n7 6or the re(o'al of doubts, it is hereby declared that, for purposes of this section, a collecti'e in'est(ent sche(e or (utual fund shall not be include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(ponent of in'est(ent besides the co(ponent of insurance issued by the insurer0: (%) 7'ery application for registration shall be in such (anner and on pay(ent of such fees as (ay be deter(ined by regulations0 (3) .he 8oard (ay, by order, suspend or cancel a certificate of registration in such (anner as (ay be deter(ined by regulations, 4ro+i-e- that no order under this sub+section shall be (ade unless the person concerned has been gi'en a reasonable opportunity of being heard0 %4CIA<.7R BA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 4rohi,itio of .% i$*l%ti+e % - -e'e$ti+e -e+i'e!, i !i-er tr%-i ( % - !*,!t% ti%l %'7*i!itio of !e'*ritie! or 'o trol.
1"A. Eo person shall directly or indirectly(a) use or e(ploy, in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recogniFed stoc) exchange, any (anipulati'e or decepti'e de'ice or contri'ance in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3
Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, w0r0e0f !+$+ %0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, reads as under, /@A81(0 D: ?ISC7==AE7CHS #0 Balidation+ Eotwithstanding anything contained in any Dudg(ent, decree or order of any court, tribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 Repeal and sa'ings + (1) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (2) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0 % Chapter BA inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
!
(b) e(ploy any de'ice, sche(e or artifice to defraud in connection with issue or dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange3 (c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange, in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (d) engage in insider trading3 (e) deal in securities while in possession of (aterial or non+public infor(ation or co((unicate such (aterial or non+public infor(ation to any other person, in a (anner which is in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (f) ac*uire control of any co(pany or securities (ore than the percentage of e*uity share capital of a co(pany whose securities are listed or proposed to be listed on a recognised stoc) exchange in contra'ention of the regulations (ade under this Act0: CDA4TER II 2INANCE, ACCOUNTS AND AUDIT Gr% t! ,> the Ce tr%l Go+er .e t. 1). .he Central &o'ern(ent (ay, after due appropriation (ade by <arlia(ent by law in this behalf, (a)e to the 8oard grants of such su(s of (oney as that &o'ern(ent (ay thin) fit for being utiliFed for the purposes of this Act0 2* -. 13. ( ) .here shall be constituted a 6und to be called the Securities and 7xchange 8oard of
India &eneral 6und and there shall be credited thereto(a) all grants, fees and charges recei'ed by the 8oard under this Act3 4G G G: (aa) %4G G G: (b) all su(s recei'ed by the 8oard fro( such other sources as (ay be decided upon by the Central &o'ern(ent0 (%) .he 6und shall be applied for (eeting(a) the salaries, allowances and other re(uneration of the (e(bers, officers and other e(ployees of the 8oard3 (b) the expenses of the 8oard in the discharge of its functions under section 3 (c) the expenses on obDects and for purposes authorised by this Act0
.he word 1and2 o(itted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 (aa) o(itted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 It was inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Clause (aa) reads as under,+ 1(aa) all su(s realiFed by way of <enalties under this Act3 and20
% Clause
%0
A''o* t! % - %*-it. 15. ( ) .he 8oard shall (aintain proper accounts and other rele'ant records and prepare an annual state(ent of accounts in such for( as (ay be prescribed by the Central &o'ern(ent in consultation with the Co(ptroller and Auditor+&eneral of India0 (%) .he accounts of the 8oard shall be audited by the Co(ptroller and Auditor+&eneral of India at such inter'als as (ay be specified by hi( and any expenditure incurred in connection with such audit shall be payable by the 8oard to the Co(ptroller and Auditor+&eneral of India0 (3) .he Co(ptroller and Auditor+&eneral of India and any other person appointed by hi( in connection with the audit of the accounts of the 8oard shall ha'e the sa(e rights and pri'ileges and authority in connection with such audit as the Co(ptroller and Auditor+ &eneral generally has in connection with the audit of the &o'ern(ent accounts and, in particular, shall ha'e the right to de(and the production of boo)s, accounts, connected 'ouchers and other docu(ents and papers and to inspect any of the offices of the 8oard0 ($) .he accounts of the 8oard as certified by the Co(ptroller and Auditor+&eneral of India or any other person appointed by hi( in this behalf together with the audit report thereon shall be forwarded annually to the Central &o'ern(ent and that &o'ern(ent shall cause the sa(e to be laid before each Iouse of <arlia(ent0 5CDA4TER IIA 4ENALTIES AND ADEUDICATION 4e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 15A. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder,(a) to furnish any docu(ent, return or report to the 8oard, fails to furnish the sa(e, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations, fails to file return or furnish the sa(e within the ti(e specified therefor in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0
Chapters BI A and BI 8 containing Ss0 "A to "M and "@ to "S respecti'ely, inserted by Securities =aws (A(end(ent) Act, !!" w0e0f0 %"+ + !!"0 % Substituted for 1a penalty not exceeding one la)h and fifty thousand rupees for each such failure2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding fi'e thousand rupees for e'ery day during which such failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for e'ery day during which the failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%
4e %lt> for f%il*re ,> % > $er!o to e ter i to %(ree.e t /ith 'lie t!. 15;. If any person, who is registered as an inter(ediary and is re*uired under this Act or any rules or regulations (ade thereunder to enter into an agree(ent with his client, fails to enter into such agree(ent, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 %54e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 15C. If any listed co(pany or any person who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such co(pany or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 4e %lt> for 'ert%i -ef%*lt! i '%!e of .*t*%l f* -!. 15D. If any person, who is(a) re*uired under this Act or any rules or regulations (ade thereunder to obtain a certificate of registration fro( the 8oard for sponsoring or carrying on any collecti'e in'est(ent sche(e, including (utual funds, sponsors or carries on any collecti'e in'est(ent sche(e, including (utual funds, without obtaining such certificate of registration, he shall be liable to 34a penalty of one la)h rupees for each day during which he sponsors or carries on any such collecti'e in'est(ent sche(e including (utual funds, or one crore rupees, whiche'er is less:3 (b) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, for sponsoring or carrying on any in'est(ent sche(e, fails to co(ply with the ter(s and conditions of certificate of registration, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, fails to (a)e an application for listing of its sche(es as pro'ided for in the regulations
Substituted for 1a penalty not exceeding fi'e la)h rupees for e'ery such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1If any person, who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing to redress the grie'ances of in'estors, fails to redress such grie'ances, he shall be liable to a penalty not exceeding ten thousand rupees for each such failure2, by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding ten thousand rupees for each day during which he carries on any such collecti'e in'est(ent sche(e including (utual funds, or ten la)h rupees whiche'er is higher02 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for each day during which such failure continues or ten la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0
%%
go'erning such listing, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (d) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to despatch
unit certificates of any sche(e in the (anner pro'ided in the regulation go'erning such despatch, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (e) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to refund the application (onies paid by the in'estors within the period specified in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (f) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to in'est (oney collected by such collecti'e in'est(ent sche(es in the (anner or within the period specified in the regulations, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for f%il*re to o,!er+e r*le! % - re(*l%tio ! ,> % %!!et .% %(e.e t 'o.$% >. 15E. Khere any asset (anage(ent co(pany of a (utual fund registered under this Act, fails to co(ply with any of the regulations pro'iding for restrictions on the acti'ities of the asset (anage(ent co(panies, such asset (anage(ent co(pany shall be liable to "4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for -ef%*lt i '%!e of !to'6 ,ro6er!. 152. If any person, who is registered as a stoc) bro)er under this Act,(a) fails to issue contract notes in the for( and (anner specified by the stoc) exchange of which such bro)er is a (e(ber, he shall be liable to a penalty not exceeding fi'e ti(es the a(ount for which the contract note was re*uired to be issued by that bro)er3 (b) fails to deli'er any security or fails to (a)e pay(ent of the a(ount due to the in'estor in the (anner within the period specified in the regulations, he shall be liable to #4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3
Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues or fi'e la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding one thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%3
(c) charges an a(ount of bro)erage which is in excess of the bro)erage specified in the regulations, he shall be liable to 4a penalty of one la)h rupees: or fi'e ti(es the a(ount of bro)erage charged in excess of the specified bro)erage, whiche'er is higher0 4e %lt> for i !i-er tr%-i (. 15G. If any insider who,(i) either on his own behalf or on behalf of any other person, deals in securities of a body corporate listed on any stoc) exchange on the basis of any unpublished price+sensiti'e infor(ation3 or (ii) co((unicates any unpublished price+sensiti'e infor(ation to any person, with or without his re*uest for such infor(ation except as re*uired in the ordinary course of business or under any law3 or
(iii) counsels, or procures for any other person to deal in any securities of any body corporate on the basis of unpublished price+sensiti'e infor(ation, shall be liable to a penalty %4of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of insider trading, whiche'er is higher:0 4e %lt> for o 0-i!'lo!*re of %'7*i!itio of !h%re! % - t%6eo+er!. 15D. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder, fails to,(i) disclose the aggregate of his shareholding in the body corporate before he ac*uires any shares of that body corporate3 or (ii) (a)e a public announce(ent to ac*uire shares at a (ini(u( price3 or 34(iii) (a)e a public offer by sending letter of offer to the shareholders of the concerned co(pany3 or (iv) (a)e pay(ent of consideration to the shareholders who sold their shares pursuant to letter of offer,: he shall be liable to a penalty $4of twenty+fi'e crore rupees or three ti(es the a(ount of profits profits (ade out of such failure, whiche'er is higher:0 554e %lt> for fr%*-*le t % - * f%ir tr%-e $r%'ti'e!. 15DA. If any person indulges in fraudulent and unfair trade practices relating to securities, he shall be liable to a penalty of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of such practices, whiche'er is higher0
Substituted for 1a penalty not exceeding fi'e thousand rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00% 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00% %00% " Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00%0
%$
4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 15D;. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 4o/er to %-G*-i'%te. 150I. ( ) 6or the purpose of adDudging under sections "A, "8, "C, "9, "7, "6, "& 4, "I, "IA and "I8:, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in subsection ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> the %-G*-i'%ti ( offi'er. 15E. Khile adDudging *uantu( of penalty under section "+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade
as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 "5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 15EA. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: )5Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!. 15E;. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 11, !e'tio 11;, !e'tio 11D, !*,0!e'tio ()) of !e'tio 1" or !e'tio 150I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e- -ef%*lt!.
Substituted for 1and "I2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the S78I (A(end(ent) Act, %00%, S0 ! w0e0f0 %!+ 0+%00%0 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
% Inserted
%"
(") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't. ()) The !ettle.e t $ro'ee-i (! * -er thi! !e'tio !h%ll ,e 'o -*'te- i %''or-% 'e /ith the $ro'e-*re !$e'ifie- i the re(*l%tio ! .%-e * -er thi! A't. (3) No %$$e%l !h%ll lie * -er !e'tio 15T %(%i !t % > or-er $%!!e- ,> the ;o%r- or %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio . < CDA4TER II; ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL E!t%,li!h.e t of Se'*ritie! A$$ell%te Tri,* %l!. 15F. ( ) .he Central &o'ern(ent shall by notification, establish one or (ore Appellate .ribunals to be )nown as the Securities Appellate .ribunal to exercise the Durisdiction, powers and authority conferred on such .ribunal by or under this Act 4or any other law for the ti(e being in force:0 (%) .he Central &o'ern(ent shall also specify in the notification referred to in sub+section ( ) the (atters and places in relation to which the Securities Appellate .ribunal (ay exercise Durisdiction0 "5Co.$o!itio of Se'*ritie! A$$ell%te Tri,* %l. 15L. A Securities Appellate .ribunal shall consist of a <residing Cfficer and two other (e(bers, to be appointed, by notification, by the Central &o'ern(ent, 4ro+i-e- that the Securities Appellate .ribunal, consisting of one person only, established before the co((ence(ent of the Securities and 7xchange 8oard of India (A(end(ent) Act, %00%, shall continue to exercise the Durisdiction, powers and authority conferred on it by or under this Act or any other law for the ti(e being in force till two other ?e(bers are appointed under this section0 9*%lifi'%tio for %$$oi t.e t %! 4re!i-i ( Offi'er or @e.,er of Se'*ritie! A$$ell%te Tri,* %l.
Inserted by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for Sections "= and "? by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "= and "? read as under,+ 1 "+=0 Co(position of securities Appellate .ribunal0 5 A Securities Appellate .ribunal shall consist of
% Substituted
one person only (hereinafter referred to as the <residing Cfficer of the Securities Appellate .ribunal) to be appointed, by notification, by the central &o'ern(ent0 "?0 Qualifications for appoint(ent as <residing Cfficer of the Securities Appellate .ribunal0 5 A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he + (a) is, or has been, or is *ualified to be, a Mudge of a Iigh Court3 or (b) has been a (e(ber of the Indian =egal Ser'ice and has held a post in &rade I of that ser'ice for at least three years3 or (c) has held office as the <residing Cfficer of a tribunal for at least three years02
%#
15@. 15( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of the Securities Appellate .ribunal unless he + (a) is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court3 or (b) is a sitting or retired Mudge of a Iigh Court who has co(pleted not less than se'en years of ser'ice as a Mudge in a Iigh Court0 ( A) .he <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0: (%) A person shall not be *ualified for appoint(ent as (e(ber of a Securities Appellate .ribunal unless he is a person of ability, integrity and standing who has shown capacity in dealing with proble(s relating to securities (ar)et and has *ualification and experience of corporate law, securities laws, finance, econo(ics or accountancy, 4ro+i-e- that a (e(ber of the 8oard or any person holding a post at senior (anage(ent le'el e*ui'alent to 7xecuti'e 9irector in the 8oard shall not be appointed as <residing Cfficer or ?e(ber of a Securities Appellate .ribunal during his ser'ice or tenure as such with the 8oard or within two years fro( the date on which he ceases to hold office as such in the 8oard0: %4Te *re of offi'e of 4re!i-i ( Offi'er % - other @e.,er! of Se'*ritie! A$$ell%te Tri,* %l. 15N. .he <residing Cfficer and e'ery other ?e(ber of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office and shall be eligible for re+appoint(ent, 4ro+i-e- that no person shall hold office as the <residing Cfficer of the Securities Appellate .ribunal after he has attained the age of sixty+eight years, 4ro+i-e- f*rther that no person shall hold office as a ?e(ber of the Securities Appellate .ribunal after he has attained the age of sixty+two years0: S%l%r> % - %llo/% 'e! % - other ter.! % - 'o -itio ! of !er+i'e of 4re!i-i ( Offi'er!. 150O. .he salary and allowances payable to and the other ter(s and conditions of ser'ice including pension, gratuity and other retire(ent benefits of the 4<residing Cfficer and other ?e(bers: of a Securities Appellate .ribunal shall be such as (ay be prescribed,
Substituted for sub+section ( ) of Section "? by the S78I (A(end(ent) Crdinance, %0 3 w0e0f0 % 00 0%0 30 <rior to substitution, it read as under,+ ;( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court , 4ro+i-e- that the <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0; % Substituted for Section "E, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "E read as under,+ 1 "E0 .er( of office0+ .he <residing officer of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office or until he attains the age of sixtyfi'e years, whiche'er is earlier02
%/
4ro+i-e- that neither the salary and allowances nor the other ter(s and conditions of ser'ice of the %4<residing Cfficer and other ?e(bers of a Securities Appellate .ribunal: shall be 'aried to their disad'antage after appoint(ent0 2illi ( *$ of +%'% 'ie!. 154. If, for reason other than te(porary absence, any 'acancy occurs in the 34office of the <residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal, then the Central &o'ern(ent shall appoint another person in accordance with the pro'isions of this Act to fill the 'acancy and the proceedings (ay be continued before the Securities Appellate .ribunal fro( the stage at which the 'acancy is filled0 Re!i( %tio % - re.o+%l. 159. ( ) .he $4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal (ay, by notice in writing under his hand addressed to the Central &o'ern(ent, resign his office, 4ro+i-e- that "4the <residing Cfficer or any other ?e(ber: shall, unless he is per(itted by the Central &o'ern(ent to relin*uish his office sooner, continue to hold office, until the expiry of three (onths fro( the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his ter( of office, whiche'er is the earliest0 (%) .he #4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal shall not be re(o'ed fro( his office except by an order by the Central &o'ern(ent on the ground of pro'ed (isbeha'iour or incapacity after an in*uiry (ade by a Mudge of the Supre(e Court, in which the /4<residing Cfficer or any other ?e(ber: concerned has been infor(ed of the charges against hi( and gi'en a reasonable opportunity of being heard in respect of these charges0 (3) .he Central &o'ern(ent (ay, by rules, regulate the procedure for the in'estigation of (isbeha'iour or incapacity of the >4<residing Cfficer or any other ?e(ber:0 Or-er! 'o !tit*ti ( A$$ell%te Tri,* %l to ,e fi %l % - ot to i +%li-%te it! $ro'ee-i (!. 15R. Eo order of the Central &o'ern(ent appointing any person as the !4<residing Cfficer or a ?e(ber: of a Securities Appellate .ribunal shall be called in *uestion in any (anner, and no act or proceeding before a Securities Appellate .ribunal shall be called in *uestion in any (anner on the ground (erely of any defect in the constitution of a Securities Appellate .ribunal0
Substituted for 1<residing Cfficer of a Securities Appellate .ribunal2 by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 / Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 > Substituted for 1aforesaid <residing Cfficer2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 ! Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0
%>
St%ff of the Se'*ritie! A$$ell%te Tri,* %l. 15S. ( ) .he Central &o'ern(ent shall pro'ide the Securities Appellate .ribunal with such officers and e(ployees as that &o'ern(ent (ay thin) fit0 (%) .he officers and e(ployees of the Securities Appellate .ribunal shall discharge their functions under general superintendence of the <residing Cfficer0 (3) .he salaries and allowances and other conditions of ser'ice of the officers and e(ployees of the Securities Appellate .ribunal shall be such as (ay be prescribed0 A$$e%l to the Se'*ritie! A$$ell%te Tri,* %l. 15T. 4( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed,(a) by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws
(Second A(end(ent) Act, !!!, under this Act, or the rules or regulations (ade thereunder3 or (b) by an order (ade by an adDudicating officer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 "5(") ********< (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 348oard or the AdDudicating Cfficer, as the case case (ay be,: is recei'ed by hi( and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 ($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0
Substituted for Sub+sec ( ) R (%) by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, Sub+sections ( ) R (%) were read as under, 1( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by any order (ade by any AdDudicating Cfficer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 (%) Eo appeal shall lie to the Securities Appellate .ribunal fro( an order (ade by an AdDudicating Cfficer with the consent of the parties02 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , o.i!!io , S*,0!e'tio (") re%- %! * -er& J(") No %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-eO (a) ,> the ;o%r- o % - %fter the 'o..e 'e.e t of the Se'*ritie! L%/! (Se'o - A.e -.e t) A't, 1999H (b) ,> % %-G*-i'%ti ( offi'er, /ith the 'o !e t of the $%rtie!.2 3 Substituted for 1a copy of the order (ade by the adDudicating officer2 by S78I (A(end(ent) Act !!!, !!!, w0e0f0 #+ %+ !!!0
%!
(") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 48oard, the: parties to the appeal and to the concerned AdDudicating Cfficer0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of the Se'*ritie! A$$ell%te Tri,* %l. 15U. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act, and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purposes of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3
(e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte 3 (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0), and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 %4Ri(ht to le(%l re$re!e t%tio . 15I. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,Substituted for 1parties2, S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for S0 "B by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, S0 "B read as under,+ 1 "B0 .he appellant (ay either appear in person or authorise one or (ore legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal02
% Substituted
30
(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of subsection ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or any attorney of any Iigh Court, and includes a pleader in practice0: Li.it%tio . 15?. .he pro'isions of the =i(itation Act, !#3 (3# of !#3), shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 54re!i-i ( Offi'er, @e.,er! % - !t%ff of Se'*ritie! A$$ell%te Tri,* %l! to ,e $*,li' !er+% t!. 15A. .he <residing Cfficer, ?e(bers and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0: Ci+il Co*rt ot to h%+e G*ri!-i'tio . 15M. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which an adDudicating officer appointed under this Act or a Securities Appellate .ribunal constituted under this Act is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "5A$$e%l to S*$re.e Co*rt.
Substituted for S0 "A by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, it read as under, + 1 "A0 .he <residing Cfficer and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian penal Code( $" of >#0)20 % Substituted for S0 "S by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution , it
was read as under,+ 1 "S0 Appeal to Iigh Court0+ Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, <ro'ided that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
3
15N. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order , 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the applicant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: CDA4TER III @ISCELLANEOUS 4o/er of Ce tr%l Go+er .e t to i!!*e -ire'tio !. 18. ( ) Kithout preDudice to the foregoing pro'isions of this Act 4or the 9epositories Act, !!#:, the 8oard shall, in exercise of its powers or the perfor(ance of its functions under this Act, be bound by such directions on *uestions of policy as the Central &o'ern(ent (ay gi'e in writing to it fro( ti(e to ti(e , 4ro+i-e- that the 8oard shall, as far as practicable, be gi'en an opportunity to express its 'iews before any direction is gi'en under this sub+section0 (%) .he decision of the Central &o'ern(ent whether a *uestion is one of policy or not shall be final0 4o/er of Ce tr%l Go+er .e t to !*$er!e-e the ;o%r-. 17. ( ) If at any ti(e the Central &o'ern(ent is of opinion(a) that on account of gra'e e(ergency, the 8oard is unable to discharge the functions and duties i(posed on it by or under the pro'isions of this Act3 or (b) that the 8oard has persistently (ade default in co(plying with any direction issued by the Central &o'ern(ent under this Act or in the discharge of the functions and duties i(posed on it by or under the pro'isions of this Act and as a result of such default the financial position of the 8oard or the ad(inistration of the 8oard has deteriorated3 or (c) that circu(stances exist which render it necessary in the public interest so to do, the Central &o'ern(ent (ay, by notification, supersede the 8oard for such period, not exceeding six (onths, as (ay be specified in the notification0 (%) Hpon the publication of a notification under sub+section ( ) superseding the 8oard,(a) all the (e(bers shall, as fro( the date of supersession, 'acate their offices as such3 (b) all the powers, functions and duties which (ay, by or under the pro'isions of this Act, be exercised or discharged by or on behalf of the 8oard, shall until the 8oard is reconstituted under sub+section (3), be exercised and discharged by such person or persons as the Central &o'ern(ent (ay direct3 and (c) all property owned or controlled by the 8oard shall, until the 8oard is reconstituted under sub+section (3), 'est in the Central &o'ern(ent0
Substituted for 1this Act2 by the 9epositories Act !!#, w0r0e0f0 %0+!+ !!"0
3%
(3) Cn the expiration of the period of supersession specified in the notification issued under sub+section ( ), the Central &o'ern(ent (ay reconstitute the 8oard by a fresh appoint(ent
and in such case any person or persons who 'acated their offices under clause ( a) of subsection (%), shall not be dee(ed dis*ualified for appoint(ent , 4ro+i-e- that the Central &o'ern(ent (ay, at any ti(e, before the expiration of the period of supersession, ta)e action under this sub+section0 ($) .he Central &o'ern(ent shall cause a notification issued under sub+section ( ) and a full report of any action ta)en under this section and the circu(stances leading to such action to be laid before each Iouse of <arlia(ent at the earliest0 Ret*r ! % - re$ort!. 1:. ( ) .he 8oard shall furnish to the Central &o'ern(ent at such ti(e and in such for( and (anner as (ay be prescribed or as the Central &o'ern(ent (ay direct, such returns and state(ents and such particulars in regard to any proposed or existing progra((e for the pro(otion and de'elop(ent of the securities (ar)et, as the Central &o'ern(ent (ay, fro( ti(e to ti(e, re*uire0 (%) Kithout preDudice to the pro'isions of sub+section ( ), the 8oard shall, within 4ninety: days after the end of each financial year, sub(it to the Central &o'ern(ent a report in such for(, as (ay be prescribed, gi'ing a true and full account of its acti'ities, policy and progra((es during the pre'ious financial year0 (3) A copy of the report recei'ed under sub+section (%) shall be laid, as soon as (ay be after it is recei'ed, before each Iouse of <arlia(ent0 Dele(%tio . 19. .he 8oard (ay, by general or special order in writing delegate to any (e(ber, officer of the 8oard or any other person subDect to such conditions, if any, as (ay be specified in the order, such of its powers and functions under this Act (except the powers under section %!) as it (ay dee( necessary0 A$$e%l!. "=. ( ) Any person aggrie'ed by an order of the 8oard (ade %4, before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!,: under this Act, or the rules or regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor, 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0
Substituted for 1sixty days2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1an order of the 8oard (ade2 by Securities =aws (Second A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0
% Substituted
33
(3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed, 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 4;%r of G*ri!-i'tio . "=A. Eo order passed by the 8oard %4or the AdDudicating Cfficer: under this Act shall be appealable except as pro'ided in 34section ". or: section %0 and no ci'il court shall ha'e Durisdiction in respect of any (atter which the 8oard $4or the AdDudicating Cfficer: is e(powered by, or under, this Act to pass any order and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any order passed by the 8oard "4or the AdDudicating Cfficer: by, or under, this Act0: S%+i (!.
"1. Eothing in this Act shall exe(pt any person fro( any suit or other proceedings which (ight, apart fro( this Act, be brought against hi(0 @e.,er!, offi'er! % - e.$lo>ee! of the ;o%r- to ,e $*,li' !er+% t!. "". All (e(bers, officers and other e(ployees of the 8oard shall be dee(ed, when acting or purporting to act in pursuance of any of the pro'isions of this Act, to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0 4rote'tio of %'tio t%6e i (oo- f%ith. "). Eo suit, prosecution or other legal proceedings shall lie against the Central &o'ern(ent #4or 8oard: or any officer of the Central &o'ern(ent or any (e(ber, officer or other e(ployee of the 8oard for anything which is in good faith done or intended to be done under this Act or the rules or regulations (ade thereunder0 /4Offe 'e!. "3. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, he shall be punishable with
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 18oard2 by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 3 Substituted for 1Section %02, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 $ Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 " Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Substituted by for S0 %$, Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" && <rior to its substitution S0%$ read as under, 1%$0 <enalty0+ Khoe'er contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both02
% Substituted
3$
i(prison(ent for a ter( which (ay extend to 4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to %4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 34Co.$o!itio of 'ert%i offe 'e!. "3A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "3;. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of the alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation, 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0
(%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0:
Substituted for 1one year, or with fine, or with both2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%, for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both20 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3"
E#e.$tio fro. t%# o /e%lth % - i 'o.e. "5. Eotwithstanding anything contained in the Kealth+tax Act, !"/ (%/ of !"/), the Inco(etax Act, !# ($3 of !# ) or any other enact(ent for the ti(e being in force relating to tax on wealth, inco(e, profits or gains(a) the 8oard3 (b) the existing Securities and 7xchange 8oard fro( the date of its constitution to the date of establish(ent of the 8oard, shall not be liable to pay wealth+tax, inco(e+tax or any other tax in respect of their wealth, inco(e, profits or gains deri'ed0 Co( iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations (ade thereunder, sa'e on a co(plaint (ade by the 8oard 4G G G:0 "5(") *****< )5 E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
.he words 1with the pre'ious sanction of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to the o.i!!io , S*,0!e'tio (") re%- %! * -er& 1(") No 'o*rt i ferior to th%t of "5% Co*rt of Se!!io < !h%ll tr> % > offe 'e $* i!h%,le * -er thi!
A't.2 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3#
A$$e%l % - re+i!io "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e of Cri.i %l 4ro'e-*re, 197) to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< Offe 'e! ,> 'o.$% ie!. "7. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly, 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n , 6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and
3/
(b) 1director2, in relation to a fir(, (eans a partner in the fir(0 4o/er to e#e.$t. ":. 4GGGGGG: "5 Re'o+er> of %.o* t! ":A. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith %
-ire'tio of -i!(or(e.e t or-er i!!*e- * -er !e'tio 11; or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifiefor. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.et%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't.
C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Section %> read as under, 1%>0 8$.er t$ e)e"%t+ If the central go'ern(ent if of the opinion that it is necessary or expedient so to do in public interest, it (ay, by order published in the Cfficial gaFette, exe(pt any person or class of persons buying or selling securities or otherwise dealing with the securities (ar)et fro( the operation of sub+section ! ) of Section %02 % I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3>
"#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio 15T of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 11;, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% !
% > offi'er of the ;o%r- /ho .%> ,e %*thoriLe-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 4o/er to .%6e r*le!. "9. ( ) .he Central &o'ern(ent (ay, by notification, (a)e rules for carrying out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers under sub+section ( ) of section "3 (b) the additional functions that (ay be perfor(ed by the 8oard under section 3 (c) 4G G G: (d) the (anner in which the accounts of the 8oard shall be (aintained under section "3 %4(da) the (anner of in*uiry under sub+section ( ) of section "+I3 (db) the salaries and allowances and other ter(s and conditions of ser'ice of the 34<residing Cfficers, ?e(bers: and other officers and e(ployees of the Securities Appellate .ribunal under section "+C and sub+section (3) of section "S3 (dc) the procedure for the in'estigation of (isbeha'iour or incapacity of the 4<residing Cfficers, or other ?e(bers: of the Securities Appellate .ribunal under sub+section (3) of section "Q3
Clause (c) o(itted by Securities laws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, clause (c) it read as under, 1(c) the conditions subDect to which registration certificate is to be issued under sub+section ( ) of section %20 % Inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 3 Substituted for 1<residing Cfficers2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3!
(dd) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section ". and the fees payable in respect of such appeal3: (e) the for( and the (anner in which returns and report to be (ade to the Central &o'ern(ent under section >3 (f) any other (atter which is to be, or (ay be, prescribed, or in respect of which pro'ision is to be, or (ay be, (ade by rules0 4o/er to .%6e re(*l%tio !. )=. ( ) .he 8oard (ay, %4GGG: by notification, (a)e regulations consistent with this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ti(es and places of (eetings of the 8oard and the procedure to be followed at such (eetings under sub+section ( ) of section / including *uoru( necessary for the transaction of business3 (b) the ter(s and other conditions of ser'ice of officers and e(ployees of the 8oard under sub+section (%) of section !3 34(c) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto and the (anner in which such (atters shall be disclosed by the co(panies under section A3 35('%) the *tiliL%tio of the %.o* t 're-ite- * -er !*,0!e'tio (5) of !e'tio 11H (',) the f*lfill.e t of other 'o -itio ! rel%ti ( to 'olle'ti+e i +e!t.e t !'he.e * -er !*,0!e'tio ("A) of !e'tio 11AAH ('') the $ro'e-*re to ,e follo/e- ,> the %*thoriLe- offi'er for !e%r'h or !eiL*re * -er !*,0!e'tio (9) of !e'tio 11CH < (d) the conditions subDect to which certificate of registration is to be issued, the a(ount of
fee to be paid for certificate of registration and the (anner of suspension or cancellation of certificate of registration under section %0: 55(-%) the ter.! -eter.i e- ,> the ;o%r- for !ettle.e t of $ro'ee-i (! * -er !*,!e'tio (") % - the $ro'e-*re for 'o -*'ti ( of !ettle.e t $ro'ee-i (! * -er !*,!e'tio ()) of !e'tio 15E;H (-,) % > other .%tter /hi'h i! re7*ire- to ,e, or .%> ,e, !$e'ifie- ,> re(*l%tio ! or i re!$e't of /hi'h $ro+i!io i! to ,e .%-e ,> re(*l%tio !.< R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t.
Substituted for 1<residing Cfficers2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 words 1with the pre'ious appro'al of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 3 Substituted for the existing clause (c) by the Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 <rior to substitution this clause read as under, 1(c) the a(ount of fee to be paid for registration certificate and (anner of suspension or cancellation of registration certificate under sub+section (%) and (3) of section %02 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% .he
$0
)1. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. )". .he pro'isions of this Act shall be in addition to, and not in derogation of, the pro'isions of any other law for the ti(e being in force0 A.e -.e t of 'ert%i e %'t.e t!. )). 40e%ealed bF 0e%ealing H A"ending Act' 2001&: 4o/er to re.o+e -iffi'*ltie!. )3. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order, published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as (ay appear to be necessary for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of fi'e years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 Re$e%l % - !%+i (. )5. ( ) .he Securities and 7xchange 8oard of India Crdinance, !!% (Crd0 " of !!%), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 1@( /@(5A9( 4 ee section 33: A@END@ENT O2 CERTAIN ENACT@ENTS 40e%ealed bF 0e%ealing H A"ending Act' 2001:
*SECURITIES CONTRACTS (REGULATION) RULES, 1957
In exercise of the powers conferred by section 30 of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the Central &o'ern(ent hereby (a)es the following rules, the sa(e ha'ing been pre'iously published as re*uired by sub+section (3) of the said section, na(ely ,Short title. 1. .hese rules (ay be called the Securities Contracts (Regulation) Rules, !"/0 Defi itio !. ". In these rules, unless the context otherwise re*uires,(a) 1for(2 (eans a for( appended to these rules3 (b) 1the Act2 (eans the Securities Contracts (Regulation) Act, !"# ($% of !"#)3 (c) 1&o'ern(ent co(pany2 (eans a co(pany in which not less than fifty+one per cent of the share capital is held by the Central &o'ern(ent or by any State &o'ern(ent or &o'ern(ents or partly by the Central &o'ern(ent and partly by one or (ore State &o'ern(ents ; 4(d) 1public2 (eans persons other than 5 (i) the pro(oter and pro(oter group3 (ii) subsidiaries and associates of the co(pany0 E#$l% %tio & 6or the purpose of this clause the words 1pro(oter2 and 1pro(oter group2 shall ha'e the sa(e (eaning as assigned to the( under the Securities and 7xchange 8oard of India (Issue of Capital and 9isclosure Re*uire(ents) Regulations, %00!3: %4(da) ;public sector co(pany; (eans a body corporate constituted by an Act of <arlia(ent or any State =egislature and includes a go'ern(ent co(pany,: 4(e) 1public shareholding2 (eans e*uity shares of the co(pany held by public and shall exclude shares which are held by custodian against depository receipts issued o'erseas0: A$$li'%tio for re'o( itio . ). An application under section 3 of the Act for recognition of a stoc) exchange shall be (ade to the 34Securities and 7xchange 8oard of India: in 6or( A0
* The!e R*le! h%+e ,ee *$-%te- ,%!e- o the R*le! % - A.e -.e t! %+%il%,le o the /e,!ite of the De$%rt.e t of E'o o.i' Aff%ir!0 htt$&11fi .i . i'.i 1l%/1i -e#.%!$ % - %+%il%,le %.e -.e t otifi'%tio !. Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 % Inserted by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3 Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
2ee! for %$$li'%tio . 3. ( ) .here shall be paid in respect of e'ery application under rule 3 a fee of rupees fi'e hundred0 (%) .he a(ount of the fee shall be deposited in the nearest &o'ern(ent treasury or the nearest branch of the State 8an) of India, 4ro+i-e- that at 8o(bay, Calcutta, ?adras, 9elhi and @anpur, the a(ount shall be deposited in the Reser'e 8an) of India0 (3) .he a(ount of the fee so deposited shall be credited to the receipt head 1A=BI?iscellaneous-Cther fees, fines and forfeitures20 Do'*.e t! to ,e file- %lo ( /ith the %$$li'%tio % - $%rti'*l%r! it !ho*l- 'o t%i . 5. 7'ery application shall be acco(panied by four copies of the rules (including the (e(orandu( and articles of association where the applicant stoc) exchange is an
incorporated body) and bye+laws of the stoc) exchange applying for recognition as specified in section 3 of the Act and the receipt granted by the &o'ern(ent treasury, or as the case (ay be, the State 8an) of India or the Reser'e 8an) of India, in respect of the a(ount of the fee deposited and shall contain clear particulars as to the (atters specified in the Annexure to 6or( A0 $54o/er to .%6e i 7*irie! % - '%ll for i for.%tio . 5A. 8efore granting recognition to a stoc) exchange under section $ of the Act, the "4Securities and 7xchange 8oard of India: (ay (a)e such in*uiries and re*uire such further infor(ation to be furnished, as it dee(s necessary, relating to the infor(ation furnished by the stoc) exchange in the Annexure to its application in 6or( A0: 2or. of re'o( itio . 8. .he recognition granted to a stoc) exchange shall be in 6or( 8 and be subDect to the following conditions, na(ely ,(a) that the recognition unless granted on a per(anent basis, shall be for such period not less than one year as (ay be specified in the recognition3 (b) that the stoc) exchange shall co(ply with such conditions as are or (ay be prescribed or i(posed under the pro'isions of the Act and these rules fro( ti(e to ti(e0
$ Inserted
by &SR 0!# dated $00/0 !#/, w0e0f0 %%00/0 !#/ for 1Central &o'ern(ent2 by the Securities Contracts (Regulation)(A(end(ent )Rules, !!#, w0e0f0 %30 %0 !!#0
" Substituted
Re e/%l of re'o( itio . 7. ( ) .hree (onths before the expiry of the period of recognition, a recognised stoc) exchange desirous of renewal of such recognition (ay (a)e an application to the #4Securities and 7xchange 8oard of India: in 6or( A0 (%) .he pro'isions of rule 3, rule $, rule ", rule "A and rule # shall apply in relation to renewal of recognition as they apply in relation to grant of recognition except that the fee payable in respect of an application for renewal of recognition shall be rupees two hundred0 9*%lifi'%tio ! for .e.,er!hi$ of % re'o( i!e- !to'6 e#'h% (e. :. .he rules relating to ad(ission of (e(bers of a stoc) exchange see)ing recognition shall inter alia pro'ide that , (1) Eo person shall be eligible to be elected as a (e(ber if(a) he is less than twenty+one years of age3 (b) he is not a citiFen of India3 pro'ided that the go'erning body (ay in suitable cases relax this condition with the prior appro'al of the !4Securities and 7xchange 8oard of India:3 (c) he has been adDudged ban)rupt or a recei'ing order in ban)ruptcy has been (ade against hi( or he has been pro'ed to be insol'ent e'en though he has obtained his final discharge3 (d) he has co(pounded with his creditors unless he has paid sixteen annas in the rupee3 (e) he has been con'icted of an offence in'ol'ing fraud or dishonesty3 (f) he is engaged as principal or e(ployee in any business other than that of securities /4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability unless he underta)es on ad(ission to se'er his connection with such business ,
>44ro+i-e-
that no (e(ber (ay conduct business in co((odity deri'ati'es, except by setting up a separate co(pany which shall co(ply with the regulatory re*uire(ents, such as, networth, capital ade*uacy, (argins and exposure nor(s as (ay be specified by the 6orward ?ar)et Co((ission, fro( ti(e to ti(e ,
# Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, w0e0f0 %30 %0 !!#0 / Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 > Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 <rior to its substitution, the pro'iso as a(ended by Securities Contracts (Regulation) (A(end(ent) Rules, !!# w0e0f0 %30 %0 !!#, read as under, 1<ro'ided that the Securities and 7xchange 8oard of India (ay, for reasons sufficient in the opinion of the said 8oard, per(it a recogniFed stoc) exchange to suspend the enforce(ent of this clause for a specified period on condition that the applicant is not associated with or is a (e(ber of or subscriber to or shareholder or debenture holder in or connected through a partner or e(ployee with any other organisation, institution, association, co(pany or corporation in India where forward business of any )ind whether in goods or co((odities or otherwise is carried on or is not engaged as a principal or e(ployee ion any such business02
4ro+i-e- f*rther that nothing herein shall be applicable to any corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to ()) of the pro'iso to sub+rule ($)0:3 (g) !4GGG: (h) he has been at any ti(e expelled or declared a defaulter by any other stoc) exchange3 (i) he has been pre'iously refused ad(ission to (e(bership unless a period of one year has elapsed since the date of such reDection0 (2) Eo person eligible for ad(ission as a (e(ber under sub+rule ( ) shall be ad(itted as a (e(ber unless ,(a) he has wor)ed for not less than two years as a partner with, or an authorised assistant or authorised cler) or re(isier or apprentice to, a (e(ber3 or (b) he agrees to wor) for a (ini(u( period of two years as a partner or representati'e (e(ber with another (e(ber and to enter into bargains on the floor of the stoc) exchange and not in his own na(e but in the na(e of such other (e(ber 3 or (c) he succeeds to the established business of a deceased or retiring (e(ber who is his father, uncle, brother or any other person who is, in the opinion of the go'erning body, a close relati'e , 4ro+i-e- that the rules of the stoc) exchange (ay authorise the go'erning body to wai'e co(pliance with any of the foregoing conditions if the person see)ing ad(ission is in respect of (eans, position, integrity, )nowledge and experience of business in securities, considered by the go'erning body to be otherwise *ualified for (e(bership0 (3) Eo person who is a (e(ber at the ti(e of application for recognition or subse*uently ad(itted as a (e(ber shall continue as such if(a) he ceases to be a citiFen of India , 4ro+i-e- that nothing herein shall affect those who are not citiFens of India but who were (e(bers at the ti(e of such application or were ad(itted subse*uently under the pro'isions of clause (b) of sub+rule ( ) of this rule, subDect to their co(plying with all other re*uire(ents of this rule3
(b) he is adDudged ban)rupt or a recei'ing order in ban)ruptcy is (ade against hi( or he is pro'ed to be insol'ent3 (c) he is con'icted of an offence in'ol'ing fraud or dishonesty3 (d) 04G G G: (e) 4G G G: (f) he engages either as principal or e(ployee in any business other than that of securities %4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability, pro'ided that! C(itted 0 Ibid0
by &SR 0/0(7) dated "0
0 !>>
Ibid0
% Inserted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(i) the go'erning body (ay, for reasons, to be recorded in writing, per(it a (e(ber to engage hi(self as principal or e(ployee in any such business, if the (e(ber in *uestion ceases to carry on business on the stoc) exchange either as an indi'idual or as a partner in a fir(, (ii) in the case of those (e(bers who were under the rules in force at the ti(e of such application per(itted to engage in any such business and were actually so engaged on the date of such application, a period of three years fro( the date of the grant of recognition shall be allowed for se'ering their connection with any such business, 34(iii) nothing herein shall affect (e(bers of a recognised stoc) exchange which are corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to (k) of the pro'iso to sub+rule ($)0: (4) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section 3%% of the said Act3 (ii) a (aDority of the directors of such co(pany are shareholders of such co(pany and also (e(bers of that stoc) exchange3 and (iii) the directors of such co(pany, who are (e(bers of that stoc) exchange, ha'e ulti(ate liability in such co(pany , 4ro+i-e- that where the $4Securities and 7xchange 8oard of India: (a)es a reco((endation in this regard, the go'erning body of a stoc) exchange shall, in relaxation of the re*uire(ents of this clause, ad(it as (e(ber the following corporations "4,bodies corporate:, co(panies or institutions, na(ely ,(a) the Industrial 6inance Corporation, established under the Industrial 6inance Corporation Act, !$> ( " of !$>)3 (b) the Industrial 9e'elop(ent 8an) of India, established under the Industrial 9e'elop(ent 8an) Act, !#$ ( > of !#$)3 (c) the =ife Insurance Corporation of India, established under the =ife Insurance Corporation Act, !"# (3 of !"#)3 (d) the &eneral Insurance Corporation of India constituted under the &eneral Insurance Corporation (Eationalisation) Act, !/% ("/ of !/%)3 (e) the Hnit .rust of India, established under the Hnit .rust of India Act, !#3 ("% of !#3)3
3 Substituted, ibid0 <rior to its substitution, sub+clause (iii) read as under, 1(iii) nothing herein shall affect (e(bers of a recogniFed stoc) exchange per(itted under the pro'iso to clause (f) of sub+rule( ) to suspend the enforce(ent of the aforesaid clause, for so long as such suspension is effecti'e, except that no (e(ber of such exchange shall engage in forward business of any )ind whether in goods or co((odities or otherwise and , if actually so engaged on the date of such application , he shall se'er his connection with any such business within a period of three years fro( the date of the grant of recognition02 $ Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# " Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(f) the Industrial Credit and In'est(ent Corporation of India, a co(pany registered under the Co(panies Act, !"# ( of !"#)3 (g) the subsidiaries of any of the corporations or co(panies specified in (a) to (f) and any subsidiary of the State 8an) of India or any nationalised ban) set up for pro'iding (erchant ban)ing ser'ices, buying and selling securities and other si(ilar acti'ities0 #4(h) any ban) included in the Second Schedule to the Reser'e 8an) of India Act, !3$ (% of !3$)3 (i) the 7xport I(port 8an) of India, established under the 7xport I(port 8an) of India Act, !> (%> of !> )3 (j) the Eational 8an) for Agriculture and Rural 9e'elop(ent, established under the Eational 8an) for Agriculture and Rural 9e'elop(ent Act, !> (# of !> )3 and (k) the Eational Iousing 8an), established under the Eational Iousing 8an) Act, !>/ ("3 of !>/)0: (4A) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall also be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section % of the said Act3 (ii) such co(pany underta)es to co(ply with such financial re*uire(ents and nor(s as (ay be specified by the Securities and 7xchange 8oard of India for the registration of such co(pany under sub+section ( ) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (iii) /4G G G: (iv) the directors of the co(pany are not dis*ualified fro( being (e(bers of a stoc) exchange under >4clause ( ) 4except sub+clause (b) and sub+clause (f) thereof: or clause (3) 4except sub+clause (a) and sub+clause (f) thereof:: and the 9irectors of the co(pany had not held the offices of the 9irectors in any co(pany which had been a (e(ber of the stoc) exchange and had been declared defaulter or expelled by the stoc) exchange3 and (v) not less than two directors of the co(pany are persons who possess a (ini(u( two yearsJ experience , (a) in dealing in securities3 or (b) as portfolio (anagers3 or (c) as in'est(ent consultants0 (5) Khere any (e(ber of a stoc) exchange is a fir(, the pro'isions of sub+rules ( ), (3) and ($), shall, so far as they can, apply to the ad(ission or continuation of any partner in such fir(0
# Inserted, / C(itted
ibid0 by &SR /$! (7), dated %0 00 !!$ > Substituted by &SR /!0(7), dated 0/0 0 !!$
Co tr%'t! ,et/ee .e.,er! of re'o( i!e- !to'6 e#'h% (e. 9. All contracts between the (e(bers of a recognised stoc) exchange shall be confir(ed in writing and shall be enforced in accordance with the rules and bye+laws of the stoc) exchange of which they are (e(bers0 !5No.i ee! of the Se'*ritie! % - E#'h% (e ;o%r- of I -i%< o the (o+er i ( ,o-ie! of re'o( i!e- !to'6 e#'h% (e!. 1=. .he %04Securities and 7xchange 8oard of India: (ay no(inate one or (ore persons not exceeding three in nu(ber, as (e(ber or (e(bers of the go'erning body of e'ery recognised stoc) exchange0 Such (e(ber or (e(bers shall enDoy the sa(e status and powers as other (e(bers of the go'erning body0 O,li(%tio of the (o+er i ( ,o-> to t%6e -i!'i$li %r> %'tio %(%i !t % .e.,er if !o -ire'te- ,> the % 5Se'*ritie! % - E#'h% (e ;o%r- of I -i%<. 11. After recei'ing the report of the result of an en*uiry (ade under clause (b) of subsection (3) of section # of the Act, the % 4Securities and 7xchange 8oard of India: (ay ta)e such action as they dee( proper and, in particular, (ay direct the go'erning body of the stoc) exchange to ta)e such disciplinary action against the offending (e(ber, including fine, expulsion, suspension or any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney, as (ay be specified by the % 4Securities and 7xchange 8oard of India:3 notwithstanding anything to the contrary contained in the rules or bye+laws of the stoc) exchange concerned, the go'erning body shall gi'e effect to the directions of the % 4Securities and 7xchange 8oard of India: in this behalf and shall not in any (anner co((ute, re'o)e or (odify the action ta)en in pursuance of such directions, without the prior appro'al of the % 4Securities and 7xchange 8oard of India:0 .he % 4Securities and 7xchange 8oard of India: (ay, howe'er, either of its own (otion or on the representation of the (e(ber concerned, (odify or withdraw its direction to the go'erning body0 A*-it of %''o* t! of .e.,er!. 1". 7'ery (e(ber shall get his accounts audited by a chartered accountant whene'er such audit is re*uired by the % 4Securities and 7xchange 8oard of India:0 ?ith-r%/%l of re'o( itio . 1). .he written notice referred to in section " of the Act shall be in 6or( C0
! Substituted %0 Ibid0 %
by 60 Eo0 L3/LS7L!$, dated %#0 00 !!$0
Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> re'o( i!e- !to'6 e#'h% (e. 13. 7'ery recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years, (1) ?inute boo)s of the (eetings of(a) (e(bers3 (b) go'erning body3 (c) any standing co((ittee or co((ittees of the go'erning body or of the general body of (e(bers0
(2) Register of (e(bers showing their full na(es and addresses0 Khere any (e(ber of the stoc) exchange is a fir(, full na(es and addresses of all partners shall be shown0 (3) Register of authorised cler)s0 (4) Register of re(isiers of authorised assistants0 (5) Record of security deposits0 (6) ?argin deposits boo)0 (7) =edgers0 (8) Mournals0 (9) Cash boo)0 (10) 8an) pass+boo)0 ;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> .e.,er of % re'o( i!e- !to'6 e#'h% (e. 15. ( ) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years , (a) Register of transactions ( a!da boo))0 (b) ClientsJ ledger0 (c) &eneral ledger0 (d) Mournals0 (e) Cash boo)0 (f) 8an) pass+boo)0 (g) 9ocu(ents register showing full particulars of shares and securities recei'ed and deli'ered0 (2) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following docu(ents for a period of two years, (a) ?e(berJs contract boo)s showing details of all contracts entered into by hi( with other (e(bers of the sa(e exchange or counterfoils or duplicates of (e(os of confir(ation issued to such other (e(bers0 (b) Counterfoils or duplicates of contract notes issued to clients0 (c) Kritten consent of clients in respect of contracts entered into as principals0 @% er of i 7*ir> i rel%tio to the %ff%ir! of the (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e or the %ff%ir! of % > .e.,er of the !to'6 e#'h% (e i rel%tio to the !to'6 e#'h% (e. 18. ( )(a) .he person or persons appointed by the %%4Securities and 7xchange 8oard of India: to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act shall hereafter in this rule be referred to as the Nin*uiring authorityJ3 (b) where the in*uiring authority consists of two or (ore persons, one of the( shall be appointed as the chair(an or senior (e(ber thereof3 (c) the in*uiring authority shall hand o'er a state(ent of issues to be in*uired into to the go'erning body or the (e(ber concerned, as the case (ay be, who will be gi'en a reasonable opportunity to state their or his side of the case3 (d) if any witness is called for exa(ination, an opportunity shall be pro'ided to the go'erning body or the (e(ber whose affairs are being in*uired into, as the case (ay be, to cross+exa(ine such witness3 (e) where the in*uiring authority consists of (ore than one person, the 'iews of the (aDority shall be dee(ed to represent the findings of such authority and, in the e'ent of
an e*uality of 'otes, the chair(an or senior (e(ber shall ha'e a casting 'ote3 (f) the in*uiring authority shall sub(it its report in writing to the %%4Securities and 7xchange 8oard of India: within the period specified in the order of appoint(ent3 (g) te(porary absence fro( any hearing or hearings of any (e(ber of the in*uiring authority shall not 'itiate its proceedings0 (%) Khere the %%4Securities and 7xchange 8oard of India: has directed the go'erning body of a stoc) exchange to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act, the go'erning body concerned shall appoint one or (ore (e(bers thereof to (a)e the in*uiry and the pro'isions of sub+rule ( ) shall apply "!tati# "!tandi# to such in*uiry0 S*,.i!!io of % *%l re$ort. 17. ( ) 7'ery recognised stoc) exchange shall before the 3 st day of Manuary in each year or within such extended ti(e as the %34Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, allow, furnish the %34Securities and 7xchange 8oard of India: annually with a report about its acti'ities during the preceding calendar year, which shall inter alia contain detailed infor(ation about the following (atters , (a) changes in rules and bye+laws, if any3 (b) changes in the co(position of the go'erning body3 (c) any new sub+co((ittees set up and changes in the co(position of existing ones3
%% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# %3 Ibid0
(d) ad(issions, re+ad(issions, deaths or resignations of (e(bers3 (e) disciplinary action against (e(bers3 (f) arbitration of disputes (nature and nu(ber) between (e(bers and non+(e(bers3 (g) defaults3 (h) action ta)en to co(bat any e(ergency in trade3 (i) securities listed and de+listed3 and (j) securities brought on or re(o'ed fro( the forward list0 (%) 7'ery recognised stoc) exchange shall within one (onth of the date of the holding of its annual general (eeting, furnish the %$4Securities and 7xchange 8oard of India: with a copy of its audited balance+sheet and profit and loss account for its preceding financial year0 S*,.i!!io of $erio-i'%l ret*r !. 17A. 7'ery recognised stoc) exchange shall furnish the %$4Securities and 7xchange 8oard of India: periodical returns relating to(i) the official rates for the securities enlisted thereon3 (ii) the nu(ber of shares deli'ered through the clearing house3 (iii) the (a)ing+up prices3 (iv) the clearing house progra((es3 (v) the nu(ber of securities listed and de+listed during the pre'ious three (onths3 (vi) the nu(ber of securities brought on or re(o'ed fro( the forward list during the pre'ious three (onths3 and (vii) any other (atter as (ay be specified by the %$4Securities and 7xchange 8oard of India:0 @% er of $*,li'%tio of ,>e0l%/! for 'riti'i!.. 1:. .he bye+laws to be (ade, a(ended or re'ised under the Act shall be published for
criticis( in accordance with the pro'isions of section %3 of the &eneral Clauses Act, >!/ both in the &aFette of India and Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate0 Re7*ire.e t! /ith re!$e't to the li!ti ( of !e'*ritie! o % re'o( i!e- !to'6 e#'h% (e. 19. ( ) A public co(pany as defined under the Co(panies Act, !"#, desirous of getting its securities listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars ,
%$ Ibid0
(a) ?e(orandu( and articles of association and, in the case of a debenture issue, a copy of the trust deed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any securities for subscription or sale during the last fi'e years0 (d) Copies of balance+sheets and audited accounts for the last fi'e years, or in the case of new co(panies, for such shorter period for which accounts ha'e been (ade up0 (e) A state(ent showing(i) di'idends and cash bonuses, if any, paid during the last ten years (or such shorter period as the co(pany has been in existence, whether as a pri'ate or public co(pany), (ii) di'idends or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents with or between ,(i) 'endors andLor pro(oters, (ii) underwriters and sub+underwriters, (iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents with(i) (anaging agents and secretaries and treasurers, (ii) selling agents, (iii) (anaging directors and technical directors, (iv) general (anager, sales (anager, (anager or secretary0 (h) Certified copy of e'ery letter, report, balance+sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering securities for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents0 (j) A brief history of the co(pany since its incorporation gi'ing details of its acti'ities including any reorganisation, reconstruction or a(alga(ation, changes in its capital structure, (authorised, issued and subscribed) and debenture borrowings, if any0
(k) <articulars of shares and debentures issued-(i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s including an option for the issue of any )ind of the securities granted to any person0 (") Certified copies of%"4(i) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3: (ii) agree(ents, if any, with the Industrial 6inance Corporation, Industrial Credit and In'est(ent Corporation and si(ilar bodies0 (n) <articulars of shares forfeited0 ($) A list of highest ten holders of each class or )ind of securities of the co(pany as on the date of application along with particulars as to the nu(ber of shares or debentures held by and the address of each such holder0 (%) <articulars of shares or debentures for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0 (%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant co(pany shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer, (ii) that the fully paid shares will be free fro( all lien, while in the case of partly paid shares, the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such shares, (iii) that any a(ount paid+up in ad'ance of calls on any share (ay carry interest but shall not entitle the holder of the share to participate in respect thereof, in a di'idend subse*uently declared, (iv) there will be no forfeiture of unclai(ed di'idends before the clai( beco(es barred by law, (v) that option or right to call of shares shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the securities of a co(pany which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0
%" Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 <rior to its substitution, sub+clause (i), read as under, 1(i) letters of consent of the Controller of Capital Issues02
%#4(b)
(i) At least twenty fi'e per cent0 of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent3 or (ii) At least ten per cent of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent if the post issue capital of the
co(pany calculated at offer price is (ore than four thousand crore rupees, <ro'ided that the re*uire(ent of post issue capital being (ore than four thousand crore rupees shall not apply to a co(pany whose draft offer docu(ent is pending with the Securities and 7xchange 8oard of India on or before the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, if it satisfies the conditions prescribed in clause (b) of sub+rule % of rule ! of the Securities Contracts (Regulation) Rules, !"# as existed prior to the date of such co((ence(ent, %/4<ro'ided further that the co(pany, referred to in sub clause (ii), shall increase its public shareholding to at least twenty fi'e per cent, within a
%# Substituted
by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, clause (b) as a(ended by the A(end(ent Rules, %00 , w0e0f0 0/00#0%00 , read as under, 1(b) At least 0 per cent of each class or )ind of securities issued by a co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted subDect to the following conditions, (a) (ini(u( %0 la)h securities (excluding reser'ations, fir( allot(ent and pro(otersJ contribution) was offered to the public3 (b) the siFe of the offer to the public, i&e&' the offer price (ultiplied by the nu(ber of securities offered to the public was (ini(u( Rs0 00 crores3 and (c) the issue was (ade only through boo) building (ethod with allocation of #0 per cent of the issue siFe to the *ualified institutional buyers as specified by the Securities and 7xchange 8oard of India, 4ro+i-e- that if a co(pany does not fulfil the conditions, it shall offer at least %" per cent of each class or )ind of securities to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted, 4ro+i-e- f*rther that a recognised stoc) exchange (ay relax any of the conditions with the pre'ious appro'al of the Securities and 7xchange 8oard of India, in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#), and subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*6or the purpose of this clause, it is hereby clarified that where any part of the securities sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental 6ire and &eneral Insurance Co(pany =i(ited and the Hnited 6ire and &eneral Insurance Co(pany =i(ited or Hnit .rust of India, the total subscription to the securities, whether by one or (ore of such bodies, shall not for( part of the 0 per cent or %" per cent of the securities, as the case (ay be, to be offered to the public02 %/ Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 <rior to its substitution, second pro'iso, read as under, 1<ro'ided further that the co(pany, referred in sub+clause (ii), shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of atleast fi'e per
period of three years fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India0: %>4GGG:: %!4(c) Eotwithstanding anything contained in clause (b), a public sector co(pany, shall offer and allot at least ten per cent, of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares to public in ter(s of an offer docu(ent0: (3) A co(pany applying for listing shall, as a condition precedent, underta)e inter alia(a) (i) that letters of allot(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to
that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been posted, (ii) that letters of right will be issued si(ultaneously, (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the securities to which they relate, (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right, (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or di'idend on the securities will be calculated, (b) to issue, when so re*uired, receipts for all securities deposited with it whether for registration, sub+di'ision, exchange or for other purposes 3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of certificates and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (bb) to issue, when so re*uired, consolidation and renewal certificates in deno(inations of the (ar)et unit of trading to split certificates, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3
cent per annu( beginning fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India,2 %> C(itted, ibid <rior to its o(ission, third pro'iso, read as under, 1<ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase beings its public shareholding to the le'el of twenty fi'e per cent in that year02 %! Inserted, ibid0
(c) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders, and (ii) to 'erify when the co(pany is unable to issue certificates or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (d) on production of the necessary docu(ents by shareholders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or certificate of the Controller of 7state 9uty or si(ilar other docu(ent has been duly exhibited to
and registered by the co(pany3 (e) to issue certificates in respect of shares or debentures lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance certificates within the sa(e period where the transfer is acco(panied by a larger certificate3 (f) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a di'idend or the issue of right or bonus share will be considered3 (g) to reco((end or declare all di'idends andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all di'idends andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (h) to notify the stoc) exchange of any (aterial change in the general character or nature of the co(panyJs business3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (anaging agent or secretaries and treasurers, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued, copies of all other notices and circulars sent to the shareholders including proceedings of ordinary and extraordinary general (eetings of the co(pany and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the shareholders of any new issue of securities whether by way of right, pri'ilege bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited securities or the issue of securities held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of di'idend or issue of right or bonus shares or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s (or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its shareholders or debentureholders) and specifying the purpose or purposes for which the transfer boo)s are to be closed (or the record is to be ta)en)3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority subDect to which the issue is proposed to be (ade ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after each annual general (eeting of at least ten principal holders of each class of security of the co(pany along with particulars as to the nu(ber of shares or debentures held by,
and address of, each such holder3 (+) to grant to shareholders the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e not being less than four wee)s within which to record, exercise, or renounce such rights, pri'ileges and benefits and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3 (r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any securities listed on the exchange, (ii) of the intention to (a)e a drawing of such securities, inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing of the balance) for the drawing, (iii) of the a(ount of securities outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the shareholders to apprise the position of the co(pany and to a'oid the establish(ent of a false (ar)et in the shares of the co(pany3 (t) (t)that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 304($) An application for listing shall be necessary in respect of the following, (a) all new issues of any class or )ind of securities of a co(pany to be offered to the public3 (b) all further issues of any class or )ind of securities of a co(pany if such class or )ind of securities of the co(pany are already listed on a recognised stoc) exchange0: (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the securities of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 3 44ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any security, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and its orders shall be carried out by the stoc) exchange0: 3%4(#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore
or re+ad(it to dealings any securities suspended or withdrawn fro( the list0: 334(#A) 7xcept as otherwise pro'ided in these rules or per(itted by the Securities and 7xchange 8oard of India under sub+rule (/), all re*uire(ents with respect to listing
30 Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, sub+rule ($), read as under, 1($) A fresh application for listing will be necessary in respect of all new issues desired to be dealt in, pro'ided that, where such new securities are identical in all respects with those already listed, ad(ission to dealings will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new issues0 7xplanation, Shares are identical in all respects only if(a) they are of the sa(e no(inal 'alue and the sa(e a(ount per share has been called up3 (b) they are entitled to di'idend at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the di'idend payable on each share will a(ount to exactly the sa(e su(, net and gross3 and (c) they carry the sa(e rights in all other respects02 3 Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%0000 7arlier, the second pro'iso was a(ended by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 3% Substituted by the Securities Contracts (Regulation) (A(end(ent), %000, w0e0f0 0>00>0%0000 7arlier, subrule (#) was a(ended by the Securities Contracts (Regulation) (A(end(ent), !!#, w0e0f0 %30 %0 !!#0 33 Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!0>0%0 00 <rior to its substitution, sub+rule (#A) as a(ended by the Securities Contracts
prescribed by these rules shall, so far as they (ay be, also apply to a public sector co(pany0: 3$4GGG: (/) .he 3"4Securities and 7xchange 8oard of India: (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect to listing prescribed by these rules0 3#4Co ti *o*! Li!ti ( Re7*ire.e t. 19A. ( ) 7'ery listed co(pany 3/4other than public sector co(pany: shall (aintain public shareholding of at least twenty fi'e per cent0, 3>4<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent, on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall increase its public shareholding to at least twenty fi'e per cent, within a period of three years fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India0 7xplanation, 6or the purposes of this sub+rule, a co(pany whose securities has been listed pursuant to an offer and allot(ent (ade to public in ter(s of sub+clause (ii) of clause (b) of sub+rule (%) of rule !, shall (aintain (ini(u( twenty fi'e per cent, public shareholding fro( the date on which the public shareholding in the co(pany reaches the le'el of twenty fi'e percent in ter(s of said sub+clause0: (%) Khere the public shareholding in a listed co(pany falls below twenty fi'e per cent0 at any ti(e, such co(pany shall bring the public shareholding to twenty fi'e per cent0
(Regulations)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 and &SR % (7) w0e0f0 0!0030 !!", read as under, 1(#A) All the re*uire(ents with respect to listing and continuous listing prescribed by these rules, shall so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature ,2 3$ C(itted by the Securities Contracts (Regulation)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its o(ission, pro'iso, as substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# and inserted by &SR %! (7) dated %/0030 !!", read as under,
1<ro'ided that a recognised stoc) exchange (ay relax the re*uire(ent of offer to public for subscription of atleast twenty+fi'e percent of the each class or )ind of securities issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e02 3" Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent), Rules, !!#, w0e0f0 %30 %0 !!#0 3# Inserted by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 3/ Inserted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3> Substituted, ibid0 <rior to substitution, pro'isos, read as under, 1<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of at least fi'e per cent per annu( beginning fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India, <ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase brings its public shareholding to the le'el of twenty fi'e per cent in that year02
within a (axi(u( period of twel'e (onths fro( the date of such fall in the (anner specified by the Securities and 7xchange 8oard of India0: 3!4(3) Eotwithstanding anything contained in this rule, e'ery listed public sector co(pany shall (aintain public shareholding of at least ten per cent0, <ro'ided that a listed public sector co(pany+ (a) which has public shareholding below ten per cent, on the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of three years fro( the date of such co((ence(ent3 (b) whose public shareholding reduces below ten per cent, after the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of twel'e (onths fro( the date of such reduction,0: $04Re7*ire.e t! /ith re!$e't to the li!ti ( of * it! or % > other i !tr*.e t of % Colle'ti+e I +e!t.e t S'he.e o % re'o( i!e- !to'6 e#'h% (e. "=. ( ) A Collecti'e In'est(ent ?anage(ent Co(pany (CI?C) which is desirous of getting its any collecti'e in'est(ent sche(e listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars , (a) Certificate of incorporation, (e(orandu( and articles of association of the co(pany and the copy of the trust deed of the sche(e intended to be listed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any unit or other instru(ent for subscription or sale during the last fi'e years, or in the case of a new co(pany, such shorter period during which the co(pany has been in existence0 (d) Copies of balance sheets and audited accounts for the last fi'e years, or in the case of a new co(pany, for such co(pleted financial year for which accounts ha'e been (ade up0 (e) A state(ent showing,(i) returns and cash bonuses, if any, paid during the last ten years (or such
shorter period as the co(pany has been in existence whether as a pri'ate or public co(pany)3 (ii) returns or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents pertaining to each sche(e of the co(pany with or between,(i) 'endors andLor pro(oters3 (ii) underwriters and sub+underwriters3
3! Inserted $0 Inserted
by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 0 by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%000
(iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents pertaining to each sche(e of a co(pany with(i) selling agents and other ser'ice pro'iders3 (ii) (anaging directors and technical directors3 (iii) general (anager, sales (anager, (anager or secretary0 (h) Certified copies of e'ery letter, report, balance sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering units or any other instru(ents of the sche(e for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents pertaining to such sche(e0 (j) A brief history of the Co(pany since its incorporation gi'ing details of its acti'ities including any re+organisation, reconstruction or a(alga(ation, changes in its capital structure (authorised, issued and subscribed) and debenture borrowings, if any, and the perfor(ance of other collecti'e in'est(ent sche(es of the co(pany0 (k) <articulars of units of the sche(e andLor shares, debentures of the co(pany issued (i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s granted to any person pertaining to such sche(e0 (") Certified copies of(i) certificate of registration granted by the Securities and 7xchange 8oard of India3 (ii) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3 (iii) agree(ents, if any, with any public financial institution as specified in section $A of the Co(panies Act, !"# ( of !"#)0 (n) A list of the highest ten holders of units of each sche(e of the co(pany as on the date of application along with particulars as to the nu(ber of units held by and the address of each such holder0 ($) <articulars of units of the sche(e for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0
(%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer of units of a particular sche(e3 (ii) that the fully paid units issued under the sche(e will be free fro( all lien, while in the case of partly paid units the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such units3 (iii) that any a(ount paid+up in ad'ance of calls on any units (ay carry interest but shall not entitle the holder of the unit to participate in respect thereof, in a return subse*uently declared3 (iv) there will be no forfeiture of unclai(ed returns before the clai( beco(es barred by law3 (v) that option or right to call of units shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the units of a sche(e which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0 (b) At least twenty+fi'e per cent of the units or any other instru(ent of a sche(e issued by the co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and not (ore than ninety days, and that applications recei'ed in pursuance of such offer were allotted fairly and unconditionally , 4ro+i-e- that a recognised stoc) exchange (ay relax this re*uire(ent, with the pre'ious appro'al of the Securities and 7xchange 8oard of India in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#) and subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*Khere any part of the units or any other instru(ents sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely, the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental Insurance Co(pany =i(ited and the Hnited Insurance Co(pany =i(ited, or Hnit .rust of India, the total subscription to the units or any other instru(ent, whether by one or (ore of such bodies, shall not for( part of the twenty+fi'e per cent of the units or any other instru(ent to be offered to the public0 (3) A co(pany applying for listing of a sche(e shall, as a condition precedent, underta)e, inter alia,(a) (i) that letters of allot(ent of units or any other instru(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been
posted3 (ii) that letters of right will be issued si(ultaneously3 (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and, exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the units or any other instru(ent to which they relate3 (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right3 (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or return on the units or any other instru(ent will be calculated3 (b) to issue, when so re*uired, receipts for all units and any other instru(ent deposited with it whether for registration, sub+di'ision, exchange or for other purposes3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of units and any other instru(ent and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (c) to issue, when so re*uired, consolidation and renewal units or any other instru(ent in deno(inations of the (ar)et unit of trading, to split units or any other instru(ent, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3 (d) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders3 and (ii) to 'erify when the co(pany is unable to issue units or any other instru(ents or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (e) on production of the necessary docu(ents by unit holders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or si(ilar other docu(ent has been duly exhibited to and registered by the co(pany3 (f) to issue certificates in respect of units or any other instru(ent lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance units or any other instru(ent within the sa(e period where the transfer is acco(panied by a larger unit or any other instru(ent certificate3 (g) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a return or the issue or right or bonus units or
any other instru(ent will be considered3 (h) to reco((end or declare all returns andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all returns andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts of such sche(e as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued copies of all other notices and circulars sent to the unitLother instru(ent holders regarding any i(portant de'elop(ent or resolutions passed by the co(pany affecting the perfor(ance of the sche(e and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the unitLany other instru(ent holders, of any new issue of unitsLother instru(ents whether by way of right, pri'ilege, bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited unitsLother instru(ents or the issue of unitsLother instru(ents held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of unit capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of returns or issue of right or bonus unitsLany other instru(ents in the sche(e or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its unitLother instru(ent holders and specifying the purpose or purposes for which the transfer boo)s are to be closed or the record is to be ta)en3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority, subDect to which the issue is proposed to be (ade, ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after the preparation of annual accounts of at least ten principal holders of each class of unitsLany other instru(ents of the co(pany along with particulars as to the nu(ber of unitsLany other instru(ent held by, and address of, each such holder3 (+) to grant to unitLany other instru(ent holders of the sche(e the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e, not being less than four wee)s, within which to record, exercise, or renounce such rights, pri'ileges and benefits, and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3
(r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any unitLother instru(ent listed on the exchange3 (ii) of the intention to (a)e a drawing of such unitLother instru(ent inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing off the balance) for the drawing3 (iii) of the a(ount of unitsLother instru(ents outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the unitLany other instru(ent holders to appraise the position of the sche(e and to a'oid the establish(ent of a false (ar)et in the unitsLany other instru(ents of the co(pany3 (t) that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 ($) A fresh application for listing will be necessary in respect of all new sche(es desired to be dealt in , 4ro+i-e- that, where such new unitsLother instru(ents are identical in all respects with those already listed, ad(ission to dealing will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new sche(es0 ()%lanati$n0-HnitsLany other instru(ents are identical in all respects only if(a) they are issued under the sa(e sche(e3 (b) they are of the sa(e no(inal 'alue and the sa(e a(ount per unitLother instru(ents has been called up3 (c) they are entitled to returns at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the return payable on each unitLother issue will a(ount to exactly the sa(e su(, net and gross3 and (d) they carry the sa(e rights in all other respects0 (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the unitsLother instru(ents of a sche(e of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 4ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any unitLother instru(ent of a collecti'e in'est(ent sche(e, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an
opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and thereupon the orders of the Securities Appellate .ribunal shall be carried out by the stoc) exchange0 (#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore or read(it to dealings any unitsLother instru(ents suspended or withdrawn fro( the list0 (/) All the re*uire(ents with respect to listing prescribed by these rules, shall, so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature , 4ro+i-e- that a recognised stoc) exchange (ay relax the re*uire(ent of offer to the public for subscription of at least twenty+fi'e per cent of the units or any other instru(ent of a collecti'e in'est(ent sche(e issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 (>) .he Securities and 7xchange 8oard of India (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect of listing prescribed by these rules0: $ 4Deli!ti ( of !e'*ritie!. "1. A recogniFed stoc) exchange (ay, without preDudice to any other action that (ay be ta)en under the Act or under any other law for the ti(e being in force, delist any securities listed thereon on any of the following grounds in accordance with the regulations (ade by the Securities and 7xchange 8oard of India, na(ely,(a) the co(pany has incurred losses during the preceding three consecuti'e years and it has negati'e networth3 (b) trading in the securities of the co(pany has re(ained suspended for a period of (ore than six (onths3 (c) the securities of the co(pany ha'e re(ained infre*uently traded during the preceding three years3 (d) the co(pany or any of its pro(oters or any of its director has been con'icted for failure to co(ply with any of the pro'isions of the Act or the Securities and 7xchange 8oard of India Act, !!% or the 9epositories Act, !!# (%% of !!#) or rules, regulations, agree(ents (ade thereunder, as the case (ay be and awarded a penalty of not less than rupees one crore or i(prison(ent of not less than three years3 (e) the addresses of the co(pany or any of its pro(oter or any of its directors, are not )nown or false addresses ha'e been furnished or the co(pany has changed its registered office in contra'ention of the pro'isions of the Co(panies Act, !"# ( of !"#)3 or
$
Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %00>, w0e0f0 000#0%00!
(f) shareholding of the co(pany held by the public has co(e below the (ini(u( le'el applicable to the co(pany as per the listing agree(ent under the Act and the co(pany has failed to raise public holding to the re*uired le'el within the ti(e specified by the recogniFed stoc) exchange , 4ro+i-e- that no securities shall be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) If the securities is delisted under clause ( ),
(a) the co(pany, pro(oter and director of the co(pany shall be Dointly and se'erally liable to purchase the outstanding securities fro( those holders who wish to sell the( at a fair price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India, under the Act3 and (b) the said securities shall be delisted fro( all recogniFed stoc) exchanges0 (3) A recogniFed stoc) exchange (ay, on the re*uest of the co(pany, delist any securities listed thereon in accordance with the regulations (ade under the Act by Securities and 7xchange 8oard of India, subDect to the following conditions, na(ely ,(a) the securities of the co(pany ha'e been listed for a (ini(u( period of three years on the recogniFed stoc) exchange3 (b) the delisting of such securities has been appro'ed by the two+third of public shareholders3 and (c) the co(pany, pro(oter andLor the director of the co(pany purchase the outstanding securities fro( those holders who wish to sell the( at a price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India under the Act, 4ro+i-e- that the condition at (c) (ay be dispensed with by Securities and 7xchange 8oard of India if the securities re(ain listed at least on the Eational Stoc) 7xchange of India =i(ited or the 8o(bay Stoc) 7xchange =i(ited0: FORM A ( ee Rules 3 and /) A$$li'%tio for re'o( itio 1re e/%l of re'o( itio of % !to'6 e#'h% (e * -er !e'tio ) of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 .o 00000000000000000000000000000000000000 00000000000000000000000000000000000000 !bject,*A%%licati$n f$r rec$gniti$n-rene.al $f rec$gniti$n $f a #t$ck e)change !nder #ecti$n 3 $f the ec!ritie# /$ntract# (0eg!lati$n) Act' 1956& Sir, <ursuant to the $%4Securities and 7xchange 8oard of India: Eotification Eo0 00000000000000000000000000 00000000000000000 dated 000000000000000000000000000000000LCertificate of recognition dated0000000000000000000000000000000KeLI on behalf of 000000000000000000 (na(e and address of stoc) exchange) being a stoc) exchange as defined in section % of the Securities Contracts
$% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
(Regulation) Act, !"# hereby apply for recognitionLrenewal of recognition for the purposes of the said Act in respect of contracts in securities0 ". 6our copies of the rules, (e(orandu( and articles of association relating in general to the constitution and (anage(ent of the stoc) exchange and four copies of the bye+laws for the regulation and control contracts in securities are enclosed0 ). All the necessary infor(ation re*uired in the Annexure to this 6or( is enclosed0 Any additional infor(ation will be furnished as and when called for by the $34Securities and 7xchange 8oard of India:0 3. KeLI on behalf of the said stoc) exchange hereby underta)e to co(ply with the re*uire(ents of section $ of the said Act and such other conditions and ter(s as (ay be contained in the certificate of recognition or be prescribed or i(posed subse*uently0 5. .reasury Receipt Eo0 000000dated000000for Rs000000000000is attached0
Oours faithfully, Signature of applicant ANNEAURE TO 2OR@ BAC Part I - General 0 Ea(e of the applicant stoc) exchange0 %0 Address0 30 9ate of establish(ent0 $0 Is your exchange a Doint stoc) co(pany (state whether public or pri'ate) registered under the Indian Co(panies Act or an association for profit or otherwise P If it is organised on so(e other basis, this (ay be stated0 "0 &i'e details of your capital structure and attach three copies of the audited balance sheets and profit and loss account of the 7xchange for the preceding three years0 Part II - Membership #0 State the nu(ber of (e(bers at the ti(e of application0 Also specify how (any are inacti'e0 /0 State whether there is any pro'ision, resolution or con'ention for li(iting the nu(ber of (e(bers and whether in pursuance thereof you ha'e fixed a ceiling on the nu(ber of (e(bers that you would ta)e0 >0 9o you insist on any (ini(u( *ualifications and experience before enrolling new (e(bers P If so gi'e details0 !0 State the different classes of (e(bers, if any, the nu(ber thereof and the pri'ileges enDoyed by each class0 Khat is the procedure followed by your exchange for the ad(ission of different classes of new (e(bers P 00 Khat are the rates of your annual subscription in respect of the different classes of (e(bers P 0 9o you collect any security deposit fro( your (e(bers P If so, gi'e details and also state the (anner in which such deposits are utilised and the rate of interest allowed, if any0
$3 Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
%0 9o you collect any ad(ission or entrance fees fro( your (e(bers or fro( partners of fir(s who are (e(bers P If so, how (uch P 30 9o you insist on your (e(bers and partners of fir(s who are (e(bers di'esting the(sel'es of other acti'ities either as principal or as e(ployee P $0 9o your rules per(it fir(s to beco(e (e(bers P If so, is it incu(bent on (e(bers to see) the appro'al of the go'erning body before ad(itting new partners P State the conditions, if any, laid down in your rules for the ad(ission of such partners0 "0 If your rules do not per(it of fir(s being enrolled as (e(bers, do you per(it indi'idual (e(bers to for( a partnership P State the procedure followed for the recognition of such partnership0 #0 9o you per(it (e(bers to wor) in partnership with non+(e(bers P If so, how far such non+(e(bers subDect to the control of the stoc) exchange P Part III - Governing Body /0 Khat is the present strength of your go'erning body P &i'e details of the constitution, powers of (anage(ent, election and tenure of office of (e(bers of the go'erning body, and the (anner in which its business is transacted0 >0 Are any trade or co((ercial interest represented on your go'erning body P If so,
gi'e details of interests represented0 !0 9o you associate shareholders of in'estors associations with the (anage(ent of your exchange P If so, state the (anner in which it is done0 %00 Are there any &o'ern(ent representati'es on your go'erning body P If so, furnish their na(es0 % 0 9o your rules pro'ide for the direct election by (e(bers of any other bodies or co((ittees, apart fro( the go'erning body P If so, gi'e details of their constitution, tenure, powers and functions0 %%0 9o you ha'e any pro'ision for the appoint(ent of standing or ad h$c subco((ittees of the go'erning body P If so, furnish details of the (ethod of their appoint(ent, ter(s of office, powers and functions0 %30 &i'e the designations, powers and duties of principal office+bearers of your exchange0 Are any of these office+bearers in the pay of the stoc) exchange P If so, gi'e details as to the (ode of their appoint(ent, tenure of office and re(uneration0 Part IV - Trading %$0 9o you ha'e a trading ring P If not, how do you carry on the business P &i'e details0 %"0 State the different )inds of contracts in use on your exchange e&g&' spot, ready and forward0 State the period of deli'ery and pay(ent in each case0 %#0 &i'e details of business hours for each type of contract0 %/0 &i'e details of the scale of bro)erage and other charges, if any, prescribed by your exchange0 %>0 9o you prescribe standard for(s of contract for the use of your (e(bers P Attach three copies of each such contract for(0 %!0 9o you classify your (e(bers into bro)ers and Dobbers P If so, specify the bye+law under which this is done0 300 9o you ha'e a syste( of registration of re(isiers andLor authorised cler)s P If so, gi'e details as to their *ualifications, obligations and rights, etc0 3 0 9o you ha'e any regulations regarding dealings by (e(bers on their own account whether in the nature of 1aravani (day+to+day) or otherwise P 3%0 9o you ha'e any pro'isions for regulating the 'olu(e of business done by any indi'idual (e(ber other than through a syste( of (argins P If so, gi'e details0 330 Khat pro'isions ha'e you (ade for periodical settle(ent of contracts and differences thereunder, the deli'ery of, and pay(ent for securities and the passing of deli'ery orders P 3$0 9o you ha'e a clearing house for the settle(ent of contracts P If so, gi'e details of its organisation and (anage(ent0 3"0 If you ha'e clearing house, what returns do the (e(bers of your exchange sub(it regarding the transactions cleared through such clearing house P 9oes the exchange as) for any regular returns in respect of transactions settled outside the clearing house P Sub(it three copies of for(s used in this connection0 3#0 Iow do you fix, alter or postpone the dates of settle(ent P 3/0 Iow do you deter(ine and declare (a)ing+up prices P 3>0 9o you ha'e any arrange(ents for (a)ing or recording of bargains P 3!0 Ia'e you any arrange(ents for recording and publishing (ar)et rates including opening, closing, highest and lowest rates P $00 Khat pro'isions ha'e you (ade for regulating-(a) the entering into contracts, their
perfor(ance and rescission, including contracts , (i) between (e(bers, (ii) between a (e(ber and his constituent, and (iii) between a (e(ber and a non+(e(ber3 (b) the conse*uences of breach, default or insol'ency on the part of (e(bers whether acting as buyers, sellers or inter(ediaries 3 and (c) 2havala#3 and other (atters relating to conduct of business of (e(bers in the exchange P $ 0 9o you prescribe (argin re*uire(ents P If yes, gi'e details0 $%0 9o you prescribe (axi(u( and (ini(u( prices for securities P If so, how and under what conditions0 $30 9o you pro'ide any safeguards for the pre'ention of Nbulls*ueeFesJ and 3 NbearraidsJ and for (eeting e(ergencies in trade P &i'e details0 $$0 Khat are the (easures adopted by you to regulate or prohibit ad'ertising or issue of circulars by your (e(bers P $"0 Khat are the disciplinary power with the go'erning body to enforce due co(pliance by (e(bers of the rules and bye+laws of the exchange and generally to ensure proper standard of business conduct P $#0 9o you re*uire (e(bers to supply such infor(ation or explanation and to produce such boo)s relating to their business as your go'erning body (ay re*uire P $/0 9o you publish any statistics in regard to business done on the exchange including the transactions settled through the clearing house, if (aintained P In particular, ha'e you e'ol'ed any (achinery for co(puting the 'olu(e of transactions in the different )inds of contracts per(itted on your exchange P &i'e details0 $>0 9o you ha'e any bye+laws contra'ention of which (a)es a contract 'oid P Part V - Miscellaneo s $!0 9o you ha'e any (achinery for arbitration of disputes between (e(bers andLor between (e(bers and their constituents P &i'e details0 "00 Khat are the conditions subDect to which securities are listed for dealings on your exchange P " 0 Khat are your re*uire(ents for ad(itting securities to forward+trading P "%0 9o you ha'e the right to prohibit, withdraw or suspend dealings in a listed security P If so, under what circu(stances is this right exercised P "30 Khat pro'isions ha'e you (ade for the le'y and reco'ery of fees, fines and penalties P FORM B ( ee rules # and /) $$5The Se'*ritie! % - E#'h% (e ;o%r- of I -i%< 4e. 5elhi' the 20&&&&&&&&&&&&& Eo0 000000000000000000000000000000000000.he $"4Securities and 7xchange 8oard of India:, ha'ing considered the application for recognitionLrenewal of recognition (ade under section 3 of the Securities Contracts (Regulation) Act, !"# by000000000000000000000000000000 (na(e and address of exchange) and being satisfied that it would be in the interest of the trade and also in the public interest so to do, hereby grants, in exercise of the powers conferred by section $ of the Securities Contracts (Regulation) Act, !"# recognition to the said exchange under section $ of the said Act for 0000000000000000000 yearLyears ending 0000000000000000000000%0 0000000on a per(anent basis in respect of contracts in securities subDect to the conditions stated herein below or as (ay be prescribed or i(posed hereafter0 Seal of the $#48oard: Signature of Cfficer
Note&-Application for renewal of recognition shall be (ade so as to reach the Central &o'ern(ent not less than three (onths before the expiry of the period0 (.his certificate, will also ha'e to be published as a Eotification in the &aFette of India and also in the Cfficial &aFette of the State in which principal office of the recognised stoc) exchange is situate)0 $/5FORM ! ( ee rule 3) Noti'e to !ho/ '%*!e %(%i !t the /ith-r%/%l of re'o( itio .I7 S7CHRI.I7S AE9 7ACIAE&7 8CAR9 C6 IE9IA 6!"bai' the&&&&&&&&&&& .o 0000000000000000000000000000000000000000000000000000000000000000000000000000000000
$$ Substituted
for 1&o'ern(ent of India, ?inistry of 6inance2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 $" Substituted for 1Central &o'ern(ent2, ibid0 $# Substituted for 1?inistry2, ibid0 $/ Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#
0000000000000000000000000000000000000000000000000000000000000000000000000000000000 (na(e and address of the exchange) Oou are hereby called upon to show cause on or before 0000000000000000000000000000000000000 at the office of 0000000000000000000000000000000000000000000000000000 ( designation of the officer) why the recognition granted to you under the ?inistry of 6inanceLthe Securities and 7xchange 8oard of India, Eotification Eo0 0000000000000000000000000000 dated 000000000000000000000000000000000000000 and Certificate Eo0 00000000000000000000000000000 dated 000000000000000000000000000000 should not be withdrawn for the reasons gi'en in the annexure to this notice0 8y order and in the na(e of the Securities and 7xchange 8oard of India0 Seal of the Securities and 7xchange 8oard of India0 Notifi'%tio & 4$& 576' dated 217271957&
SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< SECTIONS
80(9:6:4A0; 1. Short title, extent and co((ence(ent ". 9efinitions 0(/<=4: (5 1</> (?/@A4=( ). Application for recognition of stoc) exchanges 3. &rant of recognition to stoc) exchanges0 3A. Corporatisation and de(utualisation of stoc) exchanges 3;. <rocedure for corporatisation and de(utualisation 5. Kithdrawal of recognition 8. <ower of Central &o'ern(ent to call for periodical returns or direct in*uiries to be (ade 7. Annual reports to be furnished to Central &o'ern(ent by stoc) exchanges 7A. <ower of recognised stoc) exchange to (a)e rules restricting 'oting rights, etc :. <ower of Central &o'ern(ent to direct rules to be (ade or to (a)e rules :A. Clearing corporation 9. <ower of recognised stoc) exchanges to (a)e bye+laws 1=. <ower of Securities and 7xchange 8oard of India to (a)e or a(end byelaws of recognised stoc) exchanges 11. <ower of Central &o'ern(ent to supersede go'erning body of a recognised stoc) exchange 1". <ower to suspend business of recognised stoc) exchanges0 1"A. <ower to issue directions 1). Contracts in notified areas illegal in certain circu(stances 1)A. Additional trading floor 13. Contracts in notified areas to be 'oid in certain circu(stances 15. ?e(bers (ay not act as principals in certain circu(stances 18. <ower to prohibit contracts in certain cases 17. =icensing of dealers in securities in certain areas 17A. <ublic issue and listing of securities referred to in sub+clause ( ie) of clause (h) of section % 1:. 7xclusion of spot deli'ery contracts fro( sections 3, $, " and / 1:A. Contracts in deri'ati'e 19. Stoc) exchanges other than recognised stoc) exchanges prohibited "=. <rohibition of options in securities "1. Conditions for listing "1A. 9elisting of securities "". Right of appeal against refusal of stoc) exchanges to list securities of public co(panies ""A. Right of appeal to Securities Appellate .ribunal against refusal of stoc) exchange to list securities of public co(panies "";. <rocedure and powers of Securities Appellate .ribunal ""C. Right to legal representation ""D. =i(itation ""E. Ci'il court not to ha'e Durisdiction
""2. Appeal to Supre(e Court 8(4A91:( A45 80</(5A0( "). <enalties ")A. <enalty for failure to furnish infor(ation, return, etc0 ");. <enalty for failure by any person to enter into an agree(ent with clients ")C. <enalty for failure to redress in'estorsJ grie'ances ")D. <enalty for failure to segregate securities or (oneys of client or clients ")E. <enalty for failure to co(ply with pro'ision of listing conditions or delisting conditions or grounds ")2. <enalty for excess de(aterialisation or deli'ery of unlisted securities ")G. <enalty for failure to furnish periodical returns, etc0 ")D. <enalty for contra'ention where no separate penalty has been pro'ided ")0I. <ower to adDudicate ")E. 6actors to be ta)en into account by adDudicating officer ")EA. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! ")E;. Re'o+er> of %.o* t! ")F. Crediting su(s realised by way of penalties to Consolidated 6und of India ")L. Appeal to Securities Appellate .ribunal ")@. Cffences ")N. Co(position of certain offences ")0O. <ower to grant i((unity "3. Cffences by co(panies "5. Certain offences to be cogniFable "8. CogniFance of offences by courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! 6: /(99A4(<A "7. .itle to di'idends "7A. Right to recei'e inco(e fro( collecti'e in'est(ent sche(e "7;. Right to recei'e inco(e fro( (utual fund ":. Act not to apply in certain cases "9. <rotection of action ta)en in good faith "9A. <ower to delegate )=. <ower to (a)e rules )1. <ower of Securities and 7xchange 8oard of India to (a)e regulations SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< 53th Se$te.,er, 1958< A A't to $re+e t * -e!ir%,le tr% !%'tio ! i !e'*ritie! ,> re(*l%ti ( the ,*!i e!! of -e%li ( therei , 14***: ,> $ro+i-i ( for 'ert%i other .%tter! 'o e'te- there/ith. 87 it enacted by <arlia(ent in the Se'enth Oear of the Republic of India as follows ,
80(9:6:4A0; Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities Contracts (Regulation) Act, !"#0 (%) It extends to the whole of India0
Kords 1by prohibiting options and2 o(itted by the Securities =aws (A(end(ent) Act, !!", Sec0 >, w0e0f0 %"+0 + !!".
(3) It shall co(e into force on such date% as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 Defi itio !. ". In this Act, unless the context otherwise re*uires,(a) 1contract2 (eans a contract for or relating to the purchase or sale of securities3 3 4(aa) 1corporatisation2 (eans the succession of a recognised stoc) exchange, being a body of indi'iduals or a society registered under the Societies Registration Act, >#0 (% of >#0), by another stoc) exchange, being a co(pany incorporated for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities carried on by such indi'iduals or society3 (ab) 1de(utualisation2 (eans the segregation of ownership and (anage(ent fro( the trading rights of the (e(bers of a recognised stoc) exchange in accordance with a sche(e appro'ed by the Securities and 7xchange 8oard of India3: $4"4(ac): 1deri'ati'e2 includes(A) a security deri'ed fro( a debt instru(ent, share, loan, whether secured or unsecured, ris) instru(ent or contract for differences or any other for( of security3 (B) a contract which deri'es its 'alue fro( the prices, or index of prices, of underlying securities3: (b) 1&o'ern(ent security2 (eans a security created and issued, whether before or after the co((ence(ent of this Act, by the Central &o'ern(ent or a State &o'ern(ent for the purpose of raising a public loan and ha'ing one of the for(s specified in clause (2) of section % of the <ublic 9ebt Act, !$$ ( > of !$$)3 (c) 1(e(ber2 (eans a (e(ber of a recognised stoc) exchange3 (d) 1option in securities2 (eans a contract for the purchase or sale of a right to buy or sell, or a right to buy and sell, securities in future, and includes a teji' a "andi' a teji "andi' a galli' a put, a call or a put and call in securities3 (e) 1prescribed2 (eans prescribed by rules (ade under this Act3
% %0+%+
!"/ vide SRC "%>, dated #+0%+ !"/, published in the &aFette of India, 7xtra0, <t0 II, Sec0 3, p0 "$!, dated #+0%+ !"/0 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 $ Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000 " Clause (aa) renu(bered as clause (ac) by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0
(f) 1recognised stoc) exchange2 (eans a stoc) exchange which is for the ti(e
being recognised by the Central &o'ern(ent under section $3 (g) 1rules2, with reference to the rules relating in general to the constitution and (anage(ent of a stoc) exchange, includes, in the case of a stoc) exchange which is an incorporated association, its (e(orandu( and articles of association3 64(ga) 1sche(e2 (eans a sche(e for corporatisation or de(utualisation of a recognised stoc) exchange which (ay pro'ide for(i) the issue of shares for a lawful consideration and pro'ision of trading rights in lieu of (e(bership cards of (e(bers of a recognised stoc) exchange3 (ii) the restrictions on 'oting rights3 (iii) the transfer of property, business, assets, rights, liabilities, recognitions, contracts of the recognised stoc) exchange, legal proceedings by, or against, the recognised stoc) exchange, whether in the na(e of the recognised stoc) exchange or any trustee or otherwise and any per(ission gi'en to, or by, the recognised stoc) exchange3 (iv) the transfer of e(ployees of a recognised stoc) exchange to another recognised stoc) exchange3 (v) any other (atter re*uired for the purpose of, or in connection with, the corporatisation or de(utualisation, as the case (ay be, of the recognised stoc) exchange3: /4>4(gb): 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (h) 1securities2 include(i) shares, scrips, stoc)s, bonds, debentures, debenture stoc) or other (ar)etable securities of a li)e nature in or of any incorporated co(pany or other body corporate3 !4(ia) deri'ati'e3 (ib) units or any other instru(ent issued by any collecti'e in'est(ent sche(e to the in'estors in such sche(es3:
# Inserted / Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (Second A(end(ent) Act, !!!, Sec %, w0e0f0 #+ %+ !!!0 > Clause (ga) renu(bered as clause (gb) by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 ! Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000
04(ic) security receipt as defined in clause ( Cg) of section % of the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%3: 114(id) units or any other such instru(ent issued to the in'estors under any (utual fund sche(e3: %47xplanation0-6or the re(o'al of doubts, it is hereby declared that ;securities; shall not include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(bined benefit ris) on the life of the persons and in'est(ent by such
persons and issued by an insurer referred to in clause (!) of section % of the Insurance Act, !3> ($ of !3>)3: 35(ie) any certificate or instru(ent (by whate'er na(e called), issued to an in'estor by any issuer being a special purpose distinct entity which possesses any debt or recei'able, including (ortgage debt, assigned to such entity, and ac)nowledging beneficial interest of such in'estor in such debt or recei'able, including (ortgage debt, as the case (ay be3 <
0 Inserted by the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%, Sec0 $ and Schedule, w0r0e0f0 % +#+%00%0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0e0f0 %+ 0+%00$0 % Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, Sec $, w0r0e0f0 0!+0$+%0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, read as under , ;CIA<.7R BI ?ISC7==AE7CHS #0 Dalidati$n&-Eotwithstanding anything contained in any Dudg(ent, decree or order of any Court, .ribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly, any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 0e%eal and #aving#&*( ) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0; 3 Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec %, w0e0f0 %>+"+ %00/0
$4(ii) &o'ern(ent securities3 (iia) such other instru(ents as (ay be declared by the Central &o'ern(ent to be securities3 and: (iii) rights or interest in securities3 "4(i) 1spot deli'ery contract2 (eans a contract which pro'ides for,(a) actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e
town or locality3 (b) transfer of the securities by the depository fro( the account of a beneficial owner to the account of another beneficial owner when such securities are dealt with by a depository3: #4(j) 1stoc) exchange2 (eans(a) any body of indi'iduals, whether incorporated or not, constituted before corporatisation and de(utualisation under sections $A and $8, or (b) a body corporate incorporated under the Co(panies Act, !"# ( of !"#) whether under a sche(e of corporatisation and de(utualisation or otherwise, for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0: /4I ter$ret%tio of 'ert%i /or-! % - e#$re!!io !. "A. Kords and expressions used herein and not defined in this Act but defined in the Co(panies Act, !"# ( of !"#) or the Securities and 7xchange 8oard of India
$ Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, for sub+clause (ii), w0r0e0f0 30+0 + !!%0 " Substituted by the 9epositories Act, !!#, Sec 30 and Schedule, <t0 III, w0r0e0f0 %0+0!+ !!" . <rior to its substitution, clause (i) read as under , N(i) 1spot deli'ery contract2 (eans a contract which pro'ides for the actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e town or locality3J # Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (j) read as under ,N(j) 1stoc) exchange2 (eans any body of indi'iduals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0J / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
Act, !!% ( " of !!%) or the 9epositories Act, !!# (%% of !!#) shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts0: 0(/<=4: (5 1</> (?/@A4=( A$$li'%tio for re'o( itio of !to'6 e#'h% (e!. ). ( ) Any stoc) exchange, which is desirous of being recognised for the purposes of this Act, (ay (a)e an application in the prescribed (anner to the Central &o'ern(ent01: (%) 7'ery application under sub+section ( ) shall contain such particulars as (ay be prescribed, and shall be acco(panied by a copy of the bye+laws of the stoc) exchange for the regulation and control of contracts and also a copy of the rules relating in general to the constitution of the stoc) exchange and in particular, to(a) the go'erning body of such stoc) exchange, its constitution and powers of (anage(ent and the (anner in which its business is to be transacted3 (b) the powers and duties of the office bearers of the stoc) exchange3 (c) the ad(ission into the stoc) exchange of 'arious classes of (e(bers, the *ualifications for (e(bership, and the exclusion, suspension, expulsion and
re+ad(ission of (e(bers therefro( or thereinto3 (d) the procedure for the registration of partnerships as (e(bers of the stoc) exchange in cases where the rules pro'ide for such (e(bership3 and the no(ination and appoint(ent of authorised representati'es and cler)s0 Gr% t of re'o( itio to !to'6 e#'h% (e!. 3. ( ) If the Central &o'ern(ent ! is satisfied, after (a)ing such in*uiry as (ay be necessary in this behalf and after obtaining such further infor(ation, if any, as it (ay re*uire,(a) that the rules and bye+laws of a stoc) exchange applying for registration are in confor(ity with such conditions as (ay be prescribed with a 'iew to ensure fair dealing and to protect in'estors3 (b) that the stoc) exchange is willing to co(ply with any other conditions (including conditions as to the nu(ber of (e(bers) which the Central &o'ern(ent, after consultation with the go'erning body of the stoc) exchange and ha'ing regard to the area ser'ed by the stoc) exchange and its standing and the nature of the securities dealt with by it, (ay i(pose for the purpose of carrying out the obDects of this Act3 and
> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 ! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
(c) that it would be in the interest of the trade and also in the public interest to grant recognition to the stoc) exchange3 it (ay grant recognition to the stoc) exchange subDect to the conditions i(posed upon it as aforesaid and in such for( as (ay be prescribed0 (%) .he conditions which the Central &o'ern(ent %0 (ay prescribe under clause (a) of sub+section ( ) for the grant of recognition to the stoc) exchanges (ay include, a(ong other (atters, conditions relating to,(i) the *ualifications for (e(bership of stoc) exchanges3 (ii) the (anner in which contracts shall be entered into and enforced as between (e(bers3 (iii) the representation of the Central &o'ern(ent on each of the stoc) exchange by such nu(ber of persons not exceeding three as the Central &o'ern(ent (ay no(inate in this behalf3 and (iv) the (aintenance of accounts of (e(bers and their audit by chartered accountants whene'er such audit is re*uired by the Central &o'ern(ent0 (3) 7'ery grant of recognition to a stoc) exchange under this section shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office as of the stoc) exchange is situate, and such recognition shall ha'e effect as fro( the date of its publication in the &aFette of India0 % ($) Eo application for the grant of recognition shall be refused except after gi'ing an opportunity to the stoc) exchange concerned to be heard in the (atter3 and the reasons for such refusal shall be co((unicated to the stoc) exchange in writing0 %% (") Eo rules of a recognised stoc) exchange relating to any of the (atters specified in sub+section (%) of section 3 shall be a(ended except with the appro'al of the
Central &o'ern(ent0%3 "35Cor$or%ti!%tio % - -e.*t*%li!%tio of !to'6 e#'h% (e!. 3A. Cn and fro( the appointed date, all recognised stoc) exchanges (if not corporatised and de(utualised before the appointed date) shall be corporatised and de(utualised in accordance with the pro'isions contained in section $8 ,
%0 <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 % <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %% <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %3 <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 %$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
4ro+i-e- that the Securities and 7xchange 8oard of India (ay, if it is satisfied that any recognised stoc) exchange was pre'ented by sufficient cause fro( being corporatised and de(utualised on or after the appointed date, specify another appointed date in respect of that recognised stoc) exchange and such recognised stoc) exchange (ay continue as such before such appointed date0 ()%lanati$n&*6or the purposes of this section, 1appointed date2 (eans the date which the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, appoint and different appointed dates (ay be appointed for different recognised stoc) exchanges0: "554ro'e-*re for 'or$or%ti!%tio % - -e.*t*%li!%tio . 3;. ( ) All recognised stoc) exchanges referred to in section $A shall, within such ti(e as (ay be specified by the Securities and 7xchange 8oard of India, sub(it a sche(e for corporatisation and de(utualisation for its appro'al , 4ro+i-e- that the Securities and 7xchange 8oard of India, (ay, by notification in the Cfficial &aFette, specify na(e of the recognised stoc) exchange, which had already been corporatised and de(utualised, and such stoc) exchange shall not be re*uired to sub(it the sche(e under this section0 (%) Cn receipt of the sche(e referred to in sub+section ( ), the Securities and 7xchange 8oard of India (ay, after (a)ing such en*uiry as (ay be necessary in this behalf and obtaining such further infor(ation, if any, as it (ay re*uire and if it is satisfied that it would be in the interest of the trade and also in the public interest, appro'e the sche(e with or without (odification0 (3) Eo sche(e under sub+section (%) shall be appro'ed by the Securities and 7xchange 8oard of India if the issue of shares for a lawful consideration or pro'ision of trading rights in lieu of (e(bership card of the (e(bers of a recognised stoc) exchange or pay(ent of di'idends to (e(bers ha'e been proposed out of any reser'es or assets of that stoc) exchange0 ($) Khere the sche(e is appro'ed under sub+section (%), the sche(e so appro'ed shall be published i((ediately by(a) the Securities and 7xchange 8oard of India in the Cfficial &aFette3 (b) the recognised stoc) exchange in such two daily newspapers circulating in India, as (ay be specified by the Securities and 7xchange 8oard of India,
and upon such publication, notwithstanding anything to the contrary contained in this Act or any other law for the ti(e being in force or any agree(ent, award, Dudg(ent, decree or other instru(ent for the ti(e being in force, the sche(e shall ha'e effect and be binding on all persons and authorities including all (e(bers, creditors, depositors and e(ployees of the recognised stoc) exchange and on all
%" Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
persons ha'ing any contract, right, power, obligation or liability with, against, o'er, to, or in connection with, the recognised stoc) exchange or its (e(bers0 (") Khere the Securities and 7xchange 8oard of India is satisfied that it would not be in the interest of the trade and also in the public interest to appro'e the sche(e under sub+section (%), it (ay, by an order, reDect the sche(e and such order of reDection shall be published by it in the Cfficial &aFette , 4ro+i-e- that the Securities and 7xchange 8oard of India shall gi'e a reasonable opportunity of being heard to all the persons concerned and the recognised stoc) exchange concerned before passing an order reDecting the sche(e0 (#) .he Securities and 7xchange 8oard of India (ay, while appro'ing the sche(e under sub+section (%), by an order in writing, restrict(a) the 'oting rights of the shareholders who are also stoc) bro)ers of the reognised stoc) exchange3 (b) the right of shareholders or a stoc) bro)er of the recognised stoc) exchange to appoint the representati'es on the go'erning board of the stoc) exchange3 (c) the (axi(u( nu(ber of representati'es of the stoc) bro)ers of the recognised stoc) exchange to be appointed on the go'erning board of the recognised stoc) exchange, which shall not exceed one+fourth of the total strength of the go'erning board0 (/) .he order (ade under sub+section (#) shall be published in the Cfficial &aFette and on the publication thereof, the order shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#), or any other law for the ti(e being in force, ha'e full effect0 (>) 7'ery recognised stoc) exchange, in respect of which the sche(e for corporatisation or de(utualisation has been appro'ed under sub+section (%), shall, either by fresh issue of e*uity shares to the public or in any other (anner as (ay be specified by the regulations (ade by the Securities and 7xchange 8oard of India %#, ensure that at least fifty+one per cent of its e*uity share capital is held, within twel'e (onths fro( the date of publication of the order under sub+section (/), by the public other than shareholders ha'ing trading rights , 4ro+i-e- that the Securities and 7xchange 8oard of India (ay, on sufficient cause being shown to it and in the public interest, extend the said period by another twel'e (onths0:
ee Securities Contracts (Regulation) (Stoc) 7xchanges and Clearing Corporations) Regulations, %0 %, w0e0f0 %0+0#+%0 % notified vide &aFette Eotification Eo0 =A9+ ERCL&EL%0 %+ 3L0/L 3"$#, 7xtra0, <t0 III, Section $, dtd %0+0#+%0 %0
%#
?ith-r%/%l of re'o( itio .
5. %/4( ): If the Central &o'ern(ent%> is of opinion that the recognition granted to a stoc) exchange under the pro'isions of this Act should, in the interest of the trade or in the public interest, be withdrawn, the Central &o'ern(ent (ay ser'e on the go'erning body of the stoc) exchange a written notice that the Central &o'ern(ent is considering the withdrawal of the recognition for the reasons stated in the notice and after gi'ing an opportunity to the go'erning body to be heard in the (atter, the Central &o'ern(ent (ay withdraw, by notification in the Cfficial &aFette, the recognition granted to the stoc) exchange , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Central &o'ern(ent (ay, after consultation with the stoc) exchange, (a)e such pro'ision as it dee(s fit in the notification of withdrawal or in any subse*uent notification si(ilarly published for the due perfor(ance of any contracts outstanding on that date0 %!4(%) Khere the recognised stoc) exchange has not been corporatised or de(utualised or it fails to sub(it the sche(e referred to in sub+section ( ) of section $8 within the specified ti(e therefor or the sche(e has been reDected by the Securities and 7xchange 8oard of India under sub+section (") of section $8, the recognition granted to such stoc) exchange under section $, shall, notwithstanding anything to the contrary contained in this Act, stand withdrawn and the Central &o'ern(ent shall publish, by notification in the Cfficial &aFette, such withdrawal of recognition , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Securities and 7xchange 8oard of India (ay, after consultation with the stoc) exchange, (a)e such pro'isions as it dee(s fit in the order reDecting the sche(e published in the Cfficial &aFette under sub+section (") of section $80: 4o/er of Ce tr%l Go+er .e t to '%ll for $erio-i'%l ret*r ! or -ire't i 7*irie! to ,e .%-e. 8. ( ) 7'ery recognised stoc) exchange shall furnish to the 304Securities and 7xchange 8oard of India: such periodical returns relating to its affairs as (ay be prescribed0
%/ Section
" renu(bered as sub+section ( ) by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 %> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 30 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(%) 7'ery recognised stoc) exchange and e'ery (e(ber thereof shall (aintain and preser'e for such periods not exceeding fi'e years such boo)s of account, and other docu(ents as the Central &o'ern(ent, after consultation with the stoc) exchange concerned, (ay prescribe in the interest of the trade or in the public interest, and such boo)s of account, and other docu(ents shall be subDect to inspection at all reasonable ti(es 3 4by the Securities and 7xchange 8oard of India:0 (3) Kithout preDudice to the pro'isions contained in sub+sections ( ) and (%), the
3%4Securities
and 7xchange 8oard of India:, if it is satisfied that it is in the interest of the trade or in the public interest so to do, (ay, by order in writing,(a) call upon a recognised stoc) exchange or any (e(ber thereof to furnish in writing such infor(ation or explanation relating to the affairs of the stoc) exchange or of the (e(ber in relation to the stoc) exchange as the 334Securities and 7xchange 8oard of India: (ay re*uire3 or (b) appoint one or (ore persons to (a)e an in*uiry in the prescribed (anner in relation to the affairs of the go'erning body of a stoc) exchange or the affairs of any of the (e(bers of the stoc) exchange in relation to the stoc) exchange and sub(it a report of the result of such in*uiry to the 3$4Securities and 7xchange 8oard of India: within such ti(e as (ay be specified in the order or, in the case of an in*uiry in relation to the affairs of any of the (e(bers of a stoc) exchange, direct the go'erning body to (a)e the in*uiry and sub(it its report to the 3"4Securities and 7xchange 8oard of India:0 ($) Khere an in*uiry in relation to the affairs of a recognised stoc) exchange or the affairs of any of its (e(bers in relation to the stoc) exchange has been underta)en under sub+section (3),(a) e'ery director, (anager, secretary or other officer of such stoc) exchange3 (b) e'ery (e(ber of such stoc) exchange3 (c) if the (e(ber of the stoc) exchange is a fir(, e'ery partner, (anager, secretary or other officer of the fir(3 and (d) e'ery other person or body of persons who has had dealings in the course of business with any of the persons (entioned in clauses ( a), (b) and (c), whether directly or indirectly3
Substituted for ;by the Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3% Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 33 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3" Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
3
shall be bound to produce before the authority (a)ing the in*uiry all such boo)s of account, and other docu(ents in his custody or power relating to or ha'ing a bearing on the subDect+(atter of such in*uiry and also to furnish the authorities within such ti(e as (ay be specified with any such state(ent or infor(ation relating thereto as (ay be re*uired of hi(0 )8A *%l re$ort! to ,e f*r i!he- to Ce tr%l Go+er .e t ,> !to'6 e#'h% (e!. 7. 7'ery recognised stoc) exchange shall furnish the Central &o'ern(ent with a copy of the annual report, and such annual report shall contain such particulars as (ay be prescribed0 )754o/er of re'o( i!e- !to'6 e#'h% (e to .%6e r*le! re!tri'ti ( +oti ( ri(ht!, et'. 7A. ( ) A recognised stoc) exchange (ay (a)e rules or a(end any rules (ade by it
to pro'ide for all or any of the following (atters, na(ely ,(a) the restriction of 'oting rights to (e(bers only in respect of any (atter placed before the stoc) exchange at any (eeting3 (b) the regulation of 'oting rights in respect of any (atter placed before the stoc) exchange at any (eeting so that each (e(ber (ay be entitled to ha'e one 'ote only, irrespecti'e of his share of the paid+up e*uity capital of the stoc) exchange3 (c) the restriction on the right of a (e(ber to appoint another person as his proxy to attend and 'ote at a (eeting of the stoc) exchange3 (d) such incidental, conse*uential and supple(entary (atters as (ay be necessary to gi'e effect to any of the (atters specified in clauses ( a), (b) and (c)0 (%) Eo rules of a recognised stoc) exchange (ade or a(ended in relation to any (atter referred to in clauses (a) to (d) of sub+section ( ) shall ha'e effect until they ha'e been appro'ed by the Central &o'ern(ent 3> and published by that &o'ern(ent in the Cfficial &aFette and, in appro'ing the rules so (ade or a(ended, the Central &o'ern(ent (ay (a)e such (odifications therein as it thin)s fit, and on such publication, the rules as appro'ed by the Central &o'ern(ent shall be dee(ed to ha'e been 'alidly (ade, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#)0:
3# <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 3/ Inserted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec %, w0e0f0 0>+ %+ !"!0 3> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
4o/er of Ce tr%l Go+er .e t )9 to -ire't r*le! to ,e .%-e or to .%6e r*le!. :. ( ) Khere, after consultation with the go'erning bodies of stoc) exchanges generally or with the go'erning body of any stoc) exchange in particular, the Central &o'ern(ent is of opinion that it is necessary or expedient so to do, it (ay, by order in writing together with a state(ent of the reasons therefor, direct recognised stoc) exchanges generally or any recognised stoc) exchange in particular, as the case (ay be, to (a)e any rules or to a(end any rules already (ade in respect of all or any of the (atters specified in sub+section (%) of section 3 within a period of $04two (onths: fro( the date of the order0 (%) If any recognised stoc) exchange fails or neglects to co(ply with any order (ade under sub+section ( ) within the period specified therein, the Central &o'ern(ent (ay (a)e the rules for, or a(end the rules (ade by, the recognised stoc) exchange, either in the for( proposed in the order or with such (odifications thereof as (ay be agreed to between the stoc) exchange and the Central &o'ern(ent0 (3) Khere in pursuance of this section any rules ha'e been (ade or a(ended, the rules so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette or &aFettes of the State or States in which the principal office or offices of the recognised stoc) exchange or exchanges is or are situate, and, on the publication thereof in the &aFette of India, the rules so (ade or a(ended shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# (
of !"#), or in any other law for the ti(e being in force, ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange or stoc) exchanges, as the case (ay be0 315Cle%ri ( 'or$or%tio . :A. ( ) A recognised stoc) exchange (ay, with the prior appro'al of the Securities and 7xchange 8oard of India, transfer the duties and functions of a clearing house to a clearing corporation, being a co(pany incorporated under the Co(panies Act, !"# ( of !"#), for the purpose of(a) the periodical settle(ent of contracts and differences thereunder3 (b) the deli'ery of, and pay(ent for, securities3 (c) any other (atter incidental to, or connected with, such transfer0 (%) 7'ery clearing corporation shall, for the purpose of transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( ),
3! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 $0 Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec !, w0e0f0 %"+ 0 + !!"0 $ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0
(a)e bye+laws and sub(it the sa(e to the Securities and 7xchange 8oard of India for its appro'al0 (3) .he Securities and 7xchange 8oard of India (ay, on being satisfied that it is in the interest of the trade and also in the public interest to transfer the duties and functions of a clearing house to a clearing corporation, grant appro'al to the byelaws sub(itted to it under sub+section (%) and appro'e the transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( )0 ($) .he pro'isions of sections $, ", #, /, >, !, 0, and % shall, as far as (ay be, apply to a clearing corporation referred to in sub+section ( ) as they apply in relation to a recognised stoc) exchange0: 4o/er of re'o( i!e- !to'6 e#'h% (e! to .%6e ,>e0l%/!. 9. ( ) Any recognised stoc) exchange (ay, subDect to the pre'ious appro'al of the $%4Securities and 7xchange 8oard of India:, (a)e bye+laws for the regulation and control of contracts0 (%) In particular, and without preDudice to the generality of the foregoing power, such bye+laws (ay pro'ide for , (a) the opening and closing of (ar)ets and the regulation of the hours of trade3 (b) a clearing house for the periodical settle(ent of contracts and differences thereunder, the deli'ery of and pay(ent for securities, the passing on of deli'ery orders and the regulation and (aintenance of such clearing house3 (c) the sub(ission to the $34Securities and 7xchange 8oard of India: by the clearing house as soon as (ay be after each periodical settle(ent of all or any of the following particulars as the $$4Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, re*uire, na(ely ,(i) the total nu(ber of each category of security carried o'er fro( one settle(ent period to another3 (ii) the total nu(ber of each category of security, contracts in respect of
which ha'e been s*uared up during the course of each settle(ent period3 (iii) the total nu(ber of each category of security actually deli'ered at each clearing3
$% Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(d) the publication by the clearing house of all or any of the particulars sub(itted to the $"4Securities and 7xchange 8oard of India: under clause ( c) subDect to the directions, if any, issued by the $#4Securities and 7xchange 8oard of India: in this behalf3 (e) the regulation or prohibition of blan) transfers3 (f) the nu(ber and classes of contracts in respect of which settle(ents shall be (ade or differences paid through the clearing house3 (g) the regulation, or prohibition of b!dla# or carry+o'er facilities3 (h) the fixing, altering or postponing of days for settle(ents3 (i) the deter(ination and declaration of (ar)et rates, including the opening, closing highest and lowest rates for securities3 (j) the ter(s, conditions and incidents of contracts, including the prescription of (argin re*uire(ents, if any, and conditions relating thereto, and the for(s of contracts in writing3 (k) the regulation of the entering into, (a)ing, perfor(ance, recession and ter(ination, of contracts, including contracts between (e(bers or between a (e(ber and his constituent or between a (e(ber and a person who is not a (e(ber, and the conse*uences of default or insol'ency on the part of a seller or buyer or inter(ediary, the conse*uences of a breach or o(ission by a seller or buyer, and the responsibility of (e(bers who are not parties to such contracts3 (l) the regulation of taravani business including the placing of li(itations thereon3 (") the listing of securities on the stoc) exchange, the inclusion of any security for the purpose of dealings and the suspension or withdrawal of any such securities, and the suspension or prohibition of trading in any specified securities3 (n) the (ethod and procedure for the settle(ent of clai(s or disputes, including settle(ent by arbitration3 ($) the le'y and reco'ery of fees, fines and penalties3 (%) the regulation of the course of business between parties to contracts in any capacity3 (+) the fixing of a scale of bro)erage and other charges3 (r) the (a)ing, co(paring, settling and closing of bargains3 (#) the e(ergencies in trade which (ay arise, whether as a result of pool or syndicated operations or cornering or otherwise, and the exercise of powers in
$" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%,
Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $# Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
such e(ergencies, including the power to fix (axi(u( and (ini(u( prices for securities3 (t) the regulation of dealings by (e(bers for their own account3 (!) the separation of the functions of Dobbers and bro)ers3 (v) the li(itations on the 'olu(e of trade done by any indi'idual (e(ber in exceptional circu(stances3 (.) the obligation of (e(bers to supply such infor(ation or explanation and to produce such docu(ents relating to the business as the go'erning body (ay re*uire0 (3) .he bye+laws (ade under this section (ay(a) specify the bye+laws the contra'ention of which shall (a)e a contract entered into otherwise than in accordance with the bye+laws 'oid under sub+section ( ) of section $3 (b) pro'ide that the contra'ention of any of the bye+laws shall render the (e(ber concerned liable to one or (ore of the following punish(ents, na(ely ,(i) fine, (ii) expulsion fro( (e(bership, (iii) suspension fro( (e(bership for a specified period, (iv) any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney0 ($) Any bye+laws (ade under this section shall be subDect to such conditions in regard to pre'ious publication as (ay be prescribed, and, when appro'ed by the $/4Securities and 7xchange 8oard of India:, shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and shall ha'e effect as fro( the date of its publication in the &aFette of India , 4ro+i-e- that if the $>4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+law should be (ade i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0
$/ Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $> Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4o/er of 395Se'*ritie! % - E#'h% (e ;o%r- of I -i%< to .%6e or %.e - ,>e0l%/! of re'o( i!e- !to'6 e#'h% (e!. 1=. ( ) .he "04Securities and 7xchange 8oard of India: (ay, either on a re*uest in writing recei'ed by it in this behalf fro( the go'erning body of a recognised stoc) exchange or on its own (otion, if it is satisfied after consultation with the go'erning body of the stoc) exchange that it is necessary or expedient so to do and after recording its reasons for so doing, (a)e bye+laws for all or any of the (atters specified in section ! or a(end any bye+laws (ade by such stoc) exchange under that section0
(%) Khere in pursuance of this section any bye+laws ha'e been (ade or a(ended the bye+laws so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and on the publication thereof in the &aFette of India, the bye+laws so (ade or a(ended shall ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange concerned0 (3) Eotwithstanding anything contained in this section, where the go'erning body of a recognised stoc) exchange obDects to any bye+laws (ade or a(ended under this section by the " 4Securities and 7xchange 8oard of India: on its own (otion, it (ay, within "%4two (onths: of the publication thereof in the &aFette of India under subsection (%), apply to the "34Securities and 7xchange 8oard of India: for re'ision thereof, and the "$4Securities and 7xchange 8oard of India: (ay, after gi'ing an opportunity to the go'erning body of the stoc) exchange to be heard in the (atter, re'ise the bye+laws so (ade or a(ended, anywhere any bye+laws so (ade or a(ended are re'ised as a result of any action ta)en under this sub+section, the byelaws so re'ised shall be published and shall beco(e effecti'e as pro'ided in subsection (%)0 ($) .he (a)ing or the a(end(ent or re'ision of any bye+laws under this section shall in all cases be subDect to the condition of pre'ious publication ,
$! Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "0 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 " Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "% Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec %0, w0e0f0 %"+ 0 + !!"0 "3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4ro+i-e- that if the ""4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+laws should be (ade, a(ended or re'ised i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0 4o/er of Ce tr%l Go+er .e t 58 to !*$er!e-e (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e. 11. ( ) Kithout preDudice to any other powers 'ested in the Central &o'ern(ent under this Act, where the Central &o'ern(ent is of opinion that the go'erning body of any recognised stoc) exchange should be superseded, then, notwithstanding anything contained in any other law for the ti(e being in force, in the Central &o'ern(ent (ay ser'e on the go'erning body a written notice that the Central &o'ern(ent is considering the supersession of the go'erning body for the reasons specified in the notice and after gi'ing an opportunity to the go'erning body to be
heard in the (atter, it (ay, by notification in the Cfficial &aFette, declare the go'erning body of such stoc) exchange to be superseded, and (ay appoint any person or persons to exercise and perfor( all the powers and duties of the go'erning body, and, where (ore persons than one are appointed, (ay appoint one of such persons to be the chair(an and another to be the 'ice+chair(an thereof0 (%) Cn the publication of a notification in the Cfficial &aFette under sub+section ( ), the following conse*uences shall ensue, na(ely,(a) the (e(bers of the go'erning body which has been superseded shall, as fro( the date of the notification of supersession, cease to hold office as such (e(bers3 (b) the person or persons appointed under sub+section ( ) (ay exercise and perfor( all the powers and duties of the go'erning body which has been superseded3 (c) all such property of the recognised stoc) exchange as the person or persons appointed under sub+section ( ) (ay, by order in writing, specify in this behalf as being necessary for the purpose of enabling hi( or the( to carry on the business of the stoc) exchange, shall 'est in such person or persons0 (3) Eotwithstanding anything to the contrary contained in any law or the rules or bye+laws of the recognised stoc) exchange the go'erning body of which is superseded under sub+section ( ), the person or persons appointed under that subsection shall hold office for such period as (ay be specified in the notification published under that sub+section and the Central &o'ern(ent (ay fro( ti(e to ti(e, by li)e notification, 'ary such period0
"" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "# <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0
($) .he Central &o'ern(ent (ay at any ti(e before the deter(ination of the period of office of any person or persons appointed under this section call upon the recognised stoc) exchange to re+constitute the go'erning body in accordance with its rules and on such re+constitution all the property of the recognised stoc) exchange which has 'ested in, or was in the possession of, the person or persons appointed under sub+section ( ), shall re+'est or 'est, as the case (ay be, in the go'erning body so re+constituted , 4ro+i-e- that until a go'erning body is so re+constituted, the person or persons appointed under sub+section ( ) shall continue to exercise and perfor( their powers and duties0 4o/er57 to !*!$e - ,*!i e!! of re'o( i!e- !to'6 e#'h% (e!. 1". If in the opinion of the Central &o'ern(ent an e(ergency has arisen and for the purpose of (eeting the e(ergency the Central &o'ern(ent considers it expedient so to do, it (ay, by notification in the Cfficial &aFette, for reasons to be set out therein, direct a recognised stoc) exchange to suspend such of its business for such period not exceeding se'en days and subDect to such conditions as (ay be specified in the notification, and, if, in the opinion of the Central &o'ern(ent, the interest of
the trade or the public interest re*uires that the period should be extended, (ay, by li)e notification extend the said period fro( ti(e to ti(e , 4ro+i-e- that where the period of suspension is to be extended beyond the first period, no notification extending the period of suspension shall be issued unless the go'erning body of the ">4recognised stoc) exchange: has been gi'en an opportunity of being heard in the (atter0 "!54o/er to i!!*e -ire'tio !. 1"A. If, after (a)ing or causing to be (ade an in*uiry, the Securities and 7xchange 8oard of India is satisfied that it is necessary(a) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (b) to pre'ent the affairs of any recognised stoc) exchange or clearing corporation, or such other agency or person, pro'iding trading or clearing or settle(ent facility in respect of securities, being conducted in a (anner detri(ental to the interests of in'estors or securities (ar)et3 or (c) to secure the proper (anage(ent of any such stoc) exchange or clearing corporation or agency or person, referred to in clause ( b),
"/ <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 "> Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 "! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0
it (ay issue such directions,(i) to any stoc) exchange or clearing corporation or agency or person referred to in clause (b) or any person or class of persons associated with the securities (ar)et3 or (ii) to any co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 8=5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< /<410A/1 A45 <81:<4 :4 (/A0:1:( Co tr%'t! i otifie- %re%! ille(%l i 'ert%i 'ir'*.!t% 'e!. 1). If the Central &o'ern(ent# is satisfied, ha'ing regard to the nature or the 'olu(e of transactions in securities in any #%4State or States or area: that it is necessary so to do, it (ay, by notification in the Cfficial &aFette, declared this section to apply to such #34State or States or area:, and thereupon e'ery contract in such #$4State or States or area: which is entered into after the date of the notification otherwise than #"4between (e(bers of a recognised stoc) exchange or recognised stoc) exchanges: in such ##4State or States or area: or through or with such (e(ber shall be illegal ,
#0 I #
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 #% Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #3 Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #$ Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$ for ;between (e(bers of a recognised stoc) exchange; & ## Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0
#/54ro+i-e-
that any contract entered into between (e(bers of two or (ore recognised stoc) exchanges in such State or States or area, shall(i) be subDect to such ter(s and conditions as (ay be stipulated by the respecti'e stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India3 (ii) re*uire prior per(ission fro( the respecti'e stoc) exchanges if so stipulated by the stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India0: #>4A--itio %l tr%-i ( floor. 1)A. A stoc) exchange (ay establish additional trading floor with the prior appro'al of the Securities and 7xchange 8oard of India in accordance with the ter(s and conditions stipulated by the said 8oard0 ()%lanati$n , 6or the purposes of this section, 1additional trading floor2 (eans a trading ring or trading facility offered by a recognised stoc) exchange outside its area of operation to enable the in'estors to buy and sell securities through such trading floor under the regulatory fra(ewor) of that stoc) exchange0: Co tr%'t! i otifie- %re%! to ,e +oi- i 'ert%i 'ir'*.!t% 'e!. 13. ( ) Any contract entered into in any State or area specified in the notification under section 3 which is in contra'ention of any of the bye+laws specified in that behalf under clause (a) of sub+section (3) of section ! shall be 'oid , (i) as respects the rights of any (e(ber of the recognised stoc) exchange who has entered into such contract in contra'ention of any such bye+law, and also (ii) as respects the rights of any other person who has )nowingly participated in the transaction entailing such contra'ention0 (%) Eothing in sub+section ( ) shall be construed to affect the right of any person other than a (e(ber of the recognised stoc) exchange to enforce any such contract or to reco'er any su( under or in respect of such contract if such person had no )nowledge that the transaction was in contra'ention of any of the bye+laws specified in clause (a) of sub+section (3) of section !0 @e.,er! .%> ot %'t %! $ri 'i$%l! i 'ert%i 'ir'*.!t% 'e!. 15. Eo (e(ber of a recognised stoc) exchange shall in respect of any securities enter into any contract as a principal with any person other than a (e(ber of a recognised stoc) exchange, unless he has secured the consent or authority of such
#/ Inserted #> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (A(end(ent) Act, !!", Sec % , w0e0f0 %"+0 + !!"0
person and discloses in the note, (e(orandu( or agree(ent of sale or purchase that he is acting as a principal , 4ro+i-e- that where the (e(ber has secured the consent or authority of such person otherwise than in writing he shall secure written confir(ation by such person or such consent or authority within three days fro( the date of the contract , 4ro+i-e- f*rther that no such written consent or authority of such person shall be necessary for closing out any outstanding contract entered into by such person in accordance with the bye+laws, if the (e(ber discloses in the note, (e(orandu( or agree(ent of sale or purchase in respect of such closing out that he is acting as a principal0 4o/er89 to $rohi,it 'o tr%'t! i 'ert%i '%!e!. 18. ( ) If the Central &o'ern(ent is of opinion that it is necessary to pre'ent undesirable speculation in specified securities in any State or area, it (ay, by notification in the Cfficial &aFette, declare that no person in the State or area specified in the notification shall, sa'e with the per(ission of the Central &o'ern(ent, enter into any contract for the sale or purchase of any security specified in the notification except to the extent and in the (anner, if any, specified therein0 (%) All contracts in contra'ention of the pro'isions of sub+section ( ) entered into after the date of notification issued thereunder shall be illegal0 Li'e !i ( of -e%ler! i !e'*ritie! i 'ert%i %re%!. 17. ( ) SubDect to the pro'isions of sub+section (3) and to the other pro'isions contained in this Act, no person shall carry on or purport to carry on, whether on his own behalf or on behalf of any other person, the business of dealing in securities in any State or area to which section 3 has not been declared to apply and to which the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, declare this section to apply, except under the authority of a /04licence granted by the Securities and 7xchange 8oard of India: in this behalf0 (%) Eo notification under sub+section ( ) shall be issued with respect to any State or area unless the Central &o'ern(ent is satisfied, ha'ing regard to the (anner in which securities are being dealt with in such State or area, that it is desirable or
#! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 <owers are exercisable by R8I also 'ide &o'ern(ent of India Eotification Eo0 >3 (7), 9ated 0 +03+%000 in relation to any contracts in go'ern(ent securities, (oney (ar)et securities etc0 /0 Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% for ;licence granted by the Central &o'ern(ent;0
expedient in the interest of the trade or in the public interest that such dealings should be regulated by a syste( of licensing0 (3) .he restrictions i(posed by sub+section ( ) in relation to dealings in securities shall not apply to the doing of anything by or on behalf of a (e(ber of any recognised stoc) exchange0
7154*,li'
i!!*e % - li!ti ( of !e'*ritie! referre- to i !*,0'l%*!e ( ie) of 'l%*!e (h)
of !e'tio ". 17A. ( ) Kithout preDudice to the pro'isions contained in this Act or any other law for the ti(e being in force, no securities of the nature referred to in sub+clause (ie) of clause (h) of section % shall be offered to the public or listed on any recognised stoc) exchange unless the issuer fulfils such eligibility criteria and co(plies with such other re*uire(ents as (ay be specified by regulations (ade by the Securities and 7xchange 8oard of India0 (%) 7'ery issuer referred to in sub+clause (ie) of clause (h) of section % intending to offer the certificates or instru(ents referred therein to the public shall (a)e an application, before issuing the offer docu(ent to the public, to one or (ore recognised stoc) exchanges for per(ission for such certificates or instru(ents to be listed on the stoc) exchange or each such stoc) exchange0 (3) Khere the per(ission applied for under sub+section (%) for listing has not been granted or refused by the recognised stoc) exchanges or any of the(, the issuer shall forthwith repay all (oneys, if any, recei'ed fro( applicants in pursuance of the offer docu(ent, and if any such (oney is not repaid within eight days after the issuer beco(es liable to repay it, the issuer and e'ery director or trustee thereof, as the case (ay be, who is in default shall, on and fro( the expiry of the eighth day, be Dointly and se'erally liable to repay that (oney with interest at the rate of fifteen per cent per annu(0 7xplanation0-In rec)oning the eighth day after another day, any inter'ening day which is a public holiday under the Eegotiable Instru(ents Act, >> (%# of >> ), shall be disregarded, and if the eighth day (as so rec)oned) is itself such a public holiday, there shall for the said purposes be substituted the first day thereafter which is not a holiday0 ($) All the pro'isions of this Act relating to listing of securities of a public co(pany on a recognised stoc) exchange shall, (utatis (utandis, apply to the listing of the securities of the nature referred to in sub+clause (ie) of clause (h) of section % by the issuer, being a special purpose distinct entity0 <
Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec 3, w0e0f0 %>+0"+ %00/0
/
E#'l*!io of !$ot -eli+er> 'o tr%'t! fro. !e'tio ! 1), 13, 15 % - 17. 1:. ( ) Eothing contained in sections 3, $, " and / shall apply to spot deli'ery contracts0 (%) Eotwithstanding anything contained in sub+section ( ), if the Central &o'ern(ent/% is of opinion that in the interest of the trade or in the public interest it is expedient to regulate and control the business of dealing in spot deli'ery contracts also in any State or area (whether section 3 has been declared to apply to that State or area or not), it (ay, by notification in the Cfficial &aFette, declare that the pro'isions of section / shall also apply to such State or area in respect of spot deli'ery contracts generally or in respect of spot deli'ery contracts for the sale or purchase of such securities as (ay be specified in the notification, and (ay also specify the (anner in which, and the extent to which, the pro'isions of that section
shall so apply0 /34Co tr%'t! i -eri+%ti+e. 1:A. Eotwithstanding anything contained in any other law for the ti(e being in force, contracts in deri'ati'e shall be legal and 'alid if such contracts are(a) traded on a recognised stoc) exchange3 (b) settled on the clearing house of the recognised stoc) exchange, in accordance with the rules and bye+laws of such stoc) exchange0: Sto'6 e#'h% (e! other th% re'o( i!e- !to'6 e#'h% (e! $rohi,ite-. 19. ( ) Eo person shall, except with the per(ission of the Central &o'ern(ent, organise or assist in organising or be a (e(ber of any stoc) exchange (other than a recognised stoc) exchange) for the purpose of assisting in, entering into or perfor(ing any contracts in securities0 (%) .his section shall co(e into force in any State or area on such date as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 4rohi,itio of o$tio ! i !e'*ritie!. "=. 734GGGGG:
/% <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 /3 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec 3, w0e0f0 %%+%+%0000 /$ C(itted by the Securities =aws (A(end(ent) Act, !!", Sec %%, w0e0f0 %"+0 + !!"0 <rior to o(ission, section %0 read as under , 1%00 8r$hibiti$n $f $%ti$n# in #ec!ritie#&-( ) Eotwithstanding anything contained in this Act or in any other law for the ti(e being in force, all options in securities entered into after the co((ence(ent of this Act shall be illegal0
9: 1:4= <E (/A0:1:( 754GGG: /#4Co -itio ! for li!ti (. "1. Khere securities are listed on the application of any person in any recognised stoc) exchange, such person shall co(ply with the conditions of the listing agree(ent with that stoc) exchange&: 775Deli!ti ( of !e'*ritie!. "1A. ( ) A recognised stoc) exchange (ay delist the securities, after recording the reasons therefor, fro( any recognised stoc) exchange on any of the ground or grounds as (ay be prescribed under this Act , 4ro+i-e- that the securities of a co(pany shall not be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) A listed co(pany or an aggrie'ed in'estor (ay file an appeal before the Securities Appellate .ribunal against the decision of the recognised stoc) exchange delisting the securities within fifteen days fro( the date of the decision of the recognised stoc) exchange delisting the securities and the pro'isions of sections %%8 to %%7 of this Act, shall apply, as far as (ay be, to such appeals , 4ro+i-e- that the Securities Appellate .ribunal (ay, if it is satisfied that the co(pany was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding one (onth0:
(%) Any option in securities which has been entered into before such co((ence(ent and which re(ains to be perfor(ed, whether wholly or in part, after such co((ence(ent shall, to that
extent, beco(e 'oid02 /" Kords 18O <H8=IC CC?<AEI7S2 o(itted by the Securities =aws (A(end(ent) Act, !!!, Sec $, w0e0f0 %%+0%+%0000 /# Substituted by the Securities =aws (A(end(ent) Act, !!", Sec 33, w0e0f0 %"+0 + !!" . <rior to substitution, section % read as under , 1% 0 8$.er t$ c$"%el li#ting $f #ec!ritie# bF %!blic c$"%anie#& -Eotwithstanding anything contained in any other law for the ti(e being in force, if the Securities and 7xchange 8oard of India is of opinion, ha'ing regard to the nature of the securities issued by any public co(pany as defined in the Co(panies Act, !"# ( of !"#), or to the dealings in the(, that it is necessary or expedient in the interest of the trade or in the public interest so to do, it (ay re*uire the co(pany, after gi'ing it an opportunity of being heard in the (atter, to co(ply with such re*uire(ents as (ay be prescribed with respect to the listing of its securities on any recognised stoc) exchange02 // Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec >, w0r0e0f0 %+ 0+%00$0
7:5Ri(ht
of %$$e%l %(%i !t ref*!%l of !to'6 e#'h% (e! to li!t !e'*ritie! of $*,li' 'o.$% ie!. 79"". Khere a recognised stoc) exchange acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any public co(pany >04or collecti'e in'est(ent sche(e:, the co(pany > 4or sche(e: shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( ) of section /3 of the Co(panies Act, !"# ( of !"#) (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Central &o'ern(ent (ay, on sufficient cause being shown, allow, appeal to the Central &o'ern(ent against such refusal, o(ission or failure, as the case (ay be, and thereupon the Central &o'ern(ent (ay, after gi'ing the stoc) exchange an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange, or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Central &o'ern(ent sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Central &o'ern(ent: , >%44ro+i-e- that no appeal shall be preferred against refusal, o(ission or failure, as the case (ay be, under this section on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!0: :)5Ri(ht of %$$e%l to Se'*ritie! A$$ell%te Tri,* %l %(%i !t ref*!%l of !to'6 e#'h% (e to li!t !e'*ritie! of $*,li' 'o.$% ie!.
/> Substituted
by .he Co(panies (A(end(ent) Act, !/$ (Act Eo0 $ of !/$), Sec $%, w0e0f0 0 + 0%+ !/"0 /! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the
&aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 >0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%00003 Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 > Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%0000 >% Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec $, w0e0f0 #+ %+ !!!0 >3 Sections %%A, %%8, %%C, %%9, %%7 and %%6 inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!!& 7arlier section %%A was inserted by .he
""A. ( ) Khere a recognised stoc) exchange, acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any co(pany, the co(pany shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( A) of section /3 of the Co(panies Act, !"# ( of !"#), (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Securities Appellate .ribunal (ay, on sufficient cause being shown, allow, appeal to the Securities Appellate .ribunal ha'ing Durisdiction in the (atter against such refusal, o(ission or failure, as the case (ay be, and thereupon the Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange, an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange3 or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Securities Appellate .ribunal sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Securities Appellate .ribunal0 (%) 7'ery appeal under sub+section ( ) shall be in such for( and be acco(panied by such fee as (ay be prescribed0 (3) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 ($) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: :354ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. "";. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of
Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec %, w0e0f0 /+ 0 + !>#, and o(itted by the 9epositories Act, !!#, Sec 30 and Sch0, <t0III, w0r0e0f0 %0+0!+ !!"0 >$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath 3 (b) re*uiring the disco'ery and production of docu(ents 3 (c) recei'ing e'idence on affida'its 3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents 3 (e) re'iewing its decisions 3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte ; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0: :55Ri(ht to le(%l re$re!e t%tio . ""C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of sub+section ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of subsection ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of
>" Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
!"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, vakil or an attorney of any Iigh Court, and includes a pleader in practice0: :85Li.it%tio . ""D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0: :75Ci+il 'o*rt ot to h%+e G*ri!-i'tio .
""E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0: ::5A$$e%l to S*$re.e Co*rt. ""2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order, 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: 8(4A91:( A45 80</(5A0( 4e %ltie!. "). ( ) Any person who+
># Inserted >/ Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & >> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec !, w0r0e0f0 %+ 0+%00$0 7arlier section %%6 as inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", read as under,+ 1""2. A$$e%l to Di(h Co*rt.+Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order , 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
(a) without reasonable excuse (the burden of pro'ing which shall be on hi() fails to co(ply with any re*uisition (ade under sub+section ($) of section #3 or (b) enters into any contract in contra'ention of any of the pro'isions contained in section 3 or section #3 or (c) contra'enes the pro'isions contained in >!5section / or section /A<, or section !3 or 90 4(d) enters into any contract in deri'ati'e in contra'ention of section >A or the rules (ade under section 303: (e) owns or )eeps a place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act and )nowingly per(its such place to be used for such purposes3 or (f) (anages, controls, or assists in )eeping any place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act or at which contracts are recorded or adDusted or rights or liabilities arising out of contracts are adDusted, regulated or enforced in any (anner whatsoe'er3 or (g) not being a (e(ber of a recognised stoc) exchange or his agent authorised as
such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section / wilfully represents to or induces any person to belie'e that contracts can be entered into or perfor(ed under this Act through hi(3 or (h) not being a (e(ber of a recognised stoc) exchange or his agent authorised as such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section /, can'asses, ad'ertises or touts in any (anner either for hi(self or on behalf of any other persons for any business connected with contracts in contra'ention of any of the pro'isions of this Act3 or (i) Doins, gathers or assists in gathering at any place other than the place of business specified in the bye+laws of a recognised stoc) exchange any person or persons for (a)ing bids or offers or for entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act3 ! 4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which
>! Inserted
by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec $, w0e0f0 %>+0"+ %00/ for ;section /;0 !0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec #, w0e0f0 %%+0%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 ! Substituted for 1shall, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0
(ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: (%) Any person who enters into any contract in contra'ention of the pro'isions contained in section " !%4or who fails to co(ply with the pro'isions of !34section % or section % A: or with the orders of: or section %% !$4or with the orders of the Securities Appellate .ribunal: !"4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 9854e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. ")A. Any person, who is re*uired under this Act or any rules (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to a recognised stoc) exchange, fails to furnish the sa(e within the ti(e specified therefor in the listing agree(ent or conditions or bye+laws of the recognised stoc) exchange, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to (aintain boo)s of account or records, as per the listing agree(ent or conditions, or bye+laws of a recognised stoc) exchange, fails to (aintain the sa(e, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0:
9754e
%lt> for f%il*re ,> % > $er!o to e ter i to % %(ree.e t /ith 'lie t!. ");. If any person, who is re*uired under this Act or any bye+laws of a recognised stoc) exchange (ade thereunder, to enter into an agree(ent with his client, fails to enter into such an agree(ent, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0:
!% Substituted
for 1or who fails to co(ply with the orders of the Securities and 7xchange 8oard of India under section % 2 by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 <rior to !!", ;Securities and 7xchange 8oard of India under section % or Central &o'ern(ent under section %%; were substituted for ;Central &o'ern(ent under section % or section %%; vide .he Schedule, <art II of Securities and 7xchange 8oard of India Act, !!%, w0e0f0 30+0 + !!%0 !3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec #, w0e0f0 #+ %+ !!!0 !" Substituted for 1shall, on con'iction, be punishable with fine which (ay extend to one thousand rupees2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !# Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$ & !/ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$0
9:54e
%lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. ")C. If any stoc) bro)er or sub+bro)er or a co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, after ha'ing been called upon by the Securities and 7xchange 8oard of India or a recognised stoc) exchange in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e stipulated by the Securities and 7xchange 8oard of India or a recognised stoc) exchange, he or it shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 9954e %lt> for f%il*re to !e(re(%te !e'*ritie! or .o e>! of 'lie t or 'lie t!. ")D. If any person, who is registered under section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%) as a stoc) bro)er or sub+bro)er, fails to segregate securities or (oneys of the client or clients or uses the securities or (oneys of a client or clients for self or for any other client, he shall be liable to a penalty not exceeding one crore rupees0: 1==54e %lt> for f%il*re to 'o.$l> /ith $ro+i!io of li!ti ( 'o -itio ! or -eli!ti ( 'o -itio ! or (ro* -!. ")E. If a co(pany or any person (anaging collecti'e in'est(ent sche(e or (utual fund, fails to co(ply with the listing conditions or delisting conditions or grounds or co((its a breach thereof, it or he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0: 1=154e %lt> for e#'e!! -e.%teri%li!%tio or -eli+er> of * li!te- !e'*ritie!. ")2. If any issuer de(aterialises securities (ore than the issued securities of a co(pany or deli'ers in the stoc) exchanges the securities which are not listed in the recognised stoc) exchange or deli'ers securities where no trading per(ission has been gi'en by the recognised stoc) exchange, he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0:
!> Inserted !! Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 00 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0
%+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0
1="54e
%lt> for f%il*re to f*r i!h $erio-i'%l ret*r !, et'. ")G. If a recognised stoc) exchange fails or neglects to furnish periodical returns to the Securities and 7xchange 8oard of India or fails or neglects to (a)e or a(end its rules or bye+laws as directed by the Securities and 7xchange 8oard of India or fails to co(ply with directions issued by the Securities and 7xchange 8oard of India, such recognised stoc) exchange shall be liable to a penalty which (ay extend to twenty+fi'e crore rupees0: 1=)54e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. ")D. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or articles or bye+ laws or the regulations of the recognised stoc) exchange or directions issued by the Securities and 7xchange 8oard of India for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 1=354o/er to %-G*-i'%te. ")0I. ( ) 6or the purpose of adDudging under sections %3A, %38, %3C, %39, %37, %36, %3& and %3I, the Securities and 7xchange 8oard of India shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0: 1=552%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. ")E. Khile adDudging the *uantu( of penalty under section %3+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3
0% Inserted 03 Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec 0$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0" Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 , w0r0e0f0 , w0r0e0f0 , w0r0e0f0
%+ %+ %+ %+
0+%00$0 0+%00$0 0+%00$0 0+%00$0
(b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0: 1=85 Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!.
")EA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 1"A or !e'tio ")0I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%tefor the %lle(e- -ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re %! !$e'ifie,> the ;o%r- * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")L %(%i !t % > or-er $%!!e- ,> the ;o%ror %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 1=75Re'o+er> of %.o* t!. ")E;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 1"A or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H
0# I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30"==7) 0/ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %!
.%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - ThirS'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")L of thi! A't. (") The re'o+er> offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ())Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 0'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 1"A, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1),(") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 1=:5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. ")F. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: 1=95A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")L. ( ) Any person aggrie'ed, by the order or decision of the recogniFed stoc) exchange or the adDudicating officer or any order (ade by the Securities and 7xchange 8oard of India under section $8, (ay prefer an appeal before the Securities Appellate .ribunal and the pro'isions of sections %%8, %%C, %%9 and %%7 of this Act, shall apply, as far as (ay be, to such appeals0 (%) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order or decision is recei'ed by the
appellant and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 (3) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 ($) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the parties to the appeal and to the concerned adDudicating officer0 (") .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: 11=5Offe 'e!. ")@. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws
0> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 0! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
(ade thereunder, for which no punish(ent is pro'ided elsewhere in this Act, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 1115Co.$o!itio of 'ert%i offe 'e!. ")N. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0: 11"54o/er to (r% t i..* it>. ")0O. ( ) .he Central &o'ern(ent (ay, on reco((endation by the Securities and 7xchange 8oard of India, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation,
4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that the reco((endation of the Securities and 7xchange 8oard of India under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under
% Inserted
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
this Act to which such person would ha'e been liable, had not such i((unity been granted0: Offe 'e! ,> 'o.$% ie!. "3. ( ) Khere an offence has been co((itted by a co(pany, e'ery person who, at the ti(e when the offence was co((itted, was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence, and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any gross negligence on the part of any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer of the co(pany, shall also be dee(ed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n0-6or the purpose of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals, and 34(b) 1director2, in relation to(i) a fir(, (eans a partner in the fir(3 (ii) any association of persons or a body of indi'iduals, (eans any (e(ber controlling the affairs thereof0: $4(3) .he pro'isions of this section shall be in addition to, and not in derogation of, the pro'isions of section %%A0: Cert%i offe 'e! to ,e 'o( iL%,le. "5. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, >!> (" of >!>) ", any offence punishable under #4GGG: section %3 shall be dee(ed to be a
cogniFable offence within the (eaning of that Code0
3 Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec /, w0e0f0 %%+%+%0000 <rior to its substitution, sub+clause (b) read as under, N(b) 1director2, in relation to a fir(, (eans a partner in the fir(0J $ Inserted by .he Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec 3, w0e0f0 /+0 + !>#0
iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central &o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or a recognised stoc) exchange or by any person0 >5(")********< 1195E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
ee now the Code of Cri(inal <rocedure, !/3 (% of !/$) 1sub+section ( ) of2 o(itted by the Securities =aws (A(end(ent) Act, %00$, w0e0f0 %+ 0+%00$0 / Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$ & <rior to its substitution section %# read as under ,1%#0 G!ri#dicti$n t$ trF $ffence# !nder thi# Act&-Eo court inferior to that of a presidency (agistrate or a (agistrate of the first class shall ta)e cogniFance of or try any offence punishable under this Act02 > O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JEo court inferior to that of a Court of Session shall try any offence punishable under this Act .K ! I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
" # Kords
/4Co(
A$$e%l % - Re+i!io . "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt. "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel% $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io !. "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< 6: /(99A4(<A Title to -i+i-e -!. "7. ( ) It shall be lawful for the holder of any security whose na(e appears on the boo)s of the co(pany issuing the said security to recei'e and retain any di'idend declared by the co(pany in respect thereof for any year, notwithstanding that the said security has already been transferred by hi( for consideration, unless the transferee who clai(s the di'idend fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the co(pany with the co(pany for being registered in his na(e within fifteen days of the date on which the di'idend beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the di'idend3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security and other docu(ents relating to
the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a co(pany to pay any di'idend which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the co(pany as the holder of the security in respect of which the di'idend has beco(e due3 or (b) the right of the transferee of any security to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security in the na(e of the transferee0 %04Ri(ht to re'ei+e i 'o.e fro. 'olle'ti+e i +e!t.e t !'he.e. "7A. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, whose na(e appears on the boo)s of the collecti'e in'est(ent sche(e issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e declared by the collecti'e in'est(ent sche(e in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e fro( the transfer or has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the collecti'e in'est(ent sche(e with the collecti'e in'est(ent sche(e for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec >, w0e0f0 %%+%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the collecti'e in'est(ent sche(e3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a collecti'e in'est(ent sche(e to pay any inco(e fro( units or other instru(ents issued by the collecti'e in'est(ent sche(e which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the collecti'e in'est(ent sche(e as the holder of the security being
units or other instru(ents issued by the collecti'e in'est(ent sche(e in respect of which the inco(e in respect of units or other instru(ents issued by the collecti'e sche(e has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security being units or other instru(ents issued by the collecti'e in'est(ent sche(e in the na(e of the transferee0: % 4Ri(ht to re'ei+e i 'o.e fro. .*t*%l f* -. "7;. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by any (utual fund, whose na(e appears on the boo)s of the (utual fund issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the (utual fund declared by the (utual fund in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the (utual fund, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the (utual fund fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the (utual fund with the (utual fund for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the (utual fund beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the (utual fund3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the (utual fund, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a (utual fund to pay any inco(e fro( units or other instru(ents issued by the (utual fund which has beco(e due to any person, whose na(e is for the ti(e being registered in the boo)s of the (utual fund as the holder of the security being units or other instru(ents issued by the (utual fund in respect of which the inco(e in respect of units or other instru(ents issued by the (utual fund has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the (utual fund, to enforce against the transferor or any other person, his rights, if any, in relation to the transfer in any case where the (utual fund has refused to register the transfer of the security being units or other instru(ents issued by the (utual fund in the na(e of the transferee0:
1""5A't
ot to %$$l> i 'ert%i '%!e!. ":. ( ) .he pro'isions of this Act shall not apply to(a) the &o'ern(ent, the Reser'e 8an) of India, any local authority or any corporation set up by a special law or any person who has effected any transaction with or through the agency of any such authority as is referred to in this clause3 (b) any con'ertible bond or share warrant or any option or right in relation thereto, in so far as it entitles the person in whose fa'our any of the foregoing has been issued to obtain at his option fro( the co(pany or other body corporate, issuing the sa(e or fro( any of its shareholders or duly appointed agentsJ shares of the co(pany or other body corporate, whether by con'ersion of the bond or warrant or otherwise, on the basis of the price agreed upon when the sa(e was issued0 (%) Kithout preDudice to the pro'isions contained in sub+section ( ), if the Central &o'ern(ent %3 is satisfied that in the interests of trade and co((erce or the
%% Substituted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec 3, w0e0f0 0>+ %+ !"!0
econo(ic de'elop(ent of the country it is necessary or expedient so to do, it (ay, by notification in the Cfficial &aFette, specify any class of contracts as contracts to which this Act or any pro'ision contained therein shall not apply, and also the conditions, li(itations or restrictions, if any, subDect to which it shall not so apply0: 4rote'tio of %'tio t%6e i (oo- f%ith. "9. Eo suit, prosecution or other legal proceeding whatsoe'er shall lie in any court against the go'erning body or any (e(ber, office bearer or ser'ant of any recognised stoc) exchange or against any person or persons appointed under subsection ( ) of section for anything which is in good faith done or intended to be done in pursuance of this Act or of any rules or bye+laws (ade thereunder0 %$44o/er to -ele(%te. "9A. .he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers (except the power under section 30) exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India or the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)0: 4o/er to .%6e r*le!. )=. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for the purpose of carrying into effect the obDects of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for,(a) the (anner in which applications (ay be (ade, the particulars which they should contain and the le'y of a fee in respect of such applications 3 (b) the (anner in which any in*uiry for the purpose of recognising any stoc) exchange (ay be (ade, the conditions which (ay be i(posed for the grant of such recognition, including conditions as to the ad(ission of (e(bers if the
%3 <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %$ Inserted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% and Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec !, w0e0f0 %%+0%+%0000 <rior to its substitution, section %!A read as under , 1%!A0 8$.er t$ delegate&*.he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India02
stoc) exchange concerned is to be the only recognised stoc) exchange in the area3 and the for( in which such recognition shall be granted3 (c) the particulars which should be contained in the periodical returns and annual reports to be furnished to the Central &o'ern(ent3 (d) the docu(ents which should be (aintained and preser'ed under section # and the periods for which they should be preser'ed3 (e) the (anner in which any in*uiry by the go'erning body of a stoc) exchange shall be (ade under section #3 (f) the (anner in which the bye+laws to be (ade or a(ended under this Act shall before being so (ade or a(ended be published for criticis(3 (g) the (anner in which applications (ay be (ade by dealers in securities for licences under section /, the fee payable in respect thereof and the period of such licences, the conditions subDect to which licences (ay be granted, including conditions relating to the for(s which (ay be used in (a)ing contracts, the docu(ents to be (aintained by licensed dealers and the furnishing of periodical infor(ation to such authority as (ay be specified and the re'ocation of licences for breach of conditions3 %"4(h) the re*uire(ents which shall be co(plied with(A) by public co(panies for the purpose of getting their securities listed on any stoc) exchange3 (B) by collecti'e in'est(ent sche(e for the purpose of getting their units listed on any stoc) exchange3: %#4GGG: %/4(ha) the grounds on which the securities of a co(pany (ay be delisted fro( any recognised stoc) exchange under sub+section ( ) of section % A3 (hb) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under sub+section (%) of section % A and the fees payable in respect of such appeal3 (hc) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3
%" Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec 0, w0e0f0 %%+0%+%0000 <rior to its substitution, clause (h) read as under , 1(h) the re*uire(ents which shall be co(plied with by public co(panies for the purpose of getting their securities listed on any stoc) exchange32 %# .he word ;and; o(itted by .he Securities Contracts (Regulation) A(end(ent Act, !>", Sec $, w0e0f0 /+0 + !>#0 %/ Substituted for clause (ha) by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 7arlier clause (ha), as a(ended by the Securities =aws (A(end(ent) Act, !!!, read as
under ,1(ha) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3 and2
(hd) the (anner of in*uiry under sub+section ( ) of section %3+I3 (he) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3= and the fees payable in respect of such appeal3: (i) any other (atter which is to be or (ay be prescribed0 %>4(3) 7'ery rule (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule0: 1"954o/er of Se'*ritie! % - E#'h% (e ;o%r- of I -i% to .%6e re(*l%tio !. )1. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 305(%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,%> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 <rior to its substitution, sub+section (3), as a(ended by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!", read as under , 1(3) 7'ery rule (ade under this section shall, as soon as (ay be, after its publication in the Cfficial &aFette, be laid before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e session aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule02 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0 7arlier it was repealed by the Repealing and A(ending Act, !#0, Sec % and 6irst Sch0 w0e0f0 %>+ %+ !#00 30 Substituted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec ", w0e0f0 %>+ 0"+%00/0 <rior to substitution it read as under , 1(%) In particular and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for the (anner in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section02
(a) the (anner, in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of
publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section3 (b) the eligibility criteria and other re*uire(ents under section /A0 < (3) 7'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the regulation or both Iouses agree that the regulation should not be (ade, the regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that regulation0:
DE4OSITORIES ACT, 1998 SECTIONS /@A81(0 : 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS ). Certificate of co((ence(ent of business by depositories /@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS 3. Agree(ent between depository and participant 5. Ser'ices of depository 8. Surrender of certificate of security 7. Registration of transfer of securities with depositories :. Cptions to recei'e security certificate or hold securities with depository 9. Securities in depositories to be in fungible for( 1=. Rights of depositories and beneficial owner 11. Register of beneficial owner 1". <ledge or hypothecation of securities held in a depository 1). 6urnishing of infor(ation and records by depository and issuer 13. Cption to opt out in respect of any security 15. Act > of >! to apply to depositories 18. 9epositories to inde(nify loss in certain cases 17. Rights and obligations of depositories, etc0 /@A81(0 :: EN9UIRM AND INS4ECTION 1:. <ower of 8oard to call for infor(ation and en*uiry 19. <ower of 8oard to gi'e directions in certain cases 19A. <enalty for failure to furnish infor(ation, return, etc0 19;. <enalty for failure to enter into an agree(ent 19C. <enalty for failure to redress in'estorsJ grie'ances
19D. <enalty for delay in de(aterialisation or issue of certificate of securities 19E. <enalty for failure to reconcile records 192. <enalty for failure to co(ply with directions issued by 8oard under section ! of the Act 19G. <enalty for contra'ention where no separate penalty has been pro'ided 19D. <ower to adDudicate 190I. 6actors to be ta)en into account by adDudicating officer 190IA. Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (! 190I;. Re'o+er> of %.o* t! 190E. Crediting su(s realised by way of penalties to Consolidated 6und of India /@A81(0 D 4ENALTM "=. Cffences "1. Cffences by co(panies /@A81(0 D: @ISCELLANEOUS "". CogniFance of offences by courts ""A. Co(position of certain offences "";. <ower to grant i((unity ""C. E!t%,li!h.e t of S$e'i%l Co*rt! ""D. Offe 'e! tri%,le ,> S$e'i%l Co*rt! ""E. A$$e%l % - re+i!io ""2. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""G. Tr% !itio %l 4ro+i!io ! "). Appeals ")A. Appeal to Securities Appellate .ribunal ")A. Appeal to Securities Appellate .ribunal ");. <rocedure and powers of Securities Appellate .ribunal ")C. Right to =egal Representation ")D. =i(itation ")E. Ci'il court not to ha'e Durisdiction ")2. Appeal to Supre(e Court "3. <ower of Central &o'ern(ent to (a)e rules "5. <ower of 8oard to (a)e regulations "8. <ower of depositories to (a)e bye+laws "7. Rules and regulations to be laid before <arlia(ent ":. Application of other laws not barred "9. Re(o'al of difficulties )=. A(end(ents to certain enact(ents )1. Repeal and sa'ing /@(5A9( A?7E9?7E. .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0: DE4OSITORIES ACT, 1998 5"" O2 1998< 51=th A*(*!t, 1998< An Act to provide $or reg lation o$ depositories in sec rities and $or matters connected there%ith or incidental thereto& B( it enacted bF 8arlia"ent in the E$rtF7#eventh ;ear $f the 0e%!blic $f :ndia a# f$ll$.# ,*
/@A81(0 : 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the 9epositories Act, !!#0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the %0th day of Septe(ber, !!"0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 1beneficial owner2 (eans a person whose na(e is recorded as such with a depository3 (b) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 3 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (c) 1bye+laws2 (eans bye+laws (ade by a depository under section %#3 (d) 1Co(pany =aw 8oard2 (eans the 8oard of Co(pany =aw Ad(inistration constituted under section 07 of the Co(panies Act, !"# ( of !"#)3 (e) 1depository2 (eans a co(pany for(ed and registered under the Co(panies Act, !"# ( of !"#), and which has been granted a certificate of registration under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (f) 1issuer2 (eans any person (a)ing an issue of securities3 (g) 1participant2 (eans a person registered as such under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (h) 1prescribed2 (eans prescribed by rules (ade under this Act3 (i) 1record2 includes the records (aintained in the for( of boo)s or stored in a co(puter or in such other for( as (ay be deter(ined by regulations3 (j) 1registered owner2 (eans a depository whose na(e is entered as such in the register of the issuer3 (k) 1regulations2 (eans the regulations (ade by the 8oard3 4(ka) 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (l) 1security2 (eans such security as (ay be specified by the 8oard3 (") 1ser'ice2 (eans any ser'ice connected with recording of allot(ent of securities or transfer of ownership of securities in the record of a depository0 (%) Kords and expressions used herein and not defined but defined in the Co(panies Act, !"# ( of !"#), or the Securities Contracts (Regulation) Act, !"# ($% of !"#), or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), shall ha'e the (eanings respecti'ely assigned to the( in those Acts0 /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS Certifi'%te of 'o..e 'e.e t of ,*!i e!! ,> -e$o!itorie!. ). ( ) Eo depository shall act as a depository unless it obtains a certificate of co((ence(ent of business fro( the 8oard0 (%) A certificate granted under sub+section ( ) shall be in such for( as (ay be specified by the regulations0 (3) .he 8oard shall not grant a certificate under sub+section ( ) unless it is satisfied that the depository has ade*uate syste(s and safeguards to pre'ent (anipulation of records and transactions , 4ro+i-e- that no certificate shall be refused under this section unless the depository concerned has been gi'en a reasonable opportunity of being heard0
Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
/@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS A(ree.e t ,et/ee -e$o!itor> % - $%rti'i$% t. 3. ( ) A depository shall enter into an agree(ent with one or (ore participants as its agent0 (%) 7'ery agree(ent under sub+section ( ) shall be in such for( as (ay be specified by the bye+laws0 Ser+i'e! of -e$o!itor>. 5. Any person, through a participant, (ay enter into an agree(ent, in such for( as (ay be specified by the bye+laws, with any depository for a'ailing its ser'ices0 S*rre -er of 'ertifi'%te of !e'*rit>. 8. ( ) Any person who has entered into an agree(ent under section " shall surrender the certificate of security, for which he see)s to a'ail the ser'ices of a depository, to the issuer in such (anner as (ay be specified by the regulations0 (%) .he issuer, on receipt of certificate of security under sub+section ( ), shall cancel the certificate of security and substitute in its records the na(e of the depository as a registered owner in respect of that security and infor( the depository accordingly0 (3) A depository shall, on receipt of infor(ation under sub+section (%), enter the na(e of the person referred to in sub+section ( ) in its records, as the beneficial owner0 Re(i!tr%tio of tr% !fer of !e'*ritie! /ith -e$o!itor>. 7. ( ) 7'ery depository shall, on receipt of inti(ation fro( a participant, register the transfer of security in the na(e of the transferee0 (%) If a beneficial owner or a transferee of any security see)s to ha'e custody of such security the depository shall infor( the issuer accordingly0 O$tio ! to re'ei+e !e'*rit> 'ertifi'%te or hol- !e'*ritie! /ith -e$o!itor>. :. ( ) 7'ery person subscribing to securities offered by an issuer shall ha'e the option either to recei'e the security certificates or hold securities with a depository0 (%) Khere a person opts to hold a security with a depository, the issuer shall inti(ate such depository the details of allot(ent of the security, and on receipt of such infor(ation the depository shall enter in its records the na(e of the allottee as the beneficial owner of that security0 Se'*ritie! i -e$o!itorie! to ,e i f* (i,le for.. 9. ( ) All securities held by a depository shall be de(aterialised and shall be in a fungible for(0 %4(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#), shall apply to a depository in respect of securities held by it on behalf of the beneficial owners&: Ri(ht! of -e$o!itorie! % - ,e efi'i%l o/ er. 1=. ( ) Eotwithstanding anything contained in any other law for the ti(e being in force, a depository shall be dee(ed to be the registered owner for the purposes of effecting transfer of ownership of security on behalf of a beneficial owner0 (%) Sa'e as otherwise pro'ided in sub+section ( ), the depository as a registered owner shall not ha'e any 'oting rights or any other rights in respect of securities held by it0 (3) .he beneficial owner shall be entitled to all the rights and benefits and be subDected to all the liabilities in respect of his securities held by a depository0 Re(i!ter of ,e efi'i%l o/ er. 11. 7'ery depository shall (aintain a register and an index of beneficial owners in the
(anner pro'ided in sections "0, " and "% of the Co(panies Act, !"# ( of !"#)0 4le-(e or h>$othe'%tio of !e'*ritie! hel- i % -e$o!itor>. 1". ( ) SubDect to such regulations and bye+laws, as (ay be (ade in this behalf, a beneficial owner (ay with the pre'ious appro'al of the depository create a pledge or hypothecation in respect of a security owned by hi( through a depository0 (%) 7'ery beneficial owner shall gi'e inti(ation of such pledge or hypothecation to the depository and such depository shall thereupon (a)e entries in its records accordingly0 (3) Any entry in the records of a depository under sub+section (%) shall be e'idence of a pledge or hypothecation0 2*r i!hi ( of i for.%tio % - re'or-! ,> -e$o!itor> % - i!!*er. 1). ( ) 7'ery depository shall furnish to the issuer infor(ation about the transfer of securities in the na(e of beneficial owners at such inter'als and in such (anner as (ay be specified by the bye+laws0 (%) 7'ery issuer shall (a)e a'ailable to the depository copies of the rele'ant records in respect of securities held by such depository0 O$tio to o$t o*t i re!$e't of % > !e'*rit>.
% Substituted
by the 9epositories Related =aws (A(end(ent) Act, !!/, Sec %%, w0e0f0 "+0 + !!/0 <rior to its substitution sub+section (%) read as under , 1(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#) shall apply to the securities held by a depository on behalf of the beneficial owners02
13. ( ) If a beneficial owner see)s to opt out of a depository in respect of any security he shall infor( the depository accordingly0 (%) .he depository shall on receipt of inti(ation under sub+section ( ) (a)e appropriate entries in its records and shall infor( the issuer0 (3) 7'ery issuer shall, within thirty days of the receipt of inti(ation fro( the depository and on fulfil(ent of such conditions and on pay(ent of such fees as (ay be specified by the regulations, issue the certificate of securities to the beneficial owner or the transferee, as the case (ay be0 A't 1: of 1:91 to %$$l> to -e$o!itorie!. 15. .he 8an)ersJ 8oo)s 7'idence Act, >! shall apply in relation to a depository as if it were a ban) as defined in section % of that Act0 De$o!itorie! to i -e. if> lo!! i 'ert%i '%!e!. 18. ( ) Kithout preDudice to the pro'isions of any other law for the ti(e being in force, any loss caused to the beneficial owner due to the negligence of the depository or the participant, the depository shall inde(nify such beneficial owner0 (%) Khere the loss due to the negligence of the participant under sub+section ( ) is inde(nified by the depository, the depository shall ha'e the right to reco'er the sa(e fro( such participant0 Ri(ht! % - o,li(%tio ! of -e$o!itorie!, et'. 17. ( ) SubDect to the pro'isions of this Act, the rights and obligations of the depositories, participants and the issuers whose securities are dealt with by a depository shall be specified by the regulations0 (%) .he eligibility criteria for ad(ission of securities into the depository shall be specified by the regulations0 /@A81(0 :D EN9UIRM AND INS4ECTION 4o/er of ;o%r- to '%ll for i for.%tio % - e 7*ir>. 1:. ( ) .he 8oard, on being satisfied that it is necessary in the public interest or in the interest of in'estors so to do, (ay, by order in writing,-
(a) call upon any issuer, depository, participant or beneficial owner to furnish in writing such infor(ation relating to the securities held in a depository as it (ay re*uire3 or (b) authorise any person to (a)e an en*uiry or inspection in relation to the affairs of the issuer, beneficial owner, depository or participant, who shall sub(it a report of such en*uiry or inspection to it within such period as (ay be specified in the order0 (%) 7'ery director, (anager, partner, secretary, officer or e(ployee of the depository or issuer or the participant or beneficial owner shall on de(and produce before the person (a)ing the en*uiry or inspection all infor(ation or such records and other docu(ents in his custody ha'ing a bearing on the subDect+(atter of such en*uiry or inspection0 4o/er of ;o%r- to (i+e -ire'tio ! i 'ert%i '%!e!. 19. Sa'e as pro'ided in this Act, if after (a)ing or causing to be (ade an en*uiry or inspection, the 8oard is satisfied that it is necessary(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any depository or participant being conducted in the (anner detri(ental to the interests of in'estors or securities (ar)et, it (ay issue such directions,(a) to any depository or participant or any person associated with the securities (ar)et3 or (b) to any issuer, as (ay be appropriate in the interest of in'estors or the securities (ar)et0 )5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< $44e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 19A. Any person, who is re*uired under this Act or any rules or regulations or bye+laws (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to the 8oard, fails to furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations or bye+laws, fails to file return or furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0
3I $ Inserted
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the Securities =aws (A(end(ent) Act, %00$, Sec0 /, w0r0e0f0 %+ 0+%00$0
4e %lt> for f%il*re to e ter i to % %(ree.e t. 19;. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and is re*uired under this Act or any rules or regulations (ade thereunder, to enter into an agree(ent, fails to enter into such agree(ent, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0
4e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 19C. If any depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such depository or participant or issuer or its agents or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for -el%> i -e.%teri%li!%tio or i!!*e of 'ertifi'%te of !e'*ritie!. 19D. If any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to de(aterialise or issue the certificate of securities on opting out of a depository by the in'estors, within the ti(e specified under this Act or regulations or bye+laws (ade thereunder or abets in delaying the process of de(aterialisation or issue the certificate of securities on opting out of a depository of securities, such issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to re'o 'ile re'or-!. 19E. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to reconcile the records of de(aterialised securities with all the securities issued by the issuer as specified in the regulations, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to 'o.$l> /ith -ire'tio ! i!!*e- ,> ;o%r- * -er !e'tio 19 of the A't. 192. If any person fails to co(ply with the directions issued by the 8oard under section !, within the ti(e specified by it, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 19G. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations or bye+laws (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0 4o/er to %-G*-i'%te. 19D. ( ) 6or the purpose of adDudging under sections !A, !8, !C, !9, !7, !6 and !&, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the
sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. 190I. Khile adDudging the *uantu( of penalty under section !I, the adDudicating officer shall ha'e due regard to the following factors, na(ely,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 55 Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (!. 190IA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 19, !e'tio 19D, %! the '%!e .%> ,e, .%> file % %$$li'%tio i /riti ( to the ;o%r$ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e-ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h
"I
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re !$e'ifie- ,> the ;o%r* -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")A %(%i !t % > or-er $%!!e- ,> the ;o%r- or the %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 85 Re'o+er> of %.o* t!. 190I;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 19 or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6
%''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hilor !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C!
#I
!erte- ,> The Se'*ritie! L%/! (A.e- .e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
.o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")A of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 19, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 19E. All su(s realiFed by way of penalties under this Act shall be credited to the Consolidated 6und of India0: /@A81(0 D 4ENALTM /4Offe 'e!. "=. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws (ade thereunder, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0
/ Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 >, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %0 read as under,1%00 <ffence#0- Khoe'er contran'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or any regulations or bye+laws (ade thereunder shall be punishable with i(prison(ent for a ter( which (ay extend to fi'e years, or with fine or with both02
(%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with
fine, which (ay extend to twenty+fi'e crore rupees, or with both0: Offe 'e! ,> 'o.$% ie!. "1. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n&-6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and (b) 1director2, in relation to a fir(, (eans a partner in the fir(0 /@A81(0 D: @ISCELLANEOUS >4Co( iL% 'e of offe 'e! ,> 'o*rt!. "". ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central
> Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 !, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %% read as under,1%%0 /$gniCance $f $ffence# bF c$!rt#&*( ) Eo Court shall ta)e cogniFance of any offence punishable under this Act or any regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the 8oard0 (%) Eo court inferior to that of a ?etropolitan ?agistrate or a Dudicial ?agistrate of the first class shall try any offence punishable under this Act02
&o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or by any person0 !5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < Co.$o!itio of 'ert%i offe 'e!. ""A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "";. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any
penalty under this Act with respect to the alleged 'iolation , 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity , 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0: 1=5 E!t%,li!h.e t of S$e'i%l Co*rt!. ""C. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>.
! <rior
to o(ission, Sub+section(%) read 1Eo court inferior to that of a Court of Session shall try any offence punishable under this Act02 0 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. ""D. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-. A$$e%l % - Re+i!io ""E. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""2. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197).
(") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erioof ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! ""G. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< A$$e%l!. "). ( ) Any person aggrie'ed by an order of the 8oard (ade 4before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!: under this Act, or the regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor , 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0 (3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed , 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 %4A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")A. ( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!, under this Act, or the regulations (ade thereunder, 34or by an order (ade by an adDudicating officer under this Act: (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 $5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 8oard is recei'ed by the person referred to in sub+section ( ) and it shall be in such for( and be acco(panied by such fee as (ay be prescribed ,
Substituted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 $, w0e0f0 #+ %+ !!! for ;an order of the 8oard (ade;0 % Sections %3A to %36 inserted by the Securities =aws (Second A(end(ent) Act, !!! , Sec0 ", w0e0f0 #+ %+ !!!& 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %0, w0r0e0f0 %+ 0+%00$0 $ 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JNo %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-e ,> the ;o%r- /ith the 'o !e t of the $%rtie!.K
4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0
($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 (") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. ");. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3 (e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte; (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 Ri(ht to le(%l re$re!e t%tio . ")C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or an attorney of any Iigh Court, and
includes a pleader in practice0 Li.it%tio . ")D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 Ci+il 'o*rt ot to h%+e G*ri!-i'tio . ")E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "4A$$e%l to S*$re.e Co*rt. ")2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order ,
" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 % , w0r0e0f0 %+ 0+%00$0 <rior to its substitution, Section %36, as inserted by Securities =aws (Second A(end(ent) Act, !!!, w0e0f0 #+ %+ !!!, read as under,1%360 A%%eal t$ @igh /$!rt&-Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0:: 4o/er of Ce tr%l Go+er .e t to .%6e r*le!. "3. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for carrying out the pro'isions of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,164(a) the (anner of in*uiry under sub+section ( ) of section !I3 (aa) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %33: (b) the for( in which an appeal (ay be preferred under sub+section (3) of section %3 and the fees payable in respect of such appeal 3 (c) the procedure for disposing of an appeal under sub+section ($) of section %33 /4(d) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3A and the fees payable in respect of such appeal0: 4o/er of ;o%r- to .%6e re(*l%tio !. "5. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the 8oard (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for(a) the for( in which record is to be (aintained under clause ( i) of sub+section ( ) of section %3 (b) the for( in which the certificate of co((ence(ent of business shall be issued under
sub+section (%) of section 33 (c) the (anner in which the certificate of security shall be surrendered under sub+section ( ) of section #3 (d) the (anner of creating a pledge or hypothecation in respect of security owned by a beneficial owner under sub+section ( ) of section %3 (e) the conditions and the fees payable with respect to the issue of certificate of securities under sub+section (3) of section $3
# Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %%, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (a) read as under,1(a) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %332 / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 #, w0e0f0 #+ %+ !!!0
(f) the rights and obligations of the depositories, participants and the issuers under subsection ( ) of section /3 (g) the eligibility criteria for ad(ission of securities into the depository under sub+section (%) of section /0 4o/er of -e$o!itorie! to .%6e ,>e0l%/!. "8. ( ) A depository shall, with the pre'ious appro'al of the 8oard, (a)e bye+laws consistent with the pro'isions of this Act and the regulations0 (%) In particular, and without preDudice to the generality of the foregoing power, such byelaws shall pro'ide for(a) the eligibility criteria for ad(ission and re(o'al of securities in the depository3 (b) the conditions subDect to which the securities shall be dealt with3 (c) the eligibility criteria for ad(ission of any person as a participant3 (d) the (anner and procedure for de(aterialisation of securities3 (e) the procedure for transactions within the depository3 (f) the (anner in which securities shall be dealt with or withdrawn fro( a depository3 (g) the procedure for ensuring safeguards to protect the interests of participants and beneficial owners3 (h) the conditions of ad(ission into and withdrawal fro( a participant by a beneficial owner3 (i) the procedure for con'eying infor(ation to the participants and beneficial owners on di'idend declaration, shareholder (eetings and other (atters of interest to the beneficial owners3 (j) the (anner of distribution of di'idends, interest and (onetary benefits recei'ed fro( the co(pany a(ong beneficial owners3 (k) the (anner of creating pledge or hypothecation in respect of securities held with a depository3 (l) inter #e rights and obligations a(ong the depository, issuer, participants, and beneficial owners3 (") the (anner and the periodicity of furnishing infor(ation to the 8oard, issuer and other persons3 (n) the procedure for resol'ing disputes in'ol'ing depository, issuer, co(pany or a beneficial owner3 ($) the procedure for proceeding against the participant co((itting breach of the regulations and pro'isions for suspension and expulsion of participants fro( the depository and cancellation of agree(ents entered with the depository3 (%) the internal control standards including procedure for auditing, re'iewing and (onitoring0
(3) Khere the 8oard considers it expedient so to do, it (ay, by order in writing, direct a depository to (a)e any bye+laws or to a(end or re'o)e any bye+laws already (ade within such period as it (ay specify in this behalf0 ($) If the depository fails or neglects to co(ply with such order within the specified period, the 8oard (ay (a)e the bye+laws or a(end or re'o)e the bye+laws (ade either in the for( specified in the order or with such (odifications thereof as the 8oard thin)s fit0 R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t. "7. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. ":. .he pro'isions of this Act shall be in addition to, and not in derogation of, any other law for the ti(e being in force relating to the holding and transfer of securities0 Re.o+%l of -iffi'*ltie!. "9. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as appear to it to be necessary or expedient for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of a period of two years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 A.e -.e t! to 'ert%i e %'t.e t!. )=. 40e%ealed bF 0e%ealing H A"ending Act' 20010: Re$e%l % - !%+i (. )1. ( ) .he 9epositories (.hird) Crdinance, !!# (Crd0 %> of !!#), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 /@(5A9( 4 ee section 30: A?7E9?7E.S .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0:
SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 SECTIONS !'APT"R I 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions !'APT"R II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA
). 7stablish(ent and incorporation of 8oard 3. ?anage(ent of the 8oard 5. .er( of office and conditions of ser'ice of Chair(an and (e(bers of the 8oard 8. Re(o'al of (e(ber fro( office 7. ?eetings 7A. ?e(ber not to participate in (eetings in certain cases :. Bacancies, etc0, not to in'alidate proceedings of 8oard 9. Cfficers and e(ployees of the 8oard !'APT"R III TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD 1=. .ransfer of assets, liabilities, etc0, of existing Securities and 7xchange 8oard to the 8oard !'APT"R IV 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 11. 6unctions of 8oard 11A. 8oard to regulate or prohibit issue of prospectus, offer docu(ent or ad'ertise(ent soliciting (oney for issue of securities 11AA. Collecti'e in'est(ent sche(e 11;. <ower to issue directions 11C. In'estigation 11D. Cease and desist proceedings !'APT"R V REGISTRATION CERTI2ICATE 1". Registration of stoc) bro)ers, sub+bro)ers, share transfer agents, etc0
%
!'APT"R VA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 1"A. <rohibition of (anipulati'e and decepti'e de'ices, insider trading and substantial ac*uisition of securities or control !'APT"R VI 2INANCE, ACCOUNTS AND AUDIT 1). &rants by the Central &o'ern(ent 13. 6und 15. Accounts and audit !'APT"R VIA 4ENALTIES AND ADEUDICATION 15A. <enalty for failure to furnish infor(ation, return, etc & 15;. <enalty for failure by any person to enter into agree(ent with clients 15C. <enalty for failure to redress in'estorsJ grie'ances 15D. <enalty for certain defaults in case of (utual funds 15E. <enalty for failure to obser'e rules and regulations by an asset (anage(ent co(pany 152. <enalty for default in case of stoc) bro)ers 15G. <enalty for insider trading 15D. <enalty for non+disclosure of ac*uisition of shares and ta)eo'ers 15DA. <enalty for fraudulent and unfair trade practices 15D;. <enalty for contra'ention where no separate penalty has been pro'ided
150I. <ower to adDudicate 15E. 6actors to be ta)en into account by the AdDudicating Cfficer 15EA. Crediting su(s realised by way of penalties to Consolidated 6und of India 15E;. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! !'APT"R VIB ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL 15F. 7stablish(ent of Securities Appellate .ribunals 15L. Co(position of Securities Appellate .ribunal 15@. Qualification for appoint(ent as <residing Cfficer or ?e(ber of Securities Appellate .ribunal
3
15N. .enure of office of <residing Cfficer and other (e(bers of Securities Appellate .ribunal 150O. Salary and allowances and other ter(s and conditions of ser'ice of <residing Cfficers 154. 6illing up of 'acancies 159. Resignation and re(o'al 15R. Crders constituting Appellate .ribunal to be final and not to in'alidate its proceedings 15S. Staff of the Securities Appellate .ribunal 15T. Appeal to the Securities Appellate .ribunal 15U. <rocedure and powers of the Securities Appellate .ribunal 15I. Right to legal representation 15?. =i(itation 15A. <residing Cfficer, (e(bers and staff of Securities Appellate .ribunals to be public ser'ants 15M. Ci'il Court not to ha'e Durisdiction 15N. Appeal to Supre(e Court !'APT"R VII @ISCELLANEOUS 18. <ower of Central &o'ern(ent to issue directions 17. <ower of Central &o'ern(ent to supersede the 8oard 1:. Returns and reports 19. 9elegation "=. Appeals "=A. 8ar of Durisdiction "1. Sa'ings "". ?e(bers, officers and e(ployees of the 8oard to be public ser'ants "). <rotection of action ta)en in good faith "3. Cffences "3A. Co(position of certain offences "3;. <ower to grant i((unity "5. 7xe(ption fro( tax on wealth and inco(e "8. CogniFance of offences by Courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! "7. Cffences by co(panies
":. 4C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!":
$
":A. Re'o+er> of %.o* t! "9. <ower to (a)e rules )=. <ower to (a)e regulations )1. Rules and regulations to be laid before <arlia(ent )". Application of other laws not barred )). 4Repealed by Repealing R A(ending Act, %00 : )3. <ower to re(o'e difficulties )5. Repeal and sa'ing .I7 SCI79H=7 4Repealed by Repealing R A(ending Act, %00 : SECURITIES AND EACDANGE ;OARD O2 INDIA ACT, 199" 515 O2 199"< 53th A$ril, 199"< A A't to $ro+i-e for the e!t%,li!h.e t of % ;o%r- to $rote't the i tere!t! of i +e!tor! i !e'*ritie! % - to $ro.ote the -e+elo$.e t of, % - to re(*l%te, the !e'*ritie! .%r6et % - for .%tter! 'o e'te- there/ith or i 'i-e t%l thereto B( it enacted bF 8arlia"ent in the E$rtF7third ;ear $f the 0e%!blic $f :ndia a# f$ll$.# , CDA4TER I 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities and 7xchange 8oard of India Act, !!%0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the 30th day of Manuary, !!%0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 33 (b) 1Chair(an2 (eans the Chair(an of the 8oard3 4(ba) 1collecti'e in'est(ent sche(e2 (eans any sche(e or arrange(ent which satisfies the conditions specified in section AA3: (c) 1existing Securities and 7xchange 8oard2 (eans the Securities and 7xchange 8oard of India constituted under the Resolution of the &o'ern(ent of India in the 9epart(ent of 7cono(ic Affairs Eo0 ($$) S7L>#, dated the %th day of April, !>>3 (d) 16und2 (eans the 6und constituted under section $3 (e) 1(e(ber2 (eans a (e(ber of the 8oard and includes the Chair(an3 (f) 1notification2 (eans a notification published in the Cfficial &aFette3 (g) 1prescribed2 (eans prescribed by rules (ade under this Act3
Inserted by the Securities =aws (A(end(ent) Act, !!!, w0e0f0 %%+%+%0000
"
(h) 1regulations2 (eans the regulations (ade by the 8oard under this Act3 4(ha) 1Reser'e 8an)2 (eans the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)3: (i) 1securities2 has the (eaning assigned to it in section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#)0 %4(%) Kords and expressions used and not defined in this Act but defined in the Securities Contracts (Regulation) Act, !"# ($% of !"#) 34or the 9epositories Act, !!#:, shall ha'e the (eanings respecti'ely assigned to the( in that Act:0 CDA4TER II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA E!t%,li!h.e t % - i 'or$or%tio of ;o%r-.
). ( ) Kith effect fro( such date as the Central &o'ern(ent (ay, by notification, appoint, there shall be established, for the purposes of this Act, a 8oard by the na(e of the Securities and 7xchange 8oard of India0 (%) .he 8oard shall be a body corporate by the na(e aforesaid, ha'ing perpetual succession and a co((on seal, with power subDect to the pro'isions of this Act, to ac*uire, hold and dispose of property, both (o'able and i((o'able, and to contract, and shall, by the said na(e, sue or be sued0 (3) .he head office of the 8oard shall be at 8o(bay0 ($) .he 8oard (ay establish offices at other places in India0 @% %(e.e t of the ;o%r-. 3. ( ) .he 8oard shall consist of the following (e(bers, na(ely,(a) a Chair(an3 (b) two (e(bers fro( a(ongst the officials of the $4?inistry: of the Central &o'ern(ent dealing with 6inance "4and ad(inistration of the Co(panies Act, !"# ( of !"#):3 (c) one (e(ber fro( a(ongst the officials of #4the Reser'e 8an):3 /4(d) fi'e other (e(bers of who( at least three shall be the whole+ti(e (e(bers,: to be appointed by the Central &o'ern(ent0
Inserted by the Securities =aws (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0 <rior to its substitution, sub+section (%) reads as under, 1(%) Kords and expressions used and not defined in this Act but defined in the Capital Issues (Control) Act, !$/ or the Securities Contracts Regulation Act, !"# shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts02 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 $ Substituted for 1?inistries2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1and law2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act !3$ (% of !3$)2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 / Substituted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, clause (d) read as, 1(d) two other (e(bers20
% Substituted
#
(%) .he general superintendence, direction and (anage(ent of the affairs of the 8oard shall 'est in a 8oard of (e(bers, which (ay exercise all powers and do all acts and things which (ay be exercised or done by the 8oard0 (3) Sa'e as otherwise deter(ined by regulations, the Chair(an shall also ha'e powers of general superintendence and direction of the affairs of the 8oard and (ay also exercise all powers and do all acts and things which (ay be exercised or done by that 8oard0 ($) .he Chair(an and (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be appointed by the Central &o'ern(ent and the (e(bers referred to in clauses ( b) and (c) of that sub+section shall be no(inated by the Central &o'ern(ent and the 4Reser'e 8an): respecti'ely0 (") .he Chair(an and the other (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be persons of ability, integrity and standing who ha'e shown capacity in dealing with proble(s relating to securities (ar)et or ha'e special )nowledge or experience of law, finance, econo(ics, accountancy, ad(inistration or in any other discipline which, in the opinion of the Central &o'ern(ent, shall be useful to the 8oard0 Ter. of offi'e % - 'o -itio ! of !er+i'e of Ch%ir.% % - .e.,er! of the ;o%r-. 5. ( ) .he ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers referred to in clause (d) of sub+section ( ) of section $ shall be such as (ay be prescribed0 (%) Eotwithstanding anything contained in sub+section ( ), the Central &o'ern(ent shall ha'e the right to ter(inate the ser'ices of the Chair(an or a (e(ber appointed under clause ( d) of
sub+section ( ) of section $, at any ti(e before the expiry of the period prescribed under subsection ( ), by gi'ing hi( notice of not less than three (onths in writing or three (onthsJ salary and allowances in lieu thereof, and the Chair(an or a (e(ber, as the case (ay be, shall also ha'e the right to relin*uish his office, at any ti(e before the expiry of the period prescribed under sub+section ( ), by gi'ing to the Central &o'ern(ent notice of not less than three (onths in writing0 Re.o+%l of .e.,er fro. offi'e. 8. %4G G G: .he Central &o'ern(ent shall re(o'e a (e(ber fro( office if he(a) is, or at any ti(e has been, adDudicated as insol'ent3 (b) is of unsound (ind and stands so declared by a co(petent court3 (c) has been con'icted of an offence which, in the opinion of the Central &o'ern(ent, in'ol'es a (oral turpitude3 (d) 34G G G: (e) has, in the opinion of the Central &o'ern(ent, so abused his position as to render his continuation in office detri(ental to the public interest , 4ro+i-e- that no (e(ber shall be re(o'ed under this clause unless he has been gi'en a reasonable opportunity of being heard in the (atter0
Substituted for 1Reser'e 8an) of India2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 )2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 C(itted, by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to o(ission clause (d) read read as, 1(d) is appointed as a director of a co(pany20
% 1(
/
@eeti (!. 7. ( ) .he 8oard shall (eet at such ti(es and places, and shall obser'e such rules of procedure in regard to the transaction of business at its (eetings (including *uoru( at such (eetings) as (ay be pro'ided by regulations0 (%) .he Chair(an or, if for any reason, he is unable to attend a (eeting of the 8oard, any other (e(ber chosen by the (e(bers present fro( a(ongst the(sel'es at the (eeting shall preside at the (eeting0 (3) All *uestions which co(e up before any (eeting of the 8oard shall be decided by a (aDority 'otes of the (e(bers present and 'oting, and, in the e'ent of an e*uality of 'otes, the Chair(an, or in his absence, the person presiding, shall ha'e a second or casting 'ote0 4@e.,er ot to $%rti'i$%te i .eeti (! i 'ert%i '%!e!. 7A. Any (e(ber, who is a director of a co(pany and who as such director has any direct or indirect pecuniary interest in any (atter co(ing up for consideration at a (eeting of the 8oard, shall, as soon as possible after rele'ant circu(stances ha'e co(e to his )nowledge, disclose the nature of his interest at such (eeting and such disclosure shall be recorded in the proceedings of the 8oard, and the (e(ber shall not ta)e any part in any deliberation or decision of the 8oard with respect to that (atter0: I%'% 'ie!, et'., ot to i +%li-%te $ro'ee-i (! of ;o%r-. :. Eo act or proceeding of the 8oard shall be in'alid (erely by reason of(a) any 'acancy in, or any defect in the constitution of, the 8oard3 or (b) any defect in the appoint(ent of a person acting as a (e(ber of the 8oard3 or (c) any irregularity in the procedure of the 8oard not affecting the (erits of the case0 Offi'er! % - e.$lo>ee! of the ;o%r-. 9. ( ) .he 8oard (ay appoint such other officers and e(ployees as it considers necessary for the efficient discharge of its functions under this Act0 (%) .he ter( and other conditions of ser'ice of officers and e(ployees of the 8oard appointed under sub+section ( ) shall be such as (ay be deter(ined by regulations0 CDA4TER III
TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD Tr% !fer of %!!et!, li%,ilitie!, et'., of e#i!ti ( Se'*ritie! % - E#'h% (e ;o%r- to the ;o%r-. 1=. ( ) Cn and fro( the date of establish(ent of the 8oard,(a) any reference to the existing Securities and 7xchange 8oard in any law other than this Act or in any contract or other instru(ent shall be dee(ed as a reference to the 8oard3 (b) all properties and assets, (o'able and i((o'able, of, or belonging to, the existing Securities and 7xchange 8oard, shall 'est in the 8oard3
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
>
(c) all rights and liabilities of the existing Securities and 7xchange 8oard shall be transferred to, and be the rights and liabilities of, the 8oard3 (d) without preDudice to the pro'isions of clause (c), all debts, obligations and liabilities incurred, all contracts entered into and all (atters and things engaged to be done by, with or for the existing Securities and 7xchange 8oard i((ediately before that date, for or in connection with the purpose of the said existing 8oard shall be dee(ed to ha'e been incurred, entered into, or engaged to be done by, with or for, the 8oard3 (e) all su(s of (oney due to the existing Securities and 7xchange 8oard i((ediately before that date shall be dee(ed to be due to the 8oard3 (f) all suits and other legal proceedings instituted or which could ha'e been instituted by or against the existing Securities and 7xchange 8oard i((ediately before that date (ay be continued or (ay be instituted by or against the 8oard3 and (g) e'ery e(ployee holding any office under the existing Securities and 7xchange 8oard i((ediately before that date shall hold his office in the 8oard by the sa(e tenure and upon the sa(e ter(s and conditions of ser'ice as respects re(uneration, lea'e, pro'ident fund, retire(ent and other ter(inal benefits as he would ha'e held such office if the 8oard had not been established and shall continue to do so as an e(ployee of the 8oard or until the expiry of the period of six (onths fro( that date if such e(ployee opts not to be the e(ployee of the 8oard within such period0 (%) Eotwithstanding anything contained in the Industrial 9isputes Act, !$/ ( $ of !$/), or in any other law for the ti(e being in force, absorption of any e(ployee by the 8oard in its regular ser'ice under this section shall not entitle such e(ployee to any co(pensation under that Act or other law and no such clai( shall be entertained by any court, tribunal or other authority0 CDA4TER II 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 2* 'tio ! of ;o%r-. 11. ( ) SubDect to the pro'isions of this Act, it shall be the duty of the 8oard to protect the interests of in'estors in securities and to pro(ote the de'elop(ent of, and to regulate the securities (ar)et, by such (easures as it thin)s fit0 (%) Kithout preDudice to the generality of the foregoing pro'isions, the (easures referred to therein (ay pro'ide for(a) regulating the business in stoc) exchanges and any other securities (ar)ets3 (b) registering and regulating the wor)ing of stoc) bro)ers, sub+bro)ers, share transfer agents, ban)ers to an issue, trustees of trust deeds, registrars to an issue, (erchant ban)ers, underwriters, portfolio (anagers, in'est(ent ad'isers and such other inter(ediaries who (ay be associated with securities (ar)ets in any (anner3 4(ba) registering and regulating the wor)ing of the depositories, %4participants:, custodians of securities, foreign institutional in'estors, credit rating agencies and such other inter(ediaries as the 8oard (ay, by notification, specify in this behalf3: (c) registering and regulating the wor)ing of 4'enture capital funds and collecti'e
in'est(ent sche(es:, including (utual funds3
% Inserted
Inserted by Securities =aws (A(end(ent) Act !!", w0r0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+!+ !!"0
!
(d) pro(oting and regulating self+regulatory organisations3 (e) prohibiting fraudulent and unfair trade practices relating to securities (ar)ets3 (f) pro(oting in'estorsJ education and training of inter(ediaries of securities (ar)ets3 (g) prohibiting insider trading in securities3 (h) regulating substantial ac*uisition of shares and ta)e o'er of co(panies3 (i) calling for infor(ation fro(, underta)ing inspection, conducting in*uiries and audits of the %4stoc) exchanges, (utual funds, other persons associated with the securities (ar)et:, inter(ediaries and self+regulatory organisations in the securities (ar)et3 34(ia) '%lli ( for i for.%tio % - re'or-! fro. % > $er!o i 'l*-i ( % > ,% 6 or % > other %*thorit> or ,o%r- or 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l or St%te A't /hi'h, i the o$i io of the ;o%r-, !h%ll ,e rele+% t to % > i +e!ti(%tio or i 7*ir> ,> the ;o%r- i re!$e't of % > tr% !%'tio i !e'*ritie! 3: $5(i,) '%lli ( for i for.%tio fro., or f*r i!hi ( i for.%tio to, other %*thoritie!, /hether i I -i% or o*t!i-e I -i%, h%+i ( f* 'tio ! !i.il%r to tho!e of the ;o%r-, i the .%tter! rel%ti ( to the $re+e tio or -ete'tio of +iol%tio ! i re!$e't of !e'*ritie! l%/!, !*,Ge't to the $ro+i!io ! of other l%/! for the ti.e ,ei ( i for'e i thi! re(%r-& 4ro+i-e- th%t the ;o%r-, for the $*r$o!e of f*r i!hi ( % > i for.%tio to % > %*thorit> o*t!i-e I -i%, .%> e ter i to % %rr% (e.e t or %(ree.e t or * -er!t% -i ( /ith !*'h %*thorit> /ith the $rior %$$ro+%l of the Ce tr%l Go+er .e tH< (j) perfor(ing such functions and exercising such powers under the pro'isions of "4G G G: the Securities Contracts (Regulation) Act, !"# ($% of !"#), as (ay be delegated to it by the Central &o'ern(ent3 (k) le'ying fees or other charges for carrying out the purposes of this section3 (l) conducting research for the abo'e purposes3 #4(la) calling fro( or furnishing to any such agencies, as (ay be specified by the 8oard, such infor(ation as (ay be considered necessary by it for the efficient discharge of its functions3: (") perfor(ing such other functions as (ay be prescribed0 /4(%A) Kithout preDudice to the pro'isions contained in sub+section (%), the 8oard (ay ta)e (easures to underta)e inspection of any boo), or register, or other docu(ent or record of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard
Substituted for 1collecti'e in'est(ent sche(es2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % Substituted for 1stoc) exchanges and2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 S*,!tit*te- for J'%lli ( for i for.%tio % - re'or- fro. % > ,% 6 or % > other %*thorit> or ,o%ror 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l, St%te or 4ro+i 'i%l A't i re!$e't of % > tr% !%'tio i !e'*ritie! /hi'h i! * -er i +e!ti(%tio or i 7*ir> ,> the ;o%r-K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). E%rlier Se'tio 11(")(i%) /%! i !erte- ,> the SE;I (A.e -.e t) A't, "==" /.e.f. "901=0"=="0 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. =80=)0 199:) " .he words 1the Capital Issues (Control) Act, !$/ (%! of !$/) and2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
0
has reasonable grounds to belie'e that such co(pany has been indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et0: 4(3) Eotwithstanding anything contained in any other law for the ti(e being in force while exercising the powers under %4clause (i) or clause (ia) of sub+section (%) or sub+ section (2A):, the 8oard shall ha'e the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(i) the disco'ery and production of boo)s of account and other docu(ents, at such place and such ti(e as (ay be specified by the 8oard3 (ii) su((oning and enforcing the attendance of persons and exa(ining the( on oath3 (iii) inspection of any boo)s, registers and other docu(ents of any person referred to in section %, at any place3: 34(iv) inspection of any boo), or register, or other docu(ent or record of the co(pany referred to in sub+section (%A)3 (v) issuing co((issions for the exa(ination of witnesses or docu(ents0: $4($) Kithout preDudice to the pro'isions contained in sub+sections ( ), (%), (%A) and (3) and section 8, the 8oard (ay, by an order, for reasons to be recorded in writing, in the interests of in'estors or securities (ar)et, ta)e any of the following (easures, either pending in'estigation or in*uiry or on co(pletion of such in'estigation or in*uiry, na(ely,(a) suspend the trading of any security in a recognised stoc) exchange3 (b) restrain persons fro( accessing the securities (ar)et and prohibit any person associated with securities (ar)et to buy, sell or deal in securities3 (c) suspend any office+bearer of any stoc) exchange or self+regulatory organisation fro( holding such position3 (d) i(pound and retain the proceeds or securities in respect of any transaction which is under in'estigation3 (e) attach, after passing of an order on an application (ade for appro'al by the Mudicial ?agistrate of the first class ha'ing Durisdiction, for a period not exceeding one (onth, one or (ore ban) account or accounts of any inter(ediary or any person associated with the securities (ar)et in any (anner in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder , 4ro+i-e- that only the ban) account or accounts or any transaction entered therein, so far as it relates to the proceeds actually in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder shall be allowed to be attached3 (f) direct any inter(ediary or any person associated with the securities (ar)et in any (anner not to dispose of or alienate an asset for(ing part of any transaction which is under in'estigation , 4ro+i-e- that the 8oard (ay, without preDudice to the pro'isions contained in sub+section (%) or sub+section (%A), ta)e any of the (easures specified in clause ( d) or clause (e) or clause (f), in respect of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard has reasonable grounds to belie'e that such co(pany has been
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1clause (i) of sub+section (%)2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 3 Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 $ Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
% Substituted
indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et , 4ro+i-e- f*rther that the 8oard shall, either before or after passing such orders, gi'e an
opportunity of hearing to such inter(ediaries or persons concerned0: 15(5) The %.o* t -i!(or(e-, $*r!*% t to % -ire'tio i!!*e- * -er !e'tio 11; or !e'tio 1"A of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 or !e'tio 19 of the De$o!itorie! A't, 1998, %! the '%!e .%> ,e, !h%ll ,e 're-ite- to the I +e!tor 4rote'tio % - E-*'%tio 2* e!t%,li!he- ,> the ;o%r- % - !*'h %.o* t !h%ll ,e *tiliLe- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< %4;o%r- to re(*l%te or $rohi,it i!!*e of $ro!$e't*!, offer -o'*.e t or %-+erti!e.e t !oli'iti ( .o e> for i!!*e of !e'*ritie!. 11A. ( ) Kithout preDudice to the pro'isions of the Co(panies Act, !"# ( of !"#), the 8oard (ay, for the protection of in'estors,(a) specify, by regulations(i) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (ii) the (anner in which such (atters shall be disclosed by the co(panies3 (b) by general or special orders(i) prohibit any co(pany fro( issuing prospectus, any offer docu(ent, or ad'ertise(ent soliciting (oney fro( the public for the issue of securities3 (ii) specify the conditions subDect to which the prospectus, such offer docu(ent or ad'ertise(ent, if not prohibited, (ay be issued0 (%) Kithout preDudice to the pro'isions of section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the 8oard (ay specify the re*uire(ents for listing and transfer of securities and other (atters incidental thereto0: 34Colle'ti+e i +e!t.e t !'he.e. 11AA. ( ) Any sche(e or arrange(ent which satisfies the conditions referred to in subsection (%) $5or !*,0!e'tio ("A)< shall be a collecti'e in'est(ent sche(e0 "44ro+i-e- th%t % > $ooli ( of f* -! * -er % > !'he.e or %rr% (e.e t, /hi'h i! ot re(i!tere- /ith the ;o%r- or i! ot 'o+ere- * -er !*,0!e'tio ()), i +ol+i ( %
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 7arlier S0 A was inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" for S0 A0 <rior to its substitution, S0 A read as under,+ 1 A0 ?atters to be disclosed by the co(panies0+ Kithout <reDudice to the <ro'isions of the Co(panies Act , !"# ( of !"#), the board (ay , for the protection of in'estors, specify, by regulations,+ (a) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (b) the (anner in which such (atters, shall be disclosed by the co(panies02 3 Inserted by S78I (A(end(ent) Act !!!, w0e0f0 %%+%+%0000 $I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% Substituted
%
'or$*! %.o* t of o e h* -re- 'rore r*$ee! or .ore !h%ll ,e -ee.e- to ,e % 'olle'ti+e i +e!t.e t !'he.e.< (%) Any sche(e or arrange(ent (ade or offered by any 5$er!o < under which,(i) the contributions, or pay(ents (ade by the in'estors, by whate'er na(e called, are pooled and utiliFed for the purposes of the sche(e or arrange(ent3 (ii) the contributions or pay(ents are (ade to such sche(e or arrange(ent by the in'estors with a 'iew to recei'e profits, inco(e, produce or property, whether (o'able or i((o'able, fro( such sche(e or arrange(ent3 (iii) the property, contribution or in'est(ent for(ing part of sche(e or arrange(ent, whether identifiable or not, is (anaged on behalf of the in'estors3
(iv) the in'estors do not ha'e day+to+day control o'er the (anage(ent and operation of the sche(e or arrange(ent0 "5("A)< A > !'he.e or %rr% (e.e t .%-e or offere- ,> % > $er!o !%ti!f>i ( the 'o -itio ! %! .%> ,e !$e'ifie- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< (3) Eotwithstanding anything contained in sub+section (%) 35or !*,0!e'tio ("A)<, any sche(e or arrange(ent(i) (ade or offered by a co+operati'e society registered under the Co+operati'e Societies Act, ! % (% of ! %) or a society being a society registered or dee(ed to be registered under any law relating to co+operati'e societies for the ti(e being in force in any State3 (ii) under which deposits are accepted by non+ban)ing financial co(panies as defined in clause (f) of section $"+I of the Reser'e 8an) of India Act, !3$ (% of !3$)3 (iii) being a contract of insurance to which the Insurance Act, !3> ($ of !3>), applies3 (iv) pro'iding for any Sche(e, <ension Sche(e or the Insurance Sche(e fra(ed under the 7(ployees <ro'ident 6und and ?iscellaneous <ro'isions Act, !"% ( ! of !"%)3 (v) under which deposits are accepted under section ">A of the Co(panies Act, !"# ( of !"#)3 (vi) under which deposits are accepted by a co(pany declared as a Eidhi or a (utual benefit society under section #%0A of the Co(panies Act, !"# ( of !"#)3 (vii) falling within the (eaning of Chit business as defined in clause ( d) of section % of the Chit 6und Act, !>% ($0 of !>%)3 (viii) under which contributions (ade are in the nature of subscription to a (utual fund3 35(i#) !*'h other !'he.e or %rr% (e.e t /hi'h the Ce tr%l Go+er .e t .%>, i 'o !*lt%tio /ith the ;o%r-, otif>H< shall not be a collecti'e in'est(ent sche(e0: "54o/er to i!!*e -ire'tio !. 11;. Sa'e as otherwise pro'ided in section , if after (a)ing or causing to be (ade an en*uiry, the 8oard is satisfied that it is necessary,S*,!tit*te- for J'o.$% >K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) 3I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
%I
3
(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any inter(ediary or other persons referred to in section % being conducted in a (anner detri(ental to the interest of in'estors or securities (ar)et3 or (iii) to secure the proper (anage(ent of any such inter(ediary or person, it (ay issue such directions,(a) to any person or class of persons referred to in section %, or associated with the securities (ar)et3 or (b) to any co(pany in respect of (atters specified in section A, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 15E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< %4I +e!ti(%tio . 11C. ( ) Khere the 8oard has reasonable ground to belie'e that-
(a) the transactions in securities are being dealt with in a (anner detri(ental to the in'estors or the securities (ar)et3 or (b) any inter(ediary or any person associated with the securities (ar)et has 'iolated any of the pro'isions of this Act or the rules or the regulations (ade or directions issued by the 8oard thereunder, it (ay, at any ti(e by order in writing, direct any person (hereafter in this section referred to as the In'estigating Authority) specified in the order to in'estigate the affairs of such inter(ediary or persons associated with the securities (ar)et and to report thereon to the 8oard0 (%) Kithout preDudice to the pro'isions of sections %3" to %$ of the Co(panies Act, !"# ( of !"#), it shall be the duty of e'ery (anager, (anaging director, officer and other e(ployee of the co(pany and e'ery inter(ediary referred to in section % or e'ery person associated with the securities (ar)et to preser'e and to produce to the In'estigating Authority or any person authorised by it in this behalf, all the boo)s, registers, other docu(ents and record of, or relating to, the co(pany or, as the case (ay be, of or relating to, the inter(ediary or such person, which are in their custody or power0 (3) .he In'estigating Authority (ay re*uire any inter(ediary or any person associated with securities (ar)et in any (anner to furnish such infor(ation to, or produce such boo)s, or registers, or other docu(ents, or record before hi( or any person authorised by it in this behalf as it (ay consider necessary if the furnishing of such infor(ation or the production of such boo)s, or registers, or other docu(ents, or record is rele'ant or necessary for the purposes of its in'estigation0 ($) .he In'estigating Authority (ay )eep in its custody any boo)s, registers, other docu(ents and record produced under sub+section (%) or sub+section (3) for six (onths and thereafter
% Inserted
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
$
shall return the sa(e to any inter(ediary or any person associated with securities (ar)et by who( or on whose behalf the boo)s, registers, other docu(ents and record are produced , 4ro+i-e- that the In'estigating Authority (ay call for any boo), register, other docu(ent and record if they are needed again , 4ro+i-e- f*rther that if the person on whose behalf the boo)s, registers, other docu(ents and record are produced re*uires certified copies of the boo)s, registers, other docu(ents and record produced before the In'estigating Authority, it shall gi'e certified copies of such boo)s, registers, other docu(ents and record to such person or on whose behalf the boo)s, registers, other docu(ents and record were produced0 (") Any person, directed to (a)e an in'estigation under sub+section ( ), (ay exa(ine on oath, any (anager, (anaging director, officer and other e(ployee of any inter(ediary or any person associated with securities (ar)et in any (anner, in relation to the affairs of his business and (ay ad(inister an oath accordingly and for that purpose (ay re*uire any of those persons to appear before it personally0 (#) If any person fails without reasonable cause or refuses(a) to produce to the In'estigating Authority or any person authorised by it in this behalf any boo), register, other docu(ent and record which is his duty under sub+section (%) or sub+section (3) to produce3 or (b) to furnish any infor(ation which is his duty under sub+section (3) to furnish3 or (c) to appear before the In'estigating Authority personally when re*uired to do so under sub+section (") or to answer any *uestion which is put to hi( by the In'estigating Authority in pursuance of that sub+section3 or (d) to sign the notes of any exa(ination referred to in sub+section (/), he shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with
fine, which (ay extend to one crore rupees, or with both, and also with a further fine which (ay extend to fi'e la)h rupees for e'ery day after the first during which the failure or refusal continues0 (/) Eotes of any exa(ination under sub+section (") shall be ta)en down in writing and shall be read o'er to, or by, and signed by, the person exa(ined, and (ay thereafter be used in e'idence against hi(0 4(:) ?here i the 'o*r!e of % i +e!ti(%tio , the I +e!ti(%ti ( A*thorit> h%! re%!o to ,elie+e th%t % > $er!o or e ter$ri!e, %! the '%!e .%> ,e, to /ho. % oti'e * -er !*,!e'tio ()) h%! ,ee i!!*e- or .i(ht ,e i!!*e-, 0 (%) h%! o.itte- or f%ile- to $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! %! re7*irei the oti'eH or (,) /o*l- ot $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! /hi'h !h%ll ,e *!ef*l for, or rele+% t to, the i +e!ti(%tio H or (') /o*l- -e!tro>, .*til%te, %lter, f%l!if> or !e'rete the i for.%tio or -o'*.e t! *!ef*l for, or rele+% t to, the i +e!ti(%tio ,
S*,!tit*te- for JKhere in the course of in'estigation, the In'estigating Authority has reasonable ground to belie'e that the boo)s, registers, other docu(ents and record of, or relating to, any inter(ediary or any person associated with securities (ar)et in any (anner, (ay be destroyed, (utilated, altered, falsified or secreted, the In'estigating Authority (ay (a)e an application to the Mudicial ?agistrate of the first class ha'ing Durisdiction for an order for the seiFure of such boo)s, registers, other docu(ents and record K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
"
the , the Ch%ir.% .%>, %fter ,ei ( !%ti!fie- th%t it i! e'e!!%r> to -o !o, %*thoriLe the I +e!ti(%ti ( A*thorit> or % > other offi'er of the ;o%r- (the offi'er !o %*thoriLe- i %ll '%!e! ,ei ( herei %fter referre- to %! the %*thori!e- offi'er), to0 (i) e ter % - !e%r'h, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft /here !*'h i for.%tio or -o'*.e t! %re e#$e'te- or ,elie+e- to ,e 6e$tH (ii) ,re%6 o$e the lo'6 of % > -oor, ,o#, lo'6er, !%fe, %l.ir%h or other re'e$t%'le for e#er'i!i ( the $o/er! 'o ferre- ,> !*,0'l%*!e (i), /here the 6e>! thereof %re ot %+%il%,leH (iii) !e%r'h % > $er!o /ho h%! (ot o*t of, or i! %,o*t to (et i to, or i! i , the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft, if the %*thoriLe- offi'er h%! re%!o to !*!$e't th%t !*'h $er!o h%! !e'rete- %,o*t hi! $er!o % > !*'h ,oo6! of %''o* t or other -o'*.e t!H (i+) re7*ire % > $er!o /ho i! fo* - to ,e i $o!!e!!io or 'o trol of % > ,oo6! of %''o* t or other -o'*.e t!, .%i t%i e- i the for. of ele'tro i' re'or-, to $ro+i-e the %*thori!e- offi'er the e'e!!%r> f%'ilit> to i !$e't !*'h ,oo6! of %''o* t or other -o'*.e t!. "#planation0 2or the $*r$o!e of thi! !*,0'l%*!e, the e#$re!!io Jele'tro i' re'or-K !h%ll h%+e the .e% i ( %!!i( e- to it i 'l%*!e (t) of !*,0!e'tio (1) of !e'tio " of the I for.%tio Te'h olo(> A't, "===. (+) !eiLe % > !*'h ,oo6! of %''o* t or other -o'*.e t! fo* - %! % re!*lt of !*'h !e%r'hH (+i) $l%'e .%r6! of i-e tifi'%tio o % > ,oo6! of %''o* t or other -o'*.e t! or .%6e or '%*!e to ,e .%-e e#tr%'t! or 'o$ie! therefro.H (+ii) re'or- o o%th the !t%te.e t of % > $er!o /ho i! fo* - to ,e i $o!!e!!io or i 'o trol of the i for.%tio or -o'*.e t! referre- to i !*,0'l%*!e! (i), (iii) % - (i+).< 4(9) The ;o%r- .%> .%6e re(*l%tio ! i rel%tio to % > !e%r'h or !eiL*re * -er thi! !e'tio H % - i $%rti'*l%r, /itho*t $reG*-i'e to the (e er%lit> of the fore(oi ( $o/er, !*'h re(*l%tio ! .%> $ro+i-e for the $ro'e-*re to ,e follo/e- ,> the %*thori!e- offi'er0
(%) for o,t%i i ( i (re!! i to % > ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft to ,e !e%r'he- /here free i (re!! thereto i! ot %+%il%,leH
1 S*,!tit*te-
,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) for the follo/i (& JAfter 'o !i-eri ( the %$$li'%tio % - he%ri ( the I +e!ti(%ti ( A*thorit>, if e'e!!%r>, the @%(i!tr%te .%>, ,> or-er, %*thori!e the I +e!ti(%ti ( A*thorit>O (a) to e ter, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the $l%'e or $l%'e! /here !*'h ,oo6!, re(i!ter!, other -o'*.e t! % - re'or- %re 6e$tH (b) to !e%r'h th%t $l%'e or tho!e $l%'e! i the .% er !$e'ifie- i the or-erH % (c) to !eiLe ,oo6!, re(i!ter!, other -o'*.e t! % - re'or-, it 'o !i-er! e'e!!%r> for the $*r$o!e! of the i +e!ti(%tio & 4ro+i-e- th%t the @%(i!tr%te !h%ll ot %*thori!e !eiL*re of ,oo6!, re(i!ter!, other -o'*.e t! % re'or-, of % > li!te- $*,li' 'o.$% > or % $*,li' 'o.$% > ( ot ,ei ( the i ter.e-i%rie! !$e'ifie* -er !e'tio 1") /hi'h i te -! to (et it! !e'*ritie! li!te- o % > re'o( i!e- !to'6 e#'h% (e * le!! !*'h 'o.$% > i -*l(e! i i !i-er tr%-i ( or .%r6et .% i$*l%tio .K
#
(,) for e !*ri ( !%fe '*!to-> of % > ,oo6! of %''o* t or other -o'*.e t! or %!!et! !eiLe-.< ( 0) .he In'estigating Authority shall )eep in its custody the boo)s, registers, other docu(ents and record seiFed under this section for such period not later than the conclusion of the in'estigation as it considers necessary and thereafter shall return the sa(e to the co(pany or the other body corporate, or, as the case (ay be, to the (anaging director or the (anager or any other person, fro( whose custody or power they were seiFed 5***<, 4ro+i-e- that the In'estigating Authority (ay, before returning such boo)s, registers, other docu(ents and record as aforesaid, place identification (ar)s on the( or any part thereof0 ( ) Sa'e as otherwise pro'ided in this section, e'ery search or seiFure (ade under this section shall be carried out in accordance with the pro'isions of the Code of Cri(inal <rocedure, !/3 (% of !/$) relating to searches or seiFures (ade under that Code0 Ce%!e % - -e!i!t $ro'ee-i (!. 11D. If the 8oard finds, after causing an in*uiry to be (ade, that any person has 'iolated, or is li)ely to 'iolate, any pro'isions of this Act, or any rules or regulations (ade thereunder, it (ay pass an order re*uiring such person to cease and desist fro( co((itting or causing such 'iolation, 4ro+i-e- that the 8oard shall not pass such order in respect of any listed public co(pany or a public co(pany (other than the inter(ediaries specified under section %) which intends to get its securities listed on any recognised stoc) exchange unless the 8oard has reasonable grounds to belie'e that such co(pany has indulged in insider trading or (ar)et (anipulation0: CDA4TER I REGISTRATION CERTI2ICATE Re(i!tr%tio of !to'6 ,ro6er!, !*,0,ro6er!, !h%re tr% !fer %(e t!, et'. 1". ( ) Eo stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et shall buy, sell or deal in securities except under, and in accordance with, the conditions of a certificate of registration obtained fro( the 8oard in accordance with the %4regulations: (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et i((ediately before the establish(ent of the 8oard for which no registration certificate was
necessary prior to such establish(ent, (ay continue to do so for a period of three (onths fro( such establish(ent or, if he has (ade an application for such registration within the said period of three (onths, till the disposal of such application,
The /or-! P% - i for. the @%(i!tr%te of !*'h ret*r P, o.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) % Substituted for 1rules2 by Securities =aw (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0
/
44ro+i-e- f*rther that any certificate of registration, obtained i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", shall be dee(ed to ha'e been obtained fro( the 8oard in accordance with the regulations pro'iding for such registration0 ( A) Eo depository, %4participant,: custodian of securities, foreign institutional in'estor, credit rating agency, or any other inter(ediary associated with the securities (ar)et as the 8oard (ay by notification in this behalf specify, shall buy or sell or deal in securities except under and in accordance with the conditions of a certificate of registration obtained fro( the 8oard in accordance with the regulations (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a depository, 34participant,: custodian of securities, foreign institutional in'estor or credit rating agency i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to buy or sell securities or otherwise deal with the securities (ar)et until such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300 ( 8) Eo person shall sponsor or cause to be sponsored or carry on or caused to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es including (utual funds, unless he obtains a certificate of registration fro( the 8oard in accordance with the regulations, 4ro+i-e- that any person sponsoring or causing to be sponsored, carrying or causing to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es operating in the securities (ar)et i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to operate till such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300:
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0
% Inserted
>
4()%lanati$n7 6or the re(o'al of doubts, it is hereby declared that, for purposes of this section, a collecti'e in'est(ent sche(e or (utual fund shall not be include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(ponent of in'est(ent besides the co(ponent of insurance issued by the insurer0: (%) 7'ery application for registration shall be in such (anner and on pay(ent of such fees as (ay be deter(ined by regulations0 (3) .he 8oard (ay, by order, suspend or cancel a certificate of registration in such (anner as (ay be deter(ined by regulations, 4ro+i-e- that no order under this sub+section shall be (ade unless the person concerned has been gi'en a reasonable opportunity of being heard0 %4CIA<.7R BA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 4rohi,itio of .% i$*l%ti+e % - -e'e$ti+e -e+i'e!, i !i-er tr%-i ( % - !*,!t% ti%l %'7*i!itio of !e'*ritie! or 'o trol.
1"A. Eo person shall directly or indirectly(a) use or e(ploy, in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recogniFed stoc) exchange, any (anipulati'e or decepti'e de'ice or contri'ance in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3
Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, w0r0e0f !+$+ %0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, reads as under, /@A81(0 D: ?ISC7==AE7CHS #0 Balidation+ Eotwithstanding anything contained in any Dudg(ent, decree or order of any court, tribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 Repeal and sa'ings + (1) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (2) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0 % Chapter BA inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
!
(b) e(ploy any de'ice, sche(e or artifice to defraud in connection with issue or dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange3 (c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange, in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (d) engage in insider trading3 (e) deal in securities while in possession of (aterial or non+public infor(ation or co((unicate such (aterial or non+public infor(ation to any other person, in a (anner which is in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (f) ac*uire control of any co(pany or securities (ore than the percentage of e*uity share capital of a co(pany whose securities are listed or proposed to be listed on a recognised stoc) exchange in contra'ention of the regulations (ade under this Act0: CDA4TER II 2INANCE, ACCOUNTS AND AUDIT Gr% t! ,> the Ce tr%l Go+er .e t. 1). .he Central &o'ern(ent (ay, after due appropriation (ade by <arlia(ent by law in this behalf, (a)e to the 8oard grants of such su(s of (oney as that &o'ern(ent (ay thin) fit for being utiliFed for the purposes of this Act0 2* -. 13. ( ) .here shall be constituted a 6und to be called the Securities and 7xchange 8oard of
India &eneral 6und and there shall be credited thereto(a) all grants, fees and charges recei'ed by the 8oard under this Act3 4G G G: (aa) %4G G G: (b) all su(s recei'ed by the 8oard fro( such other sources as (ay be decided upon by the Central &o'ern(ent0 (%) .he 6und shall be applied for (eeting(a) the salaries, allowances and other re(uneration of the (e(bers, officers and other e(ployees of the 8oard3 (b) the expenses of the 8oard in the discharge of its functions under section 3 (c) the expenses on obDects and for purposes authorised by this Act0
.he word 1and2 o(itted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 (aa) o(itted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 It was inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Clause (aa) reads as under,+ 1(aa) all su(s realiFed by way of <enalties under this Act3 and20
% Clause
%0
A''o* t! % - %*-it. 15. ( ) .he 8oard shall (aintain proper accounts and other rele'ant records and prepare an annual state(ent of accounts in such for( as (ay be prescribed by the Central &o'ern(ent in consultation with the Co(ptroller and Auditor+&eneral of India0 (%) .he accounts of the 8oard shall be audited by the Co(ptroller and Auditor+&eneral of India at such inter'als as (ay be specified by hi( and any expenditure incurred in connection with such audit shall be payable by the 8oard to the Co(ptroller and Auditor+&eneral of India0 (3) .he Co(ptroller and Auditor+&eneral of India and any other person appointed by hi( in connection with the audit of the accounts of the 8oard shall ha'e the sa(e rights and pri'ileges and authority in connection with such audit as the Co(ptroller and Auditor+ &eneral generally has in connection with the audit of the &o'ern(ent accounts and, in particular, shall ha'e the right to de(and the production of boo)s, accounts, connected 'ouchers and other docu(ents and papers and to inspect any of the offices of the 8oard0 ($) .he accounts of the 8oard as certified by the Co(ptroller and Auditor+&eneral of India or any other person appointed by hi( in this behalf together with the audit report thereon shall be forwarded annually to the Central &o'ern(ent and that &o'ern(ent shall cause the sa(e to be laid before each Iouse of <arlia(ent0 5CDA4TER IIA 4ENALTIES AND ADEUDICATION 4e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 15A. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder,(a) to furnish any docu(ent, return or report to the 8oard, fails to furnish the sa(e, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations, fails to file return or furnish the sa(e within the ti(e specified therefor in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0
Chapters BI A and BI 8 containing Ss0 "A to "M and "@ to "S respecti'ely, inserted by Securities =aws (A(end(ent) Act, !!" w0e0f0 %"+ + !!"0 % Substituted for 1a penalty not exceeding one la)h and fifty thousand rupees for each such failure2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding fi'e thousand rupees for e'ery day during which such failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for e'ery day during which the failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%
4e %lt> for f%il*re ,> % > $er!o to e ter i to %(ree.e t /ith 'lie t!. 15;. If any person, who is registered as an inter(ediary and is re*uired under this Act or any rules or regulations (ade thereunder to enter into an agree(ent with his client, fails to enter into such agree(ent, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 %54e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 15C. If any listed co(pany or any person who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such co(pany or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 4e %lt> for 'ert%i -ef%*lt! i '%!e of .*t*%l f* -!. 15D. If any person, who is(a) re*uired under this Act or any rules or regulations (ade thereunder to obtain a certificate of registration fro( the 8oard for sponsoring or carrying on any collecti'e in'est(ent sche(e, including (utual funds, sponsors or carries on any collecti'e in'est(ent sche(e, including (utual funds, without obtaining such certificate of registration, he shall be liable to 34a penalty of one la)h rupees for each day during which he sponsors or carries on any such collecti'e in'est(ent sche(e including (utual funds, or one crore rupees, whiche'er is less:3 (b) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, for sponsoring or carrying on any in'est(ent sche(e, fails to co(ply with the ter(s and conditions of certificate of registration, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, fails to (a)e an application for listing of its sche(es as pro'ided for in the regulations
Substituted for 1a penalty not exceeding fi'e la)h rupees for e'ery such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1If any person, who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing to redress the grie'ances of in'estors, fails to redress such grie'ances, he shall be liable to a penalty not exceeding ten thousand rupees for each such failure2, by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding ten thousand rupees for each day during which he carries on any such collecti'e in'est(ent sche(e including (utual funds, or ten la)h rupees whiche'er is higher02 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for each day during which such failure continues or ten la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0
%%
go'erning such listing, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (d) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to despatch
unit certificates of any sche(e in the (anner pro'ided in the regulation go'erning such despatch, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (e) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to refund the application (onies paid by the in'estors within the period specified in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (f) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to in'est (oney collected by such collecti'e in'est(ent sche(es in the (anner or within the period specified in the regulations, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for f%il*re to o,!er+e r*le! % - re(*l%tio ! ,> % %!!et .% %(e.e t 'o.$% >. 15E. Khere any asset (anage(ent co(pany of a (utual fund registered under this Act, fails to co(ply with any of the regulations pro'iding for restrictions on the acti'ities of the asset (anage(ent co(panies, such asset (anage(ent co(pany shall be liable to "4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for -ef%*lt i '%!e of !to'6 ,ro6er!. 152. If any person, who is registered as a stoc) bro)er under this Act,(a) fails to issue contract notes in the for( and (anner specified by the stoc) exchange of which such bro)er is a (e(ber, he shall be liable to a penalty not exceeding fi'e ti(es the a(ount for which the contract note was re*uired to be issued by that bro)er3 (b) fails to deli'er any security or fails to (a)e pay(ent of the a(ount due to the in'estor in the (anner within the period specified in the regulations, he shall be liable to #4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3
Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues or fi'e la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding one thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%3
(c) charges an a(ount of bro)erage which is in excess of the bro)erage specified in the regulations, he shall be liable to 4a penalty of one la)h rupees: or fi'e ti(es the a(ount of bro)erage charged in excess of the specified bro)erage, whiche'er is higher0 4e %lt> for i !i-er tr%-i (. 15G. If any insider who,(i) either on his own behalf or on behalf of any other person, deals in securities of a body corporate listed on any stoc) exchange on the basis of any unpublished price+sensiti'e infor(ation3 or (ii) co((unicates any unpublished price+sensiti'e infor(ation to any person, with or without his re*uest for such infor(ation except as re*uired in the ordinary course of business or under any law3 or
(iii) counsels, or procures for any other person to deal in any securities of any body corporate on the basis of unpublished price+sensiti'e infor(ation, shall be liable to a penalty %4of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of insider trading, whiche'er is higher:0 4e %lt> for o 0-i!'lo!*re of %'7*i!itio of !h%re! % - t%6eo+er!. 15D. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder, fails to,(i) disclose the aggregate of his shareholding in the body corporate before he ac*uires any shares of that body corporate3 or (ii) (a)e a public announce(ent to ac*uire shares at a (ini(u( price3 or 34(iii) (a)e a public offer by sending letter of offer to the shareholders of the concerned co(pany3 or (iv) (a)e pay(ent of consideration to the shareholders who sold their shares pursuant to letter of offer,: he shall be liable to a penalty $4of twenty+fi'e crore rupees or three ti(es the a(ount of profits profits (ade out of such failure, whiche'er is higher:0 554e %lt> for fr%*-*le t % - * f%ir tr%-e $r%'ti'e!. 15DA. If any person indulges in fraudulent and unfair trade practices relating to securities, he shall be liable to a penalty of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of such practices, whiche'er is higher0
Substituted for 1a penalty not exceeding fi'e thousand rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00% 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00% %00% " Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00%0
%$
4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 15D;. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 4o/er to %-G*-i'%te. 150I. ( ) 6or the purpose of adDudging under sections "A, "8, "C, "9, "7, "6, "& 4, "I, "IA and "I8:, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in subsection ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> the %-G*-i'%ti ( offi'er. 15E. Khile adDudging *uantu( of penalty under section "+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade
as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 "5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 15EA. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: )5Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!. 15E;. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 11, !e'tio 11;, !e'tio 11D, !*,0!e'tio ()) of !e'tio 1" or !e'tio 150I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e- -ef%*lt!.
Substituted for 1and "I2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the S78I (A(end(ent) Act, %00%, S0 ! w0e0f0 %!+ 0+%00%0 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
% Inserted
%"
(") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't. ()) The !ettle.e t $ro'ee-i (! * -er thi! !e'tio !h%ll ,e 'o -*'te- i %''or-% 'e /ith the $ro'e-*re !$e'ifie- i the re(*l%tio ! .%-e * -er thi! A't. (3) No %$$e%l !h%ll lie * -er !e'tio 15T %(%i !t % > or-er $%!!e- ,> the ;o%r- or %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio . < CDA4TER II; ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL E!t%,li!h.e t of Se'*ritie! A$$ell%te Tri,* %l!. 15F. ( ) .he Central &o'ern(ent shall by notification, establish one or (ore Appellate .ribunals to be )nown as the Securities Appellate .ribunal to exercise the Durisdiction, powers and authority conferred on such .ribunal by or under this Act 4or any other law for the ti(e being in force:0 (%) .he Central &o'ern(ent shall also specify in the notification referred to in sub+section ( ) the (atters and places in relation to which the Securities Appellate .ribunal (ay exercise Durisdiction0 "5Co.$o!itio of Se'*ritie! A$$ell%te Tri,* %l. 15L. A Securities Appellate .ribunal shall consist of a <residing Cfficer and two other (e(bers, to be appointed, by notification, by the Central &o'ern(ent, 4ro+i-e- that the Securities Appellate .ribunal, consisting of one person only, established before the co((ence(ent of the Securities and 7xchange 8oard of India (A(end(ent) Act, %00%, shall continue to exercise the Durisdiction, powers and authority conferred on it by or under this Act or any other law for the ti(e being in force till two other ?e(bers are appointed under this section0 9*%lifi'%tio for %$$oi t.e t %! 4re!i-i ( Offi'er or @e.,er of Se'*ritie! A$$ell%te Tri,* %l.
Inserted by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for Sections "= and "? by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "= and "? read as under,+ 1 "+=0 Co(position of securities Appellate .ribunal0 5 A Securities Appellate .ribunal shall consist of
% Substituted
one person only (hereinafter referred to as the <residing Cfficer of the Securities Appellate .ribunal) to be appointed, by notification, by the central &o'ern(ent0 "?0 Qualifications for appoint(ent as <residing Cfficer of the Securities Appellate .ribunal0 5 A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he + (a) is, or has been, or is *ualified to be, a Mudge of a Iigh Court3 or (b) has been a (e(ber of the Indian =egal Ser'ice and has held a post in &rade I of that ser'ice for at least three years3 or (c) has held office as the <residing Cfficer of a tribunal for at least three years02
%#
15@. 15( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of the Securities Appellate .ribunal unless he + (a) is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court3 or (b) is a sitting or retired Mudge of a Iigh Court who has co(pleted not less than se'en years of ser'ice as a Mudge in a Iigh Court0 ( A) .he <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0: (%) A person shall not be *ualified for appoint(ent as (e(ber of a Securities Appellate .ribunal unless he is a person of ability, integrity and standing who has shown capacity in dealing with proble(s relating to securities (ar)et and has *ualification and experience of corporate law, securities laws, finance, econo(ics or accountancy, 4ro+i-e- that a (e(ber of the 8oard or any person holding a post at senior (anage(ent le'el e*ui'alent to 7xecuti'e 9irector in the 8oard shall not be appointed as <residing Cfficer or ?e(ber of a Securities Appellate .ribunal during his ser'ice or tenure as such with the 8oard or within two years fro( the date on which he ceases to hold office as such in the 8oard0: %4Te *re of offi'e of 4re!i-i ( Offi'er % - other @e.,er! of Se'*ritie! A$$ell%te Tri,* %l. 15N. .he <residing Cfficer and e'ery other ?e(ber of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office and shall be eligible for re+appoint(ent, 4ro+i-e- that no person shall hold office as the <residing Cfficer of the Securities Appellate .ribunal after he has attained the age of sixty+eight years, 4ro+i-e- f*rther that no person shall hold office as a ?e(ber of the Securities Appellate .ribunal after he has attained the age of sixty+two years0: S%l%r> % - %llo/% 'e! % - other ter.! % - 'o -itio ! of !er+i'e of 4re!i-i ( Offi'er!. 150O. .he salary and allowances payable to and the other ter(s and conditions of ser'ice including pension, gratuity and other retire(ent benefits of the 4<residing Cfficer and other ?e(bers: of a Securities Appellate .ribunal shall be such as (ay be prescribed,
Substituted for sub+section ( ) of Section "? by the S78I (A(end(ent) Crdinance, %0 3 w0e0f0 % 00 0%0 30 <rior to substitution, it read as under,+ ;( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court , 4ro+i-e- that the <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0; % Substituted for Section "E, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "E read as under,+ 1 "E0 .er( of office0+ .he <residing officer of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office or until he attains the age of sixtyfi'e years, whiche'er is earlier02
%/
4ro+i-e- that neither the salary and allowances nor the other ter(s and conditions of ser'ice of the %4<residing Cfficer and other ?e(bers of a Securities Appellate .ribunal: shall be 'aried to their disad'antage after appoint(ent0 2illi ( *$ of +%'% 'ie!. 154. If, for reason other than te(porary absence, any 'acancy occurs in the 34office of the <residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal, then the Central &o'ern(ent shall appoint another person in accordance with the pro'isions of this Act to fill the 'acancy and the proceedings (ay be continued before the Securities Appellate .ribunal fro( the stage at which the 'acancy is filled0 Re!i( %tio % - re.o+%l. 159. ( ) .he $4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal (ay, by notice in writing under his hand addressed to the Central &o'ern(ent, resign his office, 4ro+i-e- that "4the <residing Cfficer or any other ?e(ber: shall, unless he is per(itted by the Central &o'ern(ent to relin*uish his office sooner, continue to hold office, until the expiry of three (onths fro( the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his ter( of office, whiche'er is the earliest0 (%) .he #4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal shall not be re(o'ed fro( his office except by an order by the Central &o'ern(ent on the ground of pro'ed (isbeha'iour or incapacity after an in*uiry (ade by a Mudge of the Supre(e Court, in which the /4<residing Cfficer or any other ?e(ber: concerned has been infor(ed of the charges against hi( and gi'en a reasonable opportunity of being heard in respect of these charges0 (3) .he Central &o'ern(ent (ay, by rules, regulate the procedure for the in'estigation of (isbeha'iour or incapacity of the >4<residing Cfficer or any other ?e(ber:0 Or-er! 'o !tit*ti ( A$$ell%te Tri,* %l to ,e fi %l % - ot to i +%li-%te it! $ro'ee-i (!. 15R. Eo order of the Central &o'ern(ent appointing any person as the !4<residing Cfficer or a ?e(ber: of a Securities Appellate .ribunal shall be called in *uestion in any (anner, and no act or proceeding before a Securities Appellate .ribunal shall be called in *uestion in any (anner on the ground (erely of any defect in the constitution of a Securities Appellate .ribunal0
Substituted for 1<residing Cfficer of a Securities Appellate .ribunal2 by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 / Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 > Substituted for 1aforesaid <residing Cfficer2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 ! Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0
%>
St%ff of the Se'*ritie! A$$ell%te Tri,* %l. 15S. ( ) .he Central &o'ern(ent shall pro'ide the Securities Appellate .ribunal with such officers and e(ployees as that &o'ern(ent (ay thin) fit0 (%) .he officers and e(ployees of the Securities Appellate .ribunal shall discharge their functions under general superintendence of the <residing Cfficer0 (3) .he salaries and allowances and other conditions of ser'ice of the officers and e(ployees of the Securities Appellate .ribunal shall be such as (ay be prescribed0 A$$e%l to the Se'*ritie! A$$ell%te Tri,* %l. 15T. 4( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed,(a) by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws
(Second A(end(ent) Act, !!!, under this Act, or the rules or regulations (ade thereunder3 or (b) by an order (ade by an adDudicating officer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 "5(") ********< (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 348oard or the AdDudicating Cfficer, as the case case (ay be,: is recei'ed by hi( and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 ($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0
Substituted for Sub+sec ( ) R (%) by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, Sub+sections ( ) R (%) were read as under, 1( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by any order (ade by any AdDudicating Cfficer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 (%) Eo appeal shall lie to the Securities Appellate .ribunal fro( an order (ade by an AdDudicating Cfficer with the consent of the parties02 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , o.i!!io , S*,0!e'tio (") re%- %! * -er& J(") No %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-eO (a) ,> the ;o%r- o % - %fter the 'o..e 'e.e t of the Se'*ritie! L%/! (Se'o - A.e -.e t) A't, 1999H (b) ,> % %-G*-i'%ti ( offi'er, /ith the 'o !e t of the $%rtie!.2 3 Substituted for 1a copy of the order (ade by the adDudicating officer2 by S78I (A(end(ent) Act !!!, !!!, w0e0f0 #+ %+ !!!0
%!
(") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 48oard, the: parties to the appeal and to the concerned AdDudicating Cfficer0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of the Se'*ritie! A$$ell%te Tri,* %l. 15U. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act, and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purposes of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3
(e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte 3 (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0), and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 %4Ri(ht to le(%l re$re!e t%tio . 15I. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,Substituted for 1parties2, S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for S0 "B by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, S0 "B read as under,+ 1 "B0 .he appellant (ay either appear in person or authorise one or (ore legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal02
% Substituted
30
(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of subsection ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or any attorney of any Iigh Court, and includes a pleader in practice0: Li.it%tio . 15?. .he pro'isions of the =i(itation Act, !#3 (3# of !#3), shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 54re!i-i ( Offi'er, @e.,er! % - !t%ff of Se'*ritie! A$$ell%te Tri,* %l! to ,e $*,li' !er+% t!. 15A. .he <residing Cfficer, ?e(bers and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0: Ci+il Co*rt ot to h%+e G*ri!-i'tio . 15M. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which an adDudicating officer appointed under this Act or a Securities Appellate .ribunal constituted under this Act is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "5A$$e%l to S*$re.e Co*rt.
Substituted for S0 "A by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, it read as under, + 1 "A0 .he <residing Cfficer and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian penal Code( $" of >#0)20 % Substituted for S0 "S by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution , it
was read as under,+ 1 "S0 Appeal to Iigh Court0+ Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, <ro'ided that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
3
15N. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order , 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the applicant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: CDA4TER III @ISCELLANEOUS 4o/er of Ce tr%l Go+er .e t to i!!*e -ire'tio !. 18. ( ) Kithout preDudice to the foregoing pro'isions of this Act 4or the 9epositories Act, !!#:, the 8oard shall, in exercise of its powers or the perfor(ance of its functions under this Act, be bound by such directions on *uestions of policy as the Central &o'ern(ent (ay gi'e in writing to it fro( ti(e to ti(e , 4ro+i-e- that the 8oard shall, as far as practicable, be gi'en an opportunity to express its 'iews before any direction is gi'en under this sub+section0 (%) .he decision of the Central &o'ern(ent whether a *uestion is one of policy or not shall be final0 4o/er of Ce tr%l Go+er .e t to !*$er!e-e the ;o%r-. 17. ( ) If at any ti(e the Central &o'ern(ent is of opinion(a) that on account of gra'e e(ergency, the 8oard is unable to discharge the functions and duties i(posed on it by or under the pro'isions of this Act3 or (b) that the 8oard has persistently (ade default in co(plying with any direction issued by the Central &o'ern(ent under this Act or in the discharge of the functions and duties i(posed on it by or under the pro'isions of this Act and as a result of such default the financial position of the 8oard or the ad(inistration of the 8oard has deteriorated3 or (c) that circu(stances exist which render it necessary in the public interest so to do, the Central &o'ern(ent (ay, by notification, supersede the 8oard for such period, not exceeding six (onths, as (ay be specified in the notification0 (%) Hpon the publication of a notification under sub+section ( ) superseding the 8oard,(a) all the (e(bers shall, as fro( the date of supersession, 'acate their offices as such3 (b) all the powers, functions and duties which (ay, by or under the pro'isions of this Act, be exercised or discharged by or on behalf of the 8oard, shall until the 8oard is reconstituted under sub+section (3), be exercised and discharged by such person or persons as the Central &o'ern(ent (ay direct3 and (c) all property owned or controlled by the 8oard shall, until the 8oard is reconstituted under sub+section (3), 'est in the Central &o'ern(ent0
Substituted for 1this Act2 by the 9epositories Act !!#, w0r0e0f0 %0+!+ !!"0
3%
(3) Cn the expiration of the period of supersession specified in the notification issued under sub+section ( ), the Central &o'ern(ent (ay reconstitute the 8oard by a fresh appoint(ent
and in such case any person or persons who 'acated their offices under clause ( a) of subsection (%), shall not be dee(ed dis*ualified for appoint(ent , 4ro+i-e- that the Central &o'ern(ent (ay, at any ti(e, before the expiration of the period of supersession, ta)e action under this sub+section0 ($) .he Central &o'ern(ent shall cause a notification issued under sub+section ( ) and a full report of any action ta)en under this section and the circu(stances leading to such action to be laid before each Iouse of <arlia(ent at the earliest0 Ret*r ! % - re$ort!. 1:. ( ) .he 8oard shall furnish to the Central &o'ern(ent at such ti(e and in such for( and (anner as (ay be prescribed or as the Central &o'ern(ent (ay direct, such returns and state(ents and such particulars in regard to any proposed or existing progra((e for the pro(otion and de'elop(ent of the securities (ar)et, as the Central &o'ern(ent (ay, fro( ti(e to ti(e, re*uire0 (%) Kithout preDudice to the pro'isions of sub+section ( ), the 8oard shall, within 4ninety: days after the end of each financial year, sub(it to the Central &o'ern(ent a report in such for(, as (ay be prescribed, gi'ing a true and full account of its acti'ities, policy and progra((es during the pre'ious financial year0 (3) A copy of the report recei'ed under sub+section (%) shall be laid, as soon as (ay be after it is recei'ed, before each Iouse of <arlia(ent0 Dele(%tio . 19. .he 8oard (ay, by general or special order in writing delegate to any (e(ber, officer of the 8oard or any other person subDect to such conditions, if any, as (ay be specified in the order, such of its powers and functions under this Act (except the powers under section %!) as it (ay dee( necessary0 A$$e%l!. "=. ( ) Any person aggrie'ed by an order of the 8oard (ade %4, before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!,: under this Act, or the rules or regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor, 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0
Substituted for 1sixty days2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1an order of the 8oard (ade2 by Securities =aws (Second A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0
% Substituted
33
(3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed, 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 4;%r of G*ri!-i'tio . "=A. Eo order passed by the 8oard %4or the AdDudicating Cfficer: under this Act shall be appealable except as pro'ided in 34section ". or: section %0 and no ci'il court shall ha'e Durisdiction in respect of any (atter which the 8oard $4or the AdDudicating Cfficer: is e(powered by, or under, this Act to pass any order and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any order passed by the 8oard "4or the AdDudicating Cfficer: by, or under, this Act0: S%+i (!.
"1. Eothing in this Act shall exe(pt any person fro( any suit or other proceedings which (ight, apart fro( this Act, be brought against hi(0 @e.,er!, offi'er! % - e.$lo>ee! of the ;o%r- to ,e $*,li' !er+% t!. "". All (e(bers, officers and other e(ployees of the 8oard shall be dee(ed, when acting or purporting to act in pursuance of any of the pro'isions of this Act, to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0 4rote'tio of %'tio t%6e i (oo- f%ith. "). Eo suit, prosecution or other legal proceedings shall lie against the Central &o'ern(ent #4or 8oard: or any officer of the Central &o'ern(ent or any (e(ber, officer or other e(ployee of the 8oard for anything which is in good faith done or intended to be done under this Act or the rules or regulations (ade thereunder0 /4Offe 'e!. "3. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, he shall be punishable with
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 18oard2 by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 3 Substituted for 1Section %02, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 $ Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 " Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Substituted by for S0 %$, Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" && <rior to its substitution S0%$ read as under, 1%$0 <enalty0+ Khoe'er contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both02
% Substituted
3$
i(prison(ent for a ter( which (ay extend to 4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to %4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 34Co.$o!itio of 'ert%i offe 'e!. "3A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "3;. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of the alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation, 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0
(%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0:
Substituted for 1one year, or with fine, or with both2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%, for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both20 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3"
E#e.$tio fro. t%# o /e%lth % - i 'o.e. "5. Eotwithstanding anything contained in the Kealth+tax Act, !"/ (%/ of !"/), the Inco(etax Act, !# ($3 of !# ) or any other enact(ent for the ti(e being in force relating to tax on wealth, inco(e, profits or gains(a) the 8oard3 (b) the existing Securities and 7xchange 8oard fro( the date of its constitution to the date of establish(ent of the 8oard, shall not be liable to pay wealth+tax, inco(e+tax or any other tax in respect of their wealth, inco(e, profits or gains deri'ed0 Co( iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations (ade thereunder, sa'e on a co(plaint (ade by the 8oard 4G G G:0 "5(") *****< )5 E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
.he words 1with the pre'ious sanction of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to the o.i!!io , S*,0!e'tio (") re%- %! * -er& 1(") No 'o*rt i ferior to th%t of "5% Co*rt of Se!!io < !h%ll tr> % > offe 'e $* i!h%,le * -er thi!
A't.2 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3#
A$$e%l % - re+i!io "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e of Cri.i %l 4ro'e-*re, 197) to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< Offe 'e! ,> 'o.$% ie!. "7. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly, 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n , 6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and
3/
(b) 1director2, in relation to a fir(, (eans a partner in the fir(0 4o/er to e#e.$t. ":. 4GGGGGG: "5 Re'o+er> of %.o* t! ":A. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith %
-ire'tio of -i!(or(e.e t or-er i!!*e- * -er !e'tio 11; or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifiefor. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.et%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't.
C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Section %> read as under, 1%>0 8$.er t$ e)e"%t+ If the central go'ern(ent if of the opinion that it is necessary or expedient so to do in public interest, it (ay, by order published in the Cfficial gaFette, exe(pt any person or class of persons buying or selling securities or otherwise dealing with the securities (ar)et fro( the operation of sub+section ! ) of Section %02 % I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3>
"#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio 15T of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 11;, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% !
% > offi'er of the ;o%r- /ho .%> ,e %*thoriLe-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 4o/er to .%6e r*le!. "9. ( ) .he Central &o'ern(ent (ay, by notification, (a)e rules for carrying out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers under sub+section ( ) of section "3 (b) the additional functions that (ay be perfor(ed by the 8oard under section 3 (c) 4G G G: (d) the (anner in which the accounts of the 8oard shall be (aintained under section "3 %4(da) the (anner of in*uiry under sub+section ( ) of section "+I3 (db) the salaries and allowances and other ter(s and conditions of ser'ice of the 34<residing Cfficers, ?e(bers: and other officers and e(ployees of the Securities Appellate .ribunal under section "+C and sub+section (3) of section "S3 (dc) the procedure for the in'estigation of (isbeha'iour or incapacity of the 4<residing Cfficers, or other ?e(bers: of the Securities Appellate .ribunal under sub+section (3) of section "Q3
Clause (c) o(itted by Securities laws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, clause (c) it read as under, 1(c) the conditions subDect to which registration certificate is to be issued under sub+section ( ) of section %20 % Inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 3 Substituted for 1<residing Cfficers2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3!
(dd) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section ". and the fees payable in respect of such appeal3: (e) the for( and the (anner in which returns and report to be (ade to the Central &o'ern(ent under section >3 (f) any other (atter which is to be, or (ay be, prescribed, or in respect of which pro'ision is to be, or (ay be, (ade by rules0 4o/er to .%6e re(*l%tio !. )=. ( ) .he 8oard (ay, %4GGG: by notification, (a)e regulations consistent with this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ti(es and places of (eetings of the 8oard and the procedure to be followed at such (eetings under sub+section ( ) of section / including *uoru( necessary for the transaction of business3 (b) the ter(s and other conditions of ser'ice of officers and e(ployees of the 8oard under sub+section (%) of section !3 34(c) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto and the (anner in which such (atters shall be disclosed by the co(panies under section A3 35('%) the *tiliL%tio of the %.o* t 're-ite- * -er !*,0!e'tio (5) of !e'tio 11H (',) the f*lfill.e t of other 'o -itio ! rel%ti ( to 'olle'ti+e i +e!t.e t !'he.e * -er !*,0!e'tio ("A) of !e'tio 11AAH ('') the $ro'e-*re to ,e follo/e- ,> the %*thoriLe- offi'er for !e%r'h or !eiL*re * -er !*,0!e'tio (9) of !e'tio 11CH < (d) the conditions subDect to which certificate of registration is to be issued, the a(ount of
fee to be paid for certificate of registration and the (anner of suspension or cancellation of certificate of registration under section %0: 55(-%) the ter.! -eter.i e- ,> the ;o%r- for !ettle.e t of $ro'ee-i (! * -er !*,!e'tio (") % - the $ro'e-*re for 'o -*'ti ( of !ettle.e t $ro'ee-i (! * -er !*,!e'tio ()) of !e'tio 15E;H (-,) % > other .%tter /hi'h i! re7*ire- to ,e, or .%> ,e, !$e'ifie- ,> re(*l%tio ! or i re!$e't of /hi'h $ro+i!io i! to ,e .%-e ,> re(*l%tio !.< R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t.
Substituted for 1<residing Cfficers2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 words 1with the pre'ious appro'al of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 3 Substituted for the existing clause (c) by the Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 <rior to substitution this clause read as under, 1(c) the a(ount of fee to be paid for registration certificate and (anner of suspension or cancellation of registration certificate under sub+section (%) and (3) of section %02 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% .he
$0
)1. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. )". .he pro'isions of this Act shall be in addition to, and not in derogation of, the pro'isions of any other law for the ti(e being in force0 A.e -.e t of 'ert%i e %'t.e t!. )). 40e%ealed bF 0e%ealing H A"ending Act' 2001&: 4o/er to re.o+e -iffi'*ltie!. )3. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order, published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as (ay appear to be necessary for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of fi'e years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 Re$e%l % - !%+i (. )5. ( ) .he Securities and 7xchange 8oard of India Crdinance, !!% (Crd0 " of !!%), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 1@( /@(5A9( 4 ee section 33: A@END@ENT O2 CERTAIN ENACT@ENTS 40e%ealed bF 0e%ealing H A"ending Act' 2001:
*SECURITIES CONTRACTS (REGULATION) RULES, 1957
In exercise of the powers conferred by section 30 of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the Central &o'ern(ent hereby (a)es the following rules, the sa(e ha'ing been pre'iously published as re*uired by sub+section (3) of the said section, na(ely ,Short title. 1. .hese rules (ay be called the Securities Contracts (Regulation) Rules, !"/0 Defi itio !. ". In these rules, unless the context otherwise re*uires,(a) 1for(2 (eans a for( appended to these rules3 (b) 1the Act2 (eans the Securities Contracts (Regulation) Act, !"# ($% of !"#)3 (c) 1&o'ern(ent co(pany2 (eans a co(pany in which not less than fifty+one per cent of the share capital is held by the Central &o'ern(ent or by any State &o'ern(ent or &o'ern(ents or partly by the Central &o'ern(ent and partly by one or (ore State &o'ern(ents ; 4(d) 1public2 (eans persons other than 5 (i) the pro(oter and pro(oter group3 (ii) subsidiaries and associates of the co(pany0 E#$l% %tio & 6or the purpose of this clause the words 1pro(oter2 and 1pro(oter group2 shall ha'e the sa(e (eaning as assigned to the( under the Securities and 7xchange 8oard of India (Issue of Capital and 9isclosure Re*uire(ents) Regulations, %00!3: %4(da) ;public sector co(pany; (eans a body corporate constituted by an Act of <arlia(ent or any State =egislature and includes a go'ern(ent co(pany,: 4(e) 1public shareholding2 (eans e*uity shares of the co(pany held by public and shall exclude shares which are held by custodian against depository receipts issued o'erseas0: A$$li'%tio for re'o( itio . ). An application under section 3 of the Act for recognition of a stoc) exchange shall be (ade to the 34Securities and 7xchange 8oard of India: in 6or( A0
* The!e R*le! h%+e ,ee *$-%te- ,%!e- o the R*le! % - A.e -.e t! %+%il%,le o the /e,!ite of the De$%rt.e t of E'o o.i' Aff%ir!0 htt$&11fi .i . i'.i 1l%/1i -e#.%!$ % - %+%il%,le %.e -.e t otifi'%tio !. Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 % Inserted by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3 Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
2ee! for %$$li'%tio . 3. ( ) .here shall be paid in respect of e'ery application under rule 3 a fee of rupees fi'e hundred0 (%) .he a(ount of the fee shall be deposited in the nearest &o'ern(ent treasury or the nearest branch of the State 8an) of India, 4ro+i-e- that at 8o(bay, Calcutta, ?adras, 9elhi and @anpur, the a(ount shall be deposited in the Reser'e 8an) of India0 (3) .he a(ount of the fee so deposited shall be credited to the receipt head 1A=BI?iscellaneous-Cther fees, fines and forfeitures20 Do'*.e t! to ,e file- %lo ( /ith the %$$li'%tio % - $%rti'*l%r! it !ho*l- 'o t%i . 5. 7'ery application shall be acco(panied by four copies of the rules (including the (e(orandu( and articles of association where the applicant stoc) exchange is an
incorporated body) and bye+laws of the stoc) exchange applying for recognition as specified in section 3 of the Act and the receipt granted by the &o'ern(ent treasury, or as the case (ay be, the State 8an) of India or the Reser'e 8an) of India, in respect of the a(ount of the fee deposited and shall contain clear particulars as to the (atters specified in the Annexure to 6or( A0 $54o/er to .%6e i 7*irie! % - '%ll for i for.%tio . 5A. 8efore granting recognition to a stoc) exchange under section $ of the Act, the "4Securities and 7xchange 8oard of India: (ay (a)e such in*uiries and re*uire such further infor(ation to be furnished, as it dee(s necessary, relating to the infor(ation furnished by the stoc) exchange in the Annexure to its application in 6or( A0: 2or. of re'o( itio . 8. .he recognition granted to a stoc) exchange shall be in 6or( 8 and be subDect to the following conditions, na(ely ,(a) that the recognition unless granted on a per(anent basis, shall be for such period not less than one year as (ay be specified in the recognition3 (b) that the stoc) exchange shall co(ply with such conditions as are or (ay be prescribed or i(posed under the pro'isions of the Act and these rules fro( ti(e to ti(e0
$ Inserted
by &SR 0!# dated $00/0 !#/, w0e0f0 %%00/0 !#/ for 1Central &o'ern(ent2 by the Securities Contracts (Regulation)(A(end(ent )Rules, !!#, w0e0f0 %30 %0 !!#0
" Substituted
Re e/%l of re'o( itio . 7. ( ) .hree (onths before the expiry of the period of recognition, a recognised stoc) exchange desirous of renewal of such recognition (ay (a)e an application to the #4Securities and 7xchange 8oard of India: in 6or( A0 (%) .he pro'isions of rule 3, rule $, rule ", rule "A and rule # shall apply in relation to renewal of recognition as they apply in relation to grant of recognition except that the fee payable in respect of an application for renewal of recognition shall be rupees two hundred0 9*%lifi'%tio ! for .e.,er!hi$ of % re'o( i!e- !to'6 e#'h% (e. :. .he rules relating to ad(ission of (e(bers of a stoc) exchange see)ing recognition shall inter alia pro'ide that , (1) Eo person shall be eligible to be elected as a (e(ber if(a) he is less than twenty+one years of age3 (b) he is not a citiFen of India3 pro'ided that the go'erning body (ay in suitable cases relax this condition with the prior appro'al of the !4Securities and 7xchange 8oard of India:3 (c) he has been adDudged ban)rupt or a recei'ing order in ban)ruptcy has been (ade against hi( or he has been pro'ed to be insol'ent e'en though he has obtained his final discharge3 (d) he has co(pounded with his creditors unless he has paid sixteen annas in the rupee3 (e) he has been con'icted of an offence in'ol'ing fraud or dishonesty3 (f) he is engaged as principal or e(ployee in any business other than that of securities /4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability unless he underta)es on ad(ission to se'er his connection with such business ,
>44ro+i-e-
that no (e(ber (ay conduct business in co((odity deri'ati'es, except by setting up a separate co(pany which shall co(ply with the regulatory re*uire(ents, such as, networth, capital ade*uacy, (argins and exposure nor(s as (ay be specified by the 6orward ?ar)et Co((ission, fro( ti(e to ti(e ,
# Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, w0e0f0 %30 %0 !!#0 / Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 > Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 <rior to its substitution, the pro'iso as a(ended by Securities Contracts (Regulation) (A(end(ent) Rules, !!# w0e0f0 %30 %0 !!#, read as under, 1<ro'ided that the Securities and 7xchange 8oard of India (ay, for reasons sufficient in the opinion of the said 8oard, per(it a recogniFed stoc) exchange to suspend the enforce(ent of this clause for a specified period on condition that the applicant is not associated with or is a (e(ber of or subscriber to or shareholder or debenture holder in or connected through a partner or e(ployee with any other organisation, institution, association, co(pany or corporation in India where forward business of any )ind whether in goods or co((odities or otherwise is carried on or is not engaged as a principal or e(ployee ion any such business02
4ro+i-e- f*rther that nothing herein shall be applicable to any corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to ()) of the pro'iso to sub+rule ($)0:3 (g) !4GGG: (h) he has been at any ti(e expelled or declared a defaulter by any other stoc) exchange3 (i) he has been pre'iously refused ad(ission to (e(bership unless a period of one year has elapsed since the date of such reDection0 (2) Eo person eligible for ad(ission as a (e(ber under sub+rule ( ) shall be ad(itted as a (e(ber unless ,(a) he has wor)ed for not less than two years as a partner with, or an authorised assistant or authorised cler) or re(isier or apprentice to, a (e(ber3 or (b) he agrees to wor) for a (ini(u( period of two years as a partner or representati'e (e(ber with another (e(ber and to enter into bargains on the floor of the stoc) exchange and not in his own na(e but in the na(e of such other (e(ber 3 or (c) he succeeds to the established business of a deceased or retiring (e(ber who is his father, uncle, brother or any other person who is, in the opinion of the go'erning body, a close relati'e , 4ro+i-e- that the rules of the stoc) exchange (ay authorise the go'erning body to wai'e co(pliance with any of the foregoing conditions if the person see)ing ad(ission is in respect of (eans, position, integrity, )nowledge and experience of business in securities, considered by the go'erning body to be otherwise *ualified for (e(bership0 (3) Eo person who is a (e(ber at the ti(e of application for recognition or subse*uently ad(itted as a (e(ber shall continue as such if(a) he ceases to be a citiFen of India , 4ro+i-e- that nothing herein shall affect those who are not citiFens of India but who were (e(bers at the ti(e of such application or were ad(itted subse*uently under the pro'isions of clause (b) of sub+rule ( ) of this rule, subDect to their co(plying with all other re*uire(ents of this rule3
(b) he is adDudged ban)rupt or a recei'ing order in ban)ruptcy is (ade against hi( or he is pro'ed to be insol'ent3 (c) he is con'icted of an offence in'ol'ing fraud or dishonesty3 (d) 04G G G: (e) 4G G G: (f) he engages either as principal or e(ployee in any business other than that of securities %4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability, pro'ided that! C(itted 0 Ibid0
by &SR 0/0(7) dated "0
0 !>>
Ibid0
% Inserted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(i) the go'erning body (ay, for reasons, to be recorded in writing, per(it a (e(ber to engage hi(self as principal or e(ployee in any such business, if the (e(ber in *uestion ceases to carry on business on the stoc) exchange either as an indi'idual or as a partner in a fir(, (ii) in the case of those (e(bers who were under the rules in force at the ti(e of such application per(itted to engage in any such business and were actually so engaged on the date of such application, a period of three years fro( the date of the grant of recognition shall be allowed for se'ering their connection with any such business, 34(iii) nothing herein shall affect (e(bers of a recognised stoc) exchange which are corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to (k) of the pro'iso to sub+rule ($)0: (4) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section 3%% of the said Act3 (ii) a (aDority of the directors of such co(pany are shareholders of such co(pany and also (e(bers of that stoc) exchange3 and (iii) the directors of such co(pany, who are (e(bers of that stoc) exchange, ha'e ulti(ate liability in such co(pany , 4ro+i-e- that where the $4Securities and 7xchange 8oard of India: (a)es a reco((endation in this regard, the go'erning body of a stoc) exchange shall, in relaxation of the re*uire(ents of this clause, ad(it as (e(ber the following corporations "4,bodies corporate:, co(panies or institutions, na(ely ,(a) the Industrial 6inance Corporation, established under the Industrial 6inance Corporation Act, !$> ( " of !$>)3 (b) the Industrial 9e'elop(ent 8an) of India, established under the Industrial 9e'elop(ent 8an) Act, !#$ ( > of !#$)3 (c) the =ife Insurance Corporation of India, established under the =ife Insurance Corporation Act, !"# (3 of !"#)3 (d) the &eneral Insurance Corporation of India constituted under the &eneral Insurance Corporation (Eationalisation) Act, !/% ("/ of !/%)3 (e) the Hnit .rust of India, established under the Hnit .rust of India Act, !#3 ("% of !#3)3
3 Substituted, ibid0 <rior to its substitution, sub+clause (iii) read as under, 1(iii) nothing herein shall affect (e(bers of a recogniFed stoc) exchange per(itted under the pro'iso to clause (f) of sub+rule( ) to suspend the enforce(ent of the aforesaid clause, for so long as such suspension is effecti'e, except that no (e(ber of such exchange shall engage in forward business of any )ind whether in goods or co((odities or otherwise and , if actually so engaged on the date of such application , he shall se'er his connection with any such business within a period of three years fro( the date of the grant of recognition02 $ Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# " Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(f) the Industrial Credit and In'est(ent Corporation of India, a co(pany registered under the Co(panies Act, !"# ( of !"#)3 (g) the subsidiaries of any of the corporations or co(panies specified in (a) to (f) and any subsidiary of the State 8an) of India or any nationalised ban) set up for pro'iding (erchant ban)ing ser'ices, buying and selling securities and other si(ilar acti'ities0 #4(h) any ban) included in the Second Schedule to the Reser'e 8an) of India Act, !3$ (% of !3$)3 (i) the 7xport I(port 8an) of India, established under the 7xport I(port 8an) of India Act, !> (%> of !> )3 (j) the Eational 8an) for Agriculture and Rural 9e'elop(ent, established under the Eational 8an) for Agriculture and Rural 9e'elop(ent Act, !> (# of !> )3 and (k) the Eational Iousing 8an), established under the Eational Iousing 8an) Act, !>/ ("3 of !>/)0: (4A) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall also be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section % of the said Act3 (ii) such co(pany underta)es to co(ply with such financial re*uire(ents and nor(s as (ay be specified by the Securities and 7xchange 8oard of India for the registration of such co(pany under sub+section ( ) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (iii) /4G G G: (iv) the directors of the co(pany are not dis*ualified fro( being (e(bers of a stoc) exchange under >4clause ( ) 4except sub+clause (b) and sub+clause (f) thereof: or clause (3) 4except sub+clause (a) and sub+clause (f) thereof:: and the 9irectors of the co(pany had not held the offices of the 9irectors in any co(pany which had been a (e(ber of the stoc) exchange and had been declared defaulter or expelled by the stoc) exchange3 and (v) not less than two directors of the co(pany are persons who possess a (ini(u( two yearsJ experience , (a) in dealing in securities3 or (b) as portfolio (anagers3 or (c) as in'est(ent consultants0 (5) Khere any (e(ber of a stoc) exchange is a fir(, the pro'isions of sub+rules ( ), (3) and ($), shall, so far as they can, apply to the ad(ission or continuation of any partner in such fir(0
# Inserted, / C(itted
ibid0 by &SR /$! (7), dated %0 00 !!$ > Substituted by &SR /!0(7), dated 0/0 0 !!$
Co tr%'t! ,et/ee .e.,er! of re'o( i!e- !to'6 e#'h% (e. 9. All contracts between the (e(bers of a recognised stoc) exchange shall be confir(ed in writing and shall be enforced in accordance with the rules and bye+laws of the stoc) exchange of which they are (e(bers0 !5No.i ee! of the Se'*ritie! % - E#'h% (e ;o%r- of I -i%< o the (o+er i ( ,o-ie! of re'o( i!e- !to'6 e#'h% (e!. 1=. .he %04Securities and 7xchange 8oard of India: (ay no(inate one or (ore persons not exceeding three in nu(ber, as (e(ber or (e(bers of the go'erning body of e'ery recognised stoc) exchange0 Such (e(ber or (e(bers shall enDoy the sa(e status and powers as other (e(bers of the go'erning body0 O,li(%tio of the (o+er i ( ,o-> to t%6e -i!'i$li %r> %'tio %(%i !t % .e.,er if !o -ire'te- ,> the % 5Se'*ritie! % - E#'h% (e ;o%r- of I -i%<. 11. After recei'ing the report of the result of an en*uiry (ade under clause (b) of subsection (3) of section # of the Act, the % 4Securities and 7xchange 8oard of India: (ay ta)e such action as they dee( proper and, in particular, (ay direct the go'erning body of the stoc) exchange to ta)e such disciplinary action against the offending (e(ber, including fine, expulsion, suspension or any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney, as (ay be specified by the % 4Securities and 7xchange 8oard of India:3 notwithstanding anything to the contrary contained in the rules or bye+laws of the stoc) exchange concerned, the go'erning body shall gi'e effect to the directions of the % 4Securities and 7xchange 8oard of India: in this behalf and shall not in any (anner co((ute, re'o)e or (odify the action ta)en in pursuance of such directions, without the prior appro'al of the % 4Securities and 7xchange 8oard of India:0 .he % 4Securities and 7xchange 8oard of India: (ay, howe'er, either of its own (otion or on the representation of the (e(ber concerned, (odify or withdraw its direction to the go'erning body0 A*-it of %''o* t! of .e.,er!. 1". 7'ery (e(ber shall get his accounts audited by a chartered accountant whene'er such audit is re*uired by the % 4Securities and 7xchange 8oard of India:0 ?ith-r%/%l of re'o( itio . 1). .he written notice referred to in section " of the Act shall be in 6or( C0
! Substituted %0 Ibid0 %
by 60 Eo0 L3/LS7L!$, dated %#0 00 !!$0
Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> re'o( i!e- !to'6 e#'h% (e. 13. 7'ery recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years, (1) ?inute boo)s of the (eetings of(a) (e(bers3 (b) go'erning body3 (c) any standing co((ittee or co((ittees of the go'erning body or of the general body of (e(bers0
(2) Register of (e(bers showing their full na(es and addresses0 Khere any (e(ber of the stoc) exchange is a fir(, full na(es and addresses of all partners shall be shown0 (3) Register of authorised cler)s0 (4) Register of re(isiers of authorised assistants0 (5) Record of security deposits0 (6) ?argin deposits boo)0 (7) =edgers0 (8) Mournals0 (9) Cash boo)0 (10) 8an) pass+boo)0 ;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> .e.,er of % re'o( i!e- !to'6 e#'h% (e. 15. ( ) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years , (a) Register of transactions ( a!da boo))0 (b) ClientsJ ledger0 (c) &eneral ledger0 (d) Mournals0 (e) Cash boo)0 (f) 8an) pass+boo)0 (g) 9ocu(ents register showing full particulars of shares and securities recei'ed and deli'ered0 (2) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following docu(ents for a period of two years, (a) ?e(berJs contract boo)s showing details of all contracts entered into by hi( with other (e(bers of the sa(e exchange or counterfoils or duplicates of (e(os of confir(ation issued to such other (e(bers0 (b) Counterfoils or duplicates of contract notes issued to clients0 (c) Kritten consent of clients in respect of contracts entered into as principals0 @% er of i 7*ir> i rel%tio to the %ff%ir! of the (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e or the %ff%ir! of % > .e.,er of the !to'6 e#'h% (e i rel%tio to the !to'6 e#'h% (e. 18. ( )(a) .he person or persons appointed by the %%4Securities and 7xchange 8oard of India: to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act shall hereafter in this rule be referred to as the Nin*uiring authorityJ3 (b) where the in*uiring authority consists of two or (ore persons, one of the( shall be appointed as the chair(an or senior (e(ber thereof3 (c) the in*uiring authority shall hand o'er a state(ent of issues to be in*uired into to the go'erning body or the (e(ber concerned, as the case (ay be, who will be gi'en a reasonable opportunity to state their or his side of the case3 (d) if any witness is called for exa(ination, an opportunity shall be pro'ided to the go'erning body or the (e(ber whose affairs are being in*uired into, as the case (ay be, to cross+exa(ine such witness3 (e) where the in*uiring authority consists of (ore than one person, the 'iews of the (aDority shall be dee(ed to represent the findings of such authority and, in the e'ent of
an e*uality of 'otes, the chair(an or senior (e(ber shall ha'e a casting 'ote3 (f) the in*uiring authority shall sub(it its report in writing to the %%4Securities and 7xchange 8oard of India: within the period specified in the order of appoint(ent3 (g) te(porary absence fro( any hearing or hearings of any (e(ber of the in*uiring authority shall not 'itiate its proceedings0 (%) Khere the %%4Securities and 7xchange 8oard of India: has directed the go'erning body of a stoc) exchange to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act, the go'erning body concerned shall appoint one or (ore (e(bers thereof to (a)e the in*uiry and the pro'isions of sub+rule ( ) shall apply "!tati# "!tandi# to such in*uiry0 S*,.i!!io of % *%l re$ort. 17. ( ) 7'ery recognised stoc) exchange shall before the 3 st day of Manuary in each year or within such extended ti(e as the %34Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, allow, furnish the %34Securities and 7xchange 8oard of India: annually with a report about its acti'ities during the preceding calendar year, which shall inter alia contain detailed infor(ation about the following (atters , (a) changes in rules and bye+laws, if any3 (b) changes in the co(position of the go'erning body3 (c) any new sub+co((ittees set up and changes in the co(position of existing ones3
%% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# %3 Ibid0
(d) ad(issions, re+ad(issions, deaths or resignations of (e(bers3 (e) disciplinary action against (e(bers3 (f) arbitration of disputes (nature and nu(ber) between (e(bers and non+(e(bers3 (g) defaults3 (h) action ta)en to co(bat any e(ergency in trade3 (i) securities listed and de+listed3 and (j) securities brought on or re(o'ed fro( the forward list0 (%) 7'ery recognised stoc) exchange shall within one (onth of the date of the holding of its annual general (eeting, furnish the %$4Securities and 7xchange 8oard of India: with a copy of its audited balance+sheet and profit and loss account for its preceding financial year0 S*,.i!!io of $erio-i'%l ret*r !. 17A. 7'ery recognised stoc) exchange shall furnish the %$4Securities and 7xchange 8oard of India: periodical returns relating to(i) the official rates for the securities enlisted thereon3 (ii) the nu(ber of shares deli'ered through the clearing house3 (iii) the (a)ing+up prices3 (iv) the clearing house progra((es3 (v) the nu(ber of securities listed and de+listed during the pre'ious three (onths3 (vi) the nu(ber of securities brought on or re(o'ed fro( the forward list during the pre'ious three (onths3 and (vii) any other (atter as (ay be specified by the %$4Securities and 7xchange 8oard of India:0 @% er of $*,li'%tio of ,>e0l%/! for 'riti'i!.. 1:. .he bye+laws to be (ade, a(ended or re'ised under the Act shall be published for
criticis( in accordance with the pro'isions of section %3 of the &eneral Clauses Act, >!/ both in the &aFette of India and Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate0 Re7*ire.e t! /ith re!$e't to the li!ti ( of !e'*ritie! o % re'o( i!e- !to'6 e#'h% (e. 19. ( ) A public co(pany as defined under the Co(panies Act, !"#, desirous of getting its securities listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars ,
%$ Ibid0
(a) ?e(orandu( and articles of association and, in the case of a debenture issue, a copy of the trust deed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any securities for subscription or sale during the last fi'e years0 (d) Copies of balance+sheets and audited accounts for the last fi'e years, or in the case of new co(panies, for such shorter period for which accounts ha'e been (ade up0 (e) A state(ent showing(i) di'idends and cash bonuses, if any, paid during the last ten years (or such shorter period as the co(pany has been in existence, whether as a pri'ate or public co(pany), (ii) di'idends or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents with or between ,(i) 'endors andLor pro(oters, (ii) underwriters and sub+underwriters, (iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents with(i) (anaging agents and secretaries and treasurers, (ii) selling agents, (iii) (anaging directors and technical directors, (iv) general (anager, sales (anager, (anager or secretary0 (h) Certified copy of e'ery letter, report, balance+sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering securities for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents0 (j) A brief history of the co(pany since its incorporation gi'ing details of its acti'ities including any reorganisation, reconstruction or a(alga(ation, changes in its capital structure, (authorised, issued and subscribed) and debenture borrowings, if any0
(k) <articulars of shares and debentures issued-(i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s including an option for the issue of any )ind of the securities granted to any person0 (") Certified copies of%"4(i) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3: (ii) agree(ents, if any, with the Industrial 6inance Corporation, Industrial Credit and In'est(ent Corporation and si(ilar bodies0 (n) <articulars of shares forfeited0 ($) A list of highest ten holders of each class or )ind of securities of the co(pany as on the date of application along with particulars as to the nu(ber of shares or debentures held by and the address of each such holder0 (%) <articulars of shares or debentures for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0 (%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant co(pany shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer, (ii) that the fully paid shares will be free fro( all lien, while in the case of partly paid shares, the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such shares, (iii) that any a(ount paid+up in ad'ance of calls on any share (ay carry interest but shall not entitle the holder of the share to participate in respect thereof, in a di'idend subse*uently declared, (iv) there will be no forfeiture of unclai(ed di'idends before the clai( beco(es barred by law, (v) that option or right to call of shares shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the securities of a co(pany which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0
%" Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 <rior to its substitution, sub+clause (i), read as under, 1(i) letters of consent of the Controller of Capital Issues02
%#4(b)
(i) At least twenty fi'e per cent0 of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent3 or (ii) At least ten per cent of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent if the post issue capital of the
co(pany calculated at offer price is (ore than four thousand crore rupees, <ro'ided that the re*uire(ent of post issue capital being (ore than four thousand crore rupees shall not apply to a co(pany whose draft offer docu(ent is pending with the Securities and 7xchange 8oard of India on or before the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, if it satisfies the conditions prescribed in clause (b) of sub+rule % of rule ! of the Securities Contracts (Regulation) Rules, !"# as existed prior to the date of such co((ence(ent, %/4<ro'ided further that the co(pany, referred to in sub clause (ii), shall increase its public shareholding to at least twenty fi'e per cent, within a
%# Substituted
by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, clause (b) as a(ended by the A(end(ent Rules, %00 , w0e0f0 0/00#0%00 , read as under, 1(b) At least 0 per cent of each class or )ind of securities issued by a co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted subDect to the following conditions, (a) (ini(u( %0 la)h securities (excluding reser'ations, fir( allot(ent and pro(otersJ contribution) was offered to the public3 (b) the siFe of the offer to the public, i&e&' the offer price (ultiplied by the nu(ber of securities offered to the public was (ini(u( Rs0 00 crores3 and (c) the issue was (ade only through boo) building (ethod with allocation of #0 per cent of the issue siFe to the *ualified institutional buyers as specified by the Securities and 7xchange 8oard of India, 4ro+i-e- that if a co(pany does not fulfil the conditions, it shall offer at least %" per cent of each class or )ind of securities to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted, 4ro+i-e- f*rther that a recognised stoc) exchange (ay relax any of the conditions with the pre'ious appro'al of the Securities and 7xchange 8oard of India, in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#), and subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*6or the purpose of this clause, it is hereby clarified that where any part of the securities sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental 6ire and &eneral Insurance Co(pany =i(ited and the Hnited 6ire and &eneral Insurance Co(pany =i(ited or Hnit .rust of India, the total subscription to the securities, whether by one or (ore of such bodies, shall not for( part of the 0 per cent or %" per cent of the securities, as the case (ay be, to be offered to the public02 %/ Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 <rior to its substitution, second pro'iso, read as under, 1<ro'ided further that the co(pany, referred in sub+clause (ii), shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of atleast fi'e per
period of three years fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India0: %>4GGG:: %!4(c) Eotwithstanding anything contained in clause (b), a public sector co(pany, shall offer and allot at least ten per cent, of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares to public in ter(s of an offer docu(ent0: (3) A co(pany applying for listing shall, as a condition precedent, underta)e inter alia(a) (i) that letters of allot(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to
that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been posted, (ii) that letters of right will be issued si(ultaneously, (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the securities to which they relate, (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right, (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or di'idend on the securities will be calculated, (b) to issue, when so re*uired, receipts for all securities deposited with it whether for registration, sub+di'ision, exchange or for other purposes 3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of certificates and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (bb) to issue, when so re*uired, consolidation and renewal certificates in deno(inations of the (ar)et unit of trading to split certificates, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3
cent per annu( beginning fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India,2 %> C(itted, ibid <rior to its o(ission, third pro'iso, read as under, 1<ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase beings its public shareholding to the le'el of twenty fi'e per cent in that year02 %! Inserted, ibid0
(c) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders, and (ii) to 'erify when the co(pany is unable to issue certificates or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (d) on production of the necessary docu(ents by shareholders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or certificate of the Controller of 7state 9uty or si(ilar other docu(ent has been duly exhibited to
and registered by the co(pany3 (e) to issue certificates in respect of shares or debentures lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance certificates within the sa(e period where the transfer is acco(panied by a larger certificate3 (f) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a di'idend or the issue of right or bonus share will be considered3 (g) to reco((end or declare all di'idends andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all di'idends andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (h) to notify the stoc) exchange of any (aterial change in the general character or nature of the co(panyJs business3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (anaging agent or secretaries and treasurers, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued, copies of all other notices and circulars sent to the shareholders including proceedings of ordinary and extraordinary general (eetings of the co(pany and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the shareholders of any new issue of securities whether by way of right, pri'ilege bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited securities or the issue of securities held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of di'idend or issue of right or bonus shares or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s (or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its shareholders or debentureholders) and specifying the purpose or purposes for which the transfer boo)s are to be closed (or the record is to be ta)en)3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority subDect to which the issue is proposed to be (ade ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after each annual general (eeting of at least ten principal holders of each class of security of the co(pany along with particulars as to the nu(ber of shares or debentures held by,
and address of, each such holder3 (+) to grant to shareholders the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e not being less than four wee)s within which to record, exercise, or renounce such rights, pri'ileges and benefits and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3 (r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any securities listed on the exchange, (ii) of the intention to (a)e a drawing of such securities, inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing of the balance) for the drawing, (iii) of the a(ount of securities outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the shareholders to apprise the position of the co(pany and to a'oid the establish(ent of a false (ar)et in the shares of the co(pany3 (t) (t)that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 304($) An application for listing shall be necessary in respect of the following, (a) all new issues of any class or )ind of securities of a co(pany to be offered to the public3 (b) all further issues of any class or )ind of securities of a co(pany if such class or )ind of securities of the co(pany are already listed on a recognised stoc) exchange0: (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the securities of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 3 44ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any security, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and its orders shall be carried out by the stoc) exchange0: 3%4(#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore
or re+ad(it to dealings any securities suspended or withdrawn fro( the list0: 334(#A) 7xcept as otherwise pro'ided in these rules or per(itted by the Securities and 7xchange 8oard of India under sub+rule (/), all re*uire(ents with respect to listing
30 Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, sub+rule ($), read as under, 1($) A fresh application for listing will be necessary in respect of all new issues desired to be dealt in, pro'ided that, where such new securities are identical in all respects with those already listed, ad(ission to dealings will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new issues0 7xplanation, Shares are identical in all respects only if(a) they are of the sa(e no(inal 'alue and the sa(e a(ount per share has been called up3 (b) they are entitled to di'idend at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the di'idend payable on each share will a(ount to exactly the sa(e su(, net and gross3 and (c) they carry the sa(e rights in all other respects02 3 Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%0000 7arlier, the second pro'iso was a(ended by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 3% Substituted by the Securities Contracts (Regulation) (A(end(ent), %000, w0e0f0 0>00>0%0000 7arlier, subrule (#) was a(ended by the Securities Contracts (Regulation) (A(end(ent), !!#, w0e0f0 %30 %0 !!#0 33 Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!0>0%0 00 <rior to its substitution, sub+rule (#A) as a(ended by the Securities Contracts
prescribed by these rules shall, so far as they (ay be, also apply to a public sector co(pany0: 3$4GGG: (/) .he 3"4Securities and 7xchange 8oard of India: (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect to listing prescribed by these rules0 3#4Co ti *o*! Li!ti ( Re7*ire.e t. 19A. ( ) 7'ery listed co(pany 3/4other than public sector co(pany: shall (aintain public shareholding of at least twenty fi'e per cent0, 3>4<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent, on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall increase its public shareholding to at least twenty fi'e per cent, within a period of three years fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India0 7xplanation, 6or the purposes of this sub+rule, a co(pany whose securities has been listed pursuant to an offer and allot(ent (ade to public in ter(s of sub+clause (ii) of clause (b) of sub+rule (%) of rule !, shall (aintain (ini(u( twenty fi'e per cent, public shareholding fro( the date on which the public shareholding in the co(pany reaches the le'el of twenty fi'e percent in ter(s of said sub+clause0: (%) Khere the public shareholding in a listed co(pany falls below twenty fi'e per cent0 at any ti(e, such co(pany shall bring the public shareholding to twenty fi'e per cent0
(Regulations)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 and &SR % (7) w0e0f0 0!0030 !!", read as under, 1(#A) All the re*uire(ents with respect to listing and continuous listing prescribed by these rules, shall so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature ,2 3$ C(itted by the Securities Contracts (Regulation)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its o(ission, pro'iso, as substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# and inserted by &SR %! (7) dated %/0030 !!", read as under,
1<ro'ided that a recognised stoc) exchange (ay relax the re*uire(ent of offer to public for subscription of atleast twenty+fi'e percent of the each class or )ind of securities issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e02 3" Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent), Rules, !!#, w0e0f0 %30 %0 !!#0 3# Inserted by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 3/ Inserted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3> Substituted, ibid0 <rior to substitution, pro'isos, read as under, 1<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of at least fi'e per cent per annu( beginning fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India, <ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase brings its public shareholding to the le'el of twenty fi'e per cent in that year02
within a (axi(u( period of twel'e (onths fro( the date of such fall in the (anner specified by the Securities and 7xchange 8oard of India0: 3!4(3) Eotwithstanding anything contained in this rule, e'ery listed public sector co(pany shall (aintain public shareholding of at least ten per cent0, <ro'ided that a listed public sector co(pany+ (a) which has public shareholding below ten per cent, on the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of three years fro( the date of such co((ence(ent3 (b) whose public shareholding reduces below ten per cent, after the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of twel'e (onths fro( the date of such reduction,0: $04Re7*ire.e t! /ith re!$e't to the li!ti ( of * it! or % > other i !tr*.e t of % Colle'ti+e I +e!t.e t S'he.e o % re'o( i!e- !to'6 e#'h% (e. "=. ( ) A Collecti'e In'est(ent ?anage(ent Co(pany (CI?C) which is desirous of getting its any collecti'e in'est(ent sche(e listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars , (a) Certificate of incorporation, (e(orandu( and articles of association of the co(pany and the copy of the trust deed of the sche(e intended to be listed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any unit or other instru(ent for subscription or sale during the last fi'e years, or in the case of a new co(pany, such shorter period during which the co(pany has been in existence0 (d) Copies of balance sheets and audited accounts for the last fi'e years, or in the case of a new co(pany, for such co(pleted financial year for which accounts ha'e been (ade up0 (e) A state(ent showing,(i) returns and cash bonuses, if any, paid during the last ten years (or such
shorter period as the co(pany has been in existence whether as a pri'ate or public co(pany)3 (ii) returns or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents pertaining to each sche(e of the co(pany with or between,(i) 'endors andLor pro(oters3 (ii) underwriters and sub+underwriters3
3! Inserted $0 Inserted
by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 0 by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%000
(iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents pertaining to each sche(e of a co(pany with(i) selling agents and other ser'ice pro'iders3 (ii) (anaging directors and technical directors3 (iii) general (anager, sales (anager, (anager or secretary0 (h) Certified copies of e'ery letter, report, balance sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering units or any other instru(ents of the sche(e for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents pertaining to such sche(e0 (j) A brief history of the Co(pany since its incorporation gi'ing details of its acti'ities including any re+organisation, reconstruction or a(alga(ation, changes in its capital structure (authorised, issued and subscribed) and debenture borrowings, if any, and the perfor(ance of other collecti'e in'est(ent sche(es of the co(pany0 (k) <articulars of units of the sche(e andLor shares, debentures of the co(pany issued (i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s granted to any person pertaining to such sche(e0 (") Certified copies of(i) certificate of registration granted by the Securities and 7xchange 8oard of India3 (ii) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3 (iii) agree(ents, if any, with any public financial institution as specified in section $A of the Co(panies Act, !"# ( of !"#)0 (n) A list of the highest ten holders of units of each sche(e of the co(pany as on the date of application along with particulars as to the nu(ber of units held by and the address of each such holder0 ($) <articulars of units of the sche(e for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0
(%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer of units of a particular sche(e3 (ii) that the fully paid units issued under the sche(e will be free fro( all lien, while in the case of partly paid units the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such units3 (iii) that any a(ount paid+up in ad'ance of calls on any units (ay carry interest but shall not entitle the holder of the unit to participate in respect thereof, in a return subse*uently declared3 (iv) there will be no forfeiture of unclai(ed returns before the clai( beco(es barred by law3 (v) that option or right to call of units shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the units of a sche(e which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0 (b) At least twenty+fi'e per cent of the units or any other instru(ent of a sche(e issued by the co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and not (ore than ninety days, and that applications recei'ed in pursuance of such offer were allotted fairly and unconditionally , 4ro+i-e- that a recognised stoc) exchange (ay relax this re*uire(ent, with the pre'ious appro'al of the Securities and 7xchange 8oard of India in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#) and subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*Khere any part of the units or any other instru(ents sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely, the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental Insurance Co(pany =i(ited and the Hnited Insurance Co(pany =i(ited, or Hnit .rust of India, the total subscription to the units or any other instru(ent, whether by one or (ore of such bodies, shall not for( part of the twenty+fi'e per cent of the units or any other instru(ent to be offered to the public0 (3) A co(pany applying for listing of a sche(e shall, as a condition precedent, underta)e, inter alia,(a) (i) that letters of allot(ent of units or any other instru(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been
posted3 (ii) that letters of right will be issued si(ultaneously3 (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and, exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the units or any other instru(ent to which they relate3 (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right3 (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or return on the units or any other instru(ent will be calculated3 (b) to issue, when so re*uired, receipts for all units and any other instru(ent deposited with it whether for registration, sub+di'ision, exchange or for other purposes3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of units and any other instru(ent and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (c) to issue, when so re*uired, consolidation and renewal units or any other instru(ent in deno(inations of the (ar)et unit of trading, to split units or any other instru(ent, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3 (d) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders3 and (ii) to 'erify when the co(pany is unable to issue units or any other instru(ents or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (e) on production of the necessary docu(ents by unit holders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or si(ilar other docu(ent has been duly exhibited to and registered by the co(pany3 (f) to issue certificates in respect of units or any other instru(ent lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance units or any other instru(ent within the sa(e period where the transfer is acco(panied by a larger unit or any other instru(ent certificate3 (g) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a return or the issue or right or bonus units or
any other instru(ent will be considered3 (h) to reco((end or declare all returns andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all returns andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts of such sche(e as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued copies of all other notices and circulars sent to the unitLother instru(ent holders regarding any i(portant de'elop(ent or resolutions passed by the co(pany affecting the perfor(ance of the sche(e and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the unitLany other instru(ent holders, of any new issue of unitsLother instru(ents whether by way of right, pri'ilege, bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited unitsLother instru(ents or the issue of unitsLother instru(ents held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of unit capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of returns or issue of right or bonus unitsLany other instru(ents in the sche(e or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its unitLother instru(ent holders and specifying the purpose or purposes for which the transfer boo)s are to be closed or the record is to be ta)en3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority, subDect to which the issue is proposed to be (ade, ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after the preparation of annual accounts of at least ten principal holders of each class of unitsLany other instru(ents of the co(pany along with particulars as to the nu(ber of unitsLany other instru(ent held by, and address of, each such holder3 (+) to grant to unitLany other instru(ent holders of the sche(e the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e, not being less than four wee)s, within which to record, exercise, or renounce such rights, pri'ileges and benefits, and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3
(r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any unitLother instru(ent listed on the exchange3 (ii) of the intention to (a)e a drawing of such unitLother instru(ent inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing off the balance) for the drawing3 (iii) of the a(ount of unitsLother instru(ents outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the unitLany other instru(ent holders to appraise the position of the sche(e and to a'oid the establish(ent of a false (ar)et in the unitsLany other instru(ents of the co(pany3 (t) that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 ($) A fresh application for listing will be necessary in respect of all new sche(es desired to be dealt in , 4ro+i-e- that, where such new unitsLother instru(ents are identical in all respects with those already listed, ad(ission to dealing will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new sche(es0 ()%lanati$n0-HnitsLany other instru(ents are identical in all respects only if(a) they are issued under the sa(e sche(e3 (b) they are of the sa(e no(inal 'alue and the sa(e a(ount per unitLother instru(ents has been called up3 (c) they are entitled to returns at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the return payable on each unitLother issue will a(ount to exactly the sa(e su(, net and gross3 and (d) they carry the sa(e rights in all other respects0 (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the unitsLother instru(ents of a sche(e of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 4ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any unitLother instru(ent of a collecti'e in'est(ent sche(e, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an
opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and thereupon the orders of the Securities Appellate .ribunal shall be carried out by the stoc) exchange0 (#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore or read(it to dealings any unitsLother instru(ents suspended or withdrawn fro( the list0 (/) All the re*uire(ents with respect to listing prescribed by these rules, shall, so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature , 4ro+i-e- that a recognised stoc) exchange (ay relax the re*uire(ent of offer to the public for subscription of at least twenty+fi'e per cent of the units or any other instru(ent of a collecti'e in'est(ent sche(e issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 (>) .he Securities and 7xchange 8oard of India (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect of listing prescribed by these rules0: $ 4Deli!ti ( of !e'*ritie!. "1. A recogniFed stoc) exchange (ay, without preDudice to any other action that (ay be ta)en under the Act or under any other law for the ti(e being in force, delist any securities listed thereon on any of the following grounds in accordance with the regulations (ade by the Securities and 7xchange 8oard of India, na(ely,(a) the co(pany has incurred losses during the preceding three consecuti'e years and it has negati'e networth3 (b) trading in the securities of the co(pany has re(ained suspended for a period of (ore than six (onths3 (c) the securities of the co(pany ha'e re(ained infre*uently traded during the preceding three years3 (d) the co(pany or any of its pro(oters or any of its director has been con'icted for failure to co(ply with any of the pro'isions of the Act or the Securities and 7xchange 8oard of India Act, !!% or the 9epositories Act, !!# (%% of !!#) or rules, regulations, agree(ents (ade thereunder, as the case (ay be and awarded a penalty of not less than rupees one crore or i(prison(ent of not less than three years3 (e) the addresses of the co(pany or any of its pro(oter or any of its directors, are not )nown or false addresses ha'e been furnished or the co(pany has changed its registered office in contra'ention of the pro'isions of the Co(panies Act, !"# ( of !"#)3 or
$
Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %00>, w0e0f0 000#0%00!
(f) shareholding of the co(pany held by the public has co(e below the (ini(u( le'el applicable to the co(pany as per the listing agree(ent under the Act and the co(pany has failed to raise public holding to the re*uired le'el within the ti(e specified by the recogniFed stoc) exchange , 4ro+i-e- that no securities shall be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) If the securities is delisted under clause ( ),
(a) the co(pany, pro(oter and director of the co(pany shall be Dointly and se'erally liable to purchase the outstanding securities fro( those holders who wish to sell the( at a fair price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India, under the Act3 and (b) the said securities shall be delisted fro( all recogniFed stoc) exchanges0 (3) A recogniFed stoc) exchange (ay, on the re*uest of the co(pany, delist any securities listed thereon in accordance with the regulations (ade under the Act by Securities and 7xchange 8oard of India, subDect to the following conditions, na(ely ,(a) the securities of the co(pany ha'e been listed for a (ini(u( period of three years on the recogniFed stoc) exchange3 (b) the delisting of such securities has been appro'ed by the two+third of public shareholders3 and (c) the co(pany, pro(oter andLor the director of the co(pany purchase the outstanding securities fro( those holders who wish to sell the( at a price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India under the Act, 4ro+i-e- that the condition at (c) (ay be dispensed with by Securities and 7xchange 8oard of India if the securities re(ain listed at least on the Eational Stoc) 7xchange of India =i(ited or the 8o(bay Stoc) 7xchange =i(ited0: FORM A ( ee Rules 3 and /) A$$li'%tio for re'o( itio 1re e/%l of re'o( itio of % !to'6 e#'h% (e * -er !e'tio ) of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 .o 00000000000000000000000000000000000000 00000000000000000000000000000000000000 !bject,*A%%licati$n f$r rec$gniti$n-rene.al $f rec$gniti$n $f a #t$ck e)change !nder #ecti$n 3 $f the ec!ritie# /$ntract# (0eg!lati$n) Act' 1956& Sir, <ursuant to the $%4Securities and 7xchange 8oard of India: Eotification Eo0 00000000000000000000000000 00000000000000000 dated 000000000000000000000000000000000LCertificate of recognition dated0000000000000000000000000000000KeLI on behalf of 000000000000000000 (na(e and address of stoc) exchange) being a stoc) exchange as defined in section % of the Securities Contracts
$% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
(Regulation) Act, !"# hereby apply for recognitionLrenewal of recognition for the purposes of the said Act in respect of contracts in securities0 ". 6our copies of the rules, (e(orandu( and articles of association relating in general to the constitution and (anage(ent of the stoc) exchange and four copies of the bye+laws for the regulation and control contracts in securities are enclosed0 ). All the necessary infor(ation re*uired in the Annexure to this 6or( is enclosed0 Any additional infor(ation will be furnished as and when called for by the $34Securities and 7xchange 8oard of India:0 3. KeLI on behalf of the said stoc) exchange hereby underta)e to co(ply with the re*uire(ents of section $ of the said Act and such other conditions and ter(s as (ay be contained in the certificate of recognition or be prescribed or i(posed subse*uently0 5. .reasury Receipt Eo0 000000dated000000for Rs000000000000is attached0
Oours faithfully, Signature of applicant ANNEAURE TO 2OR@ BAC Part I - General 0 Ea(e of the applicant stoc) exchange0 %0 Address0 30 9ate of establish(ent0 $0 Is your exchange a Doint stoc) co(pany (state whether public or pri'ate) registered under the Indian Co(panies Act or an association for profit or otherwise P If it is organised on so(e other basis, this (ay be stated0 "0 &i'e details of your capital structure and attach three copies of the audited balance sheets and profit and loss account of the 7xchange for the preceding three years0 Part II - Membership #0 State the nu(ber of (e(bers at the ti(e of application0 Also specify how (any are inacti'e0 /0 State whether there is any pro'ision, resolution or con'ention for li(iting the nu(ber of (e(bers and whether in pursuance thereof you ha'e fixed a ceiling on the nu(ber of (e(bers that you would ta)e0 >0 9o you insist on any (ini(u( *ualifications and experience before enrolling new (e(bers P If so gi'e details0 !0 State the different classes of (e(bers, if any, the nu(ber thereof and the pri'ileges enDoyed by each class0 Khat is the procedure followed by your exchange for the ad(ission of different classes of new (e(bers P 00 Khat are the rates of your annual subscription in respect of the different classes of (e(bers P 0 9o you collect any security deposit fro( your (e(bers P If so, gi'e details and also state the (anner in which such deposits are utilised and the rate of interest allowed, if any0
$3 Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
%0 9o you collect any ad(ission or entrance fees fro( your (e(bers or fro( partners of fir(s who are (e(bers P If so, how (uch P 30 9o you insist on your (e(bers and partners of fir(s who are (e(bers di'esting the(sel'es of other acti'ities either as principal or as e(ployee P $0 9o your rules per(it fir(s to beco(e (e(bers P If so, is it incu(bent on (e(bers to see) the appro'al of the go'erning body before ad(itting new partners P State the conditions, if any, laid down in your rules for the ad(ission of such partners0 "0 If your rules do not per(it of fir(s being enrolled as (e(bers, do you per(it indi'idual (e(bers to for( a partnership P State the procedure followed for the recognition of such partnership0 #0 9o you per(it (e(bers to wor) in partnership with non+(e(bers P If so, how far such non+(e(bers subDect to the control of the stoc) exchange P Part III - Governing Body /0 Khat is the present strength of your go'erning body P &i'e details of the constitution, powers of (anage(ent, election and tenure of office of (e(bers of the go'erning body, and the (anner in which its business is transacted0 >0 Are any trade or co((ercial interest represented on your go'erning body P If so,
gi'e details of interests represented0 !0 9o you associate shareholders of in'estors associations with the (anage(ent of your exchange P If so, state the (anner in which it is done0 %00 Are there any &o'ern(ent representati'es on your go'erning body P If so, furnish their na(es0 % 0 9o your rules pro'ide for the direct election by (e(bers of any other bodies or co((ittees, apart fro( the go'erning body P If so, gi'e details of their constitution, tenure, powers and functions0 %%0 9o you ha'e any pro'ision for the appoint(ent of standing or ad h$c subco((ittees of the go'erning body P If so, furnish details of the (ethod of their appoint(ent, ter(s of office, powers and functions0 %30 &i'e the designations, powers and duties of principal office+bearers of your exchange0 Are any of these office+bearers in the pay of the stoc) exchange P If so, gi'e details as to the (ode of their appoint(ent, tenure of office and re(uneration0 Part IV - Trading %$0 9o you ha'e a trading ring P If not, how do you carry on the business P &i'e details0 %"0 State the different )inds of contracts in use on your exchange e&g&' spot, ready and forward0 State the period of deli'ery and pay(ent in each case0 %#0 &i'e details of business hours for each type of contract0 %/0 &i'e details of the scale of bro)erage and other charges, if any, prescribed by your exchange0 %>0 9o you prescribe standard for(s of contract for the use of your (e(bers P Attach three copies of each such contract for(0 %!0 9o you classify your (e(bers into bro)ers and Dobbers P If so, specify the bye+law under which this is done0 300 9o you ha'e a syste( of registration of re(isiers andLor authorised cler)s P If so, gi'e details as to their *ualifications, obligations and rights, etc0 3 0 9o you ha'e any regulations regarding dealings by (e(bers on their own account whether in the nature of 1aravani (day+to+day) or otherwise P 3%0 9o you ha'e any pro'isions for regulating the 'olu(e of business done by any indi'idual (e(ber other than through a syste( of (argins P If so, gi'e details0 330 Khat pro'isions ha'e you (ade for periodical settle(ent of contracts and differences thereunder, the deli'ery of, and pay(ent for securities and the passing of deli'ery orders P 3$0 9o you ha'e a clearing house for the settle(ent of contracts P If so, gi'e details of its organisation and (anage(ent0 3"0 If you ha'e clearing house, what returns do the (e(bers of your exchange sub(it regarding the transactions cleared through such clearing house P 9oes the exchange as) for any regular returns in respect of transactions settled outside the clearing house P Sub(it three copies of for(s used in this connection0 3#0 Iow do you fix, alter or postpone the dates of settle(ent P 3/0 Iow do you deter(ine and declare (a)ing+up prices P 3>0 9o you ha'e any arrange(ents for (a)ing or recording of bargains P 3!0 Ia'e you any arrange(ents for recording and publishing (ar)et rates including opening, closing, highest and lowest rates P $00 Khat pro'isions ha'e you (ade for regulating-(a) the entering into contracts, their
perfor(ance and rescission, including contracts , (i) between (e(bers, (ii) between a (e(ber and his constituent, and (iii) between a (e(ber and a non+(e(ber3 (b) the conse*uences of breach, default or insol'ency on the part of (e(bers whether acting as buyers, sellers or inter(ediaries 3 and (c) 2havala#3 and other (atters relating to conduct of business of (e(bers in the exchange P $ 0 9o you prescribe (argin re*uire(ents P If yes, gi'e details0 $%0 9o you prescribe (axi(u( and (ini(u( prices for securities P If so, how and under what conditions0 $30 9o you pro'ide any safeguards for the pre'ention of Nbulls*ueeFesJ and 3 NbearraidsJ and for (eeting e(ergencies in trade P &i'e details0 $$0 Khat are the (easures adopted by you to regulate or prohibit ad'ertising or issue of circulars by your (e(bers P $"0 Khat are the disciplinary power with the go'erning body to enforce due co(pliance by (e(bers of the rules and bye+laws of the exchange and generally to ensure proper standard of business conduct P $#0 9o you re*uire (e(bers to supply such infor(ation or explanation and to produce such boo)s relating to their business as your go'erning body (ay re*uire P $/0 9o you publish any statistics in regard to business done on the exchange including the transactions settled through the clearing house, if (aintained P In particular, ha'e you e'ol'ed any (achinery for co(puting the 'olu(e of transactions in the different )inds of contracts per(itted on your exchange P &i'e details0 $>0 9o you ha'e any bye+laws contra'ention of which (a)es a contract 'oid P Part V - Miscellaneo s $!0 9o you ha'e any (achinery for arbitration of disputes between (e(bers andLor between (e(bers and their constituents P &i'e details0 "00 Khat are the conditions subDect to which securities are listed for dealings on your exchange P " 0 Khat are your re*uire(ents for ad(itting securities to forward+trading P "%0 9o you ha'e the right to prohibit, withdraw or suspend dealings in a listed security P If so, under what circu(stances is this right exercised P "30 Khat pro'isions ha'e you (ade for the le'y and reco'ery of fees, fines and penalties P FORM B ( ee rules # and /) $$5The Se'*ritie! % - E#'h% (e ;o%r- of I -i%< 4e. 5elhi' the 20&&&&&&&&&&&&& Eo0 000000000000000000000000000000000000.he $"4Securities and 7xchange 8oard of India:, ha'ing considered the application for recognitionLrenewal of recognition (ade under section 3 of the Securities Contracts (Regulation) Act, !"# by000000000000000000000000000000 (na(e and address of exchange) and being satisfied that it would be in the interest of the trade and also in the public interest so to do, hereby grants, in exercise of the powers conferred by section $ of the Securities Contracts (Regulation) Act, !"# recognition to the said exchange under section $ of the said Act for 0000000000000000000 yearLyears ending 0000000000000000000000%0 0000000on a per(anent basis in respect of contracts in securities subDect to the conditions stated herein below or as (ay be prescribed or i(posed hereafter0 Seal of the $#48oard: Signature of Cfficer
Note&-Application for renewal of recognition shall be (ade so as to reach the Central &o'ern(ent not less than three (onths before the expiry of the period0 (.his certificate, will also ha'e to be published as a Eotification in the &aFette of India and also in the Cfficial &aFette of the State in which principal office of the recognised stoc) exchange is situate)0 $/5FORM ! ( ee rule 3) Noti'e to !ho/ '%*!e %(%i !t the /ith-r%/%l of re'o( itio .I7 S7CHRI.I7S AE9 7ACIAE&7 8CAR9 C6 IE9IA 6!"bai' the&&&&&&&&&&& .o 0000000000000000000000000000000000000000000000000000000000000000000000000000000000
$$ Substituted
for 1&o'ern(ent of India, ?inistry of 6inance2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 $" Substituted for 1Central &o'ern(ent2, ibid0 $# Substituted for 1?inistry2, ibid0 $/ Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#
0000000000000000000000000000000000000000000000000000000000000000000000000000000000 (na(e and address of the exchange) Oou are hereby called upon to show cause on or before 0000000000000000000000000000000000000 at the office of 0000000000000000000000000000000000000000000000000000 ( designation of the officer) why the recognition granted to you under the ?inistry of 6inanceLthe Securities and 7xchange 8oard of India, Eotification Eo0 0000000000000000000000000000 dated 000000000000000000000000000000000000000 and Certificate Eo0 00000000000000000000000000000 dated 000000000000000000000000000000 should not be withdrawn for the reasons gi'en in the annexure to this notice0 8y order and in the na(e of the Securities and 7xchange 8oard of India0 Seal of the Securities and 7xchange 8oard of India0 Notifi'%tio & 4$& 576' dated 217271957&
SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< SECTIONS
80(9:6:4A0; 1. Short title, extent and co((ence(ent ". 9efinitions 0(/<=4: (5 1</> (?/@A4=( ). Application for recognition of stoc) exchanges 3. &rant of recognition to stoc) exchanges0 3A. Corporatisation and de(utualisation of stoc) exchanges 3;. <rocedure for corporatisation and de(utualisation 5. Kithdrawal of recognition 8. <ower of Central &o'ern(ent to call for periodical returns or direct in*uiries to be (ade 7. Annual reports to be furnished to Central &o'ern(ent by stoc) exchanges 7A. <ower of recognised stoc) exchange to (a)e rules restricting 'oting rights, etc :. <ower of Central &o'ern(ent to direct rules to be (ade or to (a)e rules :A. Clearing corporation 9. <ower of recognised stoc) exchanges to (a)e bye+laws 1=. <ower of Securities and 7xchange 8oard of India to (a)e or a(end byelaws of recognised stoc) exchanges 11. <ower of Central &o'ern(ent to supersede go'erning body of a recognised stoc) exchange 1". <ower to suspend business of recognised stoc) exchanges0 1"A. <ower to issue directions 1). Contracts in notified areas illegal in certain circu(stances 1)A. Additional trading floor 13. Contracts in notified areas to be 'oid in certain circu(stances 15. ?e(bers (ay not act as principals in certain circu(stances 18. <ower to prohibit contracts in certain cases 17. =icensing of dealers in securities in certain areas 17A. <ublic issue and listing of securities referred to in sub+clause ( ie) of clause (h) of section % 1:. 7xclusion of spot deli'ery contracts fro( sections 3, $, " and / 1:A. Contracts in deri'ati'e 19. Stoc) exchanges other than recognised stoc) exchanges prohibited "=. <rohibition of options in securities "1. Conditions for listing "1A. 9elisting of securities "". Right of appeal against refusal of stoc) exchanges to list securities of public co(panies ""A. Right of appeal to Securities Appellate .ribunal against refusal of stoc) exchange to list securities of public co(panies "";. <rocedure and powers of Securities Appellate .ribunal ""C. Right to legal representation ""D. =i(itation ""E. Ci'il court not to ha'e Durisdiction
""2. Appeal to Supre(e Court 8(4A91:( A45 80</(5A0( "). <enalties ")A. <enalty for failure to furnish infor(ation, return, etc0 ");. <enalty for failure by any person to enter into an agree(ent with clients ")C. <enalty for failure to redress in'estorsJ grie'ances ")D. <enalty for failure to segregate securities or (oneys of client or clients ")E. <enalty for failure to co(ply with pro'ision of listing conditions or delisting conditions or grounds ")2. <enalty for excess de(aterialisation or deli'ery of unlisted securities ")G. <enalty for failure to furnish periodical returns, etc0 ")D. <enalty for contra'ention where no separate penalty has been pro'ided ")0I. <ower to adDudicate ")E. 6actors to be ta)en into account by adDudicating officer ")EA. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! ")E;. Re'o+er> of %.o* t! ")F. Crediting su(s realised by way of penalties to Consolidated 6und of India ")L. Appeal to Securities Appellate .ribunal ")@. Cffences ")N. Co(position of certain offences ")0O. <ower to grant i((unity "3. Cffences by co(panies "5. Certain offences to be cogniFable "8. CogniFance of offences by courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! 6: /(99A4(<A "7. .itle to di'idends "7A. Right to recei'e inco(e fro( collecti'e in'est(ent sche(e "7;. Right to recei'e inco(e fro( (utual fund ":. Act not to apply in certain cases "9. <rotection of action ta)en in good faith "9A. <ower to delegate )=. <ower to (a)e rules )1. <ower of Securities and 7xchange 8oard of India to (a)e regulations SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< 53th Se$te.,er, 1958< A A't to $re+e t * -e!ir%,le tr% !%'tio ! i !e'*ritie! ,> re(*l%ti ( the ,*!i e!! of -e%li ( therei , 14***: ,> $ro+i-i ( for 'ert%i other .%tter! 'o e'te- there/ith. 87 it enacted by <arlia(ent in the Se'enth Oear of the Republic of India as follows ,
80(9:6:4A0; Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities Contracts (Regulation) Act, !"#0 (%) It extends to the whole of India0
Kords 1by prohibiting options and2 o(itted by the Securities =aws (A(end(ent) Act, !!", Sec0 >, w0e0f0 %"+0 + !!".
(3) It shall co(e into force on such date% as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 Defi itio !. ". In this Act, unless the context otherwise re*uires,(a) 1contract2 (eans a contract for or relating to the purchase or sale of securities3 3 4(aa) 1corporatisation2 (eans the succession of a recognised stoc) exchange, being a body of indi'iduals or a society registered under the Societies Registration Act, >#0 (% of >#0), by another stoc) exchange, being a co(pany incorporated for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities carried on by such indi'iduals or society3 (ab) 1de(utualisation2 (eans the segregation of ownership and (anage(ent fro( the trading rights of the (e(bers of a recognised stoc) exchange in accordance with a sche(e appro'ed by the Securities and 7xchange 8oard of India3: $4"4(ac): 1deri'ati'e2 includes(A) a security deri'ed fro( a debt instru(ent, share, loan, whether secured or unsecured, ris) instru(ent or contract for differences or any other for( of security3 (B) a contract which deri'es its 'alue fro( the prices, or index of prices, of underlying securities3: (b) 1&o'ern(ent security2 (eans a security created and issued, whether before or after the co((ence(ent of this Act, by the Central &o'ern(ent or a State &o'ern(ent for the purpose of raising a public loan and ha'ing one of the for(s specified in clause (2) of section % of the <ublic 9ebt Act, !$$ ( > of !$$)3 (c) 1(e(ber2 (eans a (e(ber of a recognised stoc) exchange3 (d) 1option in securities2 (eans a contract for the purchase or sale of a right to buy or sell, or a right to buy and sell, securities in future, and includes a teji' a "andi' a teji "andi' a galli' a put, a call or a put and call in securities3 (e) 1prescribed2 (eans prescribed by rules (ade under this Act3
% %0+%+
!"/ vide SRC "%>, dated #+0%+ !"/, published in the &aFette of India, 7xtra0, <t0 II, Sec0 3, p0 "$!, dated #+0%+ !"/0 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 $ Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000 " Clause (aa) renu(bered as clause (ac) by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0
(f) 1recognised stoc) exchange2 (eans a stoc) exchange which is for the ti(e
being recognised by the Central &o'ern(ent under section $3 (g) 1rules2, with reference to the rules relating in general to the constitution and (anage(ent of a stoc) exchange, includes, in the case of a stoc) exchange which is an incorporated association, its (e(orandu( and articles of association3 64(ga) 1sche(e2 (eans a sche(e for corporatisation or de(utualisation of a recognised stoc) exchange which (ay pro'ide for(i) the issue of shares for a lawful consideration and pro'ision of trading rights in lieu of (e(bership cards of (e(bers of a recognised stoc) exchange3 (ii) the restrictions on 'oting rights3 (iii) the transfer of property, business, assets, rights, liabilities, recognitions, contracts of the recognised stoc) exchange, legal proceedings by, or against, the recognised stoc) exchange, whether in the na(e of the recognised stoc) exchange or any trustee or otherwise and any per(ission gi'en to, or by, the recognised stoc) exchange3 (iv) the transfer of e(ployees of a recognised stoc) exchange to another recognised stoc) exchange3 (v) any other (atter re*uired for the purpose of, or in connection with, the corporatisation or de(utualisation, as the case (ay be, of the recognised stoc) exchange3: /4>4(gb): 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (h) 1securities2 include(i) shares, scrips, stoc)s, bonds, debentures, debenture stoc) or other (ar)etable securities of a li)e nature in or of any incorporated co(pany or other body corporate3 !4(ia) deri'ati'e3 (ib) units or any other instru(ent issued by any collecti'e in'est(ent sche(e to the in'estors in such sche(es3:
# Inserted / Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (Second A(end(ent) Act, !!!, Sec %, w0e0f0 #+ %+ !!!0 > Clause (ga) renu(bered as clause (gb) by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 ! Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000
04(ic) security receipt as defined in clause ( Cg) of section % of the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%3: 114(id) units or any other such instru(ent issued to the in'estors under any (utual fund sche(e3: %47xplanation0-6or the re(o'al of doubts, it is hereby declared that ;securities; shall not include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(bined benefit ris) on the life of the persons and in'est(ent by such
persons and issued by an insurer referred to in clause (!) of section % of the Insurance Act, !3> ($ of !3>)3: 35(ie) any certificate or instru(ent (by whate'er na(e called), issued to an in'estor by any issuer being a special purpose distinct entity which possesses any debt or recei'able, including (ortgage debt, assigned to such entity, and ac)nowledging beneficial interest of such in'estor in such debt or recei'able, including (ortgage debt, as the case (ay be3 <
0 Inserted by the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%, Sec0 $ and Schedule, w0r0e0f0 % +#+%00%0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0e0f0 %+ 0+%00$0 % Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, Sec $, w0r0e0f0 0!+0$+%0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, read as under , ;CIA<.7R BI ?ISC7==AE7CHS #0 Dalidati$n&-Eotwithstanding anything contained in any Dudg(ent, decree or order of any Court, .ribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly, any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 0e%eal and #aving#&*( ) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0; 3 Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec %, w0e0f0 %>+"+ %00/0
$4(ii) &o'ern(ent securities3 (iia) such other instru(ents as (ay be declared by the Central &o'ern(ent to be securities3 and: (iii) rights or interest in securities3 "4(i) 1spot deli'ery contract2 (eans a contract which pro'ides for,(a) actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e
town or locality3 (b) transfer of the securities by the depository fro( the account of a beneficial owner to the account of another beneficial owner when such securities are dealt with by a depository3: #4(j) 1stoc) exchange2 (eans(a) any body of indi'iduals, whether incorporated or not, constituted before corporatisation and de(utualisation under sections $A and $8, or (b) a body corporate incorporated under the Co(panies Act, !"# ( of !"#) whether under a sche(e of corporatisation and de(utualisation or otherwise, for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0: /4I ter$ret%tio of 'ert%i /or-! % - e#$re!!io !. "A. Kords and expressions used herein and not defined in this Act but defined in the Co(panies Act, !"# ( of !"#) or the Securities and 7xchange 8oard of India
$ Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, for sub+clause (ii), w0r0e0f0 30+0 + !!%0 " Substituted by the 9epositories Act, !!#, Sec 30 and Schedule, <t0 III, w0r0e0f0 %0+0!+ !!" . <rior to its substitution, clause (i) read as under , N(i) 1spot deli'ery contract2 (eans a contract which pro'ides for the actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e town or locality3J # Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (j) read as under ,N(j) 1stoc) exchange2 (eans any body of indi'iduals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0J / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
Act, !!% ( " of !!%) or the 9epositories Act, !!# (%% of !!#) shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts0: 0(/<=4: (5 1</> (?/@A4=( A$$li'%tio for re'o( itio of !to'6 e#'h% (e!. ). ( ) Any stoc) exchange, which is desirous of being recognised for the purposes of this Act, (ay (a)e an application in the prescribed (anner to the Central &o'ern(ent01: (%) 7'ery application under sub+section ( ) shall contain such particulars as (ay be prescribed, and shall be acco(panied by a copy of the bye+laws of the stoc) exchange for the regulation and control of contracts and also a copy of the rules relating in general to the constitution of the stoc) exchange and in particular, to(a) the go'erning body of such stoc) exchange, its constitution and powers of (anage(ent and the (anner in which its business is to be transacted3 (b) the powers and duties of the office bearers of the stoc) exchange3 (c) the ad(ission into the stoc) exchange of 'arious classes of (e(bers, the *ualifications for (e(bership, and the exclusion, suspension, expulsion and
re+ad(ission of (e(bers therefro( or thereinto3 (d) the procedure for the registration of partnerships as (e(bers of the stoc) exchange in cases where the rules pro'ide for such (e(bership3 and the no(ination and appoint(ent of authorised representati'es and cler)s0 Gr% t of re'o( itio to !to'6 e#'h% (e!. 3. ( ) If the Central &o'ern(ent ! is satisfied, after (a)ing such in*uiry as (ay be necessary in this behalf and after obtaining such further infor(ation, if any, as it (ay re*uire,(a) that the rules and bye+laws of a stoc) exchange applying for registration are in confor(ity with such conditions as (ay be prescribed with a 'iew to ensure fair dealing and to protect in'estors3 (b) that the stoc) exchange is willing to co(ply with any other conditions (including conditions as to the nu(ber of (e(bers) which the Central &o'ern(ent, after consultation with the go'erning body of the stoc) exchange and ha'ing regard to the area ser'ed by the stoc) exchange and its standing and the nature of the securities dealt with by it, (ay i(pose for the purpose of carrying out the obDects of this Act3 and
> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 ! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
(c) that it would be in the interest of the trade and also in the public interest to grant recognition to the stoc) exchange3 it (ay grant recognition to the stoc) exchange subDect to the conditions i(posed upon it as aforesaid and in such for( as (ay be prescribed0 (%) .he conditions which the Central &o'ern(ent %0 (ay prescribe under clause (a) of sub+section ( ) for the grant of recognition to the stoc) exchanges (ay include, a(ong other (atters, conditions relating to,(i) the *ualifications for (e(bership of stoc) exchanges3 (ii) the (anner in which contracts shall be entered into and enforced as between (e(bers3 (iii) the representation of the Central &o'ern(ent on each of the stoc) exchange by such nu(ber of persons not exceeding three as the Central &o'ern(ent (ay no(inate in this behalf3 and (iv) the (aintenance of accounts of (e(bers and their audit by chartered accountants whene'er such audit is re*uired by the Central &o'ern(ent0 (3) 7'ery grant of recognition to a stoc) exchange under this section shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office as of the stoc) exchange is situate, and such recognition shall ha'e effect as fro( the date of its publication in the &aFette of India0 % ($) Eo application for the grant of recognition shall be refused except after gi'ing an opportunity to the stoc) exchange concerned to be heard in the (atter3 and the reasons for such refusal shall be co((unicated to the stoc) exchange in writing0 %% (") Eo rules of a recognised stoc) exchange relating to any of the (atters specified in sub+section (%) of section 3 shall be a(ended except with the appro'al of the
Central &o'ern(ent0%3 "35Cor$or%ti!%tio % - -e.*t*%li!%tio of !to'6 e#'h% (e!. 3A. Cn and fro( the appointed date, all recognised stoc) exchanges (if not corporatised and de(utualised before the appointed date) shall be corporatised and de(utualised in accordance with the pro'isions contained in section $8 ,
%0 <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 % <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %% <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %3 <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 %$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
4ro+i-e- that the Securities and 7xchange 8oard of India (ay, if it is satisfied that any recognised stoc) exchange was pre'ented by sufficient cause fro( being corporatised and de(utualised on or after the appointed date, specify another appointed date in respect of that recognised stoc) exchange and such recognised stoc) exchange (ay continue as such before such appointed date0 ()%lanati$n&*6or the purposes of this section, 1appointed date2 (eans the date which the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, appoint and different appointed dates (ay be appointed for different recognised stoc) exchanges0: "554ro'e-*re for 'or$or%ti!%tio % - -e.*t*%li!%tio . 3;. ( ) All recognised stoc) exchanges referred to in section $A shall, within such ti(e as (ay be specified by the Securities and 7xchange 8oard of India, sub(it a sche(e for corporatisation and de(utualisation for its appro'al , 4ro+i-e- that the Securities and 7xchange 8oard of India, (ay, by notification in the Cfficial &aFette, specify na(e of the recognised stoc) exchange, which had already been corporatised and de(utualised, and such stoc) exchange shall not be re*uired to sub(it the sche(e under this section0 (%) Cn receipt of the sche(e referred to in sub+section ( ), the Securities and 7xchange 8oard of India (ay, after (a)ing such en*uiry as (ay be necessary in this behalf and obtaining such further infor(ation, if any, as it (ay re*uire and if it is satisfied that it would be in the interest of the trade and also in the public interest, appro'e the sche(e with or without (odification0 (3) Eo sche(e under sub+section (%) shall be appro'ed by the Securities and 7xchange 8oard of India if the issue of shares for a lawful consideration or pro'ision of trading rights in lieu of (e(bership card of the (e(bers of a recognised stoc) exchange or pay(ent of di'idends to (e(bers ha'e been proposed out of any reser'es or assets of that stoc) exchange0 ($) Khere the sche(e is appro'ed under sub+section (%), the sche(e so appro'ed shall be published i((ediately by(a) the Securities and 7xchange 8oard of India in the Cfficial &aFette3 (b) the recognised stoc) exchange in such two daily newspapers circulating in India, as (ay be specified by the Securities and 7xchange 8oard of India,
and upon such publication, notwithstanding anything to the contrary contained in this Act or any other law for the ti(e being in force or any agree(ent, award, Dudg(ent, decree or other instru(ent for the ti(e being in force, the sche(e shall ha'e effect and be binding on all persons and authorities including all (e(bers, creditors, depositors and e(ployees of the recognised stoc) exchange and on all
%" Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
persons ha'ing any contract, right, power, obligation or liability with, against, o'er, to, or in connection with, the recognised stoc) exchange or its (e(bers0 (") Khere the Securities and 7xchange 8oard of India is satisfied that it would not be in the interest of the trade and also in the public interest to appro'e the sche(e under sub+section (%), it (ay, by an order, reDect the sche(e and such order of reDection shall be published by it in the Cfficial &aFette , 4ro+i-e- that the Securities and 7xchange 8oard of India shall gi'e a reasonable opportunity of being heard to all the persons concerned and the recognised stoc) exchange concerned before passing an order reDecting the sche(e0 (#) .he Securities and 7xchange 8oard of India (ay, while appro'ing the sche(e under sub+section (%), by an order in writing, restrict(a) the 'oting rights of the shareholders who are also stoc) bro)ers of the reognised stoc) exchange3 (b) the right of shareholders or a stoc) bro)er of the recognised stoc) exchange to appoint the representati'es on the go'erning board of the stoc) exchange3 (c) the (axi(u( nu(ber of representati'es of the stoc) bro)ers of the recognised stoc) exchange to be appointed on the go'erning board of the recognised stoc) exchange, which shall not exceed one+fourth of the total strength of the go'erning board0 (/) .he order (ade under sub+section (#) shall be published in the Cfficial &aFette and on the publication thereof, the order shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#), or any other law for the ti(e being in force, ha'e full effect0 (>) 7'ery recognised stoc) exchange, in respect of which the sche(e for corporatisation or de(utualisation has been appro'ed under sub+section (%), shall, either by fresh issue of e*uity shares to the public or in any other (anner as (ay be specified by the regulations (ade by the Securities and 7xchange 8oard of India %#, ensure that at least fifty+one per cent of its e*uity share capital is held, within twel'e (onths fro( the date of publication of the order under sub+section (/), by the public other than shareholders ha'ing trading rights , 4ro+i-e- that the Securities and 7xchange 8oard of India (ay, on sufficient cause being shown to it and in the public interest, extend the said period by another twel'e (onths0:
ee Securities Contracts (Regulation) (Stoc) 7xchanges and Clearing Corporations) Regulations, %0 %, w0e0f0 %0+0#+%0 % notified vide &aFette Eotification Eo0 =A9+ ERCL&EL%0 %+ 3L0/L 3"$#, 7xtra0, <t0 III, Section $, dtd %0+0#+%0 %0
%#
?ith-r%/%l of re'o( itio .
5. %/4( ): If the Central &o'ern(ent%> is of opinion that the recognition granted to a stoc) exchange under the pro'isions of this Act should, in the interest of the trade or in the public interest, be withdrawn, the Central &o'ern(ent (ay ser'e on the go'erning body of the stoc) exchange a written notice that the Central &o'ern(ent is considering the withdrawal of the recognition for the reasons stated in the notice and after gi'ing an opportunity to the go'erning body to be heard in the (atter, the Central &o'ern(ent (ay withdraw, by notification in the Cfficial &aFette, the recognition granted to the stoc) exchange , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Central &o'ern(ent (ay, after consultation with the stoc) exchange, (a)e such pro'ision as it dee(s fit in the notification of withdrawal or in any subse*uent notification si(ilarly published for the due perfor(ance of any contracts outstanding on that date0 %!4(%) Khere the recognised stoc) exchange has not been corporatised or de(utualised or it fails to sub(it the sche(e referred to in sub+section ( ) of section $8 within the specified ti(e therefor or the sche(e has been reDected by the Securities and 7xchange 8oard of India under sub+section (") of section $8, the recognition granted to such stoc) exchange under section $, shall, notwithstanding anything to the contrary contained in this Act, stand withdrawn and the Central &o'ern(ent shall publish, by notification in the Cfficial &aFette, such withdrawal of recognition , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Securities and 7xchange 8oard of India (ay, after consultation with the stoc) exchange, (a)e such pro'isions as it dee(s fit in the order reDecting the sche(e published in the Cfficial &aFette under sub+section (") of section $80: 4o/er of Ce tr%l Go+er .e t to '%ll for $erio-i'%l ret*r ! or -ire't i 7*irie! to ,e .%-e. 8. ( ) 7'ery recognised stoc) exchange shall furnish to the 304Securities and 7xchange 8oard of India: such periodical returns relating to its affairs as (ay be prescribed0
%/ Section
" renu(bered as sub+section ( ) by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 %> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 30 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(%) 7'ery recognised stoc) exchange and e'ery (e(ber thereof shall (aintain and preser'e for such periods not exceeding fi'e years such boo)s of account, and other docu(ents as the Central &o'ern(ent, after consultation with the stoc) exchange concerned, (ay prescribe in the interest of the trade or in the public interest, and such boo)s of account, and other docu(ents shall be subDect to inspection at all reasonable ti(es 3 4by the Securities and 7xchange 8oard of India:0 (3) Kithout preDudice to the pro'isions contained in sub+sections ( ) and (%), the
3%4Securities
and 7xchange 8oard of India:, if it is satisfied that it is in the interest of the trade or in the public interest so to do, (ay, by order in writing,(a) call upon a recognised stoc) exchange or any (e(ber thereof to furnish in writing such infor(ation or explanation relating to the affairs of the stoc) exchange or of the (e(ber in relation to the stoc) exchange as the 334Securities and 7xchange 8oard of India: (ay re*uire3 or (b) appoint one or (ore persons to (a)e an in*uiry in the prescribed (anner in relation to the affairs of the go'erning body of a stoc) exchange or the affairs of any of the (e(bers of the stoc) exchange in relation to the stoc) exchange and sub(it a report of the result of such in*uiry to the 3$4Securities and 7xchange 8oard of India: within such ti(e as (ay be specified in the order or, in the case of an in*uiry in relation to the affairs of any of the (e(bers of a stoc) exchange, direct the go'erning body to (a)e the in*uiry and sub(it its report to the 3"4Securities and 7xchange 8oard of India:0 ($) Khere an in*uiry in relation to the affairs of a recognised stoc) exchange or the affairs of any of its (e(bers in relation to the stoc) exchange has been underta)en under sub+section (3),(a) e'ery director, (anager, secretary or other officer of such stoc) exchange3 (b) e'ery (e(ber of such stoc) exchange3 (c) if the (e(ber of the stoc) exchange is a fir(, e'ery partner, (anager, secretary or other officer of the fir(3 and (d) e'ery other person or body of persons who has had dealings in the course of business with any of the persons (entioned in clauses ( a), (b) and (c), whether directly or indirectly3
Substituted for ;by the Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3% Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 33 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3" Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
3
shall be bound to produce before the authority (a)ing the in*uiry all such boo)s of account, and other docu(ents in his custody or power relating to or ha'ing a bearing on the subDect+(atter of such in*uiry and also to furnish the authorities within such ti(e as (ay be specified with any such state(ent or infor(ation relating thereto as (ay be re*uired of hi(0 )8A *%l re$ort! to ,e f*r i!he- to Ce tr%l Go+er .e t ,> !to'6 e#'h% (e!. 7. 7'ery recognised stoc) exchange shall furnish the Central &o'ern(ent with a copy of the annual report, and such annual report shall contain such particulars as (ay be prescribed0 )754o/er of re'o( i!e- !to'6 e#'h% (e to .%6e r*le! re!tri'ti ( +oti ( ri(ht!, et'. 7A. ( ) A recognised stoc) exchange (ay (a)e rules or a(end any rules (ade by it
to pro'ide for all or any of the following (atters, na(ely ,(a) the restriction of 'oting rights to (e(bers only in respect of any (atter placed before the stoc) exchange at any (eeting3 (b) the regulation of 'oting rights in respect of any (atter placed before the stoc) exchange at any (eeting so that each (e(ber (ay be entitled to ha'e one 'ote only, irrespecti'e of his share of the paid+up e*uity capital of the stoc) exchange3 (c) the restriction on the right of a (e(ber to appoint another person as his proxy to attend and 'ote at a (eeting of the stoc) exchange3 (d) such incidental, conse*uential and supple(entary (atters as (ay be necessary to gi'e effect to any of the (atters specified in clauses ( a), (b) and (c)0 (%) Eo rules of a recognised stoc) exchange (ade or a(ended in relation to any (atter referred to in clauses (a) to (d) of sub+section ( ) shall ha'e effect until they ha'e been appro'ed by the Central &o'ern(ent 3> and published by that &o'ern(ent in the Cfficial &aFette and, in appro'ing the rules so (ade or a(ended, the Central &o'ern(ent (ay (a)e such (odifications therein as it thin)s fit, and on such publication, the rules as appro'ed by the Central &o'ern(ent shall be dee(ed to ha'e been 'alidly (ade, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#)0:
3# <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 3/ Inserted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec %, w0e0f0 0>+ %+ !"!0 3> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
4o/er of Ce tr%l Go+er .e t )9 to -ire't r*le! to ,e .%-e or to .%6e r*le!. :. ( ) Khere, after consultation with the go'erning bodies of stoc) exchanges generally or with the go'erning body of any stoc) exchange in particular, the Central &o'ern(ent is of opinion that it is necessary or expedient so to do, it (ay, by order in writing together with a state(ent of the reasons therefor, direct recognised stoc) exchanges generally or any recognised stoc) exchange in particular, as the case (ay be, to (a)e any rules or to a(end any rules already (ade in respect of all or any of the (atters specified in sub+section (%) of section 3 within a period of $04two (onths: fro( the date of the order0 (%) If any recognised stoc) exchange fails or neglects to co(ply with any order (ade under sub+section ( ) within the period specified therein, the Central &o'ern(ent (ay (a)e the rules for, or a(end the rules (ade by, the recognised stoc) exchange, either in the for( proposed in the order or with such (odifications thereof as (ay be agreed to between the stoc) exchange and the Central &o'ern(ent0 (3) Khere in pursuance of this section any rules ha'e been (ade or a(ended, the rules so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette or &aFettes of the State or States in which the principal office or offices of the recognised stoc) exchange or exchanges is or are situate, and, on the publication thereof in the &aFette of India, the rules so (ade or a(ended shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# (
of !"#), or in any other law for the ti(e being in force, ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange or stoc) exchanges, as the case (ay be0 315Cle%ri ( 'or$or%tio . :A. ( ) A recognised stoc) exchange (ay, with the prior appro'al of the Securities and 7xchange 8oard of India, transfer the duties and functions of a clearing house to a clearing corporation, being a co(pany incorporated under the Co(panies Act, !"# ( of !"#), for the purpose of(a) the periodical settle(ent of contracts and differences thereunder3 (b) the deli'ery of, and pay(ent for, securities3 (c) any other (atter incidental to, or connected with, such transfer0 (%) 7'ery clearing corporation shall, for the purpose of transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( ),
3! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 $0 Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec !, w0e0f0 %"+ 0 + !!"0 $ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0
(a)e bye+laws and sub(it the sa(e to the Securities and 7xchange 8oard of India for its appro'al0 (3) .he Securities and 7xchange 8oard of India (ay, on being satisfied that it is in the interest of the trade and also in the public interest to transfer the duties and functions of a clearing house to a clearing corporation, grant appro'al to the byelaws sub(itted to it under sub+section (%) and appro'e the transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( )0 ($) .he pro'isions of sections $, ", #, /, >, !, 0, and % shall, as far as (ay be, apply to a clearing corporation referred to in sub+section ( ) as they apply in relation to a recognised stoc) exchange0: 4o/er of re'o( i!e- !to'6 e#'h% (e! to .%6e ,>e0l%/!. 9. ( ) Any recognised stoc) exchange (ay, subDect to the pre'ious appro'al of the $%4Securities and 7xchange 8oard of India:, (a)e bye+laws for the regulation and control of contracts0 (%) In particular, and without preDudice to the generality of the foregoing power, such bye+laws (ay pro'ide for , (a) the opening and closing of (ar)ets and the regulation of the hours of trade3 (b) a clearing house for the periodical settle(ent of contracts and differences thereunder, the deli'ery of and pay(ent for securities, the passing on of deli'ery orders and the regulation and (aintenance of such clearing house3 (c) the sub(ission to the $34Securities and 7xchange 8oard of India: by the clearing house as soon as (ay be after each periodical settle(ent of all or any of the following particulars as the $$4Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, re*uire, na(ely ,(i) the total nu(ber of each category of security carried o'er fro( one settle(ent period to another3 (ii) the total nu(ber of each category of security, contracts in respect of
which ha'e been s*uared up during the course of each settle(ent period3 (iii) the total nu(ber of each category of security actually deli'ered at each clearing3
$% Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(d) the publication by the clearing house of all or any of the particulars sub(itted to the $"4Securities and 7xchange 8oard of India: under clause ( c) subDect to the directions, if any, issued by the $#4Securities and 7xchange 8oard of India: in this behalf3 (e) the regulation or prohibition of blan) transfers3 (f) the nu(ber and classes of contracts in respect of which settle(ents shall be (ade or differences paid through the clearing house3 (g) the regulation, or prohibition of b!dla# or carry+o'er facilities3 (h) the fixing, altering or postponing of days for settle(ents3 (i) the deter(ination and declaration of (ar)et rates, including the opening, closing highest and lowest rates for securities3 (j) the ter(s, conditions and incidents of contracts, including the prescription of (argin re*uire(ents, if any, and conditions relating thereto, and the for(s of contracts in writing3 (k) the regulation of the entering into, (a)ing, perfor(ance, recession and ter(ination, of contracts, including contracts between (e(bers or between a (e(ber and his constituent or between a (e(ber and a person who is not a (e(ber, and the conse*uences of default or insol'ency on the part of a seller or buyer or inter(ediary, the conse*uences of a breach or o(ission by a seller or buyer, and the responsibility of (e(bers who are not parties to such contracts3 (l) the regulation of taravani business including the placing of li(itations thereon3 (") the listing of securities on the stoc) exchange, the inclusion of any security for the purpose of dealings and the suspension or withdrawal of any such securities, and the suspension or prohibition of trading in any specified securities3 (n) the (ethod and procedure for the settle(ent of clai(s or disputes, including settle(ent by arbitration3 ($) the le'y and reco'ery of fees, fines and penalties3 (%) the regulation of the course of business between parties to contracts in any capacity3 (+) the fixing of a scale of bro)erage and other charges3 (r) the (a)ing, co(paring, settling and closing of bargains3 (#) the e(ergencies in trade which (ay arise, whether as a result of pool or syndicated operations or cornering or otherwise, and the exercise of powers in
$" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%,
Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $# Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
such e(ergencies, including the power to fix (axi(u( and (ini(u( prices for securities3 (t) the regulation of dealings by (e(bers for their own account3 (!) the separation of the functions of Dobbers and bro)ers3 (v) the li(itations on the 'olu(e of trade done by any indi'idual (e(ber in exceptional circu(stances3 (.) the obligation of (e(bers to supply such infor(ation or explanation and to produce such docu(ents relating to the business as the go'erning body (ay re*uire0 (3) .he bye+laws (ade under this section (ay(a) specify the bye+laws the contra'ention of which shall (a)e a contract entered into otherwise than in accordance with the bye+laws 'oid under sub+section ( ) of section $3 (b) pro'ide that the contra'ention of any of the bye+laws shall render the (e(ber concerned liable to one or (ore of the following punish(ents, na(ely ,(i) fine, (ii) expulsion fro( (e(bership, (iii) suspension fro( (e(bership for a specified period, (iv) any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney0 ($) Any bye+laws (ade under this section shall be subDect to such conditions in regard to pre'ious publication as (ay be prescribed, and, when appro'ed by the $/4Securities and 7xchange 8oard of India:, shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and shall ha'e effect as fro( the date of its publication in the &aFette of India , 4ro+i-e- that if the $>4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+law should be (ade i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0
$/ Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $> Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4o/er of 395Se'*ritie! % - E#'h% (e ;o%r- of I -i%< to .%6e or %.e - ,>e0l%/! of re'o( i!e- !to'6 e#'h% (e!. 1=. ( ) .he "04Securities and 7xchange 8oard of India: (ay, either on a re*uest in writing recei'ed by it in this behalf fro( the go'erning body of a recognised stoc) exchange or on its own (otion, if it is satisfied after consultation with the go'erning body of the stoc) exchange that it is necessary or expedient so to do and after recording its reasons for so doing, (a)e bye+laws for all or any of the (atters specified in section ! or a(end any bye+laws (ade by such stoc) exchange under that section0
(%) Khere in pursuance of this section any bye+laws ha'e been (ade or a(ended the bye+laws so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and on the publication thereof in the &aFette of India, the bye+laws so (ade or a(ended shall ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange concerned0 (3) Eotwithstanding anything contained in this section, where the go'erning body of a recognised stoc) exchange obDects to any bye+laws (ade or a(ended under this section by the " 4Securities and 7xchange 8oard of India: on its own (otion, it (ay, within "%4two (onths: of the publication thereof in the &aFette of India under subsection (%), apply to the "34Securities and 7xchange 8oard of India: for re'ision thereof, and the "$4Securities and 7xchange 8oard of India: (ay, after gi'ing an opportunity to the go'erning body of the stoc) exchange to be heard in the (atter, re'ise the bye+laws so (ade or a(ended, anywhere any bye+laws so (ade or a(ended are re'ised as a result of any action ta)en under this sub+section, the byelaws so re'ised shall be published and shall beco(e effecti'e as pro'ided in subsection (%)0 ($) .he (a)ing or the a(end(ent or re'ision of any bye+laws under this section shall in all cases be subDect to the condition of pre'ious publication ,
$! Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "0 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 " Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "% Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec %0, w0e0f0 %"+ 0 + !!"0 "3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4ro+i-e- that if the ""4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+laws should be (ade, a(ended or re'ised i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0 4o/er of Ce tr%l Go+er .e t 58 to !*$er!e-e (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e. 11. ( ) Kithout preDudice to any other powers 'ested in the Central &o'ern(ent under this Act, where the Central &o'ern(ent is of opinion that the go'erning body of any recognised stoc) exchange should be superseded, then, notwithstanding anything contained in any other law for the ti(e being in force, in the Central &o'ern(ent (ay ser'e on the go'erning body a written notice that the Central &o'ern(ent is considering the supersession of the go'erning body for the reasons specified in the notice and after gi'ing an opportunity to the go'erning body to be
heard in the (atter, it (ay, by notification in the Cfficial &aFette, declare the go'erning body of such stoc) exchange to be superseded, and (ay appoint any person or persons to exercise and perfor( all the powers and duties of the go'erning body, and, where (ore persons than one are appointed, (ay appoint one of such persons to be the chair(an and another to be the 'ice+chair(an thereof0 (%) Cn the publication of a notification in the Cfficial &aFette under sub+section ( ), the following conse*uences shall ensue, na(ely,(a) the (e(bers of the go'erning body which has been superseded shall, as fro( the date of the notification of supersession, cease to hold office as such (e(bers3 (b) the person or persons appointed under sub+section ( ) (ay exercise and perfor( all the powers and duties of the go'erning body which has been superseded3 (c) all such property of the recognised stoc) exchange as the person or persons appointed under sub+section ( ) (ay, by order in writing, specify in this behalf as being necessary for the purpose of enabling hi( or the( to carry on the business of the stoc) exchange, shall 'est in such person or persons0 (3) Eotwithstanding anything to the contrary contained in any law or the rules or bye+laws of the recognised stoc) exchange the go'erning body of which is superseded under sub+section ( ), the person or persons appointed under that subsection shall hold office for such period as (ay be specified in the notification published under that sub+section and the Central &o'ern(ent (ay fro( ti(e to ti(e, by li)e notification, 'ary such period0
"" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "# <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0
($) .he Central &o'ern(ent (ay at any ti(e before the deter(ination of the period of office of any person or persons appointed under this section call upon the recognised stoc) exchange to re+constitute the go'erning body in accordance with its rules and on such re+constitution all the property of the recognised stoc) exchange which has 'ested in, or was in the possession of, the person or persons appointed under sub+section ( ), shall re+'est or 'est, as the case (ay be, in the go'erning body so re+constituted , 4ro+i-e- that until a go'erning body is so re+constituted, the person or persons appointed under sub+section ( ) shall continue to exercise and perfor( their powers and duties0 4o/er57 to !*!$e - ,*!i e!! of re'o( i!e- !to'6 e#'h% (e!. 1". If in the opinion of the Central &o'ern(ent an e(ergency has arisen and for the purpose of (eeting the e(ergency the Central &o'ern(ent considers it expedient so to do, it (ay, by notification in the Cfficial &aFette, for reasons to be set out therein, direct a recognised stoc) exchange to suspend such of its business for such period not exceeding se'en days and subDect to such conditions as (ay be specified in the notification, and, if, in the opinion of the Central &o'ern(ent, the interest of
the trade or the public interest re*uires that the period should be extended, (ay, by li)e notification extend the said period fro( ti(e to ti(e , 4ro+i-e- that where the period of suspension is to be extended beyond the first period, no notification extending the period of suspension shall be issued unless the go'erning body of the ">4recognised stoc) exchange: has been gi'en an opportunity of being heard in the (atter0 "!54o/er to i!!*e -ire'tio !. 1"A. If, after (a)ing or causing to be (ade an in*uiry, the Securities and 7xchange 8oard of India is satisfied that it is necessary(a) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (b) to pre'ent the affairs of any recognised stoc) exchange or clearing corporation, or such other agency or person, pro'iding trading or clearing or settle(ent facility in respect of securities, being conducted in a (anner detri(ental to the interests of in'estors or securities (ar)et3 or (c) to secure the proper (anage(ent of any such stoc) exchange or clearing corporation or agency or person, referred to in clause ( b),
"/ <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 "> Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 "! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0
it (ay issue such directions,(i) to any stoc) exchange or clearing corporation or agency or person referred to in clause (b) or any person or class of persons associated with the securities (ar)et3 or (ii) to any co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 8=5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< /<410A/1 A45 <81:<4 :4 (/A0:1:( Co tr%'t! i otifie- %re%! ille(%l i 'ert%i 'ir'*.!t% 'e!. 1). If the Central &o'ern(ent# is satisfied, ha'ing regard to the nature or the 'olu(e of transactions in securities in any #%4State or States or area: that it is necessary so to do, it (ay, by notification in the Cfficial &aFette, declared this section to apply to such #34State or States or area:, and thereupon e'ery contract in such #$4State or States or area: which is entered into after the date of the notification otherwise than #"4between (e(bers of a recognised stoc) exchange or recognised stoc) exchanges: in such ##4State or States or area: or through or with such (e(ber shall be illegal ,
#0 I #
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 #% Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #3 Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #$ Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$ for ;between (e(bers of a recognised stoc) exchange; & ## Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0
#/54ro+i-e-
that any contract entered into between (e(bers of two or (ore recognised stoc) exchanges in such State or States or area, shall(i) be subDect to such ter(s and conditions as (ay be stipulated by the respecti'e stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India3 (ii) re*uire prior per(ission fro( the respecti'e stoc) exchanges if so stipulated by the stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India0: #>4A--itio %l tr%-i ( floor. 1)A. A stoc) exchange (ay establish additional trading floor with the prior appro'al of the Securities and 7xchange 8oard of India in accordance with the ter(s and conditions stipulated by the said 8oard0 ()%lanati$n , 6or the purposes of this section, 1additional trading floor2 (eans a trading ring or trading facility offered by a recognised stoc) exchange outside its area of operation to enable the in'estors to buy and sell securities through such trading floor under the regulatory fra(ewor) of that stoc) exchange0: Co tr%'t! i otifie- %re%! to ,e +oi- i 'ert%i 'ir'*.!t% 'e!. 13. ( ) Any contract entered into in any State or area specified in the notification under section 3 which is in contra'ention of any of the bye+laws specified in that behalf under clause (a) of sub+section (3) of section ! shall be 'oid , (i) as respects the rights of any (e(ber of the recognised stoc) exchange who has entered into such contract in contra'ention of any such bye+law, and also (ii) as respects the rights of any other person who has )nowingly participated in the transaction entailing such contra'ention0 (%) Eothing in sub+section ( ) shall be construed to affect the right of any person other than a (e(ber of the recognised stoc) exchange to enforce any such contract or to reco'er any su( under or in respect of such contract if such person had no )nowledge that the transaction was in contra'ention of any of the bye+laws specified in clause (a) of sub+section (3) of section !0 @e.,er! .%> ot %'t %! $ri 'i$%l! i 'ert%i 'ir'*.!t% 'e!. 15. Eo (e(ber of a recognised stoc) exchange shall in respect of any securities enter into any contract as a principal with any person other than a (e(ber of a recognised stoc) exchange, unless he has secured the consent or authority of such
#/ Inserted #> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (A(end(ent) Act, !!", Sec % , w0e0f0 %"+0 + !!"0
person and discloses in the note, (e(orandu( or agree(ent of sale or purchase that he is acting as a principal , 4ro+i-e- that where the (e(ber has secured the consent or authority of such person otherwise than in writing he shall secure written confir(ation by such person or such consent or authority within three days fro( the date of the contract , 4ro+i-e- f*rther that no such written consent or authority of such person shall be necessary for closing out any outstanding contract entered into by such person in accordance with the bye+laws, if the (e(ber discloses in the note, (e(orandu( or agree(ent of sale or purchase in respect of such closing out that he is acting as a principal0 4o/er89 to $rohi,it 'o tr%'t! i 'ert%i '%!e!. 18. ( ) If the Central &o'ern(ent is of opinion that it is necessary to pre'ent undesirable speculation in specified securities in any State or area, it (ay, by notification in the Cfficial &aFette, declare that no person in the State or area specified in the notification shall, sa'e with the per(ission of the Central &o'ern(ent, enter into any contract for the sale or purchase of any security specified in the notification except to the extent and in the (anner, if any, specified therein0 (%) All contracts in contra'ention of the pro'isions of sub+section ( ) entered into after the date of notification issued thereunder shall be illegal0 Li'e !i ( of -e%ler! i !e'*ritie! i 'ert%i %re%!. 17. ( ) SubDect to the pro'isions of sub+section (3) and to the other pro'isions contained in this Act, no person shall carry on or purport to carry on, whether on his own behalf or on behalf of any other person, the business of dealing in securities in any State or area to which section 3 has not been declared to apply and to which the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, declare this section to apply, except under the authority of a /04licence granted by the Securities and 7xchange 8oard of India: in this behalf0 (%) Eo notification under sub+section ( ) shall be issued with respect to any State or area unless the Central &o'ern(ent is satisfied, ha'ing regard to the (anner in which securities are being dealt with in such State or area, that it is desirable or
#! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 <owers are exercisable by R8I also 'ide &o'ern(ent of India Eotification Eo0 >3 (7), 9ated 0 +03+%000 in relation to any contracts in go'ern(ent securities, (oney (ar)et securities etc0 /0 Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% for ;licence granted by the Central &o'ern(ent;0
expedient in the interest of the trade or in the public interest that such dealings should be regulated by a syste( of licensing0 (3) .he restrictions i(posed by sub+section ( ) in relation to dealings in securities shall not apply to the doing of anything by or on behalf of a (e(ber of any recognised stoc) exchange0
7154*,li'
i!!*e % - li!ti ( of !e'*ritie! referre- to i !*,0'l%*!e ( ie) of 'l%*!e (h)
of !e'tio ". 17A. ( ) Kithout preDudice to the pro'isions contained in this Act or any other law for the ti(e being in force, no securities of the nature referred to in sub+clause (ie) of clause (h) of section % shall be offered to the public or listed on any recognised stoc) exchange unless the issuer fulfils such eligibility criteria and co(plies with such other re*uire(ents as (ay be specified by regulations (ade by the Securities and 7xchange 8oard of India0 (%) 7'ery issuer referred to in sub+clause (ie) of clause (h) of section % intending to offer the certificates or instru(ents referred therein to the public shall (a)e an application, before issuing the offer docu(ent to the public, to one or (ore recognised stoc) exchanges for per(ission for such certificates or instru(ents to be listed on the stoc) exchange or each such stoc) exchange0 (3) Khere the per(ission applied for under sub+section (%) for listing has not been granted or refused by the recognised stoc) exchanges or any of the(, the issuer shall forthwith repay all (oneys, if any, recei'ed fro( applicants in pursuance of the offer docu(ent, and if any such (oney is not repaid within eight days after the issuer beco(es liable to repay it, the issuer and e'ery director or trustee thereof, as the case (ay be, who is in default shall, on and fro( the expiry of the eighth day, be Dointly and se'erally liable to repay that (oney with interest at the rate of fifteen per cent per annu(0 7xplanation0-In rec)oning the eighth day after another day, any inter'ening day which is a public holiday under the Eegotiable Instru(ents Act, >> (%# of >> ), shall be disregarded, and if the eighth day (as so rec)oned) is itself such a public holiday, there shall for the said purposes be substituted the first day thereafter which is not a holiday0 ($) All the pro'isions of this Act relating to listing of securities of a public co(pany on a recognised stoc) exchange shall, (utatis (utandis, apply to the listing of the securities of the nature referred to in sub+clause (ie) of clause (h) of section % by the issuer, being a special purpose distinct entity0 <
Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec 3, w0e0f0 %>+0"+ %00/0
/
E#'l*!io of !$ot -eli+er> 'o tr%'t! fro. !e'tio ! 1), 13, 15 % - 17. 1:. ( ) Eothing contained in sections 3, $, " and / shall apply to spot deli'ery contracts0 (%) Eotwithstanding anything contained in sub+section ( ), if the Central &o'ern(ent/% is of opinion that in the interest of the trade or in the public interest it is expedient to regulate and control the business of dealing in spot deli'ery contracts also in any State or area (whether section 3 has been declared to apply to that State or area or not), it (ay, by notification in the Cfficial &aFette, declare that the pro'isions of section / shall also apply to such State or area in respect of spot deli'ery contracts generally or in respect of spot deli'ery contracts for the sale or purchase of such securities as (ay be specified in the notification, and (ay also specify the (anner in which, and the extent to which, the pro'isions of that section
shall so apply0 /34Co tr%'t! i -eri+%ti+e. 1:A. Eotwithstanding anything contained in any other law for the ti(e being in force, contracts in deri'ati'e shall be legal and 'alid if such contracts are(a) traded on a recognised stoc) exchange3 (b) settled on the clearing house of the recognised stoc) exchange, in accordance with the rules and bye+laws of such stoc) exchange0: Sto'6 e#'h% (e! other th% re'o( i!e- !to'6 e#'h% (e! $rohi,ite-. 19. ( ) Eo person shall, except with the per(ission of the Central &o'ern(ent, organise or assist in organising or be a (e(ber of any stoc) exchange (other than a recognised stoc) exchange) for the purpose of assisting in, entering into or perfor(ing any contracts in securities0 (%) .his section shall co(e into force in any State or area on such date as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 4rohi,itio of o$tio ! i !e'*ritie!. "=. 734GGGGG:
/% <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 /3 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec 3, w0e0f0 %%+%+%0000 /$ C(itted by the Securities =aws (A(end(ent) Act, !!", Sec %%, w0e0f0 %"+0 + !!"0 <rior to o(ission, section %0 read as under , 1%00 8r$hibiti$n $f $%ti$n# in #ec!ritie#&-( ) Eotwithstanding anything contained in this Act or in any other law for the ti(e being in force, all options in securities entered into after the co((ence(ent of this Act shall be illegal0
9: 1:4= <E (/A0:1:( 754GGG: /#4Co -itio ! for li!ti (. "1. Khere securities are listed on the application of any person in any recognised stoc) exchange, such person shall co(ply with the conditions of the listing agree(ent with that stoc) exchange&: 775Deli!ti ( of !e'*ritie!. "1A. ( ) A recognised stoc) exchange (ay delist the securities, after recording the reasons therefor, fro( any recognised stoc) exchange on any of the ground or grounds as (ay be prescribed under this Act , 4ro+i-e- that the securities of a co(pany shall not be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) A listed co(pany or an aggrie'ed in'estor (ay file an appeal before the Securities Appellate .ribunal against the decision of the recognised stoc) exchange delisting the securities within fifteen days fro( the date of the decision of the recognised stoc) exchange delisting the securities and the pro'isions of sections %%8 to %%7 of this Act, shall apply, as far as (ay be, to such appeals , 4ro+i-e- that the Securities Appellate .ribunal (ay, if it is satisfied that the co(pany was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding one (onth0:
(%) Any option in securities which has been entered into before such co((ence(ent and which re(ains to be perfor(ed, whether wholly or in part, after such co((ence(ent shall, to that
extent, beco(e 'oid02 /" Kords 18O <H8=IC CC?<AEI7S2 o(itted by the Securities =aws (A(end(ent) Act, !!!, Sec $, w0e0f0 %%+0%+%0000 /# Substituted by the Securities =aws (A(end(ent) Act, !!", Sec 33, w0e0f0 %"+0 + !!" . <rior to substitution, section % read as under , 1% 0 8$.er t$ c$"%el li#ting $f #ec!ritie# bF %!blic c$"%anie#& -Eotwithstanding anything contained in any other law for the ti(e being in force, if the Securities and 7xchange 8oard of India is of opinion, ha'ing regard to the nature of the securities issued by any public co(pany as defined in the Co(panies Act, !"# ( of !"#), or to the dealings in the(, that it is necessary or expedient in the interest of the trade or in the public interest so to do, it (ay re*uire the co(pany, after gi'ing it an opportunity of being heard in the (atter, to co(ply with such re*uire(ents as (ay be prescribed with respect to the listing of its securities on any recognised stoc) exchange02 // Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec >, w0r0e0f0 %+ 0+%00$0
7:5Ri(ht
of %$$e%l %(%i !t ref*!%l of !to'6 e#'h% (e! to li!t !e'*ritie! of $*,li' 'o.$% ie!. 79"". Khere a recognised stoc) exchange acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any public co(pany >04or collecti'e in'est(ent sche(e:, the co(pany > 4or sche(e: shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( ) of section /3 of the Co(panies Act, !"# ( of !"#) (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Central &o'ern(ent (ay, on sufficient cause being shown, allow, appeal to the Central &o'ern(ent against such refusal, o(ission or failure, as the case (ay be, and thereupon the Central &o'ern(ent (ay, after gi'ing the stoc) exchange an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange, or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Central &o'ern(ent sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Central &o'ern(ent: , >%44ro+i-e- that no appeal shall be preferred against refusal, o(ission or failure, as the case (ay be, under this section on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!0: :)5Ri(ht of %$$e%l to Se'*ritie! A$$ell%te Tri,* %l %(%i !t ref*!%l of !to'6 e#'h% (e to li!t !e'*ritie! of $*,li' 'o.$% ie!.
/> Substituted
by .he Co(panies (A(end(ent) Act, !/$ (Act Eo0 $ of !/$), Sec $%, w0e0f0 0 + 0%+ !/"0 /! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the
&aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 >0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%00003 Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 > Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%0000 >% Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec $, w0e0f0 #+ %+ !!!0 >3 Sections %%A, %%8, %%C, %%9, %%7 and %%6 inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!!& 7arlier section %%A was inserted by .he
""A. ( ) Khere a recognised stoc) exchange, acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any co(pany, the co(pany shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( A) of section /3 of the Co(panies Act, !"# ( of !"#), (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Securities Appellate .ribunal (ay, on sufficient cause being shown, allow, appeal to the Securities Appellate .ribunal ha'ing Durisdiction in the (atter against such refusal, o(ission or failure, as the case (ay be, and thereupon the Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange, an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange3 or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Securities Appellate .ribunal sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Securities Appellate .ribunal0 (%) 7'ery appeal under sub+section ( ) shall be in such for( and be acco(panied by such fee as (ay be prescribed0 (3) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 ($) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: :354ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. "";. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of
Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec %, w0e0f0 /+ 0 + !>#, and o(itted by the 9epositories Act, !!#, Sec 30 and Sch0, <t0III, w0r0e0f0 %0+0!+ !!"0 >$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath 3 (b) re*uiring the disco'ery and production of docu(ents 3 (c) recei'ing e'idence on affida'its 3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents 3 (e) re'iewing its decisions 3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte ; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0: :55Ri(ht to le(%l re$re!e t%tio . ""C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of sub+section ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of subsection ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of
>" Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
!"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, vakil or an attorney of any Iigh Court, and includes a pleader in practice0: :85Li.it%tio . ""D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0: :75Ci+il 'o*rt ot to h%+e G*ri!-i'tio .
""E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0: ::5A$$e%l to S*$re.e Co*rt. ""2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order, 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: 8(4A91:( A45 80</(5A0( 4e %ltie!. "). ( ) Any person who+
># Inserted >/ Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & >> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec !, w0r0e0f0 %+ 0+%00$0 7arlier section %%6 as inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", read as under,+ 1""2. A$$e%l to Di(h Co*rt.+Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order , 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
(a) without reasonable excuse (the burden of pro'ing which shall be on hi() fails to co(ply with any re*uisition (ade under sub+section ($) of section #3 or (b) enters into any contract in contra'ention of any of the pro'isions contained in section 3 or section #3 or (c) contra'enes the pro'isions contained in >!5section / or section /A<, or section !3 or 90 4(d) enters into any contract in deri'ati'e in contra'ention of section >A or the rules (ade under section 303: (e) owns or )eeps a place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act and )nowingly per(its such place to be used for such purposes3 or (f) (anages, controls, or assists in )eeping any place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act or at which contracts are recorded or adDusted or rights or liabilities arising out of contracts are adDusted, regulated or enforced in any (anner whatsoe'er3 or (g) not being a (e(ber of a recognised stoc) exchange or his agent authorised as
such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section / wilfully represents to or induces any person to belie'e that contracts can be entered into or perfor(ed under this Act through hi(3 or (h) not being a (e(ber of a recognised stoc) exchange or his agent authorised as such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section /, can'asses, ad'ertises or touts in any (anner either for hi(self or on behalf of any other persons for any business connected with contracts in contra'ention of any of the pro'isions of this Act3 or (i) Doins, gathers or assists in gathering at any place other than the place of business specified in the bye+laws of a recognised stoc) exchange any person or persons for (a)ing bids or offers or for entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act3 ! 4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which
>! Inserted
by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec $, w0e0f0 %>+0"+ %00/ for ;section /;0 !0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec #, w0e0f0 %%+0%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 ! Substituted for 1shall, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0
(ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: (%) Any person who enters into any contract in contra'ention of the pro'isions contained in section " !%4or who fails to co(ply with the pro'isions of !34section % or section % A: or with the orders of: or section %% !$4or with the orders of the Securities Appellate .ribunal: !"4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 9854e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. ")A. Any person, who is re*uired under this Act or any rules (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to a recognised stoc) exchange, fails to furnish the sa(e within the ti(e specified therefor in the listing agree(ent or conditions or bye+laws of the recognised stoc) exchange, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to (aintain boo)s of account or records, as per the listing agree(ent or conditions, or bye+laws of a recognised stoc) exchange, fails to (aintain the sa(e, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0:
9754e
%lt> for f%il*re ,> % > $er!o to e ter i to % %(ree.e t /ith 'lie t!. ");. If any person, who is re*uired under this Act or any bye+laws of a recognised stoc) exchange (ade thereunder, to enter into an agree(ent with his client, fails to enter into such an agree(ent, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0:
!% Substituted
for 1or who fails to co(ply with the orders of the Securities and 7xchange 8oard of India under section % 2 by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 <rior to !!", ;Securities and 7xchange 8oard of India under section % or Central &o'ern(ent under section %%; were substituted for ;Central &o'ern(ent under section % or section %%; vide .he Schedule, <art II of Securities and 7xchange 8oard of India Act, !!%, w0e0f0 30+0 + !!%0 !3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec #, w0e0f0 #+ %+ !!!0 !" Substituted for 1shall, on con'iction, be punishable with fine which (ay extend to one thousand rupees2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !# Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$ & !/ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$0
9:54e
%lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. ")C. If any stoc) bro)er or sub+bro)er or a co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, after ha'ing been called upon by the Securities and 7xchange 8oard of India or a recognised stoc) exchange in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e stipulated by the Securities and 7xchange 8oard of India or a recognised stoc) exchange, he or it shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 9954e %lt> for f%il*re to !e(re(%te !e'*ritie! or .o e>! of 'lie t or 'lie t!. ")D. If any person, who is registered under section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%) as a stoc) bro)er or sub+bro)er, fails to segregate securities or (oneys of the client or clients or uses the securities or (oneys of a client or clients for self or for any other client, he shall be liable to a penalty not exceeding one crore rupees0: 1==54e %lt> for f%il*re to 'o.$l> /ith $ro+i!io of li!ti ( 'o -itio ! or -eli!ti ( 'o -itio ! or (ro* -!. ")E. If a co(pany or any person (anaging collecti'e in'est(ent sche(e or (utual fund, fails to co(ply with the listing conditions or delisting conditions or grounds or co((its a breach thereof, it or he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0: 1=154e %lt> for e#'e!! -e.%teri%li!%tio or -eli+er> of * li!te- !e'*ritie!. ")2. If any issuer de(aterialises securities (ore than the issued securities of a co(pany or deli'ers in the stoc) exchanges the securities which are not listed in the recognised stoc) exchange or deli'ers securities where no trading per(ission has been gi'en by the recognised stoc) exchange, he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0:
!> Inserted !! Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 00 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0
%+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0
1="54e
%lt> for f%il*re to f*r i!h $erio-i'%l ret*r !, et'. ")G. If a recognised stoc) exchange fails or neglects to furnish periodical returns to the Securities and 7xchange 8oard of India or fails or neglects to (a)e or a(end its rules or bye+laws as directed by the Securities and 7xchange 8oard of India or fails to co(ply with directions issued by the Securities and 7xchange 8oard of India, such recognised stoc) exchange shall be liable to a penalty which (ay extend to twenty+fi'e crore rupees0: 1=)54e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. ")D. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or articles or bye+ laws or the regulations of the recognised stoc) exchange or directions issued by the Securities and 7xchange 8oard of India for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 1=354o/er to %-G*-i'%te. ")0I. ( ) 6or the purpose of adDudging under sections %3A, %38, %3C, %39, %37, %36, %3& and %3I, the Securities and 7xchange 8oard of India shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0: 1=552%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. ")E. Khile adDudging the *uantu( of penalty under section %3+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3
0% Inserted 03 Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec 0$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0" Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 , w0r0e0f0 , w0r0e0f0 , w0r0e0f0
%+ %+ %+ %+
0+%00$0 0+%00$0 0+%00$0 0+%00$0
(b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0: 1=85 Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!.
")EA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 1"A or !e'tio ")0I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%tefor the %lle(e- -ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re %! !$e'ifie,> the ;o%r- * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")L %(%i !t % > or-er $%!!e- ,> the ;o%ror %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 1=75Re'o+er> of %.o* t!. ")E;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 1"A or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H
0# I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30"==7) 0/ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %!
.%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - ThirS'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")L of thi! A't. (") The re'o+er> offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ())Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 0'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 1"A, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1),(") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 1=:5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. ")F. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: 1=95A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")L. ( ) Any person aggrie'ed, by the order or decision of the recogniFed stoc) exchange or the adDudicating officer or any order (ade by the Securities and 7xchange 8oard of India under section $8, (ay prefer an appeal before the Securities Appellate .ribunal and the pro'isions of sections %%8, %%C, %%9 and %%7 of this Act, shall apply, as far as (ay be, to such appeals0 (%) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order or decision is recei'ed by the
appellant and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 (3) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 ($) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the parties to the appeal and to the concerned adDudicating officer0 (") .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: 11=5Offe 'e!. ")@. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws
0> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 0! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
(ade thereunder, for which no punish(ent is pro'ided elsewhere in this Act, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 1115Co.$o!itio of 'ert%i offe 'e!. ")N. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0: 11"54o/er to (r% t i..* it>. ")0O. ( ) .he Central &o'ern(ent (ay, on reco((endation by the Securities and 7xchange 8oard of India, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation,
4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that the reco((endation of the Securities and 7xchange 8oard of India under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under
% Inserted
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
this Act to which such person would ha'e been liable, had not such i((unity been granted0: Offe 'e! ,> 'o.$% ie!. "3. ( ) Khere an offence has been co((itted by a co(pany, e'ery person who, at the ti(e when the offence was co((itted, was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence, and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any gross negligence on the part of any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer of the co(pany, shall also be dee(ed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n0-6or the purpose of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals, and 34(b) 1director2, in relation to(i) a fir(, (eans a partner in the fir(3 (ii) any association of persons or a body of indi'iduals, (eans any (e(ber controlling the affairs thereof0: $4(3) .he pro'isions of this section shall be in addition to, and not in derogation of, the pro'isions of section %%A0: Cert%i offe 'e! to ,e 'o( iL%,le. "5. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, >!> (" of >!>) ", any offence punishable under #4GGG: section %3 shall be dee(ed to be a
cogniFable offence within the (eaning of that Code0
3 Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec /, w0e0f0 %%+%+%0000 <rior to its substitution, sub+clause (b) read as under, N(b) 1director2, in relation to a fir(, (eans a partner in the fir(0J $ Inserted by .he Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec 3, w0e0f0 /+0 + !>#0
iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central &o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or a recognised stoc) exchange or by any person0 >5(")********< 1195E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
ee now the Code of Cri(inal <rocedure, !/3 (% of !/$) 1sub+section ( ) of2 o(itted by the Securities =aws (A(end(ent) Act, %00$, w0e0f0 %+ 0+%00$0 / Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$ & <rior to its substitution section %# read as under ,1%#0 G!ri#dicti$n t$ trF $ffence# !nder thi# Act&-Eo court inferior to that of a presidency (agistrate or a (agistrate of the first class shall ta)e cogniFance of or try any offence punishable under this Act02 > O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JEo court inferior to that of a Court of Session shall try any offence punishable under this Act .K ! I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
" # Kords
/4Co(
A$$e%l % - Re+i!io . "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt. "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel% $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io !. "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< 6: /(99A4(<A Title to -i+i-e -!. "7. ( ) It shall be lawful for the holder of any security whose na(e appears on the boo)s of the co(pany issuing the said security to recei'e and retain any di'idend declared by the co(pany in respect thereof for any year, notwithstanding that the said security has already been transferred by hi( for consideration, unless the transferee who clai(s the di'idend fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the co(pany with the co(pany for being registered in his na(e within fifteen days of the date on which the di'idend beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the di'idend3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security and other docu(ents relating to
the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a co(pany to pay any di'idend which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the co(pany as the holder of the security in respect of which the di'idend has beco(e due3 or (b) the right of the transferee of any security to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security in the na(e of the transferee0 %04Ri(ht to re'ei+e i 'o.e fro. 'olle'ti+e i +e!t.e t !'he.e. "7A. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, whose na(e appears on the boo)s of the collecti'e in'est(ent sche(e issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e declared by the collecti'e in'est(ent sche(e in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e fro( the transfer or has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the collecti'e in'est(ent sche(e with the collecti'e in'est(ent sche(e for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec >, w0e0f0 %%+%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the collecti'e in'est(ent sche(e3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a collecti'e in'est(ent sche(e to pay any inco(e fro( units or other instru(ents issued by the collecti'e in'est(ent sche(e which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the collecti'e in'est(ent sche(e as the holder of the security being
units or other instru(ents issued by the collecti'e in'est(ent sche(e in respect of which the inco(e in respect of units or other instru(ents issued by the collecti'e sche(e has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security being units or other instru(ents issued by the collecti'e in'est(ent sche(e in the na(e of the transferee0: % 4Ri(ht to re'ei+e i 'o.e fro. .*t*%l f* -. "7;. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by any (utual fund, whose na(e appears on the boo)s of the (utual fund issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the (utual fund declared by the (utual fund in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the (utual fund, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the (utual fund fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the (utual fund with the (utual fund for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the (utual fund beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the (utual fund3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the (utual fund, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a (utual fund to pay any inco(e fro( units or other instru(ents issued by the (utual fund which has beco(e due to any person, whose na(e is for the ti(e being registered in the boo)s of the (utual fund as the holder of the security being units or other instru(ents issued by the (utual fund in respect of which the inco(e in respect of units or other instru(ents issued by the (utual fund has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the (utual fund, to enforce against the transferor or any other person, his rights, if any, in relation to the transfer in any case where the (utual fund has refused to register the transfer of the security being units or other instru(ents issued by the (utual fund in the na(e of the transferee0:
1""5A't
ot to %$$l> i 'ert%i '%!e!. ":. ( ) .he pro'isions of this Act shall not apply to(a) the &o'ern(ent, the Reser'e 8an) of India, any local authority or any corporation set up by a special law or any person who has effected any transaction with or through the agency of any such authority as is referred to in this clause3 (b) any con'ertible bond or share warrant or any option or right in relation thereto, in so far as it entitles the person in whose fa'our any of the foregoing has been issued to obtain at his option fro( the co(pany or other body corporate, issuing the sa(e or fro( any of its shareholders or duly appointed agentsJ shares of the co(pany or other body corporate, whether by con'ersion of the bond or warrant or otherwise, on the basis of the price agreed upon when the sa(e was issued0 (%) Kithout preDudice to the pro'isions contained in sub+section ( ), if the Central &o'ern(ent %3 is satisfied that in the interests of trade and co((erce or the
%% Substituted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec 3, w0e0f0 0>+ %+ !"!0
econo(ic de'elop(ent of the country it is necessary or expedient so to do, it (ay, by notification in the Cfficial &aFette, specify any class of contracts as contracts to which this Act or any pro'ision contained therein shall not apply, and also the conditions, li(itations or restrictions, if any, subDect to which it shall not so apply0: 4rote'tio of %'tio t%6e i (oo- f%ith. "9. Eo suit, prosecution or other legal proceeding whatsoe'er shall lie in any court against the go'erning body or any (e(ber, office bearer or ser'ant of any recognised stoc) exchange or against any person or persons appointed under subsection ( ) of section for anything which is in good faith done or intended to be done in pursuance of this Act or of any rules or bye+laws (ade thereunder0 %$44o/er to -ele(%te. "9A. .he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers (except the power under section 30) exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India or the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)0: 4o/er to .%6e r*le!. )=. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for the purpose of carrying into effect the obDects of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for,(a) the (anner in which applications (ay be (ade, the particulars which they should contain and the le'y of a fee in respect of such applications 3 (b) the (anner in which any in*uiry for the purpose of recognising any stoc) exchange (ay be (ade, the conditions which (ay be i(posed for the grant of such recognition, including conditions as to the ad(ission of (e(bers if the
%3 <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %$ Inserted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% and Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec !, w0e0f0 %%+0%+%0000 <rior to its substitution, section %!A read as under , 1%!A0 8$.er t$ delegate&*.he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India02
stoc) exchange concerned is to be the only recognised stoc) exchange in the area3 and the for( in which such recognition shall be granted3 (c) the particulars which should be contained in the periodical returns and annual reports to be furnished to the Central &o'ern(ent3 (d) the docu(ents which should be (aintained and preser'ed under section # and the periods for which they should be preser'ed3 (e) the (anner in which any in*uiry by the go'erning body of a stoc) exchange shall be (ade under section #3 (f) the (anner in which the bye+laws to be (ade or a(ended under this Act shall before being so (ade or a(ended be published for criticis(3 (g) the (anner in which applications (ay be (ade by dealers in securities for licences under section /, the fee payable in respect thereof and the period of such licences, the conditions subDect to which licences (ay be granted, including conditions relating to the for(s which (ay be used in (a)ing contracts, the docu(ents to be (aintained by licensed dealers and the furnishing of periodical infor(ation to such authority as (ay be specified and the re'ocation of licences for breach of conditions3 %"4(h) the re*uire(ents which shall be co(plied with(A) by public co(panies for the purpose of getting their securities listed on any stoc) exchange3 (B) by collecti'e in'est(ent sche(e for the purpose of getting their units listed on any stoc) exchange3: %#4GGG: %/4(ha) the grounds on which the securities of a co(pany (ay be delisted fro( any recognised stoc) exchange under sub+section ( ) of section % A3 (hb) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under sub+section (%) of section % A and the fees payable in respect of such appeal3 (hc) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3
%" Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec 0, w0e0f0 %%+0%+%0000 <rior to its substitution, clause (h) read as under , 1(h) the re*uire(ents which shall be co(plied with by public co(panies for the purpose of getting their securities listed on any stoc) exchange32 %# .he word ;and; o(itted by .he Securities Contracts (Regulation) A(end(ent Act, !>", Sec $, w0e0f0 /+0 + !>#0 %/ Substituted for clause (ha) by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 7arlier clause (ha), as a(ended by the Securities =aws (A(end(ent) Act, !!!, read as
under ,1(ha) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3 and2
(hd) the (anner of in*uiry under sub+section ( ) of section %3+I3 (he) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3= and the fees payable in respect of such appeal3: (i) any other (atter which is to be or (ay be prescribed0 %>4(3) 7'ery rule (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule0: 1"954o/er of Se'*ritie! % - E#'h% (e ;o%r- of I -i% to .%6e re(*l%tio !. )1. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 305(%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,%> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 <rior to its substitution, sub+section (3), as a(ended by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!", read as under , 1(3) 7'ery rule (ade under this section shall, as soon as (ay be, after its publication in the Cfficial &aFette, be laid before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e session aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule02 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0 7arlier it was repealed by the Repealing and A(ending Act, !#0, Sec % and 6irst Sch0 w0e0f0 %>+ %+ !#00 30 Substituted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec ", w0e0f0 %>+ 0"+%00/0 <rior to substitution it read as under , 1(%) In particular and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for the (anner in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section02
(a) the (anner, in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of
publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section3 (b) the eligibility criteria and other re*uire(ents under section /A0 < (3) 7'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the regulation or both Iouses agree that the regulation should not be (ade, the regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that regulation0:
DE4OSITORIES ACT, 1998 SECTIONS /@A81(0 : 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS ). Certificate of co((ence(ent of business by depositories /@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS 3. Agree(ent between depository and participant 5. Ser'ices of depository 8. Surrender of certificate of security 7. Registration of transfer of securities with depositories :. Cptions to recei'e security certificate or hold securities with depository 9. Securities in depositories to be in fungible for( 1=. Rights of depositories and beneficial owner 11. Register of beneficial owner 1". <ledge or hypothecation of securities held in a depository 1). 6urnishing of infor(ation and records by depository and issuer 13. Cption to opt out in respect of any security 15. Act > of >! to apply to depositories 18. 9epositories to inde(nify loss in certain cases 17. Rights and obligations of depositories, etc0 /@A81(0 :: EN9UIRM AND INS4ECTION 1:. <ower of 8oard to call for infor(ation and en*uiry 19. <ower of 8oard to gi'e directions in certain cases 19A. <enalty for failure to furnish infor(ation, return, etc0 19;. <enalty for failure to enter into an agree(ent 19C. <enalty for failure to redress in'estorsJ grie'ances
19D. <enalty for delay in de(aterialisation or issue of certificate of securities 19E. <enalty for failure to reconcile records 192. <enalty for failure to co(ply with directions issued by 8oard under section ! of the Act 19G. <enalty for contra'ention where no separate penalty has been pro'ided 19D. <ower to adDudicate 190I. 6actors to be ta)en into account by adDudicating officer 190IA. Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (! 190I;. Re'o+er> of %.o* t! 190E. Crediting su(s realised by way of penalties to Consolidated 6und of India /@A81(0 D 4ENALTM "=. Cffences "1. Cffences by co(panies /@A81(0 D: @ISCELLANEOUS "". CogniFance of offences by courts ""A. Co(position of certain offences "";. <ower to grant i((unity ""C. E!t%,li!h.e t of S$e'i%l Co*rt! ""D. Offe 'e! tri%,le ,> S$e'i%l Co*rt! ""E. A$$e%l % - re+i!io ""2. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""G. Tr% !itio %l 4ro+i!io ! "). Appeals ")A. Appeal to Securities Appellate .ribunal ")A. Appeal to Securities Appellate .ribunal ");. <rocedure and powers of Securities Appellate .ribunal ")C. Right to =egal Representation ")D. =i(itation ")E. Ci'il court not to ha'e Durisdiction ")2. Appeal to Supre(e Court "3. <ower of Central &o'ern(ent to (a)e rules "5. <ower of 8oard to (a)e regulations "8. <ower of depositories to (a)e bye+laws "7. Rules and regulations to be laid before <arlia(ent ":. Application of other laws not barred "9. Re(o'al of difficulties )=. A(end(ents to certain enact(ents )1. Repeal and sa'ing /@(5A9( A?7E9?7E. .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0: DE4OSITORIES ACT, 1998 5"" O2 1998< 51=th A*(*!t, 1998< An Act to provide $or reg lation o$ depositories in sec rities and $or matters connected there%ith or incidental thereto& B( it enacted bF 8arlia"ent in the E$rtF7#eventh ;ear $f the 0e%!blic $f :ndia a# f$ll$.# ,*
/@A81(0 : 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the 9epositories Act, !!#0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the %0th day of Septe(ber, !!"0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 1beneficial owner2 (eans a person whose na(e is recorded as such with a depository3 (b) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 3 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (c) 1bye+laws2 (eans bye+laws (ade by a depository under section %#3 (d) 1Co(pany =aw 8oard2 (eans the 8oard of Co(pany =aw Ad(inistration constituted under section 07 of the Co(panies Act, !"# ( of !"#)3 (e) 1depository2 (eans a co(pany for(ed and registered under the Co(panies Act, !"# ( of !"#), and which has been granted a certificate of registration under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (f) 1issuer2 (eans any person (a)ing an issue of securities3 (g) 1participant2 (eans a person registered as such under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (h) 1prescribed2 (eans prescribed by rules (ade under this Act3 (i) 1record2 includes the records (aintained in the for( of boo)s or stored in a co(puter or in such other for( as (ay be deter(ined by regulations3 (j) 1registered owner2 (eans a depository whose na(e is entered as such in the register of the issuer3 (k) 1regulations2 (eans the regulations (ade by the 8oard3 4(ka) 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (l) 1security2 (eans such security as (ay be specified by the 8oard3 (") 1ser'ice2 (eans any ser'ice connected with recording of allot(ent of securities or transfer of ownership of securities in the record of a depository0 (%) Kords and expressions used herein and not defined but defined in the Co(panies Act, !"# ( of !"#), or the Securities Contracts (Regulation) Act, !"# ($% of !"#), or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), shall ha'e the (eanings respecti'ely assigned to the( in those Acts0 /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS Certifi'%te of 'o..e 'e.e t of ,*!i e!! ,> -e$o!itorie!. ). ( ) Eo depository shall act as a depository unless it obtains a certificate of co((ence(ent of business fro( the 8oard0 (%) A certificate granted under sub+section ( ) shall be in such for( as (ay be specified by the regulations0 (3) .he 8oard shall not grant a certificate under sub+section ( ) unless it is satisfied that the depository has ade*uate syste(s and safeguards to pre'ent (anipulation of records and transactions , 4ro+i-e- that no certificate shall be refused under this section unless the depository concerned has been gi'en a reasonable opportunity of being heard0
Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
/@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS A(ree.e t ,et/ee -e$o!itor> % - $%rti'i$% t. 3. ( ) A depository shall enter into an agree(ent with one or (ore participants as its agent0 (%) 7'ery agree(ent under sub+section ( ) shall be in such for( as (ay be specified by the bye+laws0 Ser+i'e! of -e$o!itor>. 5. Any person, through a participant, (ay enter into an agree(ent, in such for( as (ay be specified by the bye+laws, with any depository for a'ailing its ser'ices0 S*rre -er of 'ertifi'%te of !e'*rit>. 8. ( ) Any person who has entered into an agree(ent under section " shall surrender the certificate of security, for which he see)s to a'ail the ser'ices of a depository, to the issuer in such (anner as (ay be specified by the regulations0 (%) .he issuer, on receipt of certificate of security under sub+section ( ), shall cancel the certificate of security and substitute in its records the na(e of the depository as a registered owner in respect of that security and infor( the depository accordingly0 (3) A depository shall, on receipt of infor(ation under sub+section (%), enter the na(e of the person referred to in sub+section ( ) in its records, as the beneficial owner0 Re(i!tr%tio of tr% !fer of !e'*ritie! /ith -e$o!itor>. 7. ( ) 7'ery depository shall, on receipt of inti(ation fro( a participant, register the transfer of security in the na(e of the transferee0 (%) If a beneficial owner or a transferee of any security see)s to ha'e custody of such security the depository shall infor( the issuer accordingly0 O$tio ! to re'ei+e !e'*rit> 'ertifi'%te or hol- !e'*ritie! /ith -e$o!itor>. :. ( ) 7'ery person subscribing to securities offered by an issuer shall ha'e the option either to recei'e the security certificates or hold securities with a depository0 (%) Khere a person opts to hold a security with a depository, the issuer shall inti(ate such depository the details of allot(ent of the security, and on receipt of such infor(ation the depository shall enter in its records the na(e of the allottee as the beneficial owner of that security0 Se'*ritie! i -e$o!itorie! to ,e i f* (i,le for.. 9. ( ) All securities held by a depository shall be de(aterialised and shall be in a fungible for(0 %4(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#), shall apply to a depository in respect of securities held by it on behalf of the beneficial owners&: Ri(ht! of -e$o!itorie! % - ,e efi'i%l o/ er. 1=. ( ) Eotwithstanding anything contained in any other law for the ti(e being in force, a depository shall be dee(ed to be the registered owner for the purposes of effecting transfer of ownership of security on behalf of a beneficial owner0 (%) Sa'e as otherwise pro'ided in sub+section ( ), the depository as a registered owner shall not ha'e any 'oting rights or any other rights in respect of securities held by it0 (3) .he beneficial owner shall be entitled to all the rights and benefits and be subDected to all the liabilities in respect of his securities held by a depository0 Re(i!ter of ,e efi'i%l o/ er. 11. 7'ery depository shall (aintain a register and an index of beneficial owners in the
(anner pro'ided in sections "0, " and "% of the Co(panies Act, !"# ( of !"#)0 4le-(e or h>$othe'%tio of !e'*ritie! hel- i % -e$o!itor>. 1". ( ) SubDect to such regulations and bye+laws, as (ay be (ade in this behalf, a beneficial owner (ay with the pre'ious appro'al of the depository create a pledge or hypothecation in respect of a security owned by hi( through a depository0 (%) 7'ery beneficial owner shall gi'e inti(ation of such pledge or hypothecation to the depository and such depository shall thereupon (a)e entries in its records accordingly0 (3) Any entry in the records of a depository under sub+section (%) shall be e'idence of a pledge or hypothecation0 2*r i!hi ( of i for.%tio % - re'or-! ,> -e$o!itor> % - i!!*er. 1). ( ) 7'ery depository shall furnish to the issuer infor(ation about the transfer of securities in the na(e of beneficial owners at such inter'als and in such (anner as (ay be specified by the bye+laws0 (%) 7'ery issuer shall (a)e a'ailable to the depository copies of the rele'ant records in respect of securities held by such depository0 O$tio to o$t o*t i re!$e't of % > !e'*rit>.
% Substituted
by the 9epositories Related =aws (A(end(ent) Act, !!/, Sec %%, w0e0f0 "+0 + !!/0 <rior to its substitution sub+section (%) read as under , 1(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#) shall apply to the securities held by a depository on behalf of the beneficial owners02
13. ( ) If a beneficial owner see)s to opt out of a depository in respect of any security he shall infor( the depository accordingly0 (%) .he depository shall on receipt of inti(ation under sub+section ( ) (a)e appropriate entries in its records and shall infor( the issuer0 (3) 7'ery issuer shall, within thirty days of the receipt of inti(ation fro( the depository and on fulfil(ent of such conditions and on pay(ent of such fees as (ay be specified by the regulations, issue the certificate of securities to the beneficial owner or the transferee, as the case (ay be0 A't 1: of 1:91 to %$$l> to -e$o!itorie!. 15. .he 8an)ersJ 8oo)s 7'idence Act, >! shall apply in relation to a depository as if it were a ban) as defined in section % of that Act0 De$o!itorie! to i -e. if> lo!! i 'ert%i '%!e!. 18. ( ) Kithout preDudice to the pro'isions of any other law for the ti(e being in force, any loss caused to the beneficial owner due to the negligence of the depository or the participant, the depository shall inde(nify such beneficial owner0 (%) Khere the loss due to the negligence of the participant under sub+section ( ) is inde(nified by the depository, the depository shall ha'e the right to reco'er the sa(e fro( such participant0 Ri(ht! % - o,li(%tio ! of -e$o!itorie!, et'. 17. ( ) SubDect to the pro'isions of this Act, the rights and obligations of the depositories, participants and the issuers whose securities are dealt with by a depository shall be specified by the regulations0 (%) .he eligibility criteria for ad(ission of securities into the depository shall be specified by the regulations0 /@A81(0 :D EN9UIRM AND INS4ECTION 4o/er of ;o%r- to '%ll for i for.%tio % - e 7*ir>. 1:. ( ) .he 8oard, on being satisfied that it is necessary in the public interest or in the interest of in'estors so to do, (ay, by order in writing,-
(a) call upon any issuer, depository, participant or beneficial owner to furnish in writing such infor(ation relating to the securities held in a depository as it (ay re*uire3 or (b) authorise any person to (a)e an en*uiry or inspection in relation to the affairs of the issuer, beneficial owner, depository or participant, who shall sub(it a report of such en*uiry or inspection to it within such period as (ay be specified in the order0 (%) 7'ery director, (anager, partner, secretary, officer or e(ployee of the depository or issuer or the participant or beneficial owner shall on de(and produce before the person (a)ing the en*uiry or inspection all infor(ation or such records and other docu(ents in his custody ha'ing a bearing on the subDect+(atter of such en*uiry or inspection0 4o/er of ;o%r- to (i+e -ire'tio ! i 'ert%i '%!e!. 19. Sa'e as pro'ided in this Act, if after (a)ing or causing to be (ade an en*uiry or inspection, the 8oard is satisfied that it is necessary(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any depository or participant being conducted in the (anner detri(ental to the interests of in'estors or securities (ar)et, it (ay issue such directions,(a) to any depository or participant or any person associated with the securities (ar)et3 or (b) to any issuer, as (ay be appropriate in the interest of in'estors or the securities (ar)et0 )5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< $44e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 19A. Any person, who is re*uired under this Act or any rules or regulations or bye+laws (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to the 8oard, fails to furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations or bye+laws, fails to file return or furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0
3I $ Inserted
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the Securities =aws (A(end(ent) Act, %00$, Sec0 /, w0r0e0f0 %+ 0+%00$0
4e %lt> for f%il*re to e ter i to % %(ree.e t. 19;. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and is re*uired under this Act or any rules or regulations (ade thereunder, to enter into an agree(ent, fails to enter into such agree(ent, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0
4e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 19C. If any depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such depository or participant or issuer or its agents or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for -el%> i -e.%teri%li!%tio or i!!*e of 'ertifi'%te of !e'*ritie!. 19D. If any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to de(aterialise or issue the certificate of securities on opting out of a depository by the in'estors, within the ti(e specified under this Act or regulations or bye+laws (ade thereunder or abets in delaying the process of de(aterialisation or issue the certificate of securities on opting out of a depository of securities, such issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to re'o 'ile re'or-!. 19E. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to reconcile the records of de(aterialised securities with all the securities issued by the issuer as specified in the regulations, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to 'o.$l> /ith -ire'tio ! i!!*e- ,> ;o%r- * -er !e'tio 19 of the A't. 192. If any person fails to co(ply with the directions issued by the 8oard under section !, within the ti(e specified by it, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 19G. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations or bye+laws (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0 4o/er to %-G*-i'%te. 19D. ( ) 6or the purpose of adDudging under sections !A, !8, !C, !9, !7, !6 and !&, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the
sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. 190I. Khile adDudging the *uantu( of penalty under section !I, the adDudicating officer shall ha'e due regard to the following factors, na(ely,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 55 Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (!. 190IA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 19, !e'tio 19D, %! the '%!e .%> ,e, .%> file % %$$li'%tio i /riti ( to the ;o%r$ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e-ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h
"I
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re !$e'ifie- ,> the ;o%r* -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")A %(%i !t % > or-er $%!!e- ,> the ;o%r- or the %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 85 Re'o+er> of %.o* t!. 190I;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 19 or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6
%''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hilor !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C!
#I
!erte- ,> The Se'*ritie! L%/! (A.e- .e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
.o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")A of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 19, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 19E. All su(s realiFed by way of penalties under this Act shall be credited to the Consolidated 6und of India0: /@A81(0 D 4ENALTM /4Offe 'e!. "=. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws (ade thereunder, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0
/ Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 >, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %0 read as under,1%00 <ffence#0- Khoe'er contran'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or any regulations or bye+laws (ade thereunder shall be punishable with i(prison(ent for a ter( which (ay extend to fi'e years, or with fine or with both02
(%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with
fine, which (ay extend to twenty+fi'e crore rupees, or with both0: Offe 'e! ,> 'o.$% ie!. "1. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n&-6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and (b) 1director2, in relation to a fir(, (eans a partner in the fir(0 /@A81(0 D: @ISCELLANEOUS >4Co( iL% 'e of offe 'e! ,> 'o*rt!. "". ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central
> Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 !, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %% read as under,1%%0 /$gniCance $f $ffence# bF c$!rt#&*( ) Eo Court shall ta)e cogniFance of any offence punishable under this Act or any regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the 8oard0 (%) Eo court inferior to that of a ?etropolitan ?agistrate or a Dudicial ?agistrate of the first class shall try any offence punishable under this Act02
&o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or by any person0 !5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < Co.$o!itio of 'ert%i offe 'e!. ""A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "";. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any
penalty under this Act with respect to the alleged 'iolation , 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity , 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0: 1=5 E!t%,li!h.e t of S$e'i%l Co*rt!. ""C. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>.
! <rior
to o(ission, Sub+section(%) read 1Eo court inferior to that of a Court of Session shall try any offence punishable under this Act02 0 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. ""D. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-. A$$e%l % - Re+i!io ""E. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""2. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197).
(") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erioof ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! ""G. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< A$$e%l!. "). ( ) Any person aggrie'ed by an order of the 8oard (ade 4before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!: under this Act, or the regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor , 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0 (3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed , 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 %4A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")A. ( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!, under this Act, or the regulations (ade thereunder, 34or by an order (ade by an adDudicating officer under this Act: (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 $5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 8oard is recei'ed by the person referred to in sub+section ( ) and it shall be in such for( and be acco(panied by such fee as (ay be prescribed ,
Substituted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 $, w0e0f0 #+ %+ !!! for ;an order of the 8oard (ade;0 % Sections %3A to %36 inserted by the Securities =aws (Second A(end(ent) Act, !!! , Sec0 ", w0e0f0 #+ %+ !!!& 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %0, w0r0e0f0 %+ 0+%00$0 $ 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JNo %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-e ,> the ;o%r- /ith the 'o !e t of the $%rtie!.K
4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0
($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 (") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. ");. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3 (e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte; (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 Ri(ht to le(%l re$re!e t%tio . ")C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or an attorney of any Iigh Court, and
includes a pleader in practice0 Li.it%tio . ")D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 Ci+il 'o*rt ot to h%+e G*ri!-i'tio . ")E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "4A$$e%l to S*$re.e Co*rt. ")2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order ,
" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 % , w0r0e0f0 %+ 0+%00$0 <rior to its substitution, Section %36, as inserted by Securities =aws (Second A(end(ent) Act, !!!, w0e0f0 #+ %+ !!!, read as under,1%360 A%%eal t$ @igh /$!rt&-Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0:: 4o/er of Ce tr%l Go+er .e t to .%6e r*le!. "3. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for carrying out the pro'isions of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,164(a) the (anner of in*uiry under sub+section ( ) of section !I3 (aa) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %33: (b) the for( in which an appeal (ay be preferred under sub+section (3) of section %3 and the fees payable in respect of such appeal 3 (c) the procedure for disposing of an appeal under sub+section ($) of section %33 /4(d) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3A and the fees payable in respect of such appeal0: 4o/er of ;o%r- to .%6e re(*l%tio !. "5. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the 8oard (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for(a) the for( in which record is to be (aintained under clause ( i) of sub+section ( ) of section %3 (b) the for( in which the certificate of co((ence(ent of business shall be issued under
sub+section (%) of section 33 (c) the (anner in which the certificate of security shall be surrendered under sub+section ( ) of section #3 (d) the (anner of creating a pledge or hypothecation in respect of security owned by a beneficial owner under sub+section ( ) of section %3 (e) the conditions and the fees payable with respect to the issue of certificate of securities under sub+section (3) of section $3
# Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %%, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (a) read as under,1(a) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %332 / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 #, w0e0f0 #+ %+ !!!0
(f) the rights and obligations of the depositories, participants and the issuers under subsection ( ) of section /3 (g) the eligibility criteria for ad(ission of securities into the depository under sub+section (%) of section /0 4o/er of -e$o!itorie! to .%6e ,>e0l%/!. "8. ( ) A depository shall, with the pre'ious appro'al of the 8oard, (a)e bye+laws consistent with the pro'isions of this Act and the regulations0 (%) In particular, and without preDudice to the generality of the foregoing power, such byelaws shall pro'ide for(a) the eligibility criteria for ad(ission and re(o'al of securities in the depository3 (b) the conditions subDect to which the securities shall be dealt with3 (c) the eligibility criteria for ad(ission of any person as a participant3 (d) the (anner and procedure for de(aterialisation of securities3 (e) the procedure for transactions within the depository3 (f) the (anner in which securities shall be dealt with or withdrawn fro( a depository3 (g) the procedure for ensuring safeguards to protect the interests of participants and beneficial owners3 (h) the conditions of ad(ission into and withdrawal fro( a participant by a beneficial owner3 (i) the procedure for con'eying infor(ation to the participants and beneficial owners on di'idend declaration, shareholder (eetings and other (atters of interest to the beneficial owners3 (j) the (anner of distribution of di'idends, interest and (onetary benefits recei'ed fro( the co(pany a(ong beneficial owners3 (k) the (anner of creating pledge or hypothecation in respect of securities held with a depository3 (l) inter #e rights and obligations a(ong the depository, issuer, participants, and beneficial owners3 (") the (anner and the periodicity of furnishing infor(ation to the 8oard, issuer and other persons3 (n) the procedure for resol'ing disputes in'ol'ing depository, issuer, co(pany or a beneficial owner3 ($) the procedure for proceeding against the participant co((itting breach of the regulations and pro'isions for suspension and expulsion of participants fro( the depository and cancellation of agree(ents entered with the depository3 (%) the internal control standards including procedure for auditing, re'iewing and (onitoring0
(3) Khere the 8oard considers it expedient so to do, it (ay, by order in writing, direct a depository to (a)e any bye+laws or to a(end or re'o)e any bye+laws already (ade within such period as it (ay specify in this behalf0 ($) If the depository fails or neglects to co(ply with such order within the specified period, the 8oard (ay (a)e the bye+laws or a(end or re'o)e the bye+laws (ade either in the for( specified in the order or with such (odifications thereof as the 8oard thin)s fit0 R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t. "7. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. ":. .he pro'isions of this Act shall be in addition to, and not in derogation of, any other law for the ti(e being in force relating to the holding and transfer of securities0 Re.o+%l of -iffi'*ltie!. "9. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as appear to it to be necessary or expedient for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of a period of two years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 A.e -.e t! to 'ert%i e %'t.e t!. )=. 40e%ealed bF 0e%ealing H A"ending Act' 20010: Re$e%l % - !%+i (. )1. ( ) .he 9epositories (.hird) Crdinance, !!# (Crd0 %> of !!#), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 /@(5A9( 4 ee section 30: A?7E9?7E.S .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0:
SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 SECTIONS !'APT"R I 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions !'APT"R II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA
). 7stablish(ent and incorporation of 8oard 3. ?anage(ent of the 8oard 5. .er( of office and conditions of ser'ice of Chair(an and (e(bers of the 8oard 8. Re(o'al of (e(ber fro( office 7. ?eetings 7A. ?e(ber not to participate in (eetings in certain cases :. Bacancies, etc0, not to in'alidate proceedings of 8oard 9. Cfficers and e(ployees of the 8oard !'APT"R III TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD 1=. .ransfer of assets, liabilities, etc0, of existing Securities and 7xchange 8oard to the 8oard !'APT"R IV 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 11. 6unctions of 8oard 11A. 8oard to regulate or prohibit issue of prospectus, offer docu(ent or ad'ertise(ent soliciting (oney for issue of securities 11AA. Collecti'e in'est(ent sche(e 11;. <ower to issue directions 11C. In'estigation 11D. Cease and desist proceedings !'APT"R V REGISTRATION CERTI2ICATE 1". Registration of stoc) bro)ers, sub+bro)ers, share transfer agents, etc0
%
!'APT"R VA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 1"A. <rohibition of (anipulati'e and decepti'e de'ices, insider trading and substantial ac*uisition of securities or control !'APT"R VI 2INANCE, ACCOUNTS AND AUDIT 1). &rants by the Central &o'ern(ent 13. 6und 15. Accounts and audit !'APT"R VIA 4ENALTIES AND ADEUDICATION 15A. <enalty for failure to furnish infor(ation, return, etc & 15;. <enalty for failure by any person to enter into agree(ent with clients 15C. <enalty for failure to redress in'estorsJ grie'ances 15D. <enalty for certain defaults in case of (utual funds 15E. <enalty for failure to obser'e rules and regulations by an asset (anage(ent co(pany 152. <enalty for default in case of stoc) bro)ers 15G. <enalty for insider trading 15D. <enalty for non+disclosure of ac*uisition of shares and ta)eo'ers 15DA. <enalty for fraudulent and unfair trade practices 15D;. <enalty for contra'ention where no separate penalty has been pro'ided
150I. <ower to adDudicate 15E. 6actors to be ta)en into account by the AdDudicating Cfficer 15EA. Crediting su(s realised by way of penalties to Consolidated 6und of India 15E;. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! !'APT"R VIB ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL 15F. 7stablish(ent of Securities Appellate .ribunals 15L. Co(position of Securities Appellate .ribunal 15@. Qualification for appoint(ent as <residing Cfficer or ?e(ber of Securities Appellate .ribunal
3
15N. .enure of office of <residing Cfficer and other (e(bers of Securities Appellate .ribunal 150O. Salary and allowances and other ter(s and conditions of ser'ice of <residing Cfficers 154. 6illing up of 'acancies 159. Resignation and re(o'al 15R. Crders constituting Appellate .ribunal to be final and not to in'alidate its proceedings 15S. Staff of the Securities Appellate .ribunal 15T. Appeal to the Securities Appellate .ribunal 15U. <rocedure and powers of the Securities Appellate .ribunal 15I. Right to legal representation 15?. =i(itation 15A. <residing Cfficer, (e(bers and staff of Securities Appellate .ribunals to be public ser'ants 15M. Ci'il Court not to ha'e Durisdiction 15N. Appeal to Supre(e Court !'APT"R VII @ISCELLANEOUS 18. <ower of Central &o'ern(ent to issue directions 17. <ower of Central &o'ern(ent to supersede the 8oard 1:. Returns and reports 19. 9elegation "=. Appeals "=A. 8ar of Durisdiction "1. Sa'ings "". ?e(bers, officers and e(ployees of the 8oard to be public ser'ants "). <rotection of action ta)en in good faith "3. Cffences "3A. Co(position of certain offences "3;. <ower to grant i((unity "5. 7xe(ption fro( tax on wealth and inco(e "8. CogniFance of offences by Courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! "7. Cffences by co(panies
":. 4C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!":
$
":A. Re'o+er> of %.o* t! "9. <ower to (a)e rules )=. <ower to (a)e regulations )1. Rules and regulations to be laid before <arlia(ent )". Application of other laws not barred )). 4Repealed by Repealing R A(ending Act, %00 : )3. <ower to re(o'e difficulties )5. Repeal and sa'ing .I7 SCI79H=7 4Repealed by Repealing R A(ending Act, %00 : SECURITIES AND EACDANGE ;OARD O2 INDIA ACT, 199" 515 O2 199"< 53th A$ril, 199"< A A't to $ro+i-e for the e!t%,li!h.e t of % ;o%r- to $rote't the i tere!t! of i +e!tor! i !e'*ritie! % - to $ro.ote the -e+elo$.e t of, % - to re(*l%te, the !e'*ritie! .%r6et % - for .%tter! 'o e'te- there/ith or i 'i-e t%l thereto B( it enacted bF 8arlia"ent in the E$rtF7third ;ear $f the 0e%!blic $f :ndia a# f$ll$.# , CDA4TER I 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities and 7xchange 8oard of India Act, !!%0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the 30th day of Manuary, !!%0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 33 (b) 1Chair(an2 (eans the Chair(an of the 8oard3 4(ba) 1collecti'e in'est(ent sche(e2 (eans any sche(e or arrange(ent which satisfies the conditions specified in section AA3: (c) 1existing Securities and 7xchange 8oard2 (eans the Securities and 7xchange 8oard of India constituted under the Resolution of the &o'ern(ent of India in the 9epart(ent of 7cono(ic Affairs Eo0 ($$) S7L>#, dated the %th day of April, !>>3 (d) 16und2 (eans the 6und constituted under section $3 (e) 1(e(ber2 (eans a (e(ber of the 8oard and includes the Chair(an3 (f) 1notification2 (eans a notification published in the Cfficial &aFette3 (g) 1prescribed2 (eans prescribed by rules (ade under this Act3
Inserted by the Securities =aws (A(end(ent) Act, !!!, w0e0f0 %%+%+%0000
"
(h) 1regulations2 (eans the regulations (ade by the 8oard under this Act3 4(ha) 1Reser'e 8an)2 (eans the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)3: (i) 1securities2 has the (eaning assigned to it in section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#)0 %4(%) Kords and expressions used and not defined in this Act but defined in the Securities Contracts (Regulation) Act, !"# ($% of !"#) 34or the 9epositories Act, !!#:, shall ha'e the (eanings respecti'ely assigned to the( in that Act:0 CDA4TER II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA E!t%,li!h.e t % - i 'or$or%tio of ;o%r-.
). ( ) Kith effect fro( such date as the Central &o'ern(ent (ay, by notification, appoint, there shall be established, for the purposes of this Act, a 8oard by the na(e of the Securities and 7xchange 8oard of India0 (%) .he 8oard shall be a body corporate by the na(e aforesaid, ha'ing perpetual succession and a co((on seal, with power subDect to the pro'isions of this Act, to ac*uire, hold and dispose of property, both (o'able and i((o'able, and to contract, and shall, by the said na(e, sue or be sued0 (3) .he head office of the 8oard shall be at 8o(bay0 ($) .he 8oard (ay establish offices at other places in India0 @% %(e.e t of the ;o%r-. 3. ( ) .he 8oard shall consist of the following (e(bers, na(ely,(a) a Chair(an3 (b) two (e(bers fro( a(ongst the officials of the $4?inistry: of the Central &o'ern(ent dealing with 6inance "4and ad(inistration of the Co(panies Act, !"# ( of !"#):3 (c) one (e(ber fro( a(ongst the officials of #4the Reser'e 8an):3 /4(d) fi'e other (e(bers of who( at least three shall be the whole+ti(e (e(bers,: to be appointed by the Central &o'ern(ent0
Inserted by the Securities =aws (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0 <rior to its substitution, sub+section (%) reads as under, 1(%) Kords and expressions used and not defined in this Act but defined in the Capital Issues (Control) Act, !$/ or the Securities Contracts Regulation Act, !"# shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts02 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 $ Substituted for 1?inistries2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1and law2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act !3$ (% of !3$)2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 / Substituted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, clause (d) read as, 1(d) two other (e(bers20
% Substituted
#
(%) .he general superintendence, direction and (anage(ent of the affairs of the 8oard shall 'est in a 8oard of (e(bers, which (ay exercise all powers and do all acts and things which (ay be exercised or done by the 8oard0 (3) Sa'e as otherwise deter(ined by regulations, the Chair(an shall also ha'e powers of general superintendence and direction of the affairs of the 8oard and (ay also exercise all powers and do all acts and things which (ay be exercised or done by that 8oard0 ($) .he Chair(an and (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be appointed by the Central &o'ern(ent and the (e(bers referred to in clauses ( b) and (c) of that sub+section shall be no(inated by the Central &o'ern(ent and the 4Reser'e 8an): respecti'ely0 (") .he Chair(an and the other (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be persons of ability, integrity and standing who ha'e shown capacity in dealing with proble(s relating to securities (ar)et or ha'e special )nowledge or experience of law, finance, econo(ics, accountancy, ad(inistration or in any other discipline which, in the opinion of the Central &o'ern(ent, shall be useful to the 8oard0 Ter. of offi'e % - 'o -itio ! of !er+i'e of Ch%ir.% % - .e.,er! of the ;o%r-. 5. ( ) .he ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers referred to in clause (d) of sub+section ( ) of section $ shall be such as (ay be prescribed0 (%) Eotwithstanding anything contained in sub+section ( ), the Central &o'ern(ent shall ha'e the right to ter(inate the ser'ices of the Chair(an or a (e(ber appointed under clause ( d) of
sub+section ( ) of section $, at any ti(e before the expiry of the period prescribed under subsection ( ), by gi'ing hi( notice of not less than three (onths in writing or three (onthsJ salary and allowances in lieu thereof, and the Chair(an or a (e(ber, as the case (ay be, shall also ha'e the right to relin*uish his office, at any ti(e before the expiry of the period prescribed under sub+section ( ), by gi'ing to the Central &o'ern(ent notice of not less than three (onths in writing0 Re.o+%l of .e.,er fro. offi'e. 8. %4G G G: .he Central &o'ern(ent shall re(o'e a (e(ber fro( office if he(a) is, or at any ti(e has been, adDudicated as insol'ent3 (b) is of unsound (ind and stands so declared by a co(petent court3 (c) has been con'icted of an offence which, in the opinion of the Central &o'ern(ent, in'ol'es a (oral turpitude3 (d) 34G G G: (e) has, in the opinion of the Central &o'ern(ent, so abused his position as to render his continuation in office detri(ental to the public interest , 4ro+i-e- that no (e(ber shall be re(o'ed under this clause unless he has been gi'en a reasonable opportunity of being heard in the (atter0
Substituted for 1Reser'e 8an) of India2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 )2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 C(itted, by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to o(ission clause (d) read read as, 1(d) is appointed as a director of a co(pany20
% 1(
/
@eeti (!. 7. ( ) .he 8oard shall (eet at such ti(es and places, and shall obser'e such rules of procedure in regard to the transaction of business at its (eetings (including *uoru( at such (eetings) as (ay be pro'ided by regulations0 (%) .he Chair(an or, if for any reason, he is unable to attend a (eeting of the 8oard, any other (e(ber chosen by the (e(bers present fro( a(ongst the(sel'es at the (eeting shall preside at the (eeting0 (3) All *uestions which co(e up before any (eeting of the 8oard shall be decided by a (aDority 'otes of the (e(bers present and 'oting, and, in the e'ent of an e*uality of 'otes, the Chair(an, or in his absence, the person presiding, shall ha'e a second or casting 'ote0 4@e.,er ot to $%rti'i$%te i .eeti (! i 'ert%i '%!e!. 7A. Any (e(ber, who is a director of a co(pany and who as such director has any direct or indirect pecuniary interest in any (atter co(ing up for consideration at a (eeting of the 8oard, shall, as soon as possible after rele'ant circu(stances ha'e co(e to his )nowledge, disclose the nature of his interest at such (eeting and such disclosure shall be recorded in the proceedings of the 8oard, and the (e(ber shall not ta)e any part in any deliberation or decision of the 8oard with respect to that (atter0: I%'% 'ie!, et'., ot to i +%li-%te $ro'ee-i (! of ;o%r-. :. Eo act or proceeding of the 8oard shall be in'alid (erely by reason of(a) any 'acancy in, or any defect in the constitution of, the 8oard3 or (b) any defect in the appoint(ent of a person acting as a (e(ber of the 8oard3 or (c) any irregularity in the procedure of the 8oard not affecting the (erits of the case0 Offi'er! % - e.$lo>ee! of the ;o%r-. 9. ( ) .he 8oard (ay appoint such other officers and e(ployees as it considers necessary for the efficient discharge of its functions under this Act0 (%) .he ter( and other conditions of ser'ice of officers and e(ployees of the 8oard appointed under sub+section ( ) shall be such as (ay be deter(ined by regulations0 CDA4TER III
TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD Tr% !fer of %!!et!, li%,ilitie!, et'., of e#i!ti ( Se'*ritie! % - E#'h% (e ;o%r- to the ;o%r-. 1=. ( ) Cn and fro( the date of establish(ent of the 8oard,(a) any reference to the existing Securities and 7xchange 8oard in any law other than this Act or in any contract or other instru(ent shall be dee(ed as a reference to the 8oard3 (b) all properties and assets, (o'able and i((o'able, of, or belonging to, the existing Securities and 7xchange 8oard, shall 'est in the 8oard3
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
>
(c) all rights and liabilities of the existing Securities and 7xchange 8oard shall be transferred to, and be the rights and liabilities of, the 8oard3 (d) without preDudice to the pro'isions of clause (c), all debts, obligations and liabilities incurred, all contracts entered into and all (atters and things engaged to be done by, with or for the existing Securities and 7xchange 8oard i((ediately before that date, for or in connection with the purpose of the said existing 8oard shall be dee(ed to ha'e been incurred, entered into, or engaged to be done by, with or for, the 8oard3 (e) all su(s of (oney due to the existing Securities and 7xchange 8oard i((ediately before that date shall be dee(ed to be due to the 8oard3 (f) all suits and other legal proceedings instituted or which could ha'e been instituted by or against the existing Securities and 7xchange 8oard i((ediately before that date (ay be continued or (ay be instituted by or against the 8oard3 and (g) e'ery e(ployee holding any office under the existing Securities and 7xchange 8oard i((ediately before that date shall hold his office in the 8oard by the sa(e tenure and upon the sa(e ter(s and conditions of ser'ice as respects re(uneration, lea'e, pro'ident fund, retire(ent and other ter(inal benefits as he would ha'e held such office if the 8oard had not been established and shall continue to do so as an e(ployee of the 8oard or until the expiry of the period of six (onths fro( that date if such e(ployee opts not to be the e(ployee of the 8oard within such period0 (%) Eotwithstanding anything contained in the Industrial 9isputes Act, !$/ ( $ of !$/), or in any other law for the ti(e being in force, absorption of any e(ployee by the 8oard in its regular ser'ice under this section shall not entitle such e(ployee to any co(pensation under that Act or other law and no such clai( shall be entertained by any court, tribunal or other authority0 CDA4TER II 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 2* 'tio ! of ;o%r-. 11. ( ) SubDect to the pro'isions of this Act, it shall be the duty of the 8oard to protect the interests of in'estors in securities and to pro(ote the de'elop(ent of, and to regulate the securities (ar)et, by such (easures as it thin)s fit0 (%) Kithout preDudice to the generality of the foregoing pro'isions, the (easures referred to therein (ay pro'ide for(a) regulating the business in stoc) exchanges and any other securities (ar)ets3 (b) registering and regulating the wor)ing of stoc) bro)ers, sub+bro)ers, share transfer agents, ban)ers to an issue, trustees of trust deeds, registrars to an issue, (erchant ban)ers, underwriters, portfolio (anagers, in'est(ent ad'isers and such other inter(ediaries who (ay be associated with securities (ar)ets in any (anner3 4(ba) registering and regulating the wor)ing of the depositories, %4participants:, custodians of securities, foreign institutional in'estors, credit rating agencies and such other inter(ediaries as the 8oard (ay, by notification, specify in this behalf3: (c) registering and regulating the wor)ing of 4'enture capital funds and collecti'e
in'est(ent sche(es:, including (utual funds3
% Inserted
Inserted by Securities =aws (A(end(ent) Act !!", w0r0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+!+ !!"0
!
(d) pro(oting and regulating self+regulatory organisations3 (e) prohibiting fraudulent and unfair trade practices relating to securities (ar)ets3 (f) pro(oting in'estorsJ education and training of inter(ediaries of securities (ar)ets3 (g) prohibiting insider trading in securities3 (h) regulating substantial ac*uisition of shares and ta)e o'er of co(panies3 (i) calling for infor(ation fro(, underta)ing inspection, conducting in*uiries and audits of the %4stoc) exchanges, (utual funds, other persons associated with the securities (ar)et:, inter(ediaries and self+regulatory organisations in the securities (ar)et3 34(ia) '%lli ( for i for.%tio % - re'or-! fro. % > $er!o i 'l*-i ( % > ,% 6 or % > other %*thorit> or ,o%r- or 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l or St%te A't /hi'h, i the o$i io of the ;o%r-, !h%ll ,e rele+% t to % > i +e!ti(%tio or i 7*ir> ,> the ;o%r- i re!$e't of % > tr% !%'tio i !e'*ritie! 3: $5(i,) '%lli ( for i for.%tio fro., or f*r i!hi ( i for.%tio to, other %*thoritie!, /hether i I -i% or o*t!i-e I -i%, h%+i ( f* 'tio ! !i.il%r to tho!e of the ;o%r-, i the .%tter! rel%ti ( to the $re+e tio or -ete'tio of +iol%tio ! i re!$e't of !e'*ritie! l%/!, !*,Ge't to the $ro+i!io ! of other l%/! for the ti.e ,ei ( i for'e i thi! re(%r-& 4ro+i-e- th%t the ;o%r-, for the $*r$o!e of f*r i!hi ( % > i for.%tio to % > %*thorit> o*t!i-e I -i%, .%> e ter i to % %rr% (e.e t or %(ree.e t or * -er!t% -i ( /ith !*'h %*thorit> /ith the $rior %$$ro+%l of the Ce tr%l Go+er .e tH< (j) perfor(ing such functions and exercising such powers under the pro'isions of "4G G G: the Securities Contracts (Regulation) Act, !"# ($% of !"#), as (ay be delegated to it by the Central &o'ern(ent3 (k) le'ying fees or other charges for carrying out the purposes of this section3 (l) conducting research for the abo'e purposes3 #4(la) calling fro( or furnishing to any such agencies, as (ay be specified by the 8oard, such infor(ation as (ay be considered necessary by it for the efficient discharge of its functions3: (") perfor(ing such other functions as (ay be prescribed0 /4(%A) Kithout preDudice to the pro'isions contained in sub+section (%), the 8oard (ay ta)e (easures to underta)e inspection of any boo), or register, or other docu(ent or record of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard
Substituted for 1collecti'e in'est(ent sche(es2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % Substituted for 1stoc) exchanges and2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 S*,!tit*te- for J'%lli ( for i for.%tio % - re'or- fro. % > ,% 6 or % > other %*thorit> or ,o%ror 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l, St%te or 4ro+i 'i%l A't i re!$e't of % > tr% !%'tio i !e'*ritie! /hi'h i! * -er i +e!ti(%tio or i 7*ir> ,> the ;o%r-K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). E%rlier Se'tio 11(")(i%) /%! i !erte- ,> the SE;I (A.e -.e t) A't, "==" /.e.f. "901=0"=="0 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. =80=)0 199:) " .he words 1the Capital Issues (Control) Act, !$/ (%! of !$/) and2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
0
has reasonable grounds to belie'e that such co(pany has been indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et0: 4(3) Eotwithstanding anything contained in any other law for the ti(e being in force while exercising the powers under %4clause (i) or clause (ia) of sub+section (%) or sub+ section (2A):, the 8oard shall ha'e the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(i) the disco'ery and production of boo)s of account and other docu(ents, at such place and such ti(e as (ay be specified by the 8oard3 (ii) su((oning and enforcing the attendance of persons and exa(ining the( on oath3 (iii) inspection of any boo)s, registers and other docu(ents of any person referred to in section %, at any place3: 34(iv) inspection of any boo), or register, or other docu(ent or record of the co(pany referred to in sub+section (%A)3 (v) issuing co((issions for the exa(ination of witnesses or docu(ents0: $4($) Kithout preDudice to the pro'isions contained in sub+sections ( ), (%), (%A) and (3) and section 8, the 8oard (ay, by an order, for reasons to be recorded in writing, in the interests of in'estors or securities (ar)et, ta)e any of the following (easures, either pending in'estigation or in*uiry or on co(pletion of such in'estigation or in*uiry, na(ely,(a) suspend the trading of any security in a recognised stoc) exchange3 (b) restrain persons fro( accessing the securities (ar)et and prohibit any person associated with securities (ar)et to buy, sell or deal in securities3 (c) suspend any office+bearer of any stoc) exchange or self+regulatory organisation fro( holding such position3 (d) i(pound and retain the proceeds or securities in respect of any transaction which is under in'estigation3 (e) attach, after passing of an order on an application (ade for appro'al by the Mudicial ?agistrate of the first class ha'ing Durisdiction, for a period not exceeding one (onth, one or (ore ban) account or accounts of any inter(ediary or any person associated with the securities (ar)et in any (anner in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder , 4ro+i-e- that only the ban) account or accounts or any transaction entered therein, so far as it relates to the proceeds actually in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder shall be allowed to be attached3 (f) direct any inter(ediary or any person associated with the securities (ar)et in any (anner not to dispose of or alienate an asset for(ing part of any transaction which is under in'estigation , 4ro+i-e- that the 8oard (ay, without preDudice to the pro'isions contained in sub+section (%) or sub+section (%A), ta)e any of the (easures specified in clause ( d) or clause (e) or clause (f), in respect of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard has reasonable grounds to belie'e that such co(pany has been
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1clause (i) of sub+section (%)2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 3 Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 $ Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
% Substituted
indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et , 4ro+i-e- f*rther that the 8oard shall, either before or after passing such orders, gi'e an
opportunity of hearing to such inter(ediaries or persons concerned0: 15(5) The %.o* t -i!(or(e-, $*r!*% t to % -ire'tio i!!*e- * -er !e'tio 11; or !e'tio 1"A of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 or !e'tio 19 of the De$o!itorie! A't, 1998, %! the '%!e .%> ,e, !h%ll ,e 're-ite- to the I +e!tor 4rote'tio % - E-*'%tio 2* e!t%,li!he- ,> the ;o%r- % - !*'h %.o* t !h%ll ,e *tiliLe- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< %4;o%r- to re(*l%te or $rohi,it i!!*e of $ro!$e't*!, offer -o'*.e t or %-+erti!e.e t !oli'iti ( .o e> for i!!*e of !e'*ritie!. 11A. ( ) Kithout preDudice to the pro'isions of the Co(panies Act, !"# ( of !"#), the 8oard (ay, for the protection of in'estors,(a) specify, by regulations(i) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (ii) the (anner in which such (atters shall be disclosed by the co(panies3 (b) by general or special orders(i) prohibit any co(pany fro( issuing prospectus, any offer docu(ent, or ad'ertise(ent soliciting (oney fro( the public for the issue of securities3 (ii) specify the conditions subDect to which the prospectus, such offer docu(ent or ad'ertise(ent, if not prohibited, (ay be issued0 (%) Kithout preDudice to the pro'isions of section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the 8oard (ay specify the re*uire(ents for listing and transfer of securities and other (atters incidental thereto0: 34Colle'ti+e i +e!t.e t !'he.e. 11AA. ( ) Any sche(e or arrange(ent which satisfies the conditions referred to in subsection (%) $5or !*,0!e'tio ("A)< shall be a collecti'e in'est(ent sche(e0 "44ro+i-e- th%t % > $ooli ( of f* -! * -er % > !'he.e or %rr% (e.e t, /hi'h i! ot re(i!tere- /ith the ;o%r- or i! ot 'o+ere- * -er !*,0!e'tio ()), i +ol+i ( %
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 7arlier S0 A was inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" for S0 A0 <rior to its substitution, S0 A read as under,+ 1 A0 ?atters to be disclosed by the co(panies0+ Kithout <reDudice to the <ro'isions of the Co(panies Act , !"# ( of !"#), the board (ay , for the protection of in'estors, specify, by regulations,+ (a) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (b) the (anner in which such (atters, shall be disclosed by the co(panies02 3 Inserted by S78I (A(end(ent) Act !!!, w0e0f0 %%+%+%0000 $I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% Substituted
%
'or$*! %.o* t of o e h* -re- 'rore r*$ee! or .ore !h%ll ,e -ee.e- to ,e % 'olle'ti+e i +e!t.e t !'he.e.< (%) Any sche(e or arrange(ent (ade or offered by any 5$er!o < under which,(i) the contributions, or pay(ents (ade by the in'estors, by whate'er na(e called, are pooled and utiliFed for the purposes of the sche(e or arrange(ent3 (ii) the contributions or pay(ents are (ade to such sche(e or arrange(ent by the in'estors with a 'iew to recei'e profits, inco(e, produce or property, whether (o'able or i((o'able, fro( such sche(e or arrange(ent3 (iii) the property, contribution or in'est(ent for(ing part of sche(e or arrange(ent, whether identifiable or not, is (anaged on behalf of the in'estors3
(iv) the in'estors do not ha'e day+to+day control o'er the (anage(ent and operation of the sche(e or arrange(ent0 "5("A)< A > !'he.e or %rr% (e.e t .%-e or offere- ,> % > $er!o !%ti!f>i ( the 'o -itio ! %! .%> ,e !$e'ifie- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< (3) Eotwithstanding anything contained in sub+section (%) 35or !*,0!e'tio ("A)<, any sche(e or arrange(ent(i) (ade or offered by a co+operati'e society registered under the Co+operati'e Societies Act, ! % (% of ! %) or a society being a society registered or dee(ed to be registered under any law relating to co+operati'e societies for the ti(e being in force in any State3 (ii) under which deposits are accepted by non+ban)ing financial co(panies as defined in clause (f) of section $"+I of the Reser'e 8an) of India Act, !3$ (% of !3$)3 (iii) being a contract of insurance to which the Insurance Act, !3> ($ of !3>), applies3 (iv) pro'iding for any Sche(e, <ension Sche(e or the Insurance Sche(e fra(ed under the 7(ployees <ro'ident 6und and ?iscellaneous <ro'isions Act, !"% ( ! of !"%)3 (v) under which deposits are accepted under section ">A of the Co(panies Act, !"# ( of !"#)3 (vi) under which deposits are accepted by a co(pany declared as a Eidhi or a (utual benefit society under section #%0A of the Co(panies Act, !"# ( of !"#)3 (vii) falling within the (eaning of Chit business as defined in clause ( d) of section % of the Chit 6und Act, !>% ($0 of !>%)3 (viii) under which contributions (ade are in the nature of subscription to a (utual fund3 35(i#) !*'h other !'he.e or %rr% (e.e t /hi'h the Ce tr%l Go+er .e t .%>, i 'o !*lt%tio /ith the ;o%r-, otif>H< shall not be a collecti'e in'est(ent sche(e0: "54o/er to i!!*e -ire'tio !. 11;. Sa'e as otherwise pro'ided in section , if after (a)ing or causing to be (ade an en*uiry, the 8oard is satisfied that it is necessary,S*,!tit*te- for J'o.$% >K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) 3I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
%I
3
(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any inter(ediary or other persons referred to in section % being conducted in a (anner detri(ental to the interest of in'estors or securities (ar)et3 or (iii) to secure the proper (anage(ent of any such inter(ediary or person, it (ay issue such directions,(a) to any person or class of persons referred to in section %, or associated with the securities (ar)et3 or (b) to any co(pany in respect of (atters specified in section A, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 15E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< %4I +e!ti(%tio . 11C. ( ) Khere the 8oard has reasonable ground to belie'e that-
(a) the transactions in securities are being dealt with in a (anner detri(ental to the in'estors or the securities (ar)et3 or (b) any inter(ediary or any person associated with the securities (ar)et has 'iolated any of the pro'isions of this Act or the rules or the regulations (ade or directions issued by the 8oard thereunder, it (ay, at any ti(e by order in writing, direct any person (hereafter in this section referred to as the In'estigating Authority) specified in the order to in'estigate the affairs of such inter(ediary or persons associated with the securities (ar)et and to report thereon to the 8oard0 (%) Kithout preDudice to the pro'isions of sections %3" to %$ of the Co(panies Act, !"# ( of !"#), it shall be the duty of e'ery (anager, (anaging director, officer and other e(ployee of the co(pany and e'ery inter(ediary referred to in section % or e'ery person associated with the securities (ar)et to preser'e and to produce to the In'estigating Authority or any person authorised by it in this behalf, all the boo)s, registers, other docu(ents and record of, or relating to, the co(pany or, as the case (ay be, of or relating to, the inter(ediary or such person, which are in their custody or power0 (3) .he In'estigating Authority (ay re*uire any inter(ediary or any person associated with securities (ar)et in any (anner to furnish such infor(ation to, or produce such boo)s, or registers, or other docu(ents, or record before hi( or any person authorised by it in this behalf as it (ay consider necessary if the furnishing of such infor(ation or the production of such boo)s, or registers, or other docu(ents, or record is rele'ant or necessary for the purposes of its in'estigation0 ($) .he In'estigating Authority (ay )eep in its custody any boo)s, registers, other docu(ents and record produced under sub+section (%) or sub+section (3) for six (onths and thereafter
% Inserted
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
$
shall return the sa(e to any inter(ediary or any person associated with securities (ar)et by who( or on whose behalf the boo)s, registers, other docu(ents and record are produced , 4ro+i-e- that the In'estigating Authority (ay call for any boo), register, other docu(ent and record if they are needed again , 4ro+i-e- f*rther that if the person on whose behalf the boo)s, registers, other docu(ents and record are produced re*uires certified copies of the boo)s, registers, other docu(ents and record produced before the In'estigating Authority, it shall gi'e certified copies of such boo)s, registers, other docu(ents and record to such person or on whose behalf the boo)s, registers, other docu(ents and record were produced0 (") Any person, directed to (a)e an in'estigation under sub+section ( ), (ay exa(ine on oath, any (anager, (anaging director, officer and other e(ployee of any inter(ediary or any person associated with securities (ar)et in any (anner, in relation to the affairs of his business and (ay ad(inister an oath accordingly and for that purpose (ay re*uire any of those persons to appear before it personally0 (#) If any person fails without reasonable cause or refuses(a) to produce to the In'estigating Authority or any person authorised by it in this behalf any boo), register, other docu(ent and record which is his duty under sub+section (%) or sub+section (3) to produce3 or (b) to furnish any infor(ation which is his duty under sub+section (3) to furnish3 or (c) to appear before the In'estigating Authority personally when re*uired to do so under sub+section (") or to answer any *uestion which is put to hi( by the In'estigating Authority in pursuance of that sub+section3 or (d) to sign the notes of any exa(ination referred to in sub+section (/), he shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with
fine, which (ay extend to one crore rupees, or with both, and also with a further fine which (ay extend to fi'e la)h rupees for e'ery day after the first during which the failure or refusal continues0 (/) Eotes of any exa(ination under sub+section (") shall be ta)en down in writing and shall be read o'er to, or by, and signed by, the person exa(ined, and (ay thereafter be used in e'idence against hi(0 4(:) ?here i the 'o*r!e of % i +e!ti(%tio , the I +e!ti(%ti ( A*thorit> h%! re%!o to ,elie+e th%t % > $er!o or e ter$ri!e, %! the '%!e .%> ,e, to /ho. % oti'e * -er !*,!e'tio ()) h%! ,ee i!!*e- or .i(ht ,e i!!*e-, 0 (%) h%! o.itte- or f%ile- to $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! %! re7*irei the oti'eH or (,) /o*l- ot $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! /hi'h !h%ll ,e *!ef*l for, or rele+% t to, the i +e!ti(%tio H or (') /o*l- -e!tro>, .*til%te, %lter, f%l!if> or !e'rete the i for.%tio or -o'*.e t! *!ef*l for, or rele+% t to, the i +e!ti(%tio ,
S*,!tit*te- for JKhere in the course of in'estigation, the In'estigating Authority has reasonable ground to belie'e that the boo)s, registers, other docu(ents and record of, or relating to, any inter(ediary or any person associated with securities (ar)et in any (anner, (ay be destroyed, (utilated, altered, falsified or secreted, the In'estigating Authority (ay (a)e an application to the Mudicial ?agistrate of the first class ha'ing Durisdiction for an order for the seiFure of such boo)s, registers, other docu(ents and record K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
"
the , the Ch%ir.% .%>, %fter ,ei ( !%ti!fie- th%t it i! e'e!!%r> to -o !o, %*thoriLe the I +e!ti(%ti ( A*thorit> or % > other offi'er of the ;o%r- (the offi'er !o %*thoriLe- i %ll '%!e! ,ei ( herei %fter referre- to %! the %*thori!e- offi'er), to0 (i) e ter % - !e%r'h, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft /here !*'h i for.%tio or -o'*.e t! %re e#$e'te- or ,elie+e- to ,e 6e$tH (ii) ,re%6 o$e the lo'6 of % > -oor, ,o#, lo'6er, !%fe, %l.ir%h or other re'e$t%'le for e#er'i!i ( the $o/er! 'o ferre- ,> !*,0'l%*!e (i), /here the 6e>! thereof %re ot %+%il%,leH (iii) !e%r'h % > $er!o /ho h%! (ot o*t of, or i! %,o*t to (et i to, or i! i , the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft, if the %*thoriLe- offi'er h%! re%!o to !*!$e't th%t !*'h $er!o h%! !e'rete- %,o*t hi! $er!o % > !*'h ,oo6! of %''o* t or other -o'*.e t!H (i+) re7*ire % > $er!o /ho i! fo* - to ,e i $o!!e!!io or 'o trol of % > ,oo6! of %''o* t or other -o'*.e t!, .%i t%i e- i the for. of ele'tro i' re'or-, to $ro+i-e the %*thori!e- offi'er the e'e!!%r> f%'ilit> to i !$e't !*'h ,oo6! of %''o* t or other -o'*.e t!. "#planation0 2or the $*r$o!e of thi! !*,0'l%*!e, the e#$re!!io Jele'tro i' re'or-K !h%ll h%+e the .e% i ( %!!i( e- to it i 'l%*!e (t) of !*,0!e'tio (1) of !e'tio " of the I for.%tio Te'h olo(> A't, "===. (+) !eiLe % > !*'h ,oo6! of %''o* t or other -o'*.e t! fo* - %! % re!*lt of !*'h !e%r'hH (+i) $l%'e .%r6! of i-e tifi'%tio o % > ,oo6! of %''o* t or other -o'*.e t! or .%6e or '%*!e to ,e .%-e e#tr%'t! or 'o$ie! therefro.H (+ii) re'or- o o%th the !t%te.e t of % > $er!o /ho i! fo* - to ,e i $o!!e!!io or i 'o trol of the i for.%tio or -o'*.e t! referre- to i !*,0'l%*!e! (i), (iii) % - (i+).< 4(9) The ;o%r- .%> .%6e re(*l%tio ! i rel%tio to % > !e%r'h or !eiL*re * -er thi! !e'tio H % - i $%rti'*l%r, /itho*t $reG*-i'e to the (e er%lit> of the fore(oi ( $o/er, !*'h re(*l%tio ! .%> $ro+i-e for the $ro'e-*re to ,e follo/e- ,> the %*thori!e- offi'er0
(%) for o,t%i i ( i (re!! i to % > ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft to ,e !e%r'he- /here free i (re!! thereto i! ot %+%il%,leH
1 S*,!tit*te-
,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) for the follo/i (& JAfter 'o !i-eri ( the %$$li'%tio % - he%ri ( the I +e!ti(%ti ( A*thorit>, if e'e!!%r>, the @%(i!tr%te .%>, ,> or-er, %*thori!e the I +e!ti(%ti ( A*thorit>O (a) to e ter, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the $l%'e or $l%'e! /here !*'h ,oo6!, re(i!ter!, other -o'*.e t! % - re'or- %re 6e$tH (b) to !e%r'h th%t $l%'e or tho!e $l%'e! i the .% er !$e'ifie- i the or-erH % (c) to !eiLe ,oo6!, re(i!ter!, other -o'*.e t! % - re'or-, it 'o !i-er! e'e!!%r> for the $*r$o!e! of the i +e!ti(%tio & 4ro+i-e- th%t the @%(i!tr%te !h%ll ot %*thori!e !eiL*re of ,oo6!, re(i!ter!, other -o'*.e t! % re'or-, of % > li!te- $*,li' 'o.$% > or % $*,li' 'o.$% > ( ot ,ei ( the i ter.e-i%rie! !$e'ifie* -er !e'tio 1") /hi'h i te -! to (et it! !e'*ritie! li!te- o % > re'o( i!e- !to'6 e#'h% (e * le!! !*'h 'o.$% > i -*l(e! i i !i-er tr%-i ( or .%r6et .% i$*l%tio .K
#
(,) for e !*ri ( !%fe '*!to-> of % > ,oo6! of %''o* t or other -o'*.e t! or %!!et! !eiLe-.< ( 0) .he In'estigating Authority shall )eep in its custody the boo)s, registers, other docu(ents and record seiFed under this section for such period not later than the conclusion of the in'estigation as it considers necessary and thereafter shall return the sa(e to the co(pany or the other body corporate, or, as the case (ay be, to the (anaging director or the (anager or any other person, fro( whose custody or power they were seiFed 5***<, 4ro+i-e- that the In'estigating Authority (ay, before returning such boo)s, registers, other docu(ents and record as aforesaid, place identification (ar)s on the( or any part thereof0 ( ) Sa'e as otherwise pro'ided in this section, e'ery search or seiFure (ade under this section shall be carried out in accordance with the pro'isions of the Code of Cri(inal <rocedure, !/3 (% of !/$) relating to searches or seiFures (ade under that Code0 Ce%!e % - -e!i!t $ro'ee-i (!. 11D. If the 8oard finds, after causing an in*uiry to be (ade, that any person has 'iolated, or is li)ely to 'iolate, any pro'isions of this Act, or any rules or regulations (ade thereunder, it (ay pass an order re*uiring such person to cease and desist fro( co((itting or causing such 'iolation, 4ro+i-e- that the 8oard shall not pass such order in respect of any listed public co(pany or a public co(pany (other than the inter(ediaries specified under section %) which intends to get its securities listed on any recognised stoc) exchange unless the 8oard has reasonable grounds to belie'e that such co(pany has indulged in insider trading or (ar)et (anipulation0: CDA4TER I REGISTRATION CERTI2ICATE Re(i!tr%tio of !to'6 ,ro6er!, !*,0,ro6er!, !h%re tr% !fer %(e t!, et'. 1". ( ) Eo stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et shall buy, sell or deal in securities except under, and in accordance with, the conditions of a certificate of registration obtained fro( the 8oard in accordance with the %4regulations: (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et i((ediately before the establish(ent of the 8oard for which no registration certificate was
necessary prior to such establish(ent, (ay continue to do so for a period of three (onths fro( such establish(ent or, if he has (ade an application for such registration within the said period of three (onths, till the disposal of such application,
The /or-! P% - i for. the @%(i!tr%te of !*'h ret*r P, o.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) % Substituted for 1rules2 by Securities =aw (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0
/
44ro+i-e- f*rther that any certificate of registration, obtained i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", shall be dee(ed to ha'e been obtained fro( the 8oard in accordance with the regulations pro'iding for such registration0 ( A) Eo depository, %4participant,: custodian of securities, foreign institutional in'estor, credit rating agency, or any other inter(ediary associated with the securities (ar)et as the 8oard (ay by notification in this behalf specify, shall buy or sell or deal in securities except under and in accordance with the conditions of a certificate of registration obtained fro( the 8oard in accordance with the regulations (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a depository, 34participant,: custodian of securities, foreign institutional in'estor or credit rating agency i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to buy or sell securities or otherwise deal with the securities (ar)et until such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300 ( 8) Eo person shall sponsor or cause to be sponsored or carry on or caused to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es including (utual funds, unless he obtains a certificate of registration fro( the 8oard in accordance with the regulations, 4ro+i-e- that any person sponsoring or causing to be sponsored, carrying or causing to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es operating in the securities (ar)et i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to operate till such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300:
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0
% Inserted
>
4()%lanati$n7 6or the re(o'al of doubts, it is hereby declared that, for purposes of this section, a collecti'e in'est(ent sche(e or (utual fund shall not be include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(ponent of in'est(ent besides the co(ponent of insurance issued by the insurer0: (%) 7'ery application for registration shall be in such (anner and on pay(ent of such fees as (ay be deter(ined by regulations0 (3) .he 8oard (ay, by order, suspend or cancel a certificate of registration in such (anner as (ay be deter(ined by regulations, 4ro+i-e- that no order under this sub+section shall be (ade unless the person concerned has been gi'en a reasonable opportunity of being heard0 %4CIA<.7R BA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 4rohi,itio of .% i$*l%ti+e % - -e'e$ti+e -e+i'e!, i !i-er tr%-i ( % - !*,!t% ti%l %'7*i!itio of !e'*ritie! or 'o trol.
1"A. Eo person shall directly or indirectly(a) use or e(ploy, in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recogniFed stoc) exchange, any (anipulati'e or decepti'e de'ice or contri'ance in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3
Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, w0r0e0f !+$+ %0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, reads as under, /@A81(0 D: ?ISC7==AE7CHS #0 Balidation+ Eotwithstanding anything contained in any Dudg(ent, decree or order of any court, tribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 Repeal and sa'ings + (1) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (2) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0 % Chapter BA inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
!
(b) e(ploy any de'ice, sche(e or artifice to defraud in connection with issue or dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange3 (c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange, in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (d) engage in insider trading3 (e) deal in securities while in possession of (aterial or non+public infor(ation or co((unicate such (aterial or non+public infor(ation to any other person, in a (anner which is in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (f) ac*uire control of any co(pany or securities (ore than the percentage of e*uity share capital of a co(pany whose securities are listed or proposed to be listed on a recognised stoc) exchange in contra'ention of the regulations (ade under this Act0: CDA4TER II 2INANCE, ACCOUNTS AND AUDIT Gr% t! ,> the Ce tr%l Go+er .e t. 1). .he Central &o'ern(ent (ay, after due appropriation (ade by <arlia(ent by law in this behalf, (a)e to the 8oard grants of such su(s of (oney as that &o'ern(ent (ay thin) fit for being utiliFed for the purposes of this Act0 2* -. 13. ( ) .here shall be constituted a 6und to be called the Securities and 7xchange 8oard of
India &eneral 6und and there shall be credited thereto(a) all grants, fees and charges recei'ed by the 8oard under this Act3 4G G G: (aa) %4G G G: (b) all su(s recei'ed by the 8oard fro( such other sources as (ay be decided upon by the Central &o'ern(ent0 (%) .he 6und shall be applied for (eeting(a) the salaries, allowances and other re(uneration of the (e(bers, officers and other e(ployees of the 8oard3 (b) the expenses of the 8oard in the discharge of its functions under section 3 (c) the expenses on obDects and for purposes authorised by this Act0
.he word 1and2 o(itted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 (aa) o(itted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 It was inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Clause (aa) reads as under,+ 1(aa) all su(s realiFed by way of <enalties under this Act3 and20
% Clause
%0
A''o* t! % - %*-it. 15. ( ) .he 8oard shall (aintain proper accounts and other rele'ant records and prepare an annual state(ent of accounts in such for( as (ay be prescribed by the Central &o'ern(ent in consultation with the Co(ptroller and Auditor+&eneral of India0 (%) .he accounts of the 8oard shall be audited by the Co(ptroller and Auditor+&eneral of India at such inter'als as (ay be specified by hi( and any expenditure incurred in connection with such audit shall be payable by the 8oard to the Co(ptroller and Auditor+&eneral of India0 (3) .he Co(ptroller and Auditor+&eneral of India and any other person appointed by hi( in connection with the audit of the accounts of the 8oard shall ha'e the sa(e rights and pri'ileges and authority in connection with such audit as the Co(ptroller and Auditor+ &eneral generally has in connection with the audit of the &o'ern(ent accounts and, in particular, shall ha'e the right to de(and the production of boo)s, accounts, connected 'ouchers and other docu(ents and papers and to inspect any of the offices of the 8oard0 ($) .he accounts of the 8oard as certified by the Co(ptroller and Auditor+&eneral of India or any other person appointed by hi( in this behalf together with the audit report thereon shall be forwarded annually to the Central &o'ern(ent and that &o'ern(ent shall cause the sa(e to be laid before each Iouse of <arlia(ent0 5CDA4TER IIA 4ENALTIES AND ADEUDICATION 4e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 15A. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder,(a) to furnish any docu(ent, return or report to the 8oard, fails to furnish the sa(e, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations, fails to file return or furnish the sa(e within the ti(e specified therefor in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0
Chapters BI A and BI 8 containing Ss0 "A to "M and "@ to "S respecti'ely, inserted by Securities =aws (A(end(ent) Act, !!" w0e0f0 %"+ + !!"0 % Substituted for 1a penalty not exceeding one la)h and fifty thousand rupees for each such failure2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding fi'e thousand rupees for e'ery day during which such failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for e'ery day during which the failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%
4e %lt> for f%il*re ,> % > $er!o to e ter i to %(ree.e t /ith 'lie t!. 15;. If any person, who is registered as an inter(ediary and is re*uired under this Act or any rules or regulations (ade thereunder to enter into an agree(ent with his client, fails to enter into such agree(ent, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 %54e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 15C. If any listed co(pany or any person who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such co(pany or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 4e %lt> for 'ert%i -ef%*lt! i '%!e of .*t*%l f* -!. 15D. If any person, who is(a) re*uired under this Act or any rules or regulations (ade thereunder to obtain a certificate of registration fro( the 8oard for sponsoring or carrying on any collecti'e in'est(ent sche(e, including (utual funds, sponsors or carries on any collecti'e in'est(ent sche(e, including (utual funds, without obtaining such certificate of registration, he shall be liable to 34a penalty of one la)h rupees for each day during which he sponsors or carries on any such collecti'e in'est(ent sche(e including (utual funds, or one crore rupees, whiche'er is less:3 (b) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, for sponsoring or carrying on any in'est(ent sche(e, fails to co(ply with the ter(s and conditions of certificate of registration, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, fails to (a)e an application for listing of its sche(es as pro'ided for in the regulations
Substituted for 1a penalty not exceeding fi'e la)h rupees for e'ery such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1If any person, who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing to redress the grie'ances of in'estors, fails to redress such grie'ances, he shall be liable to a penalty not exceeding ten thousand rupees for each such failure2, by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding ten thousand rupees for each day during which he carries on any such collecti'e in'est(ent sche(e including (utual funds, or ten la)h rupees whiche'er is higher02 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for each day during which such failure continues or ten la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0
%%
go'erning such listing, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (d) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to despatch
unit certificates of any sche(e in the (anner pro'ided in the regulation go'erning such despatch, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (e) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to refund the application (onies paid by the in'estors within the period specified in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (f) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to in'est (oney collected by such collecti'e in'est(ent sche(es in the (anner or within the period specified in the regulations, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for f%il*re to o,!er+e r*le! % - re(*l%tio ! ,> % %!!et .% %(e.e t 'o.$% >. 15E. Khere any asset (anage(ent co(pany of a (utual fund registered under this Act, fails to co(ply with any of the regulations pro'iding for restrictions on the acti'ities of the asset (anage(ent co(panies, such asset (anage(ent co(pany shall be liable to "4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for -ef%*lt i '%!e of !to'6 ,ro6er!. 152. If any person, who is registered as a stoc) bro)er under this Act,(a) fails to issue contract notes in the for( and (anner specified by the stoc) exchange of which such bro)er is a (e(ber, he shall be liable to a penalty not exceeding fi'e ti(es the a(ount for which the contract note was re*uired to be issued by that bro)er3 (b) fails to deli'er any security or fails to (a)e pay(ent of the a(ount due to the in'estor in the (anner within the period specified in the regulations, he shall be liable to #4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3
Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues or fi'e la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding one thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%3
(c) charges an a(ount of bro)erage which is in excess of the bro)erage specified in the regulations, he shall be liable to 4a penalty of one la)h rupees: or fi'e ti(es the a(ount of bro)erage charged in excess of the specified bro)erage, whiche'er is higher0 4e %lt> for i !i-er tr%-i (. 15G. If any insider who,(i) either on his own behalf or on behalf of any other person, deals in securities of a body corporate listed on any stoc) exchange on the basis of any unpublished price+sensiti'e infor(ation3 or (ii) co((unicates any unpublished price+sensiti'e infor(ation to any person, with or without his re*uest for such infor(ation except as re*uired in the ordinary course of business or under any law3 or
(iii) counsels, or procures for any other person to deal in any securities of any body corporate on the basis of unpublished price+sensiti'e infor(ation, shall be liable to a penalty %4of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of insider trading, whiche'er is higher:0 4e %lt> for o 0-i!'lo!*re of %'7*i!itio of !h%re! % - t%6eo+er!. 15D. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder, fails to,(i) disclose the aggregate of his shareholding in the body corporate before he ac*uires any shares of that body corporate3 or (ii) (a)e a public announce(ent to ac*uire shares at a (ini(u( price3 or 34(iii) (a)e a public offer by sending letter of offer to the shareholders of the concerned co(pany3 or (iv) (a)e pay(ent of consideration to the shareholders who sold their shares pursuant to letter of offer,: he shall be liable to a penalty $4of twenty+fi'e crore rupees or three ti(es the a(ount of profits profits (ade out of such failure, whiche'er is higher:0 554e %lt> for fr%*-*le t % - * f%ir tr%-e $r%'ti'e!. 15DA. If any person indulges in fraudulent and unfair trade practices relating to securities, he shall be liable to a penalty of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of such practices, whiche'er is higher0
Substituted for 1a penalty not exceeding fi'e thousand rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00% 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00% %00% " Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00%0
%$
4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 15D;. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 4o/er to %-G*-i'%te. 150I. ( ) 6or the purpose of adDudging under sections "A, "8, "C, "9, "7, "6, "& 4, "I, "IA and "I8:, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in subsection ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> the %-G*-i'%ti ( offi'er. 15E. Khile adDudging *uantu( of penalty under section "+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade
as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 "5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 15EA. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: )5Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!. 15E;. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 11, !e'tio 11;, !e'tio 11D, !*,0!e'tio ()) of !e'tio 1" or !e'tio 150I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e- -ef%*lt!.
Substituted for 1and "I2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the S78I (A(end(ent) Act, %00%, S0 ! w0e0f0 %!+ 0+%00%0 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
% Inserted
%"
(") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't. ()) The !ettle.e t $ro'ee-i (! * -er thi! !e'tio !h%ll ,e 'o -*'te- i %''or-% 'e /ith the $ro'e-*re !$e'ifie- i the re(*l%tio ! .%-e * -er thi! A't. (3) No %$$e%l !h%ll lie * -er !e'tio 15T %(%i !t % > or-er $%!!e- ,> the ;o%r- or %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio . < CDA4TER II; ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL E!t%,li!h.e t of Se'*ritie! A$$ell%te Tri,* %l!. 15F. ( ) .he Central &o'ern(ent shall by notification, establish one or (ore Appellate .ribunals to be )nown as the Securities Appellate .ribunal to exercise the Durisdiction, powers and authority conferred on such .ribunal by or under this Act 4or any other law for the ti(e being in force:0 (%) .he Central &o'ern(ent shall also specify in the notification referred to in sub+section ( ) the (atters and places in relation to which the Securities Appellate .ribunal (ay exercise Durisdiction0 "5Co.$o!itio of Se'*ritie! A$$ell%te Tri,* %l. 15L. A Securities Appellate .ribunal shall consist of a <residing Cfficer and two other (e(bers, to be appointed, by notification, by the Central &o'ern(ent, 4ro+i-e- that the Securities Appellate .ribunal, consisting of one person only, established before the co((ence(ent of the Securities and 7xchange 8oard of India (A(end(ent) Act, %00%, shall continue to exercise the Durisdiction, powers and authority conferred on it by or under this Act or any other law for the ti(e being in force till two other ?e(bers are appointed under this section0 9*%lifi'%tio for %$$oi t.e t %! 4re!i-i ( Offi'er or @e.,er of Se'*ritie! A$$ell%te Tri,* %l.
Inserted by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for Sections "= and "? by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "= and "? read as under,+ 1 "+=0 Co(position of securities Appellate .ribunal0 5 A Securities Appellate .ribunal shall consist of
% Substituted
one person only (hereinafter referred to as the <residing Cfficer of the Securities Appellate .ribunal) to be appointed, by notification, by the central &o'ern(ent0 "?0 Qualifications for appoint(ent as <residing Cfficer of the Securities Appellate .ribunal0 5 A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he + (a) is, or has been, or is *ualified to be, a Mudge of a Iigh Court3 or (b) has been a (e(ber of the Indian =egal Ser'ice and has held a post in &rade I of that ser'ice for at least three years3 or (c) has held office as the <residing Cfficer of a tribunal for at least three years02
%#
15@. 15( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of the Securities Appellate .ribunal unless he + (a) is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court3 or (b) is a sitting or retired Mudge of a Iigh Court who has co(pleted not less than se'en years of ser'ice as a Mudge in a Iigh Court0 ( A) .he <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0: (%) A person shall not be *ualified for appoint(ent as (e(ber of a Securities Appellate .ribunal unless he is a person of ability, integrity and standing who has shown capacity in dealing with proble(s relating to securities (ar)et and has *ualification and experience of corporate law, securities laws, finance, econo(ics or accountancy, 4ro+i-e- that a (e(ber of the 8oard or any person holding a post at senior (anage(ent le'el e*ui'alent to 7xecuti'e 9irector in the 8oard shall not be appointed as <residing Cfficer or ?e(ber of a Securities Appellate .ribunal during his ser'ice or tenure as such with the 8oard or within two years fro( the date on which he ceases to hold office as such in the 8oard0: %4Te *re of offi'e of 4re!i-i ( Offi'er % - other @e.,er! of Se'*ritie! A$$ell%te Tri,* %l. 15N. .he <residing Cfficer and e'ery other ?e(ber of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office and shall be eligible for re+appoint(ent, 4ro+i-e- that no person shall hold office as the <residing Cfficer of the Securities Appellate .ribunal after he has attained the age of sixty+eight years, 4ro+i-e- f*rther that no person shall hold office as a ?e(ber of the Securities Appellate .ribunal after he has attained the age of sixty+two years0: S%l%r> % - %llo/% 'e! % - other ter.! % - 'o -itio ! of !er+i'e of 4re!i-i ( Offi'er!. 150O. .he salary and allowances payable to and the other ter(s and conditions of ser'ice including pension, gratuity and other retire(ent benefits of the 4<residing Cfficer and other ?e(bers: of a Securities Appellate .ribunal shall be such as (ay be prescribed,
Substituted for sub+section ( ) of Section "? by the S78I (A(end(ent) Crdinance, %0 3 w0e0f0 % 00 0%0 30 <rior to substitution, it read as under,+ ;( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court , 4ro+i-e- that the <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0; % Substituted for Section "E, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "E read as under,+ 1 "E0 .er( of office0+ .he <residing officer of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office or until he attains the age of sixtyfi'e years, whiche'er is earlier02
%/
4ro+i-e- that neither the salary and allowances nor the other ter(s and conditions of ser'ice of the %4<residing Cfficer and other ?e(bers of a Securities Appellate .ribunal: shall be 'aried to their disad'antage after appoint(ent0 2illi ( *$ of +%'% 'ie!. 154. If, for reason other than te(porary absence, any 'acancy occurs in the 34office of the <residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal, then the Central &o'ern(ent shall appoint another person in accordance with the pro'isions of this Act to fill the 'acancy and the proceedings (ay be continued before the Securities Appellate .ribunal fro( the stage at which the 'acancy is filled0 Re!i( %tio % - re.o+%l. 159. ( ) .he $4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal (ay, by notice in writing under his hand addressed to the Central &o'ern(ent, resign his office, 4ro+i-e- that "4the <residing Cfficer or any other ?e(ber: shall, unless he is per(itted by the Central &o'ern(ent to relin*uish his office sooner, continue to hold office, until the expiry of three (onths fro( the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his ter( of office, whiche'er is the earliest0 (%) .he #4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal shall not be re(o'ed fro( his office except by an order by the Central &o'ern(ent on the ground of pro'ed (isbeha'iour or incapacity after an in*uiry (ade by a Mudge of the Supre(e Court, in which the /4<residing Cfficer or any other ?e(ber: concerned has been infor(ed of the charges against hi( and gi'en a reasonable opportunity of being heard in respect of these charges0 (3) .he Central &o'ern(ent (ay, by rules, regulate the procedure for the in'estigation of (isbeha'iour or incapacity of the >4<residing Cfficer or any other ?e(ber:0 Or-er! 'o !tit*ti ( A$$ell%te Tri,* %l to ,e fi %l % - ot to i +%li-%te it! $ro'ee-i (!. 15R. Eo order of the Central &o'ern(ent appointing any person as the !4<residing Cfficer or a ?e(ber: of a Securities Appellate .ribunal shall be called in *uestion in any (anner, and no act or proceeding before a Securities Appellate .ribunal shall be called in *uestion in any (anner on the ground (erely of any defect in the constitution of a Securities Appellate .ribunal0
Substituted for 1<residing Cfficer of a Securities Appellate .ribunal2 by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 / Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 > Substituted for 1aforesaid <residing Cfficer2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 ! Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0
%>
St%ff of the Se'*ritie! A$$ell%te Tri,* %l. 15S. ( ) .he Central &o'ern(ent shall pro'ide the Securities Appellate .ribunal with such officers and e(ployees as that &o'ern(ent (ay thin) fit0 (%) .he officers and e(ployees of the Securities Appellate .ribunal shall discharge their functions under general superintendence of the <residing Cfficer0 (3) .he salaries and allowances and other conditions of ser'ice of the officers and e(ployees of the Securities Appellate .ribunal shall be such as (ay be prescribed0 A$$e%l to the Se'*ritie! A$$ell%te Tri,* %l. 15T. 4( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed,(a) by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws
(Second A(end(ent) Act, !!!, under this Act, or the rules or regulations (ade thereunder3 or (b) by an order (ade by an adDudicating officer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 "5(") ********< (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 348oard or the AdDudicating Cfficer, as the case case (ay be,: is recei'ed by hi( and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 ($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0
Substituted for Sub+sec ( ) R (%) by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, Sub+sections ( ) R (%) were read as under, 1( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by any order (ade by any AdDudicating Cfficer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 (%) Eo appeal shall lie to the Securities Appellate .ribunal fro( an order (ade by an AdDudicating Cfficer with the consent of the parties02 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , o.i!!io , S*,0!e'tio (") re%- %! * -er& J(") No %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-eO (a) ,> the ;o%r- o % - %fter the 'o..e 'e.e t of the Se'*ritie! L%/! (Se'o - A.e -.e t) A't, 1999H (b) ,> % %-G*-i'%ti ( offi'er, /ith the 'o !e t of the $%rtie!.2 3 Substituted for 1a copy of the order (ade by the adDudicating officer2 by S78I (A(end(ent) Act !!!, !!!, w0e0f0 #+ %+ !!!0
%!
(") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 48oard, the: parties to the appeal and to the concerned AdDudicating Cfficer0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of the Se'*ritie! A$$ell%te Tri,* %l. 15U. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act, and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purposes of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3
(e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte 3 (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0), and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 %4Ri(ht to le(%l re$re!e t%tio . 15I. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,Substituted for 1parties2, S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for S0 "B by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, S0 "B read as under,+ 1 "B0 .he appellant (ay either appear in person or authorise one or (ore legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal02
% Substituted
30
(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of subsection ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or any attorney of any Iigh Court, and includes a pleader in practice0: Li.it%tio . 15?. .he pro'isions of the =i(itation Act, !#3 (3# of !#3), shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 54re!i-i ( Offi'er, @e.,er! % - !t%ff of Se'*ritie! A$$ell%te Tri,* %l! to ,e $*,li' !er+% t!. 15A. .he <residing Cfficer, ?e(bers and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0: Ci+il Co*rt ot to h%+e G*ri!-i'tio . 15M. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which an adDudicating officer appointed under this Act or a Securities Appellate .ribunal constituted under this Act is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "5A$$e%l to S*$re.e Co*rt.
Substituted for S0 "A by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, it read as under, + 1 "A0 .he <residing Cfficer and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian penal Code( $" of >#0)20 % Substituted for S0 "S by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution , it
was read as under,+ 1 "S0 Appeal to Iigh Court0+ Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, <ro'ided that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
3
15N. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order , 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the applicant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: CDA4TER III @ISCELLANEOUS 4o/er of Ce tr%l Go+er .e t to i!!*e -ire'tio !. 18. ( ) Kithout preDudice to the foregoing pro'isions of this Act 4or the 9epositories Act, !!#:, the 8oard shall, in exercise of its powers or the perfor(ance of its functions under this Act, be bound by such directions on *uestions of policy as the Central &o'ern(ent (ay gi'e in writing to it fro( ti(e to ti(e , 4ro+i-e- that the 8oard shall, as far as practicable, be gi'en an opportunity to express its 'iews before any direction is gi'en under this sub+section0 (%) .he decision of the Central &o'ern(ent whether a *uestion is one of policy or not shall be final0 4o/er of Ce tr%l Go+er .e t to !*$er!e-e the ;o%r-. 17. ( ) If at any ti(e the Central &o'ern(ent is of opinion(a) that on account of gra'e e(ergency, the 8oard is unable to discharge the functions and duties i(posed on it by or under the pro'isions of this Act3 or (b) that the 8oard has persistently (ade default in co(plying with any direction issued by the Central &o'ern(ent under this Act or in the discharge of the functions and duties i(posed on it by or under the pro'isions of this Act and as a result of such default the financial position of the 8oard or the ad(inistration of the 8oard has deteriorated3 or (c) that circu(stances exist which render it necessary in the public interest so to do, the Central &o'ern(ent (ay, by notification, supersede the 8oard for such period, not exceeding six (onths, as (ay be specified in the notification0 (%) Hpon the publication of a notification under sub+section ( ) superseding the 8oard,(a) all the (e(bers shall, as fro( the date of supersession, 'acate their offices as such3 (b) all the powers, functions and duties which (ay, by or under the pro'isions of this Act, be exercised or discharged by or on behalf of the 8oard, shall until the 8oard is reconstituted under sub+section (3), be exercised and discharged by such person or persons as the Central &o'ern(ent (ay direct3 and (c) all property owned or controlled by the 8oard shall, until the 8oard is reconstituted under sub+section (3), 'est in the Central &o'ern(ent0
Substituted for 1this Act2 by the 9epositories Act !!#, w0r0e0f0 %0+!+ !!"0
3%
(3) Cn the expiration of the period of supersession specified in the notification issued under sub+section ( ), the Central &o'ern(ent (ay reconstitute the 8oard by a fresh appoint(ent
and in such case any person or persons who 'acated their offices under clause ( a) of subsection (%), shall not be dee(ed dis*ualified for appoint(ent , 4ro+i-e- that the Central &o'ern(ent (ay, at any ti(e, before the expiration of the period of supersession, ta)e action under this sub+section0 ($) .he Central &o'ern(ent shall cause a notification issued under sub+section ( ) and a full report of any action ta)en under this section and the circu(stances leading to such action to be laid before each Iouse of <arlia(ent at the earliest0 Ret*r ! % - re$ort!. 1:. ( ) .he 8oard shall furnish to the Central &o'ern(ent at such ti(e and in such for( and (anner as (ay be prescribed or as the Central &o'ern(ent (ay direct, such returns and state(ents and such particulars in regard to any proposed or existing progra((e for the pro(otion and de'elop(ent of the securities (ar)et, as the Central &o'ern(ent (ay, fro( ti(e to ti(e, re*uire0 (%) Kithout preDudice to the pro'isions of sub+section ( ), the 8oard shall, within 4ninety: days after the end of each financial year, sub(it to the Central &o'ern(ent a report in such for(, as (ay be prescribed, gi'ing a true and full account of its acti'ities, policy and progra((es during the pre'ious financial year0 (3) A copy of the report recei'ed under sub+section (%) shall be laid, as soon as (ay be after it is recei'ed, before each Iouse of <arlia(ent0 Dele(%tio . 19. .he 8oard (ay, by general or special order in writing delegate to any (e(ber, officer of the 8oard or any other person subDect to such conditions, if any, as (ay be specified in the order, such of its powers and functions under this Act (except the powers under section %!) as it (ay dee( necessary0 A$$e%l!. "=. ( ) Any person aggrie'ed by an order of the 8oard (ade %4, before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!,: under this Act, or the rules or regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor, 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0
Substituted for 1sixty days2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1an order of the 8oard (ade2 by Securities =aws (Second A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0
% Substituted
33
(3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed, 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 4;%r of G*ri!-i'tio . "=A. Eo order passed by the 8oard %4or the AdDudicating Cfficer: under this Act shall be appealable except as pro'ided in 34section ". or: section %0 and no ci'il court shall ha'e Durisdiction in respect of any (atter which the 8oard $4or the AdDudicating Cfficer: is e(powered by, or under, this Act to pass any order and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any order passed by the 8oard "4or the AdDudicating Cfficer: by, or under, this Act0: S%+i (!.
"1. Eothing in this Act shall exe(pt any person fro( any suit or other proceedings which (ight, apart fro( this Act, be brought against hi(0 @e.,er!, offi'er! % - e.$lo>ee! of the ;o%r- to ,e $*,li' !er+% t!. "". All (e(bers, officers and other e(ployees of the 8oard shall be dee(ed, when acting or purporting to act in pursuance of any of the pro'isions of this Act, to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0 4rote'tio of %'tio t%6e i (oo- f%ith. "). Eo suit, prosecution or other legal proceedings shall lie against the Central &o'ern(ent #4or 8oard: or any officer of the Central &o'ern(ent or any (e(ber, officer or other e(ployee of the 8oard for anything which is in good faith done or intended to be done under this Act or the rules or regulations (ade thereunder0 /4Offe 'e!. "3. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, he shall be punishable with
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 18oard2 by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 3 Substituted for 1Section %02, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 $ Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 " Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Substituted by for S0 %$, Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" && <rior to its substitution S0%$ read as under, 1%$0 <enalty0+ Khoe'er contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both02
% Substituted
3$
i(prison(ent for a ter( which (ay extend to 4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to %4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 34Co.$o!itio of 'ert%i offe 'e!. "3A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "3;. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of the alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation, 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0
(%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0:
Substituted for 1one year, or with fine, or with both2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%, for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both20 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3"
E#e.$tio fro. t%# o /e%lth % - i 'o.e. "5. Eotwithstanding anything contained in the Kealth+tax Act, !"/ (%/ of !"/), the Inco(etax Act, !# ($3 of !# ) or any other enact(ent for the ti(e being in force relating to tax on wealth, inco(e, profits or gains(a) the 8oard3 (b) the existing Securities and 7xchange 8oard fro( the date of its constitution to the date of establish(ent of the 8oard, shall not be liable to pay wealth+tax, inco(e+tax or any other tax in respect of their wealth, inco(e, profits or gains deri'ed0 Co( iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations (ade thereunder, sa'e on a co(plaint (ade by the 8oard 4G G G:0 "5(") *****< )5 E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
.he words 1with the pre'ious sanction of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to the o.i!!io , S*,0!e'tio (") re%- %! * -er& 1(") No 'o*rt i ferior to th%t of "5% Co*rt of Se!!io < !h%ll tr> % > offe 'e $* i!h%,le * -er thi!
A't.2 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3#
A$$e%l % - re+i!io "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e of Cri.i %l 4ro'e-*re, 197) to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< Offe 'e! ,> 'o.$% ie!. "7. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly, 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n , 6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and
3/
(b) 1director2, in relation to a fir(, (eans a partner in the fir(0 4o/er to e#e.$t. ":. 4GGGGGG: "5 Re'o+er> of %.o* t! ":A. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith %
-ire'tio of -i!(or(e.e t or-er i!!*e- * -er !e'tio 11; or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifiefor. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.et%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't.
C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Section %> read as under, 1%>0 8$.er t$ e)e"%t+ If the central go'ern(ent if of the opinion that it is necessary or expedient so to do in public interest, it (ay, by order published in the Cfficial gaFette, exe(pt any person or class of persons buying or selling securities or otherwise dealing with the securities (ar)et fro( the operation of sub+section ! ) of Section %02 % I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3>
"#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio 15T of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 11;, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% !
% > offi'er of the ;o%r- /ho .%> ,e %*thoriLe-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 4o/er to .%6e r*le!. "9. ( ) .he Central &o'ern(ent (ay, by notification, (a)e rules for carrying out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers under sub+section ( ) of section "3 (b) the additional functions that (ay be perfor(ed by the 8oard under section 3 (c) 4G G G: (d) the (anner in which the accounts of the 8oard shall be (aintained under section "3 %4(da) the (anner of in*uiry under sub+section ( ) of section "+I3 (db) the salaries and allowances and other ter(s and conditions of ser'ice of the 34<residing Cfficers, ?e(bers: and other officers and e(ployees of the Securities Appellate .ribunal under section "+C and sub+section (3) of section "S3 (dc) the procedure for the in'estigation of (isbeha'iour or incapacity of the 4<residing Cfficers, or other ?e(bers: of the Securities Appellate .ribunal under sub+section (3) of section "Q3
Clause (c) o(itted by Securities laws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, clause (c) it read as under, 1(c) the conditions subDect to which registration certificate is to be issued under sub+section ( ) of section %20 % Inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 3 Substituted for 1<residing Cfficers2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3!
(dd) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section ". and the fees payable in respect of such appeal3: (e) the for( and the (anner in which returns and report to be (ade to the Central &o'ern(ent under section >3 (f) any other (atter which is to be, or (ay be, prescribed, or in respect of which pro'ision is to be, or (ay be, (ade by rules0 4o/er to .%6e re(*l%tio !. )=. ( ) .he 8oard (ay, %4GGG: by notification, (a)e regulations consistent with this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ti(es and places of (eetings of the 8oard and the procedure to be followed at such (eetings under sub+section ( ) of section / including *uoru( necessary for the transaction of business3 (b) the ter(s and other conditions of ser'ice of officers and e(ployees of the 8oard under sub+section (%) of section !3 34(c) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto and the (anner in which such (atters shall be disclosed by the co(panies under section A3 35('%) the *tiliL%tio of the %.o* t 're-ite- * -er !*,0!e'tio (5) of !e'tio 11H (',) the f*lfill.e t of other 'o -itio ! rel%ti ( to 'olle'ti+e i +e!t.e t !'he.e * -er !*,0!e'tio ("A) of !e'tio 11AAH ('') the $ro'e-*re to ,e follo/e- ,> the %*thoriLe- offi'er for !e%r'h or !eiL*re * -er !*,0!e'tio (9) of !e'tio 11CH < (d) the conditions subDect to which certificate of registration is to be issued, the a(ount of
fee to be paid for certificate of registration and the (anner of suspension or cancellation of certificate of registration under section %0: 55(-%) the ter.! -eter.i e- ,> the ;o%r- for !ettle.e t of $ro'ee-i (! * -er !*,!e'tio (") % - the $ro'e-*re for 'o -*'ti ( of !ettle.e t $ro'ee-i (! * -er !*,!e'tio ()) of !e'tio 15E;H (-,) % > other .%tter /hi'h i! re7*ire- to ,e, or .%> ,e, !$e'ifie- ,> re(*l%tio ! or i re!$e't of /hi'h $ro+i!io i! to ,e .%-e ,> re(*l%tio !.< R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t.
Substituted for 1<residing Cfficers2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 words 1with the pre'ious appro'al of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 3 Substituted for the existing clause (c) by the Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 <rior to substitution this clause read as under, 1(c) the a(ount of fee to be paid for registration certificate and (anner of suspension or cancellation of registration certificate under sub+section (%) and (3) of section %02 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% .he
$0
)1. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. )". .he pro'isions of this Act shall be in addition to, and not in derogation of, the pro'isions of any other law for the ti(e being in force0 A.e -.e t of 'ert%i e %'t.e t!. )). 40e%ealed bF 0e%ealing H A"ending Act' 2001&: 4o/er to re.o+e -iffi'*ltie!. )3. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order, published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as (ay appear to be necessary for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of fi'e years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 Re$e%l % - !%+i (. )5. ( ) .he Securities and 7xchange 8oard of India Crdinance, !!% (Crd0 " of !!%), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 1@( /@(5A9( 4 ee section 33: A@END@ENT O2 CERTAIN ENACT@ENTS 40e%ealed bF 0e%ealing H A"ending Act' 2001:
*SECURITIES CONTRACTS (REGULATION) RULES, 1957
In exercise of the powers conferred by section 30 of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the Central &o'ern(ent hereby (a)es the following rules, the sa(e ha'ing been pre'iously published as re*uired by sub+section (3) of the said section, na(ely ,Short title. 1. .hese rules (ay be called the Securities Contracts (Regulation) Rules, !"/0 Defi itio !. ". In these rules, unless the context otherwise re*uires,(a) 1for(2 (eans a for( appended to these rules3 (b) 1the Act2 (eans the Securities Contracts (Regulation) Act, !"# ($% of !"#)3 (c) 1&o'ern(ent co(pany2 (eans a co(pany in which not less than fifty+one per cent of the share capital is held by the Central &o'ern(ent or by any State &o'ern(ent or &o'ern(ents or partly by the Central &o'ern(ent and partly by one or (ore State &o'ern(ents ; 4(d) 1public2 (eans persons other than 5 (i) the pro(oter and pro(oter group3 (ii) subsidiaries and associates of the co(pany0 E#$l% %tio & 6or the purpose of this clause the words 1pro(oter2 and 1pro(oter group2 shall ha'e the sa(e (eaning as assigned to the( under the Securities and 7xchange 8oard of India (Issue of Capital and 9isclosure Re*uire(ents) Regulations, %00!3: %4(da) ;public sector co(pany; (eans a body corporate constituted by an Act of <arlia(ent or any State =egislature and includes a go'ern(ent co(pany,: 4(e) 1public shareholding2 (eans e*uity shares of the co(pany held by public and shall exclude shares which are held by custodian against depository receipts issued o'erseas0: A$$li'%tio for re'o( itio . ). An application under section 3 of the Act for recognition of a stoc) exchange shall be (ade to the 34Securities and 7xchange 8oard of India: in 6or( A0
* The!e R*le! h%+e ,ee *$-%te- ,%!e- o the R*le! % - A.e -.e t! %+%il%,le o the /e,!ite of the De$%rt.e t of E'o o.i' Aff%ir!0 htt$&11fi .i . i'.i 1l%/1i -e#.%!$ % - %+%il%,le %.e -.e t otifi'%tio !. Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 % Inserted by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3 Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
2ee! for %$$li'%tio . 3. ( ) .here shall be paid in respect of e'ery application under rule 3 a fee of rupees fi'e hundred0 (%) .he a(ount of the fee shall be deposited in the nearest &o'ern(ent treasury or the nearest branch of the State 8an) of India, 4ro+i-e- that at 8o(bay, Calcutta, ?adras, 9elhi and @anpur, the a(ount shall be deposited in the Reser'e 8an) of India0 (3) .he a(ount of the fee so deposited shall be credited to the receipt head 1A=BI?iscellaneous-Cther fees, fines and forfeitures20 Do'*.e t! to ,e file- %lo ( /ith the %$$li'%tio % - $%rti'*l%r! it !ho*l- 'o t%i . 5. 7'ery application shall be acco(panied by four copies of the rules (including the (e(orandu( and articles of association where the applicant stoc) exchange is an
incorporated body) and bye+laws of the stoc) exchange applying for recognition as specified in section 3 of the Act and the receipt granted by the &o'ern(ent treasury, or as the case (ay be, the State 8an) of India or the Reser'e 8an) of India, in respect of the a(ount of the fee deposited and shall contain clear particulars as to the (atters specified in the Annexure to 6or( A0 $54o/er to .%6e i 7*irie! % - '%ll for i for.%tio . 5A. 8efore granting recognition to a stoc) exchange under section $ of the Act, the "4Securities and 7xchange 8oard of India: (ay (a)e such in*uiries and re*uire such further infor(ation to be furnished, as it dee(s necessary, relating to the infor(ation furnished by the stoc) exchange in the Annexure to its application in 6or( A0: 2or. of re'o( itio . 8. .he recognition granted to a stoc) exchange shall be in 6or( 8 and be subDect to the following conditions, na(ely ,(a) that the recognition unless granted on a per(anent basis, shall be for such period not less than one year as (ay be specified in the recognition3 (b) that the stoc) exchange shall co(ply with such conditions as are or (ay be prescribed or i(posed under the pro'isions of the Act and these rules fro( ti(e to ti(e0
$ Inserted
by &SR 0!# dated $00/0 !#/, w0e0f0 %%00/0 !#/ for 1Central &o'ern(ent2 by the Securities Contracts (Regulation)(A(end(ent )Rules, !!#, w0e0f0 %30 %0 !!#0
" Substituted
Re e/%l of re'o( itio . 7. ( ) .hree (onths before the expiry of the period of recognition, a recognised stoc) exchange desirous of renewal of such recognition (ay (a)e an application to the #4Securities and 7xchange 8oard of India: in 6or( A0 (%) .he pro'isions of rule 3, rule $, rule ", rule "A and rule # shall apply in relation to renewal of recognition as they apply in relation to grant of recognition except that the fee payable in respect of an application for renewal of recognition shall be rupees two hundred0 9*%lifi'%tio ! for .e.,er!hi$ of % re'o( i!e- !to'6 e#'h% (e. :. .he rules relating to ad(ission of (e(bers of a stoc) exchange see)ing recognition shall inter alia pro'ide that , (1) Eo person shall be eligible to be elected as a (e(ber if(a) he is less than twenty+one years of age3 (b) he is not a citiFen of India3 pro'ided that the go'erning body (ay in suitable cases relax this condition with the prior appro'al of the !4Securities and 7xchange 8oard of India:3 (c) he has been adDudged ban)rupt or a recei'ing order in ban)ruptcy has been (ade against hi( or he has been pro'ed to be insol'ent e'en though he has obtained his final discharge3 (d) he has co(pounded with his creditors unless he has paid sixteen annas in the rupee3 (e) he has been con'icted of an offence in'ol'ing fraud or dishonesty3 (f) he is engaged as principal or e(ployee in any business other than that of securities /4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability unless he underta)es on ad(ission to se'er his connection with such business ,
>44ro+i-e-
that no (e(ber (ay conduct business in co((odity deri'ati'es, except by setting up a separate co(pany which shall co(ply with the regulatory re*uire(ents, such as, networth, capital ade*uacy, (argins and exposure nor(s as (ay be specified by the 6orward ?ar)et Co((ission, fro( ti(e to ti(e ,
# Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, w0e0f0 %30 %0 !!#0 / Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 > Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 <rior to its substitution, the pro'iso as a(ended by Securities Contracts (Regulation) (A(end(ent) Rules, !!# w0e0f0 %30 %0 !!#, read as under, 1<ro'ided that the Securities and 7xchange 8oard of India (ay, for reasons sufficient in the opinion of the said 8oard, per(it a recogniFed stoc) exchange to suspend the enforce(ent of this clause for a specified period on condition that the applicant is not associated with or is a (e(ber of or subscriber to or shareholder or debenture holder in or connected through a partner or e(ployee with any other organisation, institution, association, co(pany or corporation in India where forward business of any )ind whether in goods or co((odities or otherwise is carried on or is not engaged as a principal or e(ployee ion any such business02
4ro+i-e- f*rther that nothing herein shall be applicable to any corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to ()) of the pro'iso to sub+rule ($)0:3 (g) !4GGG: (h) he has been at any ti(e expelled or declared a defaulter by any other stoc) exchange3 (i) he has been pre'iously refused ad(ission to (e(bership unless a period of one year has elapsed since the date of such reDection0 (2) Eo person eligible for ad(ission as a (e(ber under sub+rule ( ) shall be ad(itted as a (e(ber unless ,(a) he has wor)ed for not less than two years as a partner with, or an authorised assistant or authorised cler) or re(isier or apprentice to, a (e(ber3 or (b) he agrees to wor) for a (ini(u( period of two years as a partner or representati'e (e(ber with another (e(ber and to enter into bargains on the floor of the stoc) exchange and not in his own na(e but in the na(e of such other (e(ber 3 or (c) he succeeds to the established business of a deceased or retiring (e(ber who is his father, uncle, brother or any other person who is, in the opinion of the go'erning body, a close relati'e , 4ro+i-e- that the rules of the stoc) exchange (ay authorise the go'erning body to wai'e co(pliance with any of the foregoing conditions if the person see)ing ad(ission is in respect of (eans, position, integrity, )nowledge and experience of business in securities, considered by the go'erning body to be otherwise *ualified for (e(bership0 (3) Eo person who is a (e(ber at the ti(e of application for recognition or subse*uently ad(itted as a (e(ber shall continue as such if(a) he ceases to be a citiFen of India , 4ro+i-e- that nothing herein shall affect those who are not citiFens of India but who were (e(bers at the ti(e of such application or were ad(itted subse*uently under the pro'isions of clause (b) of sub+rule ( ) of this rule, subDect to their co(plying with all other re*uire(ents of this rule3
(b) he is adDudged ban)rupt or a recei'ing order in ban)ruptcy is (ade against hi( or he is pro'ed to be insol'ent3 (c) he is con'icted of an offence in'ol'ing fraud or dishonesty3 (d) 04G G G: (e) 4G G G: (f) he engages either as principal or e(ployee in any business other than that of securities %4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability, pro'ided that! C(itted 0 Ibid0
by &SR 0/0(7) dated "0
0 !>>
Ibid0
% Inserted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(i) the go'erning body (ay, for reasons, to be recorded in writing, per(it a (e(ber to engage hi(self as principal or e(ployee in any such business, if the (e(ber in *uestion ceases to carry on business on the stoc) exchange either as an indi'idual or as a partner in a fir(, (ii) in the case of those (e(bers who were under the rules in force at the ti(e of such application per(itted to engage in any such business and were actually so engaged on the date of such application, a period of three years fro( the date of the grant of recognition shall be allowed for se'ering their connection with any such business, 34(iii) nothing herein shall affect (e(bers of a recognised stoc) exchange which are corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to (k) of the pro'iso to sub+rule ($)0: (4) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section 3%% of the said Act3 (ii) a (aDority of the directors of such co(pany are shareholders of such co(pany and also (e(bers of that stoc) exchange3 and (iii) the directors of such co(pany, who are (e(bers of that stoc) exchange, ha'e ulti(ate liability in such co(pany , 4ro+i-e- that where the $4Securities and 7xchange 8oard of India: (a)es a reco((endation in this regard, the go'erning body of a stoc) exchange shall, in relaxation of the re*uire(ents of this clause, ad(it as (e(ber the following corporations "4,bodies corporate:, co(panies or institutions, na(ely ,(a) the Industrial 6inance Corporation, established under the Industrial 6inance Corporation Act, !$> ( " of !$>)3 (b) the Industrial 9e'elop(ent 8an) of India, established under the Industrial 9e'elop(ent 8an) Act, !#$ ( > of !#$)3 (c) the =ife Insurance Corporation of India, established under the =ife Insurance Corporation Act, !"# (3 of !"#)3 (d) the &eneral Insurance Corporation of India constituted under the &eneral Insurance Corporation (Eationalisation) Act, !/% ("/ of !/%)3 (e) the Hnit .rust of India, established under the Hnit .rust of India Act, !#3 ("% of !#3)3
3 Substituted, ibid0 <rior to its substitution, sub+clause (iii) read as under, 1(iii) nothing herein shall affect (e(bers of a recogniFed stoc) exchange per(itted under the pro'iso to clause (f) of sub+rule( ) to suspend the enforce(ent of the aforesaid clause, for so long as such suspension is effecti'e, except that no (e(ber of such exchange shall engage in forward business of any )ind whether in goods or co((odities or otherwise and , if actually so engaged on the date of such application , he shall se'er his connection with any such business within a period of three years fro( the date of the grant of recognition02 $ Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# " Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(f) the Industrial Credit and In'est(ent Corporation of India, a co(pany registered under the Co(panies Act, !"# ( of !"#)3 (g) the subsidiaries of any of the corporations or co(panies specified in (a) to (f) and any subsidiary of the State 8an) of India or any nationalised ban) set up for pro'iding (erchant ban)ing ser'ices, buying and selling securities and other si(ilar acti'ities0 #4(h) any ban) included in the Second Schedule to the Reser'e 8an) of India Act, !3$ (% of !3$)3 (i) the 7xport I(port 8an) of India, established under the 7xport I(port 8an) of India Act, !> (%> of !> )3 (j) the Eational 8an) for Agriculture and Rural 9e'elop(ent, established under the Eational 8an) for Agriculture and Rural 9e'elop(ent Act, !> (# of !> )3 and (k) the Eational Iousing 8an), established under the Eational Iousing 8an) Act, !>/ ("3 of !>/)0: (4A) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall also be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section % of the said Act3 (ii) such co(pany underta)es to co(ply with such financial re*uire(ents and nor(s as (ay be specified by the Securities and 7xchange 8oard of India for the registration of such co(pany under sub+section ( ) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (iii) /4G G G: (iv) the directors of the co(pany are not dis*ualified fro( being (e(bers of a stoc) exchange under >4clause ( ) 4except sub+clause (b) and sub+clause (f) thereof: or clause (3) 4except sub+clause (a) and sub+clause (f) thereof:: and the 9irectors of the co(pany had not held the offices of the 9irectors in any co(pany which had been a (e(ber of the stoc) exchange and had been declared defaulter or expelled by the stoc) exchange3 and (v) not less than two directors of the co(pany are persons who possess a (ini(u( two yearsJ experience , (a) in dealing in securities3 or (b) as portfolio (anagers3 or (c) as in'est(ent consultants0 (5) Khere any (e(ber of a stoc) exchange is a fir(, the pro'isions of sub+rules ( ), (3) and ($), shall, so far as they can, apply to the ad(ission or continuation of any partner in such fir(0
# Inserted, / C(itted
ibid0 by &SR /$! (7), dated %0 00 !!$ > Substituted by &SR /!0(7), dated 0/0 0 !!$
Co tr%'t! ,et/ee .e.,er! of re'o( i!e- !to'6 e#'h% (e. 9. All contracts between the (e(bers of a recognised stoc) exchange shall be confir(ed in writing and shall be enforced in accordance with the rules and bye+laws of the stoc) exchange of which they are (e(bers0 !5No.i ee! of the Se'*ritie! % - E#'h% (e ;o%r- of I -i%< o the (o+er i ( ,o-ie! of re'o( i!e- !to'6 e#'h% (e!. 1=. .he %04Securities and 7xchange 8oard of India: (ay no(inate one or (ore persons not exceeding three in nu(ber, as (e(ber or (e(bers of the go'erning body of e'ery recognised stoc) exchange0 Such (e(ber or (e(bers shall enDoy the sa(e status and powers as other (e(bers of the go'erning body0 O,li(%tio of the (o+er i ( ,o-> to t%6e -i!'i$li %r> %'tio %(%i !t % .e.,er if !o -ire'te- ,> the % 5Se'*ritie! % - E#'h% (e ;o%r- of I -i%<. 11. After recei'ing the report of the result of an en*uiry (ade under clause (b) of subsection (3) of section # of the Act, the % 4Securities and 7xchange 8oard of India: (ay ta)e such action as they dee( proper and, in particular, (ay direct the go'erning body of the stoc) exchange to ta)e such disciplinary action against the offending (e(ber, including fine, expulsion, suspension or any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney, as (ay be specified by the % 4Securities and 7xchange 8oard of India:3 notwithstanding anything to the contrary contained in the rules or bye+laws of the stoc) exchange concerned, the go'erning body shall gi'e effect to the directions of the % 4Securities and 7xchange 8oard of India: in this behalf and shall not in any (anner co((ute, re'o)e or (odify the action ta)en in pursuance of such directions, without the prior appro'al of the % 4Securities and 7xchange 8oard of India:0 .he % 4Securities and 7xchange 8oard of India: (ay, howe'er, either of its own (otion or on the representation of the (e(ber concerned, (odify or withdraw its direction to the go'erning body0 A*-it of %''o* t! of .e.,er!. 1". 7'ery (e(ber shall get his accounts audited by a chartered accountant whene'er such audit is re*uired by the % 4Securities and 7xchange 8oard of India:0 ?ith-r%/%l of re'o( itio . 1). .he written notice referred to in section " of the Act shall be in 6or( C0
! Substituted %0 Ibid0 %
by 60 Eo0 L3/LS7L!$, dated %#0 00 !!$0
Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> re'o( i!e- !to'6 e#'h% (e. 13. 7'ery recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years, (1) ?inute boo)s of the (eetings of(a) (e(bers3 (b) go'erning body3 (c) any standing co((ittee or co((ittees of the go'erning body or of the general body of (e(bers0
(2) Register of (e(bers showing their full na(es and addresses0 Khere any (e(ber of the stoc) exchange is a fir(, full na(es and addresses of all partners shall be shown0 (3) Register of authorised cler)s0 (4) Register of re(isiers of authorised assistants0 (5) Record of security deposits0 (6) ?argin deposits boo)0 (7) =edgers0 (8) Mournals0 (9) Cash boo)0 (10) 8an) pass+boo)0 ;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> .e.,er of % re'o( i!e- !to'6 e#'h% (e. 15. ( ) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years , (a) Register of transactions ( a!da boo))0 (b) ClientsJ ledger0 (c) &eneral ledger0 (d) Mournals0 (e) Cash boo)0 (f) 8an) pass+boo)0 (g) 9ocu(ents register showing full particulars of shares and securities recei'ed and deli'ered0 (2) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following docu(ents for a period of two years, (a) ?e(berJs contract boo)s showing details of all contracts entered into by hi( with other (e(bers of the sa(e exchange or counterfoils or duplicates of (e(os of confir(ation issued to such other (e(bers0 (b) Counterfoils or duplicates of contract notes issued to clients0 (c) Kritten consent of clients in respect of contracts entered into as principals0 @% er of i 7*ir> i rel%tio to the %ff%ir! of the (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e or the %ff%ir! of % > .e.,er of the !to'6 e#'h% (e i rel%tio to the !to'6 e#'h% (e. 18. ( )(a) .he person or persons appointed by the %%4Securities and 7xchange 8oard of India: to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act shall hereafter in this rule be referred to as the Nin*uiring authorityJ3 (b) where the in*uiring authority consists of two or (ore persons, one of the( shall be appointed as the chair(an or senior (e(ber thereof3 (c) the in*uiring authority shall hand o'er a state(ent of issues to be in*uired into to the go'erning body or the (e(ber concerned, as the case (ay be, who will be gi'en a reasonable opportunity to state their or his side of the case3 (d) if any witness is called for exa(ination, an opportunity shall be pro'ided to the go'erning body or the (e(ber whose affairs are being in*uired into, as the case (ay be, to cross+exa(ine such witness3 (e) where the in*uiring authority consists of (ore than one person, the 'iews of the (aDority shall be dee(ed to represent the findings of such authority and, in the e'ent of
an e*uality of 'otes, the chair(an or senior (e(ber shall ha'e a casting 'ote3 (f) the in*uiring authority shall sub(it its report in writing to the %%4Securities and 7xchange 8oard of India: within the period specified in the order of appoint(ent3 (g) te(porary absence fro( any hearing or hearings of any (e(ber of the in*uiring authority shall not 'itiate its proceedings0 (%) Khere the %%4Securities and 7xchange 8oard of India: has directed the go'erning body of a stoc) exchange to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act, the go'erning body concerned shall appoint one or (ore (e(bers thereof to (a)e the in*uiry and the pro'isions of sub+rule ( ) shall apply "!tati# "!tandi# to such in*uiry0 S*,.i!!io of % *%l re$ort. 17. ( ) 7'ery recognised stoc) exchange shall before the 3 st day of Manuary in each year or within such extended ti(e as the %34Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, allow, furnish the %34Securities and 7xchange 8oard of India: annually with a report about its acti'ities during the preceding calendar year, which shall inter alia contain detailed infor(ation about the following (atters , (a) changes in rules and bye+laws, if any3 (b) changes in the co(position of the go'erning body3 (c) any new sub+co((ittees set up and changes in the co(position of existing ones3
%% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# %3 Ibid0
(d) ad(issions, re+ad(issions, deaths or resignations of (e(bers3 (e) disciplinary action against (e(bers3 (f) arbitration of disputes (nature and nu(ber) between (e(bers and non+(e(bers3 (g) defaults3 (h) action ta)en to co(bat any e(ergency in trade3 (i) securities listed and de+listed3 and (j) securities brought on or re(o'ed fro( the forward list0 (%) 7'ery recognised stoc) exchange shall within one (onth of the date of the holding of its annual general (eeting, furnish the %$4Securities and 7xchange 8oard of India: with a copy of its audited balance+sheet and profit and loss account for its preceding financial year0 S*,.i!!io of $erio-i'%l ret*r !. 17A. 7'ery recognised stoc) exchange shall furnish the %$4Securities and 7xchange 8oard of India: periodical returns relating to(i) the official rates for the securities enlisted thereon3 (ii) the nu(ber of shares deli'ered through the clearing house3 (iii) the (a)ing+up prices3 (iv) the clearing house progra((es3 (v) the nu(ber of securities listed and de+listed during the pre'ious three (onths3 (vi) the nu(ber of securities brought on or re(o'ed fro( the forward list during the pre'ious three (onths3 and (vii) any other (atter as (ay be specified by the %$4Securities and 7xchange 8oard of India:0 @% er of $*,li'%tio of ,>e0l%/! for 'riti'i!.. 1:. .he bye+laws to be (ade, a(ended or re'ised under the Act shall be published for
criticis( in accordance with the pro'isions of section %3 of the &eneral Clauses Act, >!/ both in the &aFette of India and Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate0 Re7*ire.e t! /ith re!$e't to the li!ti ( of !e'*ritie! o % re'o( i!e- !to'6 e#'h% (e. 19. ( ) A public co(pany as defined under the Co(panies Act, !"#, desirous of getting its securities listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars ,
%$ Ibid0
(a) ?e(orandu( and articles of association and, in the case of a debenture issue, a copy of the trust deed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any securities for subscription or sale during the last fi'e years0 (d) Copies of balance+sheets and audited accounts for the last fi'e years, or in the case of new co(panies, for such shorter period for which accounts ha'e been (ade up0 (e) A state(ent showing(i) di'idends and cash bonuses, if any, paid during the last ten years (or such shorter period as the co(pany has been in existence, whether as a pri'ate or public co(pany), (ii) di'idends or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents with or between ,(i) 'endors andLor pro(oters, (ii) underwriters and sub+underwriters, (iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents with(i) (anaging agents and secretaries and treasurers, (ii) selling agents, (iii) (anaging directors and technical directors, (iv) general (anager, sales (anager, (anager or secretary0 (h) Certified copy of e'ery letter, report, balance+sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering securities for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents0 (j) A brief history of the co(pany since its incorporation gi'ing details of its acti'ities including any reorganisation, reconstruction or a(alga(ation, changes in its capital structure, (authorised, issued and subscribed) and debenture borrowings, if any0
(k) <articulars of shares and debentures issued-(i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s including an option for the issue of any )ind of the securities granted to any person0 (") Certified copies of%"4(i) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3: (ii) agree(ents, if any, with the Industrial 6inance Corporation, Industrial Credit and In'est(ent Corporation and si(ilar bodies0 (n) <articulars of shares forfeited0 ($) A list of highest ten holders of each class or )ind of securities of the co(pany as on the date of application along with particulars as to the nu(ber of shares or debentures held by and the address of each such holder0 (%) <articulars of shares or debentures for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0 (%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant co(pany shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer, (ii) that the fully paid shares will be free fro( all lien, while in the case of partly paid shares, the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such shares, (iii) that any a(ount paid+up in ad'ance of calls on any share (ay carry interest but shall not entitle the holder of the share to participate in respect thereof, in a di'idend subse*uently declared, (iv) there will be no forfeiture of unclai(ed di'idends before the clai( beco(es barred by law, (v) that option or right to call of shares shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the securities of a co(pany which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0
%" Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 <rior to its substitution, sub+clause (i), read as under, 1(i) letters of consent of the Controller of Capital Issues02
%#4(b)
(i) At least twenty fi'e per cent0 of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent3 or (ii) At least ten per cent of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent if the post issue capital of the
co(pany calculated at offer price is (ore than four thousand crore rupees, <ro'ided that the re*uire(ent of post issue capital being (ore than four thousand crore rupees shall not apply to a co(pany whose draft offer docu(ent is pending with the Securities and 7xchange 8oard of India on or before the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, if it satisfies the conditions prescribed in clause (b) of sub+rule % of rule ! of the Securities Contracts (Regulation) Rules, !"# as existed prior to the date of such co((ence(ent, %/4<ro'ided further that the co(pany, referred to in sub clause (ii), shall increase its public shareholding to at least twenty fi'e per cent, within a
%# Substituted
by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, clause (b) as a(ended by the A(end(ent Rules, %00 , w0e0f0 0/00#0%00 , read as under, 1(b) At least 0 per cent of each class or )ind of securities issued by a co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted subDect to the following conditions, (a) (ini(u( %0 la)h securities (excluding reser'ations, fir( allot(ent and pro(otersJ contribution) was offered to the public3 (b) the siFe of the offer to the public, i&e&' the offer price (ultiplied by the nu(ber of securities offered to the public was (ini(u( Rs0 00 crores3 and (c) the issue was (ade only through boo) building (ethod with allocation of #0 per cent of the issue siFe to the *ualified institutional buyers as specified by the Securities and 7xchange 8oard of India, 4ro+i-e- that if a co(pany does not fulfil the conditions, it shall offer at least %" per cent of each class or )ind of securities to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted, 4ro+i-e- f*rther that a recognised stoc) exchange (ay relax any of the conditions with the pre'ious appro'al of the Securities and 7xchange 8oard of India, in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#), and subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*6or the purpose of this clause, it is hereby clarified that where any part of the securities sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental 6ire and &eneral Insurance Co(pany =i(ited and the Hnited 6ire and &eneral Insurance Co(pany =i(ited or Hnit .rust of India, the total subscription to the securities, whether by one or (ore of such bodies, shall not for( part of the 0 per cent or %" per cent of the securities, as the case (ay be, to be offered to the public02 %/ Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 <rior to its substitution, second pro'iso, read as under, 1<ro'ided further that the co(pany, referred in sub+clause (ii), shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of atleast fi'e per
period of three years fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India0: %>4GGG:: %!4(c) Eotwithstanding anything contained in clause (b), a public sector co(pany, shall offer and allot at least ten per cent, of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares to public in ter(s of an offer docu(ent0: (3) A co(pany applying for listing shall, as a condition precedent, underta)e inter alia(a) (i) that letters of allot(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to
that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been posted, (ii) that letters of right will be issued si(ultaneously, (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the securities to which they relate, (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right, (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or di'idend on the securities will be calculated, (b) to issue, when so re*uired, receipts for all securities deposited with it whether for registration, sub+di'ision, exchange or for other purposes 3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of certificates and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (bb) to issue, when so re*uired, consolidation and renewal certificates in deno(inations of the (ar)et unit of trading to split certificates, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3
cent per annu( beginning fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India,2 %> C(itted, ibid <rior to its o(ission, third pro'iso, read as under, 1<ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase beings its public shareholding to the le'el of twenty fi'e per cent in that year02 %! Inserted, ibid0
(c) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders, and (ii) to 'erify when the co(pany is unable to issue certificates or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (d) on production of the necessary docu(ents by shareholders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or certificate of the Controller of 7state 9uty or si(ilar other docu(ent has been duly exhibited to
and registered by the co(pany3 (e) to issue certificates in respect of shares or debentures lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance certificates within the sa(e period where the transfer is acco(panied by a larger certificate3 (f) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a di'idend or the issue of right or bonus share will be considered3 (g) to reco((end or declare all di'idends andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all di'idends andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (h) to notify the stoc) exchange of any (aterial change in the general character or nature of the co(panyJs business3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (anaging agent or secretaries and treasurers, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued, copies of all other notices and circulars sent to the shareholders including proceedings of ordinary and extraordinary general (eetings of the co(pany and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the shareholders of any new issue of securities whether by way of right, pri'ilege bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited securities or the issue of securities held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of di'idend or issue of right or bonus shares or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s (or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its shareholders or debentureholders) and specifying the purpose or purposes for which the transfer boo)s are to be closed (or the record is to be ta)en)3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority subDect to which the issue is proposed to be (ade ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after each annual general (eeting of at least ten principal holders of each class of security of the co(pany along with particulars as to the nu(ber of shares or debentures held by,
and address of, each such holder3 (+) to grant to shareholders the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e not being less than four wee)s within which to record, exercise, or renounce such rights, pri'ileges and benefits and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3 (r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any securities listed on the exchange, (ii) of the intention to (a)e a drawing of such securities, inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing of the balance) for the drawing, (iii) of the a(ount of securities outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the shareholders to apprise the position of the co(pany and to a'oid the establish(ent of a false (ar)et in the shares of the co(pany3 (t) (t)that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 304($) An application for listing shall be necessary in respect of the following, (a) all new issues of any class or )ind of securities of a co(pany to be offered to the public3 (b) all further issues of any class or )ind of securities of a co(pany if such class or )ind of securities of the co(pany are already listed on a recognised stoc) exchange0: (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the securities of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 3 44ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any security, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and its orders shall be carried out by the stoc) exchange0: 3%4(#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore
or re+ad(it to dealings any securities suspended or withdrawn fro( the list0: 334(#A) 7xcept as otherwise pro'ided in these rules or per(itted by the Securities and 7xchange 8oard of India under sub+rule (/), all re*uire(ents with respect to listing
30 Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, sub+rule ($), read as under, 1($) A fresh application for listing will be necessary in respect of all new issues desired to be dealt in, pro'ided that, where such new securities are identical in all respects with those already listed, ad(ission to dealings will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new issues0 7xplanation, Shares are identical in all respects only if(a) they are of the sa(e no(inal 'alue and the sa(e a(ount per share has been called up3 (b) they are entitled to di'idend at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the di'idend payable on each share will a(ount to exactly the sa(e su(, net and gross3 and (c) they carry the sa(e rights in all other respects02 3 Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%0000 7arlier, the second pro'iso was a(ended by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 3% Substituted by the Securities Contracts (Regulation) (A(end(ent), %000, w0e0f0 0>00>0%0000 7arlier, subrule (#) was a(ended by the Securities Contracts (Regulation) (A(end(ent), !!#, w0e0f0 %30 %0 !!#0 33 Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!0>0%0 00 <rior to its substitution, sub+rule (#A) as a(ended by the Securities Contracts
prescribed by these rules shall, so far as they (ay be, also apply to a public sector co(pany0: 3$4GGG: (/) .he 3"4Securities and 7xchange 8oard of India: (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect to listing prescribed by these rules0 3#4Co ti *o*! Li!ti ( Re7*ire.e t. 19A. ( ) 7'ery listed co(pany 3/4other than public sector co(pany: shall (aintain public shareholding of at least twenty fi'e per cent0, 3>4<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent, on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall increase its public shareholding to at least twenty fi'e per cent, within a period of three years fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India0 7xplanation, 6or the purposes of this sub+rule, a co(pany whose securities has been listed pursuant to an offer and allot(ent (ade to public in ter(s of sub+clause (ii) of clause (b) of sub+rule (%) of rule !, shall (aintain (ini(u( twenty fi'e per cent, public shareholding fro( the date on which the public shareholding in the co(pany reaches the le'el of twenty fi'e percent in ter(s of said sub+clause0: (%) Khere the public shareholding in a listed co(pany falls below twenty fi'e per cent0 at any ti(e, such co(pany shall bring the public shareholding to twenty fi'e per cent0
(Regulations)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 and &SR % (7) w0e0f0 0!0030 !!", read as under, 1(#A) All the re*uire(ents with respect to listing and continuous listing prescribed by these rules, shall so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature ,2 3$ C(itted by the Securities Contracts (Regulation)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its o(ission, pro'iso, as substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# and inserted by &SR %! (7) dated %/0030 !!", read as under,
1<ro'ided that a recognised stoc) exchange (ay relax the re*uire(ent of offer to public for subscription of atleast twenty+fi'e percent of the each class or )ind of securities issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e02 3" Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent), Rules, !!#, w0e0f0 %30 %0 !!#0 3# Inserted by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 3/ Inserted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3> Substituted, ibid0 <rior to substitution, pro'isos, read as under, 1<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of at least fi'e per cent per annu( beginning fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India, <ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase brings its public shareholding to the le'el of twenty fi'e per cent in that year02
within a (axi(u( period of twel'e (onths fro( the date of such fall in the (anner specified by the Securities and 7xchange 8oard of India0: 3!4(3) Eotwithstanding anything contained in this rule, e'ery listed public sector co(pany shall (aintain public shareholding of at least ten per cent0, <ro'ided that a listed public sector co(pany+ (a) which has public shareholding below ten per cent, on the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of three years fro( the date of such co((ence(ent3 (b) whose public shareholding reduces below ten per cent, after the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of twel'e (onths fro( the date of such reduction,0: $04Re7*ire.e t! /ith re!$e't to the li!ti ( of * it! or % > other i !tr*.e t of % Colle'ti+e I +e!t.e t S'he.e o % re'o( i!e- !to'6 e#'h% (e. "=. ( ) A Collecti'e In'est(ent ?anage(ent Co(pany (CI?C) which is desirous of getting its any collecti'e in'est(ent sche(e listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars , (a) Certificate of incorporation, (e(orandu( and articles of association of the co(pany and the copy of the trust deed of the sche(e intended to be listed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any unit or other instru(ent for subscription or sale during the last fi'e years, or in the case of a new co(pany, such shorter period during which the co(pany has been in existence0 (d) Copies of balance sheets and audited accounts for the last fi'e years, or in the case of a new co(pany, for such co(pleted financial year for which accounts ha'e been (ade up0 (e) A state(ent showing,(i) returns and cash bonuses, if any, paid during the last ten years (or such
shorter period as the co(pany has been in existence whether as a pri'ate or public co(pany)3 (ii) returns or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents pertaining to each sche(e of the co(pany with or between,(i) 'endors andLor pro(oters3 (ii) underwriters and sub+underwriters3
3! Inserted $0 Inserted
by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 0 by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%000
(iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents pertaining to each sche(e of a co(pany with(i) selling agents and other ser'ice pro'iders3 (ii) (anaging directors and technical directors3 (iii) general (anager, sales (anager, (anager or secretary0 (h) Certified copies of e'ery letter, report, balance sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering units or any other instru(ents of the sche(e for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents pertaining to such sche(e0 (j) A brief history of the Co(pany since its incorporation gi'ing details of its acti'ities including any re+organisation, reconstruction or a(alga(ation, changes in its capital structure (authorised, issued and subscribed) and debenture borrowings, if any, and the perfor(ance of other collecti'e in'est(ent sche(es of the co(pany0 (k) <articulars of units of the sche(e andLor shares, debentures of the co(pany issued (i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s granted to any person pertaining to such sche(e0 (") Certified copies of(i) certificate of registration granted by the Securities and 7xchange 8oard of India3 (ii) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3 (iii) agree(ents, if any, with any public financial institution as specified in section $A of the Co(panies Act, !"# ( of !"#)0 (n) A list of the highest ten holders of units of each sche(e of the co(pany as on the date of application along with particulars as to the nu(ber of units held by and the address of each such holder0 ($) <articulars of units of the sche(e for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0
(%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer of units of a particular sche(e3 (ii) that the fully paid units issued under the sche(e will be free fro( all lien, while in the case of partly paid units the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such units3 (iii) that any a(ount paid+up in ad'ance of calls on any units (ay carry interest but shall not entitle the holder of the unit to participate in respect thereof, in a return subse*uently declared3 (iv) there will be no forfeiture of unclai(ed returns before the clai( beco(es barred by law3 (v) that option or right to call of units shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the units of a sche(e which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0 (b) At least twenty+fi'e per cent of the units or any other instru(ent of a sche(e issued by the co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and not (ore than ninety days, and that applications recei'ed in pursuance of such offer were allotted fairly and unconditionally , 4ro+i-e- that a recognised stoc) exchange (ay relax this re*uire(ent, with the pre'ious appro'al of the Securities and 7xchange 8oard of India in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#) and subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*Khere any part of the units or any other instru(ents sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely, the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental Insurance Co(pany =i(ited and the Hnited Insurance Co(pany =i(ited, or Hnit .rust of India, the total subscription to the units or any other instru(ent, whether by one or (ore of such bodies, shall not for( part of the twenty+fi'e per cent of the units or any other instru(ent to be offered to the public0 (3) A co(pany applying for listing of a sche(e shall, as a condition precedent, underta)e, inter alia,(a) (i) that letters of allot(ent of units or any other instru(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been
posted3 (ii) that letters of right will be issued si(ultaneously3 (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and, exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the units or any other instru(ent to which they relate3 (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right3 (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or return on the units or any other instru(ent will be calculated3 (b) to issue, when so re*uired, receipts for all units and any other instru(ent deposited with it whether for registration, sub+di'ision, exchange or for other purposes3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of units and any other instru(ent and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (c) to issue, when so re*uired, consolidation and renewal units or any other instru(ent in deno(inations of the (ar)et unit of trading, to split units or any other instru(ent, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3 (d) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders3 and (ii) to 'erify when the co(pany is unable to issue units or any other instru(ents or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (e) on production of the necessary docu(ents by unit holders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or si(ilar other docu(ent has been duly exhibited to and registered by the co(pany3 (f) to issue certificates in respect of units or any other instru(ent lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance units or any other instru(ent within the sa(e period where the transfer is acco(panied by a larger unit or any other instru(ent certificate3 (g) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a return or the issue or right or bonus units or
any other instru(ent will be considered3 (h) to reco((end or declare all returns andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all returns andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts of such sche(e as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued copies of all other notices and circulars sent to the unitLother instru(ent holders regarding any i(portant de'elop(ent or resolutions passed by the co(pany affecting the perfor(ance of the sche(e and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the unitLany other instru(ent holders, of any new issue of unitsLother instru(ents whether by way of right, pri'ilege, bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited unitsLother instru(ents or the issue of unitsLother instru(ents held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of unit capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of returns or issue of right or bonus unitsLany other instru(ents in the sche(e or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its unitLother instru(ent holders and specifying the purpose or purposes for which the transfer boo)s are to be closed or the record is to be ta)en3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority, subDect to which the issue is proposed to be (ade, ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after the preparation of annual accounts of at least ten principal holders of each class of unitsLany other instru(ents of the co(pany along with particulars as to the nu(ber of unitsLany other instru(ent held by, and address of, each such holder3 (+) to grant to unitLany other instru(ent holders of the sche(e the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e, not being less than four wee)s, within which to record, exercise, or renounce such rights, pri'ileges and benefits, and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3
(r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any unitLother instru(ent listed on the exchange3 (ii) of the intention to (a)e a drawing of such unitLother instru(ent inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing off the balance) for the drawing3 (iii) of the a(ount of unitsLother instru(ents outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the unitLany other instru(ent holders to appraise the position of the sche(e and to a'oid the establish(ent of a false (ar)et in the unitsLany other instru(ents of the co(pany3 (t) that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 ($) A fresh application for listing will be necessary in respect of all new sche(es desired to be dealt in , 4ro+i-e- that, where such new unitsLother instru(ents are identical in all respects with those already listed, ad(ission to dealing will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new sche(es0 ()%lanati$n0-HnitsLany other instru(ents are identical in all respects only if(a) they are issued under the sa(e sche(e3 (b) they are of the sa(e no(inal 'alue and the sa(e a(ount per unitLother instru(ents has been called up3 (c) they are entitled to returns at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the return payable on each unitLother issue will a(ount to exactly the sa(e su(, net and gross3 and (d) they carry the sa(e rights in all other respects0 (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the unitsLother instru(ents of a sche(e of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 4ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any unitLother instru(ent of a collecti'e in'est(ent sche(e, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an
opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and thereupon the orders of the Securities Appellate .ribunal shall be carried out by the stoc) exchange0 (#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore or read(it to dealings any unitsLother instru(ents suspended or withdrawn fro( the list0 (/) All the re*uire(ents with respect to listing prescribed by these rules, shall, so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature , 4ro+i-e- that a recognised stoc) exchange (ay relax the re*uire(ent of offer to the public for subscription of at least twenty+fi'e per cent of the units or any other instru(ent of a collecti'e in'est(ent sche(e issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 (>) .he Securities and 7xchange 8oard of India (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect of listing prescribed by these rules0: $ 4Deli!ti ( of !e'*ritie!. "1. A recogniFed stoc) exchange (ay, without preDudice to any other action that (ay be ta)en under the Act or under any other law for the ti(e being in force, delist any securities listed thereon on any of the following grounds in accordance with the regulations (ade by the Securities and 7xchange 8oard of India, na(ely,(a) the co(pany has incurred losses during the preceding three consecuti'e years and it has negati'e networth3 (b) trading in the securities of the co(pany has re(ained suspended for a period of (ore than six (onths3 (c) the securities of the co(pany ha'e re(ained infre*uently traded during the preceding three years3 (d) the co(pany or any of its pro(oters or any of its director has been con'icted for failure to co(ply with any of the pro'isions of the Act or the Securities and 7xchange 8oard of India Act, !!% or the 9epositories Act, !!# (%% of !!#) or rules, regulations, agree(ents (ade thereunder, as the case (ay be and awarded a penalty of not less than rupees one crore or i(prison(ent of not less than three years3 (e) the addresses of the co(pany or any of its pro(oter or any of its directors, are not )nown or false addresses ha'e been furnished or the co(pany has changed its registered office in contra'ention of the pro'isions of the Co(panies Act, !"# ( of !"#)3 or
$
Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %00>, w0e0f0 000#0%00!
(f) shareholding of the co(pany held by the public has co(e below the (ini(u( le'el applicable to the co(pany as per the listing agree(ent under the Act and the co(pany has failed to raise public holding to the re*uired le'el within the ti(e specified by the recogniFed stoc) exchange , 4ro+i-e- that no securities shall be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) If the securities is delisted under clause ( ),
(a) the co(pany, pro(oter and director of the co(pany shall be Dointly and se'erally liable to purchase the outstanding securities fro( those holders who wish to sell the( at a fair price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India, under the Act3 and (b) the said securities shall be delisted fro( all recogniFed stoc) exchanges0 (3) A recogniFed stoc) exchange (ay, on the re*uest of the co(pany, delist any securities listed thereon in accordance with the regulations (ade under the Act by Securities and 7xchange 8oard of India, subDect to the following conditions, na(ely ,(a) the securities of the co(pany ha'e been listed for a (ini(u( period of three years on the recogniFed stoc) exchange3 (b) the delisting of such securities has been appro'ed by the two+third of public shareholders3 and (c) the co(pany, pro(oter andLor the director of the co(pany purchase the outstanding securities fro( those holders who wish to sell the( at a price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India under the Act, 4ro+i-e- that the condition at (c) (ay be dispensed with by Securities and 7xchange 8oard of India if the securities re(ain listed at least on the Eational Stoc) 7xchange of India =i(ited or the 8o(bay Stoc) 7xchange =i(ited0: FORM A ( ee Rules 3 and /) A$$li'%tio for re'o( itio 1re e/%l of re'o( itio of % !to'6 e#'h% (e * -er !e'tio ) of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 .o 00000000000000000000000000000000000000 00000000000000000000000000000000000000 !bject,*A%%licati$n f$r rec$gniti$n-rene.al $f rec$gniti$n $f a #t$ck e)change !nder #ecti$n 3 $f the ec!ritie# /$ntract# (0eg!lati$n) Act' 1956& Sir, <ursuant to the $%4Securities and 7xchange 8oard of India: Eotification Eo0 00000000000000000000000000 00000000000000000 dated 000000000000000000000000000000000LCertificate of recognition dated0000000000000000000000000000000KeLI on behalf of 000000000000000000 (na(e and address of stoc) exchange) being a stoc) exchange as defined in section % of the Securities Contracts
$% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
(Regulation) Act, !"# hereby apply for recognitionLrenewal of recognition for the purposes of the said Act in respect of contracts in securities0 ". 6our copies of the rules, (e(orandu( and articles of association relating in general to the constitution and (anage(ent of the stoc) exchange and four copies of the bye+laws for the regulation and control contracts in securities are enclosed0 ). All the necessary infor(ation re*uired in the Annexure to this 6or( is enclosed0 Any additional infor(ation will be furnished as and when called for by the $34Securities and 7xchange 8oard of India:0 3. KeLI on behalf of the said stoc) exchange hereby underta)e to co(ply with the re*uire(ents of section $ of the said Act and such other conditions and ter(s as (ay be contained in the certificate of recognition or be prescribed or i(posed subse*uently0 5. .reasury Receipt Eo0 000000dated000000for Rs000000000000is attached0
Oours faithfully, Signature of applicant ANNEAURE TO 2OR@ BAC Part I - General 0 Ea(e of the applicant stoc) exchange0 %0 Address0 30 9ate of establish(ent0 $0 Is your exchange a Doint stoc) co(pany (state whether public or pri'ate) registered under the Indian Co(panies Act or an association for profit or otherwise P If it is organised on so(e other basis, this (ay be stated0 "0 &i'e details of your capital structure and attach three copies of the audited balance sheets and profit and loss account of the 7xchange for the preceding three years0 Part II - Membership #0 State the nu(ber of (e(bers at the ti(e of application0 Also specify how (any are inacti'e0 /0 State whether there is any pro'ision, resolution or con'ention for li(iting the nu(ber of (e(bers and whether in pursuance thereof you ha'e fixed a ceiling on the nu(ber of (e(bers that you would ta)e0 >0 9o you insist on any (ini(u( *ualifications and experience before enrolling new (e(bers P If so gi'e details0 !0 State the different classes of (e(bers, if any, the nu(ber thereof and the pri'ileges enDoyed by each class0 Khat is the procedure followed by your exchange for the ad(ission of different classes of new (e(bers P 00 Khat are the rates of your annual subscription in respect of the different classes of (e(bers P 0 9o you collect any security deposit fro( your (e(bers P If so, gi'e details and also state the (anner in which such deposits are utilised and the rate of interest allowed, if any0
$3 Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
%0 9o you collect any ad(ission or entrance fees fro( your (e(bers or fro( partners of fir(s who are (e(bers P If so, how (uch P 30 9o you insist on your (e(bers and partners of fir(s who are (e(bers di'esting the(sel'es of other acti'ities either as principal or as e(ployee P $0 9o your rules per(it fir(s to beco(e (e(bers P If so, is it incu(bent on (e(bers to see) the appro'al of the go'erning body before ad(itting new partners P State the conditions, if any, laid down in your rules for the ad(ission of such partners0 "0 If your rules do not per(it of fir(s being enrolled as (e(bers, do you per(it indi'idual (e(bers to for( a partnership P State the procedure followed for the recognition of such partnership0 #0 9o you per(it (e(bers to wor) in partnership with non+(e(bers P If so, how far such non+(e(bers subDect to the control of the stoc) exchange P Part III - Governing Body /0 Khat is the present strength of your go'erning body P &i'e details of the constitution, powers of (anage(ent, election and tenure of office of (e(bers of the go'erning body, and the (anner in which its business is transacted0 >0 Are any trade or co((ercial interest represented on your go'erning body P If so,
gi'e details of interests represented0 !0 9o you associate shareholders of in'estors associations with the (anage(ent of your exchange P If so, state the (anner in which it is done0 %00 Are there any &o'ern(ent representati'es on your go'erning body P If so, furnish their na(es0 % 0 9o your rules pro'ide for the direct election by (e(bers of any other bodies or co((ittees, apart fro( the go'erning body P If so, gi'e details of their constitution, tenure, powers and functions0 %%0 9o you ha'e any pro'ision for the appoint(ent of standing or ad h$c subco((ittees of the go'erning body P If so, furnish details of the (ethod of their appoint(ent, ter(s of office, powers and functions0 %30 &i'e the designations, powers and duties of principal office+bearers of your exchange0 Are any of these office+bearers in the pay of the stoc) exchange P If so, gi'e details as to the (ode of their appoint(ent, tenure of office and re(uneration0 Part IV - Trading %$0 9o you ha'e a trading ring P If not, how do you carry on the business P &i'e details0 %"0 State the different )inds of contracts in use on your exchange e&g&' spot, ready and forward0 State the period of deli'ery and pay(ent in each case0 %#0 &i'e details of business hours for each type of contract0 %/0 &i'e details of the scale of bro)erage and other charges, if any, prescribed by your exchange0 %>0 9o you prescribe standard for(s of contract for the use of your (e(bers P Attach three copies of each such contract for(0 %!0 9o you classify your (e(bers into bro)ers and Dobbers P If so, specify the bye+law under which this is done0 300 9o you ha'e a syste( of registration of re(isiers andLor authorised cler)s P If so, gi'e details as to their *ualifications, obligations and rights, etc0 3 0 9o you ha'e any regulations regarding dealings by (e(bers on their own account whether in the nature of 1aravani (day+to+day) or otherwise P 3%0 9o you ha'e any pro'isions for regulating the 'olu(e of business done by any indi'idual (e(ber other than through a syste( of (argins P If so, gi'e details0 330 Khat pro'isions ha'e you (ade for periodical settle(ent of contracts and differences thereunder, the deli'ery of, and pay(ent for securities and the passing of deli'ery orders P 3$0 9o you ha'e a clearing house for the settle(ent of contracts P If so, gi'e details of its organisation and (anage(ent0 3"0 If you ha'e clearing house, what returns do the (e(bers of your exchange sub(it regarding the transactions cleared through such clearing house P 9oes the exchange as) for any regular returns in respect of transactions settled outside the clearing house P Sub(it three copies of for(s used in this connection0 3#0 Iow do you fix, alter or postpone the dates of settle(ent P 3/0 Iow do you deter(ine and declare (a)ing+up prices P 3>0 9o you ha'e any arrange(ents for (a)ing or recording of bargains P 3!0 Ia'e you any arrange(ents for recording and publishing (ar)et rates including opening, closing, highest and lowest rates P $00 Khat pro'isions ha'e you (ade for regulating-(a) the entering into contracts, their
perfor(ance and rescission, including contracts , (i) between (e(bers, (ii) between a (e(ber and his constituent, and (iii) between a (e(ber and a non+(e(ber3 (b) the conse*uences of breach, default or insol'ency on the part of (e(bers whether acting as buyers, sellers or inter(ediaries 3 and (c) 2havala#3 and other (atters relating to conduct of business of (e(bers in the exchange P $ 0 9o you prescribe (argin re*uire(ents P If yes, gi'e details0 $%0 9o you prescribe (axi(u( and (ini(u( prices for securities P If so, how and under what conditions0 $30 9o you pro'ide any safeguards for the pre'ention of Nbulls*ueeFesJ and 3 NbearraidsJ and for (eeting e(ergencies in trade P &i'e details0 $$0 Khat are the (easures adopted by you to regulate or prohibit ad'ertising or issue of circulars by your (e(bers P $"0 Khat are the disciplinary power with the go'erning body to enforce due co(pliance by (e(bers of the rules and bye+laws of the exchange and generally to ensure proper standard of business conduct P $#0 9o you re*uire (e(bers to supply such infor(ation or explanation and to produce such boo)s relating to their business as your go'erning body (ay re*uire P $/0 9o you publish any statistics in regard to business done on the exchange including the transactions settled through the clearing house, if (aintained P In particular, ha'e you e'ol'ed any (achinery for co(puting the 'olu(e of transactions in the different )inds of contracts per(itted on your exchange P &i'e details0 $>0 9o you ha'e any bye+laws contra'ention of which (a)es a contract 'oid P Part V - Miscellaneo s $!0 9o you ha'e any (achinery for arbitration of disputes between (e(bers andLor between (e(bers and their constituents P &i'e details0 "00 Khat are the conditions subDect to which securities are listed for dealings on your exchange P " 0 Khat are your re*uire(ents for ad(itting securities to forward+trading P "%0 9o you ha'e the right to prohibit, withdraw or suspend dealings in a listed security P If so, under what circu(stances is this right exercised P "30 Khat pro'isions ha'e you (ade for the le'y and reco'ery of fees, fines and penalties P FORM B ( ee rules # and /) $$5The Se'*ritie! % - E#'h% (e ;o%r- of I -i%< 4e. 5elhi' the 20&&&&&&&&&&&&& Eo0 000000000000000000000000000000000000.he $"4Securities and 7xchange 8oard of India:, ha'ing considered the application for recognitionLrenewal of recognition (ade under section 3 of the Securities Contracts (Regulation) Act, !"# by000000000000000000000000000000 (na(e and address of exchange) and being satisfied that it would be in the interest of the trade and also in the public interest so to do, hereby grants, in exercise of the powers conferred by section $ of the Securities Contracts (Regulation) Act, !"# recognition to the said exchange under section $ of the said Act for 0000000000000000000 yearLyears ending 0000000000000000000000%0 0000000on a per(anent basis in respect of contracts in securities subDect to the conditions stated herein below or as (ay be prescribed or i(posed hereafter0 Seal of the $#48oard: Signature of Cfficer
Note&-Application for renewal of recognition shall be (ade so as to reach the Central &o'ern(ent not less than three (onths before the expiry of the period0 (.his certificate, will also ha'e to be published as a Eotification in the &aFette of India and also in the Cfficial &aFette of the State in which principal office of the recognised stoc) exchange is situate)0 $/5FORM ! ( ee rule 3) Noti'e to !ho/ '%*!e %(%i !t the /ith-r%/%l of re'o( itio .I7 S7CHRI.I7S AE9 7ACIAE&7 8CAR9 C6 IE9IA 6!"bai' the&&&&&&&&&&& .o 0000000000000000000000000000000000000000000000000000000000000000000000000000000000
$$ Substituted
for 1&o'ern(ent of India, ?inistry of 6inance2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 $" Substituted for 1Central &o'ern(ent2, ibid0 $# Substituted for 1?inistry2, ibid0 $/ Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#
0000000000000000000000000000000000000000000000000000000000000000000000000000000000 (na(e and address of the exchange) Oou are hereby called upon to show cause on or before 0000000000000000000000000000000000000 at the office of 0000000000000000000000000000000000000000000000000000 ( designation of the officer) why the recognition granted to you under the ?inistry of 6inanceLthe Securities and 7xchange 8oard of India, Eotification Eo0 0000000000000000000000000000 dated 000000000000000000000000000000000000000 and Certificate Eo0 00000000000000000000000000000 dated 000000000000000000000000000000 should not be withdrawn for the reasons gi'en in the annexure to this notice0 8y order and in the na(e of the Securities and 7xchange 8oard of India0 Seal of the Securities and 7xchange 8oard of India0 Notifi'%tio & 4$& 576' dated 217271957&
SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< SECTIONS
80(9:6:4A0; 1. Short title, extent and co((ence(ent ". 9efinitions 0(/<=4: (5 1</> (?/@A4=( ). Application for recognition of stoc) exchanges 3. &rant of recognition to stoc) exchanges0 3A. Corporatisation and de(utualisation of stoc) exchanges 3;. <rocedure for corporatisation and de(utualisation 5. Kithdrawal of recognition 8. <ower of Central &o'ern(ent to call for periodical returns or direct in*uiries to be (ade 7. Annual reports to be furnished to Central &o'ern(ent by stoc) exchanges 7A. <ower of recognised stoc) exchange to (a)e rules restricting 'oting rights, etc :. <ower of Central &o'ern(ent to direct rules to be (ade or to (a)e rules :A. Clearing corporation 9. <ower of recognised stoc) exchanges to (a)e bye+laws 1=. <ower of Securities and 7xchange 8oard of India to (a)e or a(end byelaws of recognised stoc) exchanges 11. <ower of Central &o'ern(ent to supersede go'erning body of a recognised stoc) exchange 1". <ower to suspend business of recognised stoc) exchanges0 1"A. <ower to issue directions 1). Contracts in notified areas illegal in certain circu(stances 1)A. Additional trading floor 13. Contracts in notified areas to be 'oid in certain circu(stances 15. ?e(bers (ay not act as principals in certain circu(stances 18. <ower to prohibit contracts in certain cases 17. =icensing of dealers in securities in certain areas 17A. <ublic issue and listing of securities referred to in sub+clause ( ie) of clause (h) of section % 1:. 7xclusion of spot deli'ery contracts fro( sections 3, $, " and / 1:A. Contracts in deri'ati'e 19. Stoc) exchanges other than recognised stoc) exchanges prohibited "=. <rohibition of options in securities "1. Conditions for listing "1A. 9elisting of securities "". Right of appeal against refusal of stoc) exchanges to list securities of public co(panies ""A. Right of appeal to Securities Appellate .ribunal against refusal of stoc) exchange to list securities of public co(panies "";. <rocedure and powers of Securities Appellate .ribunal ""C. Right to legal representation ""D. =i(itation ""E. Ci'il court not to ha'e Durisdiction
""2. Appeal to Supre(e Court 8(4A91:( A45 80</(5A0( "). <enalties ")A. <enalty for failure to furnish infor(ation, return, etc0 ");. <enalty for failure by any person to enter into an agree(ent with clients ")C. <enalty for failure to redress in'estorsJ grie'ances ")D. <enalty for failure to segregate securities or (oneys of client or clients ")E. <enalty for failure to co(ply with pro'ision of listing conditions or delisting conditions or grounds ")2. <enalty for excess de(aterialisation or deli'ery of unlisted securities ")G. <enalty for failure to furnish periodical returns, etc0 ")D. <enalty for contra'ention where no separate penalty has been pro'ided ")0I. <ower to adDudicate ")E. 6actors to be ta)en into account by adDudicating officer ")EA. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! ")E;. Re'o+er> of %.o* t! ")F. Crediting su(s realised by way of penalties to Consolidated 6und of India ")L. Appeal to Securities Appellate .ribunal ")@. Cffences ")N. Co(position of certain offences ")0O. <ower to grant i((unity "3. Cffences by co(panies "5. Certain offences to be cogniFable "8. CogniFance of offences by courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! 6: /(99A4(<A "7. .itle to di'idends "7A. Right to recei'e inco(e fro( collecti'e in'est(ent sche(e "7;. Right to recei'e inco(e fro( (utual fund ":. Act not to apply in certain cases "9. <rotection of action ta)en in good faith "9A. <ower to delegate )=. <ower to (a)e rules )1. <ower of Securities and 7xchange 8oard of India to (a)e regulations SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< 53th Se$te.,er, 1958< A A't to $re+e t * -e!ir%,le tr% !%'tio ! i !e'*ritie! ,> re(*l%ti ( the ,*!i e!! of -e%li ( therei , 14***: ,> $ro+i-i ( for 'ert%i other .%tter! 'o e'te- there/ith. 87 it enacted by <arlia(ent in the Se'enth Oear of the Republic of India as follows ,
80(9:6:4A0; Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities Contracts (Regulation) Act, !"#0 (%) It extends to the whole of India0
Kords 1by prohibiting options and2 o(itted by the Securities =aws (A(end(ent) Act, !!", Sec0 >, w0e0f0 %"+0 + !!".
(3) It shall co(e into force on such date% as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 Defi itio !. ". In this Act, unless the context otherwise re*uires,(a) 1contract2 (eans a contract for or relating to the purchase or sale of securities3 3 4(aa) 1corporatisation2 (eans the succession of a recognised stoc) exchange, being a body of indi'iduals or a society registered under the Societies Registration Act, >#0 (% of >#0), by another stoc) exchange, being a co(pany incorporated for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities carried on by such indi'iduals or society3 (ab) 1de(utualisation2 (eans the segregation of ownership and (anage(ent fro( the trading rights of the (e(bers of a recognised stoc) exchange in accordance with a sche(e appro'ed by the Securities and 7xchange 8oard of India3: $4"4(ac): 1deri'ati'e2 includes(A) a security deri'ed fro( a debt instru(ent, share, loan, whether secured or unsecured, ris) instru(ent or contract for differences or any other for( of security3 (B) a contract which deri'es its 'alue fro( the prices, or index of prices, of underlying securities3: (b) 1&o'ern(ent security2 (eans a security created and issued, whether before or after the co((ence(ent of this Act, by the Central &o'ern(ent or a State &o'ern(ent for the purpose of raising a public loan and ha'ing one of the for(s specified in clause (2) of section % of the <ublic 9ebt Act, !$$ ( > of !$$)3 (c) 1(e(ber2 (eans a (e(ber of a recognised stoc) exchange3 (d) 1option in securities2 (eans a contract for the purchase or sale of a right to buy or sell, or a right to buy and sell, securities in future, and includes a teji' a "andi' a teji "andi' a galli' a put, a call or a put and call in securities3 (e) 1prescribed2 (eans prescribed by rules (ade under this Act3
% %0+%+
!"/ vide SRC "%>, dated #+0%+ !"/, published in the &aFette of India, 7xtra0, <t0 II, Sec0 3, p0 "$!, dated #+0%+ !"/0 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 $ Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000 " Clause (aa) renu(bered as clause (ac) by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0
(f) 1recognised stoc) exchange2 (eans a stoc) exchange which is for the ti(e
being recognised by the Central &o'ern(ent under section $3 (g) 1rules2, with reference to the rules relating in general to the constitution and (anage(ent of a stoc) exchange, includes, in the case of a stoc) exchange which is an incorporated association, its (e(orandu( and articles of association3 64(ga) 1sche(e2 (eans a sche(e for corporatisation or de(utualisation of a recognised stoc) exchange which (ay pro'ide for(i) the issue of shares for a lawful consideration and pro'ision of trading rights in lieu of (e(bership cards of (e(bers of a recognised stoc) exchange3 (ii) the restrictions on 'oting rights3 (iii) the transfer of property, business, assets, rights, liabilities, recognitions, contracts of the recognised stoc) exchange, legal proceedings by, or against, the recognised stoc) exchange, whether in the na(e of the recognised stoc) exchange or any trustee or otherwise and any per(ission gi'en to, or by, the recognised stoc) exchange3 (iv) the transfer of e(ployees of a recognised stoc) exchange to another recognised stoc) exchange3 (v) any other (atter re*uired for the purpose of, or in connection with, the corporatisation or de(utualisation, as the case (ay be, of the recognised stoc) exchange3: /4>4(gb): 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (h) 1securities2 include(i) shares, scrips, stoc)s, bonds, debentures, debenture stoc) or other (ar)etable securities of a li)e nature in or of any incorporated co(pany or other body corporate3 !4(ia) deri'ati'e3 (ib) units or any other instru(ent issued by any collecti'e in'est(ent sche(e to the in'estors in such sche(es3:
# Inserted / Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (Second A(end(ent) Act, !!!, Sec %, w0e0f0 #+ %+ !!!0 > Clause (ga) renu(bered as clause (gb) by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 ! Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000
04(ic) security receipt as defined in clause ( Cg) of section % of the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%3: 114(id) units or any other such instru(ent issued to the in'estors under any (utual fund sche(e3: %47xplanation0-6or the re(o'al of doubts, it is hereby declared that ;securities; shall not include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(bined benefit ris) on the life of the persons and in'est(ent by such
persons and issued by an insurer referred to in clause (!) of section % of the Insurance Act, !3> ($ of !3>)3: 35(ie) any certificate or instru(ent (by whate'er na(e called), issued to an in'estor by any issuer being a special purpose distinct entity which possesses any debt or recei'able, including (ortgage debt, assigned to such entity, and ac)nowledging beneficial interest of such in'estor in such debt or recei'able, including (ortgage debt, as the case (ay be3 <
0 Inserted by the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%, Sec0 $ and Schedule, w0r0e0f0 % +#+%00%0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0e0f0 %+ 0+%00$0 % Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, Sec $, w0r0e0f0 0!+0$+%0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, read as under , ;CIA<.7R BI ?ISC7==AE7CHS #0 Dalidati$n&-Eotwithstanding anything contained in any Dudg(ent, decree or order of any Court, .ribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly, any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 0e%eal and #aving#&*( ) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0; 3 Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec %, w0e0f0 %>+"+ %00/0
$4(ii) &o'ern(ent securities3 (iia) such other instru(ents as (ay be declared by the Central &o'ern(ent to be securities3 and: (iii) rights or interest in securities3 "4(i) 1spot deli'ery contract2 (eans a contract which pro'ides for,(a) actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e
town or locality3 (b) transfer of the securities by the depository fro( the account of a beneficial owner to the account of another beneficial owner when such securities are dealt with by a depository3: #4(j) 1stoc) exchange2 (eans(a) any body of indi'iduals, whether incorporated or not, constituted before corporatisation and de(utualisation under sections $A and $8, or (b) a body corporate incorporated under the Co(panies Act, !"# ( of !"#) whether under a sche(e of corporatisation and de(utualisation or otherwise, for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0: /4I ter$ret%tio of 'ert%i /or-! % - e#$re!!io !. "A. Kords and expressions used herein and not defined in this Act but defined in the Co(panies Act, !"# ( of !"#) or the Securities and 7xchange 8oard of India
$ Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, for sub+clause (ii), w0r0e0f0 30+0 + !!%0 " Substituted by the 9epositories Act, !!#, Sec 30 and Schedule, <t0 III, w0r0e0f0 %0+0!+ !!" . <rior to its substitution, clause (i) read as under , N(i) 1spot deli'ery contract2 (eans a contract which pro'ides for the actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e town or locality3J # Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (j) read as under ,N(j) 1stoc) exchange2 (eans any body of indi'iduals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0J / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
Act, !!% ( " of !!%) or the 9epositories Act, !!# (%% of !!#) shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts0: 0(/<=4: (5 1</> (?/@A4=( A$$li'%tio for re'o( itio of !to'6 e#'h% (e!. ). ( ) Any stoc) exchange, which is desirous of being recognised for the purposes of this Act, (ay (a)e an application in the prescribed (anner to the Central &o'ern(ent01: (%) 7'ery application under sub+section ( ) shall contain such particulars as (ay be prescribed, and shall be acco(panied by a copy of the bye+laws of the stoc) exchange for the regulation and control of contracts and also a copy of the rules relating in general to the constitution of the stoc) exchange and in particular, to(a) the go'erning body of such stoc) exchange, its constitution and powers of (anage(ent and the (anner in which its business is to be transacted3 (b) the powers and duties of the office bearers of the stoc) exchange3 (c) the ad(ission into the stoc) exchange of 'arious classes of (e(bers, the *ualifications for (e(bership, and the exclusion, suspension, expulsion and
re+ad(ission of (e(bers therefro( or thereinto3 (d) the procedure for the registration of partnerships as (e(bers of the stoc) exchange in cases where the rules pro'ide for such (e(bership3 and the no(ination and appoint(ent of authorised representati'es and cler)s0 Gr% t of re'o( itio to !to'6 e#'h% (e!. 3. ( ) If the Central &o'ern(ent ! is satisfied, after (a)ing such in*uiry as (ay be necessary in this behalf and after obtaining such further infor(ation, if any, as it (ay re*uire,(a) that the rules and bye+laws of a stoc) exchange applying for registration are in confor(ity with such conditions as (ay be prescribed with a 'iew to ensure fair dealing and to protect in'estors3 (b) that the stoc) exchange is willing to co(ply with any other conditions (including conditions as to the nu(ber of (e(bers) which the Central &o'ern(ent, after consultation with the go'erning body of the stoc) exchange and ha'ing regard to the area ser'ed by the stoc) exchange and its standing and the nature of the securities dealt with by it, (ay i(pose for the purpose of carrying out the obDects of this Act3 and
> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 ! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
(c) that it would be in the interest of the trade and also in the public interest to grant recognition to the stoc) exchange3 it (ay grant recognition to the stoc) exchange subDect to the conditions i(posed upon it as aforesaid and in such for( as (ay be prescribed0 (%) .he conditions which the Central &o'ern(ent %0 (ay prescribe under clause (a) of sub+section ( ) for the grant of recognition to the stoc) exchanges (ay include, a(ong other (atters, conditions relating to,(i) the *ualifications for (e(bership of stoc) exchanges3 (ii) the (anner in which contracts shall be entered into and enforced as between (e(bers3 (iii) the representation of the Central &o'ern(ent on each of the stoc) exchange by such nu(ber of persons not exceeding three as the Central &o'ern(ent (ay no(inate in this behalf3 and (iv) the (aintenance of accounts of (e(bers and their audit by chartered accountants whene'er such audit is re*uired by the Central &o'ern(ent0 (3) 7'ery grant of recognition to a stoc) exchange under this section shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office as of the stoc) exchange is situate, and such recognition shall ha'e effect as fro( the date of its publication in the &aFette of India0 % ($) Eo application for the grant of recognition shall be refused except after gi'ing an opportunity to the stoc) exchange concerned to be heard in the (atter3 and the reasons for such refusal shall be co((unicated to the stoc) exchange in writing0 %% (") Eo rules of a recognised stoc) exchange relating to any of the (atters specified in sub+section (%) of section 3 shall be a(ended except with the appro'al of the
Central &o'ern(ent0%3 "35Cor$or%ti!%tio % - -e.*t*%li!%tio of !to'6 e#'h% (e!. 3A. Cn and fro( the appointed date, all recognised stoc) exchanges (if not corporatised and de(utualised before the appointed date) shall be corporatised and de(utualised in accordance with the pro'isions contained in section $8 ,
%0 <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 % <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %% <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %3 <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 %$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
4ro+i-e- that the Securities and 7xchange 8oard of India (ay, if it is satisfied that any recognised stoc) exchange was pre'ented by sufficient cause fro( being corporatised and de(utualised on or after the appointed date, specify another appointed date in respect of that recognised stoc) exchange and such recognised stoc) exchange (ay continue as such before such appointed date0 ()%lanati$n&*6or the purposes of this section, 1appointed date2 (eans the date which the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, appoint and different appointed dates (ay be appointed for different recognised stoc) exchanges0: "554ro'e-*re for 'or$or%ti!%tio % - -e.*t*%li!%tio . 3;. ( ) All recognised stoc) exchanges referred to in section $A shall, within such ti(e as (ay be specified by the Securities and 7xchange 8oard of India, sub(it a sche(e for corporatisation and de(utualisation for its appro'al , 4ro+i-e- that the Securities and 7xchange 8oard of India, (ay, by notification in the Cfficial &aFette, specify na(e of the recognised stoc) exchange, which had already been corporatised and de(utualised, and such stoc) exchange shall not be re*uired to sub(it the sche(e under this section0 (%) Cn receipt of the sche(e referred to in sub+section ( ), the Securities and 7xchange 8oard of India (ay, after (a)ing such en*uiry as (ay be necessary in this behalf and obtaining such further infor(ation, if any, as it (ay re*uire and if it is satisfied that it would be in the interest of the trade and also in the public interest, appro'e the sche(e with or without (odification0 (3) Eo sche(e under sub+section (%) shall be appro'ed by the Securities and 7xchange 8oard of India if the issue of shares for a lawful consideration or pro'ision of trading rights in lieu of (e(bership card of the (e(bers of a recognised stoc) exchange or pay(ent of di'idends to (e(bers ha'e been proposed out of any reser'es or assets of that stoc) exchange0 ($) Khere the sche(e is appro'ed under sub+section (%), the sche(e so appro'ed shall be published i((ediately by(a) the Securities and 7xchange 8oard of India in the Cfficial &aFette3 (b) the recognised stoc) exchange in such two daily newspapers circulating in India, as (ay be specified by the Securities and 7xchange 8oard of India,
and upon such publication, notwithstanding anything to the contrary contained in this Act or any other law for the ti(e being in force or any agree(ent, award, Dudg(ent, decree or other instru(ent for the ti(e being in force, the sche(e shall ha'e effect and be binding on all persons and authorities including all (e(bers, creditors, depositors and e(ployees of the recognised stoc) exchange and on all
%" Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
persons ha'ing any contract, right, power, obligation or liability with, against, o'er, to, or in connection with, the recognised stoc) exchange or its (e(bers0 (") Khere the Securities and 7xchange 8oard of India is satisfied that it would not be in the interest of the trade and also in the public interest to appro'e the sche(e under sub+section (%), it (ay, by an order, reDect the sche(e and such order of reDection shall be published by it in the Cfficial &aFette , 4ro+i-e- that the Securities and 7xchange 8oard of India shall gi'e a reasonable opportunity of being heard to all the persons concerned and the recognised stoc) exchange concerned before passing an order reDecting the sche(e0 (#) .he Securities and 7xchange 8oard of India (ay, while appro'ing the sche(e under sub+section (%), by an order in writing, restrict(a) the 'oting rights of the shareholders who are also stoc) bro)ers of the reognised stoc) exchange3 (b) the right of shareholders or a stoc) bro)er of the recognised stoc) exchange to appoint the representati'es on the go'erning board of the stoc) exchange3 (c) the (axi(u( nu(ber of representati'es of the stoc) bro)ers of the recognised stoc) exchange to be appointed on the go'erning board of the recognised stoc) exchange, which shall not exceed one+fourth of the total strength of the go'erning board0 (/) .he order (ade under sub+section (#) shall be published in the Cfficial &aFette and on the publication thereof, the order shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#), or any other law for the ti(e being in force, ha'e full effect0 (>) 7'ery recognised stoc) exchange, in respect of which the sche(e for corporatisation or de(utualisation has been appro'ed under sub+section (%), shall, either by fresh issue of e*uity shares to the public or in any other (anner as (ay be specified by the regulations (ade by the Securities and 7xchange 8oard of India %#, ensure that at least fifty+one per cent of its e*uity share capital is held, within twel'e (onths fro( the date of publication of the order under sub+section (/), by the public other than shareholders ha'ing trading rights , 4ro+i-e- that the Securities and 7xchange 8oard of India (ay, on sufficient cause being shown to it and in the public interest, extend the said period by another twel'e (onths0:
ee Securities Contracts (Regulation) (Stoc) 7xchanges and Clearing Corporations) Regulations, %0 %, w0e0f0 %0+0#+%0 % notified vide &aFette Eotification Eo0 =A9+ ERCL&EL%0 %+ 3L0/L 3"$#, 7xtra0, <t0 III, Section $, dtd %0+0#+%0 %0
%#
?ith-r%/%l of re'o( itio .
5. %/4( ): If the Central &o'ern(ent%> is of opinion that the recognition granted to a stoc) exchange under the pro'isions of this Act should, in the interest of the trade or in the public interest, be withdrawn, the Central &o'ern(ent (ay ser'e on the go'erning body of the stoc) exchange a written notice that the Central &o'ern(ent is considering the withdrawal of the recognition for the reasons stated in the notice and after gi'ing an opportunity to the go'erning body to be heard in the (atter, the Central &o'ern(ent (ay withdraw, by notification in the Cfficial &aFette, the recognition granted to the stoc) exchange , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Central &o'ern(ent (ay, after consultation with the stoc) exchange, (a)e such pro'ision as it dee(s fit in the notification of withdrawal or in any subse*uent notification si(ilarly published for the due perfor(ance of any contracts outstanding on that date0 %!4(%) Khere the recognised stoc) exchange has not been corporatised or de(utualised or it fails to sub(it the sche(e referred to in sub+section ( ) of section $8 within the specified ti(e therefor or the sche(e has been reDected by the Securities and 7xchange 8oard of India under sub+section (") of section $8, the recognition granted to such stoc) exchange under section $, shall, notwithstanding anything to the contrary contained in this Act, stand withdrawn and the Central &o'ern(ent shall publish, by notification in the Cfficial &aFette, such withdrawal of recognition , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Securities and 7xchange 8oard of India (ay, after consultation with the stoc) exchange, (a)e such pro'isions as it dee(s fit in the order reDecting the sche(e published in the Cfficial &aFette under sub+section (") of section $80: 4o/er of Ce tr%l Go+er .e t to '%ll for $erio-i'%l ret*r ! or -ire't i 7*irie! to ,e .%-e. 8. ( ) 7'ery recognised stoc) exchange shall furnish to the 304Securities and 7xchange 8oard of India: such periodical returns relating to its affairs as (ay be prescribed0
%/ Section
" renu(bered as sub+section ( ) by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 %> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 30 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(%) 7'ery recognised stoc) exchange and e'ery (e(ber thereof shall (aintain and preser'e for such periods not exceeding fi'e years such boo)s of account, and other docu(ents as the Central &o'ern(ent, after consultation with the stoc) exchange concerned, (ay prescribe in the interest of the trade or in the public interest, and such boo)s of account, and other docu(ents shall be subDect to inspection at all reasonable ti(es 3 4by the Securities and 7xchange 8oard of India:0 (3) Kithout preDudice to the pro'isions contained in sub+sections ( ) and (%), the
3%4Securities
and 7xchange 8oard of India:, if it is satisfied that it is in the interest of the trade or in the public interest so to do, (ay, by order in writing,(a) call upon a recognised stoc) exchange or any (e(ber thereof to furnish in writing such infor(ation or explanation relating to the affairs of the stoc) exchange or of the (e(ber in relation to the stoc) exchange as the 334Securities and 7xchange 8oard of India: (ay re*uire3 or (b) appoint one or (ore persons to (a)e an in*uiry in the prescribed (anner in relation to the affairs of the go'erning body of a stoc) exchange or the affairs of any of the (e(bers of the stoc) exchange in relation to the stoc) exchange and sub(it a report of the result of such in*uiry to the 3$4Securities and 7xchange 8oard of India: within such ti(e as (ay be specified in the order or, in the case of an in*uiry in relation to the affairs of any of the (e(bers of a stoc) exchange, direct the go'erning body to (a)e the in*uiry and sub(it its report to the 3"4Securities and 7xchange 8oard of India:0 ($) Khere an in*uiry in relation to the affairs of a recognised stoc) exchange or the affairs of any of its (e(bers in relation to the stoc) exchange has been underta)en under sub+section (3),(a) e'ery director, (anager, secretary or other officer of such stoc) exchange3 (b) e'ery (e(ber of such stoc) exchange3 (c) if the (e(ber of the stoc) exchange is a fir(, e'ery partner, (anager, secretary or other officer of the fir(3 and (d) e'ery other person or body of persons who has had dealings in the course of business with any of the persons (entioned in clauses ( a), (b) and (c), whether directly or indirectly3
Substituted for ;by the Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3% Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 33 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3" Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
3
shall be bound to produce before the authority (a)ing the in*uiry all such boo)s of account, and other docu(ents in his custody or power relating to or ha'ing a bearing on the subDect+(atter of such in*uiry and also to furnish the authorities within such ti(e as (ay be specified with any such state(ent or infor(ation relating thereto as (ay be re*uired of hi(0 )8A *%l re$ort! to ,e f*r i!he- to Ce tr%l Go+er .e t ,> !to'6 e#'h% (e!. 7. 7'ery recognised stoc) exchange shall furnish the Central &o'ern(ent with a copy of the annual report, and such annual report shall contain such particulars as (ay be prescribed0 )754o/er of re'o( i!e- !to'6 e#'h% (e to .%6e r*le! re!tri'ti ( +oti ( ri(ht!, et'. 7A. ( ) A recognised stoc) exchange (ay (a)e rules or a(end any rules (ade by it
to pro'ide for all or any of the following (atters, na(ely ,(a) the restriction of 'oting rights to (e(bers only in respect of any (atter placed before the stoc) exchange at any (eeting3 (b) the regulation of 'oting rights in respect of any (atter placed before the stoc) exchange at any (eeting so that each (e(ber (ay be entitled to ha'e one 'ote only, irrespecti'e of his share of the paid+up e*uity capital of the stoc) exchange3 (c) the restriction on the right of a (e(ber to appoint another person as his proxy to attend and 'ote at a (eeting of the stoc) exchange3 (d) such incidental, conse*uential and supple(entary (atters as (ay be necessary to gi'e effect to any of the (atters specified in clauses ( a), (b) and (c)0 (%) Eo rules of a recognised stoc) exchange (ade or a(ended in relation to any (atter referred to in clauses (a) to (d) of sub+section ( ) shall ha'e effect until they ha'e been appro'ed by the Central &o'ern(ent 3> and published by that &o'ern(ent in the Cfficial &aFette and, in appro'ing the rules so (ade or a(ended, the Central &o'ern(ent (ay (a)e such (odifications therein as it thin)s fit, and on such publication, the rules as appro'ed by the Central &o'ern(ent shall be dee(ed to ha'e been 'alidly (ade, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#)0:
3# <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 3/ Inserted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec %, w0e0f0 0>+ %+ !"!0 3> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
4o/er of Ce tr%l Go+er .e t )9 to -ire't r*le! to ,e .%-e or to .%6e r*le!. :. ( ) Khere, after consultation with the go'erning bodies of stoc) exchanges generally or with the go'erning body of any stoc) exchange in particular, the Central &o'ern(ent is of opinion that it is necessary or expedient so to do, it (ay, by order in writing together with a state(ent of the reasons therefor, direct recognised stoc) exchanges generally or any recognised stoc) exchange in particular, as the case (ay be, to (a)e any rules or to a(end any rules already (ade in respect of all or any of the (atters specified in sub+section (%) of section 3 within a period of $04two (onths: fro( the date of the order0 (%) If any recognised stoc) exchange fails or neglects to co(ply with any order (ade under sub+section ( ) within the period specified therein, the Central &o'ern(ent (ay (a)e the rules for, or a(end the rules (ade by, the recognised stoc) exchange, either in the for( proposed in the order or with such (odifications thereof as (ay be agreed to between the stoc) exchange and the Central &o'ern(ent0 (3) Khere in pursuance of this section any rules ha'e been (ade or a(ended, the rules so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette or &aFettes of the State or States in which the principal office or offices of the recognised stoc) exchange or exchanges is or are situate, and, on the publication thereof in the &aFette of India, the rules so (ade or a(ended shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# (
of !"#), or in any other law for the ti(e being in force, ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange or stoc) exchanges, as the case (ay be0 315Cle%ri ( 'or$or%tio . :A. ( ) A recognised stoc) exchange (ay, with the prior appro'al of the Securities and 7xchange 8oard of India, transfer the duties and functions of a clearing house to a clearing corporation, being a co(pany incorporated under the Co(panies Act, !"# ( of !"#), for the purpose of(a) the periodical settle(ent of contracts and differences thereunder3 (b) the deli'ery of, and pay(ent for, securities3 (c) any other (atter incidental to, or connected with, such transfer0 (%) 7'ery clearing corporation shall, for the purpose of transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( ),
3! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 $0 Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec !, w0e0f0 %"+ 0 + !!"0 $ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0
(a)e bye+laws and sub(it the sa(e to the Securities and 7xchange 8oard of India for its appro'al0 (3) .he Securities and 7xchange 8oard of India (ay, on being satisfied that it is in the interest of the trade and also in the public interest to transfer the duties and functions of a clearing house to a clearing corporation, grant appro'al to the byelaws sub(itted to it under sub+section (%) and appro'e the transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( )0 ($) .he pro'isions of sections $, ", #, /, >, !, 0, and % shall, as far as (ay be, apply to a clearing corporation referred to in sub+section ( ) as they apply in relation to a recognised stoc) exchange0: 4o/er of re'o( i!e- !to'6 e#'h% (e! to .%6e ,>e0l%/!. 9. ( ) Any recognised stoc) exchange (ay, subDect to the pre'ious appro'al of the $%4Securities and 7xchange 8oard of India:, (a)e bye+laws for the regulation and control of contracts0 (%) In particular, and without preDudice to the generality of the foregoing power, such bye+laws (ay pro'ide for , (a) the opening and closing of (ar)ets and the regulation of the hours of trade3 (b) a clearing house for the periodical settle(ent of contracts and differences thereunder, the deli'ery of and pay(ent for securities, the passing on of deli'ery orders and the regulation and (aintenance of such clearing house3 (c) the sub(ission to the $34Securities and 7xchange 8oard of India: by the clearing house as soon as (ay be after each periodical settle(ent of all or any of the following particulars as the $$4Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, re*uire, na(ely ,(i) the total nu(ber of each category of security carried o'er fro( one settle(ent period to another3 (ii) the total nu(ber of each category of security, contracts in respect of
which ha'e been s*uared up during the course of each settle(ent period3 (iii) the total nu(ber of each category of security actually deli'ered at each clearing3
$% Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(d) the publication by the clearing house of all or any of the particulars sub(itted to the $"4Securities and 7xchange 8oard of India: under clause ( c) subDect to the directions, if any, issued by the $#4Securities and 7xchange 8oard of India: in this behalf3 (e) the regulation or prohibition of blan) transfers3 (f) the nu(ber and classes of contracts in respect of which settle(ents shall be (ade or differences paid through the clearing house3 (g) the regulation, or prohibition of b!dla# or carry+o'er facilities3 (h) the fixing, altering or postponing of days for settle(ents3 (i) the deter(ination and declaration of (ar)et rates, including the opening, closing highest and lowest rates for securities3 (j) the ter(s, conditions and incidents of contracts, including the prescription of (argin re*uire(ents, if any, and conditions relating thereto, and the for(s of contracts in writing3 (k) the regulation of the entering into, (a)ing, perfor(ance, recession and ter(ination, of contracts, including contracts between (e(bers or between a (e(ber and his constituent or between a (e(ber and a person who is not a (e(ber, and the conse*uences of default or insol'ency on the part of a seller or buyer or inter(ediary, the conse*uences of a breach or o(ission by a seller or buyer, and the responsibility of (e(bers who are not parties to such contracts3 (l) the regulation of taravani business including the placing of li(itations thereon3 (") the listing of securities on the stoc) exchange, the inclusion of any security for the purpose of dealings and the suspension or withdrawal of any such securities, and the suspension or prohibition of trading in any specified securities3 (n) the (ethod and procedure for the settle(ent of clai(s or disputes, including settle(ent by arbitration3 ($) the le'y and reco'ery of fees, fines and penalties3 (%) the regulation of the course of business between parties to contracts in any capacity3 (+) the fixing of a scale of bro)erage and other charges3 (r) the (a)ing, co(paring, settling and closing of bargains3 (#) the e(ergencies in trade which (ay arise, whether as a result of pool or syndicated operations or cornering or otherwise, and the exercise of powers in
$" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%,
Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $# Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
such e(ergencies, including the power to fix (axi(u( and (ini(u( prices for securities3 (t) the regulation of dealings by (e(bers for their own account3 (!) the separation of the functions of Dobbers and bro)ers3 (v) the li(itations on the 'olu(e of trade done by any indi'idual (e(ber in exceptional circu(stances3 (.) the obligation of (e(bers to supply such infor(ation or explanation and to produce such docu(ents relating to the business as the go'erning body (ay re*uire0 (3) .he bye+laws (ade under this section (ay(a) specify the bye+laws the contra'ention of which shall (a)e a contract entered into otherwise than in accordance with the bye+laws 'oid under sub+section ( ) of section $3 (b) pro'ide that the contra'ention of any of the bye+laws shall render the (e(ber concerned liable to one or (ore of the following punish(ents, na(ely ,(i) fine, (ii) expulsion fro( (e(bership, (iii) suspension fro( (e(bership for a specified period, (iv) any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney0 ($) Any bye+laws (ade under this section shall be subDect to such conditions in regard to pre'ious publication as (ay be prescribed, and, when appro'ed by the $/4Securities and 7xchange 8oard of India:, shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and shall ha'e effect as fro( the date of its publication in the &aFette of India , 4ro+i-e- that if the $>4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+law should be (ade i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0
$/ Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $> Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4o/er of 395Se'*ritie! % - E#'h% (e ;o%r- of I -i%< to .%6e or %.e - ,>e0l%/! of re'o( i!e- !to'6 e#'h% (e!. 1=. ( ) .he "04Securities and 7xchange 8oard of India: (ay, either on a re*uest in writing recei'ed by it in this behalf fro( the go'erning body of a recognised stoc) exchange or on its own (otion, if it is satisfied after consultation with the go'erning body of the stoc) exchange that it is necessary or expedient so to do and after recording its reasons for so doing, (a)e bye+laws for all or any of the (atters specified in section ! or a(end any bye+laws (ade by such stoc) exchange under that section0
(%) Khere in pursuance of this section any bye+laws ha'e been (ade or a(ended the bye+laws so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and on the publication thereof in the &aFette of India, the bye+laws so (ade or a(ended shall ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange concerned0 (3) Eotwithstanding anything contained in this section, where the go'erning body of a recognised stoc) exchange obDects to any bye+laws (ade or a(ended under this section by the " 4Securities and 7xchange 8oard of India: on its own (otion, it (ay, within "%4two (onths: of the publication thereof in the &aFette of India under subsection (%), apply to the "34Securities and 7xchange 8oard of India: for re'ision thereof, and the "$4Securities and 7xchange 8oard of India: (ay, after gi'ing an opportunity to the go'erning body of the stoc) exchange to be heard in the (atter, re'ise the bye+laws so (ade or a(ended, anywhere any bye+laws so (ade or a(ended are re'ised as a result of any action ta)en under this sub+section, the byelaws so re'ised shall be published and shall beco(e effecti'e as pro'ided in subsection (%)0 ($) .he (a)ing or the a(end(ent or re'ision of any bye+laws under this section shall in all cases be subDect to the condition of pre'ious publication ,
$! Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "0 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 " Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "% Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec %0, w0e0f0 %"+ 0 + !!"0 "3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4ro+i-e- that if the ""4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+laws should be (ade, a(ended or re'ised i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0 4o/er of Ce tr%l Go+er .e t 58 to !*$er!e-e (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e. 11. ( ) Kithout preDudice to any other powers 'ested in the Central &o'ern(ent under this Act, where the Central &o'ern(ent is of opinion that the go'erning body of any recognised stoc) exchange should be superseded, then, notwithstanding anything contained in any other law for the ti(e being in force, in the Central &o'ern(ent (ay ser'e on the go'erning body a written notice that the Central &o'ern(ent is considering the supersession of the go'erning body for the reasons specified in the notice and after gi'ing an opportunity to the go'erning body to be
heard in the (atter, it (ay, by notification in the Cfficial &aFette, declare the go'erning body of such stoc) exchange to be superseded, and (ay appoint any person or persons to exercise and perfor( all the powers and duties of the go'erning body, and, where (ore persons than one are appointed, (ay appoint one of such persons to be the chair(an and another to be the 'ice+chair(an thereof0 (%) Cn the publication of a notification in the Cfficial &aFette under sub+section ( ), the following conse*uences shall ensue, na(ely,(a) the (e(bers of the go'erning body which has been superseded shall, as fro( the date of the notification of supersession, cease to hold office as such (e(bers3 (b) the person or persons appointed under sub+section ( ) (ay exercise and perfor( all the powers and duties of the go'erning body which has been superseded3 (c) all such property of the recognised stoc) exchange as the person or persons appointed under sub+section ( ) (ay, by order in writing, specify in this behalf as being necessary for the purpose of enabling hi( or the( to carry on the business of the stoc) exchange, shall 'est in such person or persons0 (3) Eotwithstanding anything to the contrary contained in any law or the rules or bye+laws of the recognised stoc) exchange the go'erning body of which is superseded under sub+section ( ), the person or persons appointed under that subsection shall hold office for such period as (ay be specified in the notification published under that sub+section and the Central &o'ern(ent (ay fro( ti(e to ti(e, by li)e notification, 'ary such period0
"" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "# <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0
($) .he Central &o'ern(ent (ay at any ti(e before the deter(ination of the period of office of any person or persons appointed under this section call upon the recognised stoc) exchange to re+constitute the go'erning body in accordance with its rules and on such re+constitution all the property of the recognised stoc) exchange which has 'ested in, or was in the possession of, the person or persons appointed under sub+section ( ), shall re+'est or 'est, as the case (ay be, in the go'erning body so re+constituted , 4ro+i-e- that until a go'erning body is so re+constituted, the person or persons appointed under sub+section ( ) shall continue to exercise and perfor( their powers and duties0 4o/er57 to !*!$e - ,*!i e!! of re'o( i!e- !to'6 e#'h% (e!. 1". If in the opinion of the Central &o'ern(ent an e(ergency has arisen and for the purpose of (eeting the e(ergency the Central &o'ern(ent considers it expedient so to do, it (ay, by notification in the Cfficial &aFette, for reasons to be set out therein, direct a recognised stoc) exchange to suspend such of its business for such period not exceeding se'en days and subDect to such conditions as (ay be specified in the notification, and, if, in the opinion of the Central &o'ern(ent, the interest of
the trade or the public interest re*uires that the period should be extended, (ay, by li)e notification extend the said period fro( ti(e to ti(e , 4ro+i-e- that where the period of suspension is to be extended beyond the first period, no notification extending the period of suspension shall be issued unless the go'erning body of the ">4recognised stoc) exchange: has been gi'en an opportunity of being heard in the (atter0 "!54o/er to i!!*e -ire'tio !. 1"A. If, after (a)ing or causing to be (ade an in*uiry, the Securities and 7xchange 8oard of India is satisfied that it is necessary(a) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (b) to pre'ent the affairs of any recognised stoc) exchange or clearing corporation, or such other agency or person, pro'iding trading or clearing or settle(ent facility in respect of securities, being conducted in a (anner detri(ental to the interests of in'estors or securities (ar)et3 or (c) to secure the proper (anage(ent of any such stoc) exchange or clearing corporation or agency or person, referred to in clause ( b),
"/ <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 "> Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 "! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0
it (ay issue such directions,(i) to any stoc) exchange or clearing corporation or agency or person referred to in clause (b) or any person or class of persons associated with the securities (ar)et3 or (ii) to any co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 8=5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< /<410A/1 A45 <81:<4 :4 (/A0:1:( Co tr%'t! i otifie- %re%! ille(%l i 'ert%i 'ir'*.!t% 'e!. 1). If the Central &o'ern(ent# is satisfied, ha'ing regard to the nature or the 'olu(e of transactions in securities in any #%4State or States or area: that it is necessary so to do, it (ay, by notification in the Cfficial &aFette, declared this section to apply to such #34State or States or area:, and thereupon e'ery contract in such #$4State or States or area: which is entered into after the date of the notification otherwise than #"4between (e(bers of a recognised stoc) exchange or recognised stoc) exchanges: in such ##4State or States or area: or through or with such (e(ber shall be illegal ,
#0 I #
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 #% Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #3 Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #$ Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$ for ;between (e(bers of a recognised stoc) exchange; & ## Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0
#/54ro+i-e-
that any contract entered into between (e(bers of two or (ore recognised stoc) exchanges in such State or States or area, shall(i) be subDect to such ter(s and conditions as (ay be stipulated by the respecti'e stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India3 (ii) re*uire prior per(ission fro( the respecti'e stoc) exchanges if so stipulated by the stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India0: #>4A--itio %l tr%-i ( floor. 1)A. A stoc) exchange (ay establish additional trading floor with the prior appro'al of the Securities and 7xchange 8oard of India in accordance with the ter(s and conditions stipulated by the said 8oard0 ()%lanati$n , 6or the purposes of this section, 1additional trading floor2 (eans a trading ring or trading facility offered by a recognised stoc) exchange outside its area of operation to enable the in'estors to buy and sell securities through such trading floor under the regulatory fra(ewor) of that stoc) exchange0: Co tr%'t! i otifie- %re%! to ,e +oi- i 'ert%i 'ir'*.!t% 'e!. 13. ( ) Any contract entered into in any State or area specified in the notification under section 3 which is in contra'ention of any of the bye+laws specified in that behalf under clause (a) of sub+section (3) of section ! shall be 'oid , (i) as respects the rights of any (e(ber of the recognised stoc) exchange who has entered into such contract in contra'ention of any such bye+law, and also (ii) as respects the rights of any other person who has )nowingly participated in the transaction entailing such contra'ention0 (%) Eothing in sub+section ( ) shall be construed to affect the right of any person other than a (e(ber of the recognised stoc) exchange to enforce any such contract or to reco'er any su( under or in respect of such contract if such person had no )nowledge that the transaction was in contra'ention of any of the bye+laws specified in clause (a) of sub+section (3) of section !0 @e.,er! .%> ot %'t %! $ri 'i$%l! i 'ert%i 'ir'*.!t% 'e!. 15. Eo (e(ber of a recognised stoc) exchange shall in respect of any securities enter into any contract as a principal with any person other than a (e(ber of a recognised stoc) exchange, unless he has secured the consent or authority of such
#/ Inserted #> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (A(end(ent) Act, !!", Sec % , w0e0f0 %"+0 + !!"0
person and discloses in the note, (e(orandu( or agree(ent of sale or purchase that he is acting as a principal , 4ro+i-e- that where the (e(ber has secured the consent or authority of such person otherwise than in writing he shall secure written confir(ation by such person or such consent or authority within three days fro( the date of the contract , 4ro+i-e- f*rther that no such written consent or authority of such person shall be necessary for closing out any outstanding contract entered into by such person in accordance with the bye+laws, if the (e(ber discloses in the note, (e(orandu( or agree(ent of sale or purchase in respect of such closing out that he is acting as a principal0 4o/er89 to $rohi,it 'o tr%'t! i 'ert%i '%!e!. 18. ( ) If the Central &o'ern(ent is of opinion that it is necessary to pre'ent undesirable speculation in specified securities in any State or area, it (ay, by notification in the Cfficial &aFette, declare that no person in the State or area specified in the notification shall, sa'e with the per(ission of the Central &o'ern(ent, enter into any contract for the sale or purchase of any security specified in the notification except to the extent and in the (anner, if any, specified therein0 (%) All contracts in contra'ention of the pro'isions of sub+section ( ) entered into after the date of notification issued thereunder shall be illegal0 Li'e !i ( of -e%ler! i !e'*ritie! i 'ert%i %re%!. 17. ( ) SubDect to the pro'isions of sub+section (3) and to the other pro'isions contained in this Act, no person shall carry on or purport to carry on, whether on his own behalf or on behalf of any other person, the business of dealing in securities in any State or area to which section 3 has not been declared to apply and to which the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, declare this section to apply, except under the authority of a /04licence granted by the Securities and 7xchange 8oard of India: in this behalf0 (%) Eo notification under sub+section ( ) shall be issued with respect to any State or area unless the Central &o'ern(ent is satisfied, ha'ing regard to the (anner in which securities are being dealt with in such State or area, that it is desirable or
#! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 <owers are exercisable by R8I also 'ide &o'ern(ent of India Eotification Eo0 >3 (7), 9ated 0 +03+%000 in relation to any contracts in go'ern(ent securities, (oney (ar)et securities etc0 /0 Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% for ;licence granted by the Central &o'ern(ent;0
expedient in the interest of the trade or in the public interest that such dealings should be regulated by a syste( of licensing0 (3) .he restrictions i(posed by sub+section ( ) in relation to dealings in securities shall not apply to the doing of anything by or on behalf of a (e(ber of any recognised stoc) exchange0
7154*,li'
i!!*e % - li!ti ( of !e'*ritie! referre- to i !*,0'l%*!e ( ie) of 'l%*!e (h)
of !e'tio ". 17A. ( ) Kithout preDudice to the pro'isions contained in this Act or any other law for the ti(e being in force, no securities of the nature referred to in sub+clause (ie) of clause (h) of section % shall be offered to the public or listed on any recognised stoc) exchange unless the issuer fulfils such eligibility criteria and co(plies with such other re*uire(ents as (ay be specified by regulations (ade by the Securities and 7xchange 8oard of India0 (%) 7'ery issuer referred to in sub+clause (ie) of clause (h) of section % intending to offer the certificates or instru(ents referred therein to the public shall (a)e an application, before issuing the offer docu(ent to the public, to one or (ore recognised stoc) exchanges for per(ission for such certificates or instru(ents to be listed on the stoc) exchange or each such stoc) exchange0 (3) Khere the per(ission applied for under sub+section (%) for listing has not been granted or refused by the recognised stoc) exchanges or any of the(, the issuer shall forthwith repay all (oneys, if any, recei'ed fro( applicants in pursuance of the offer docu(ent, and if any such (oney is not repaid within eight days after the issuer beco(es liable to repay it, the issuer and e'ery director or trustee thereof, as the case (ay be, who is in default shall, on and fro( the expiry of the eighth day, be Dointly and se'erally liable to repay that (oney with interest at the rate of fifteen per cent per annu(0 7xplanation0-In rec)oning the eighth day after another day, any inter'ening day which is a public holiday under the Eegotiable Instru(ents Act, >> (%# of >> ), shall be disregarded, and if the eighth day (as so rec)oned) is itself such a public holiday, there shall for the said purposes be substituted the first day thereafter which is not a holiday0 ($) All the pro'isions of this Act relating to listing of securities of a public co(pany on a recognised stoc) exchange shall, (utatis (utandis, apply to the listing of the securities of the nature referred to in sub+clause (ie) of clause (h) of section % by the issuer, being a special purpose distinct entity0 <
Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec 3, w0e0f0 %>+0"+ %00/0
/
E#'l*!io of !$ot -eli+er> 'o tr%'t! fro. !e'tio ! 1), 13, 15 % - 17. 1:. ( ) Eothing contained in sections 3, $, " and / shall apply to spot deli'ery contracts0 (%) Eotwithstanding anything contained in sub+section ( ), if the Central &o'ern(ent/% is of opinion that in the interest of the trade or in the public interest it is expedient to regulate and control the business of dealing in spot deli'ery contracts also in any State or area (whether section 3 has been declared to apply to that State or area or not), it (ay, by notification in the Cfficial &aFette, declare that the pro'isions of section / shall also apply to such State or area in respect of spot deli'ery contracts generally or in respect of spot deli'ery contracts for the sale or purchase of such securities as (ay be specified in the notification, and (ay also specify the (anner in which, and the extent to which, the pro'isions of that section
shall so apply0 /34Co tr%'t! i -eri+%ti+e. 1:A. Eotwithstanding anything contained in any other law for the ti(e being in force, contracts in deri'ati'e shall be legal and 'alid if such contracts are(a) traded on a recognised stoc) exchange3 (b) settled on the clearing house of the recognised stoc) exchange, in accordance with the rules and bye+laws of such stoc) exchange0: Sto'6 e#'h% (e! other th% re'o( i!e- !to'6 e#'h% (e! $rohi,ite-. 19. ( ) Eo person shall, except with the per(ission of the Central &o'ern(ent, organise or assist in organising or be a (e(ber of any stoc) exchange (other than a recognised stoc) exchange) for the purpose of assisting in, entering into or perfor(ing any contracts in securities0 (%) .his section shall co(e into force in any State or area on such date as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 4rohi,itio of o$tio ! i !e'*ritie!. "=. 734GGGGG:
/% <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 /3 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec 3, w0e0f0 %%+%+%0000 /$ C(itted by the Securities =aws (A(end(ent) Act, !!", Sec %%, w0e0f0 %"+0 + !!"0 <rior to o(ission, section %0 read as under , 1%00 8r$hibiti$n $f $%ti$n# in #ec!ritie#&-( ) Eotwithstanding anything contained in this Act or in any other law for the ti(e being in force, all options in securities entered into after the co((ence(ent of this Act shall be illegal0
9: 1:4= <E (/A0:1:( 754GGG: /#4Co -itio ! for li!ti (. "1. Khere securities are listed on the application of any person in any recognised stoc) exchange, such person shall co(ply with the conditions of the listing agree(ent with that stoc) exchange&: 775Deli!ti ( of !e'*ritie!. "1A. ( ) A recognised stoc) exchange (ay delist the securities, after recording the reasons therefor, fro( any recognised stoc) exchange on any of the ground or grounds as (ay be prescribed under this Act , 4ro+i-e- that the securities of a co(pany shall not be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) A listed co(pany or an aggrie'ed in'estor (ay file an appeal before the Securities Appellate .ribunal against the decision of the recognised stoc) exchange delisting the securities within fifteen days fro( the date of the decision of the recognised stoc) exchange delisting the securities and the pro'isions of sections %%8 to %%7 of this Act, shall apply, as far as (ay be, to such appeals , 4ro+i-e- that the Securities Appellate .ribunal (ay, if it is satisfied that the co(pany was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding one (onth0:
(%) Any option in securities which has been entered into before such co((ence(ent and which re(ains to be perfor(ed, whether wholly or in part, after such co((ence(ent shall, to that
extent, beco(e 'oid02 /" Kords 18O <H8=IC CC?<AEI7S2 o(itted by the Securities =aws (A(end(ent) Act, !!!, Sec $, w0e0f0 %%+0%+%0000 /# Substituted by the Securities =aws (A(end(ent) Act, !!", Sec 33, w0e0f0 %"+0 + !!" . <rior to substitution, section % read as under , 1% 0 8$.er t$ c$"%el li#ting $f #ec!ritie# bF %!blic c$"%anie#& -Eotwithstanding anything contained in any other law for the ti(e being in force, if the Securities and 7xchange 8oard of India is of opinion, ha'ing regard to the nature of the securities issued by any public co(pany as defined in the Co(panies Act, !"# ( of !"#), or to the dealings in the(, that it is necessary or expedient in the interest of the trade or in the public interest so to do, it (ay re*uire the co(pany, after gi'ing it an opportunity of being heard in the (atter, to co(ply with such re*uire(ents as (ay be prescribed with respect to the listing of its securities on any recognised stoc) exchange02 // Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec >, w0r0e0f0 %+ 0+%00$0
7:5Ri(ht
of %$$e%l %(%i !t ref*!%l of !to'6 e#'h% (e! to li!t !e'*ritie! of $*,li' 'o.$% ie!. 79"". Khere a recognised stoc) exchange acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any public co(pany >04or collecti'e in'est(ent sche(e:, the co(pany > 4or sche(e: shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( ) of section /3 of the Co(panies Act, !"# ( of !"#) (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Central &o'ern(ent (ay, on sufficient cause being shown, allow, appeal to the Central &o'ern(ent against such refusal, o(ission or failure, as the case (ay be, and thereupon the Central &o'ern(ent (ay, after gi'ing the stoc) exchange an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange, or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Central &o'ern(ent sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Central &o'ern(ent: , >%44ro+i-e- that no appeal shall be preferred against refusal, o(ission or failure, as the case (ay be, under this section on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!0: :)5Ri(ht of %$$e%l to Se'*ritie! A$$ell%te Tri,* %l %(%i !t ref*!%l of !to'6 e#'h% (e to li!t !e'*ritie! of $*,li' 'o.$% ie!.
/> Substituted
by .he Co(panies (A(end(ent) Act, !/$ (Act Eo0 $ of !/$), Sec $%, w0e0f0 0 + 0%+ !/"0 /! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the
&aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 >0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%00003 Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 > Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%0000 >% Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec $, w0e0f0 #+ %+ !!!0 >3 Sections %%A, %%8, %%C, %%9, %%7 and %%6 inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!!& 7arlier section %%A was inserted by .he
""A. ( ) Khere a recognised stoc) exchange, acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any co(pany, the co(pany shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( A) of section /3 of the Co(panies Act, !"# ( of !"#), (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Securities Appellate .ribunal (ay, on sufficient cause being shown, allow, appeal to the Securities Appellate .ribunal ha'ing Durisdiction in the (atter against such refusal, o(ission or failure, as the case (ay be, and thereupon the Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange, an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange3 or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Securities Appellate .ribunal sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Securities Appellate .ribunal0 (%) 7'ery appeal under sub+section ( ) shall be in such for( and be acco(panied by such fee as (ay be prescribed0 (3) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 ($) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: :354ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. "";. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of
Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec %, w0e0f0 /+ 0 + !>#, and o(itted by the 9epositories Act, !!#, Sec 30 and Sch0, <t0III, w0r0e0f0 %0+0!+ !!"0 >$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath 3 (b) re*uiring the disco'ery and production of docu(ents 3 (c) recei'ing e'idence on affida'its 3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents 3 (e) re'iewing its decisions 3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte ; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0: :55Ri(ht to le(%l re$re!e t%tio . ""C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of sub+section ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of subsection ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of
>" Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
!"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, vakil or an attorney of any Iigh Court, and includes a pleader in practice0: :85Li.it%tio . ""D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0: :75Ci+il 'o*rt ot to h%+e G*ri!-i'tio .
""E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0: ::5A$$e%l to S*$re.e Co*rt. ""2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order, 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: 8(4A91:( A45 80</(5A0( 4e %ltie!. "). ( ) Any person who+
># Inserted >/ Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & >> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec !, w0r0e0f0 %+ 0+%00$0 7arlier section %%6 as inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", read as under,+ 1""2. A$$e%l to Di(h Co*rt.+Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order , 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
(a) without reasonable excuse (the burden of pro'ing which shall be on hi() fails to co(ply with any re*uisition (ade under sub+section ($) of section #3 or (b) enters into any contract in contra'ention of any of the pro'isions contained in section 3 or section #3 or (c) contra'enes the pro'isions contained in >!5section / or section /A<, or section !3 or 90 4(d) enters into any contract in deri'ati'e in contra'ention of section >A or the rules (ade under section 303: (e) owns or )eeps a place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act and )nowingly per(its such place to be used for such purposes3 or (f) (anages, controls, or assists in )eeping any place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act or at which contracts are recorded or adDusted or rights or liabilities arising out of contracts are adDusted, regulated or enforced in any (anner whatsoe'er3 or (g) not being a (e(ber of a recognised stoc) exchange or his agent authorised as
such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section / wilfully represents to or induces any person to belie'e that contracts can be entered into or perfor(ed under this Act through hi(3 or (h) not being a (e(ber of a recognised stoc) exchange or his agent authorised as such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section /, can'asses, ad'ertises or touts in any (anner either for hi(self or on behalf of any other persons for any business connected with contracts in contra'ention of any of the pro'isions of this Act3 or (i) Doins, gathers or assists in gathering at any place other than the place of business specified in the bye+laws of a recognised stoc) exchange any person or persons for (a)ing bids or offers or for entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act3 ! 4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which
>! Inserted
by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec $, w0e0f0 %>+0"+ %00/ for ;section /;0 !0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec #, w0e0f0 %%+0%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 ! Substituted for 1shall, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0
(ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: (%) Any person who enters into any contract in contra'ention of the pro'isions contained in section " !%4or who fails to co(ply with the pro'isions of !34section % or section % A: or with the orders of: or section %% !$4or with the orders of the Securities Appellate .ribunal: !"4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 9854e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. ")A. Any person, who is re*uired under this Act or any rules (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to a recognised stoc) exchange, fails to furnish the sa(e within the ti(e specified therefor in the listing agree(ent or conditions or bye+laws of the recognised stoc) exchange, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to (aintain boo)s of account or records, as per the listing agree(ent or conditions, or bye+laws of a recognised stoc) exchange, fails to (aintain the sa(e, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0:
9754e
%lt> for f%il*re ,> % > $er!o to e ter i to % %(ree.e t /ith 'lie t!. ");. If any person, who is re*uired under this Act or any bye+laws of a recognised stoc) exchange (ade thereunder, to enter into an agree(ent with his client, fails to enter into such an agree(ent, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0:
!% Substituted
for 1or who fails to co(ply with the orders of the Securities and 7xchange 8oard of India under section % 2 by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 <rior to !!", ;Securities and 7xchange 8oard of India under section % or Central &o'ern(ent under section %%; were substituted for ;Central &o'ern(ent under section % or section %%; vide .he Schedule, <art II of Securities and 7xchange 8oard of India Act, !!%, w0e0f0 30+0 + !!%0 !3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec #, w0e0f0 #+ %+ !!!0 !" Substituted for 1shall, on con'iction, be punishable with fine which (ay extend to one thousand rupees2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !# Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$ & !/ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$0
9:54e
%lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. ")C. If any stoc) bro)er or sub+bro)er or a co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, after ha'ing been called upon by the Securities and 7xchange 8oard of India or a recognised stoc) exchange in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e stipulated by the Securities and 7xchange 8oard of India or a recognised stoc) exchange, he or it shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 9954e %lt> for f%il*re to !e(re(%te !e'*ritie! or .o e>! of 'lie t or 'lie t!. ")D. If any person, who is registered under section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%) as a stoc) bro)er or sub+bro)er, fails to segregate securities or (oneys of the client or clients or uses the securities or (oneys of a client or clients for self or for any other client, he shall be liable to a penalty not exceeding one crore rupees0: 1==54e %lt> for f%il*re to 'o.$l> /ith $ro+i!io of li!ti ( 'o -itio ! or -eli!ti ( 'o -itio ! or (ro* -!. ")E. If a co(pany or any person (anaging collecti'e in'est(ent sche(e or (utual fund, fails to co(ply with the listing conditions or delisting conditions or grounds or co((its a breach thereof, it or he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0: 1=154e %lt> for e#'e!! -e.%teri%li!%tio or -eli+er> of * li!te- !e'*ritie!. ")2. If any issuer de(aterialises securities (ore than the issued securities of a co(pany or deli'ers in the stoc) exchanges the securities which are not listed in the recognised stoc) exchange or deli'ers securities where no trading per(ission has been gi'en by the recognised stoc) exchange, he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0:
!> Inserted !! Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 00 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0
%+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0
1="54e
%lt> for f%il*re to f*r i!h $erio-i'%l ret*r !, et'. ")G. If a recognised stoc) exchange fails or neglects to furnish periodical returns to the Securities and 7xchange 8oard of India or fails or neglects to (a)e or a(end its rules or bye+laws as directed by the Securities and 7xchange 8oard of India or fails to co(ply with directions issued by the Securities and 7xchange 8oard of India, such recognised stoc) exchange shall be liable to a penalty which (ay extend to twenty+fi'e crore rupees0: 1=)54e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. ")D. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or articles or bye+ laws or the regulations of the recognised stoc) exchange or directions issued by the Securities and 7xchange 8oard of India for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 1=354o/er to %-G*-i'%te. ")0I. ( ) 6or the purpose of adDudging under sections %3A, %38, %3C, %39, %37, %36, %3& and %3I, the Securities and 7xchange 8oard of India shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0: 1=552%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. ")E. Khile adDudging the *uantu( of penalty under section %3+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3
0% Inserted 03 Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec 0$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0" Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 , w0r0e0f0 , w0r0e0f0 , w0r0e0f0
%+ %+ %+ %+
0+%00$0 0+%00$0 0+%00$0 0+%00$0
(b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0: 1=85 Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!.
")EA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 1"A or !e'tio ")0I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%tefor the %lle(e- -ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re %! !$e'ifie,> the ;o%r- * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")L %(%i !t % > or-er $%!!e- ,> the ;o%ror %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 1=75Re'o+er> of %.o* t!. ")E;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 1"A or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H
0# I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30"==7) 0/ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %!
.%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - ThirS'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")L of thi! A't. (") The re'o+er> offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ())Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 0'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 1"A, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1),(") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 1=:5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. ")F. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: 1=95A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")L. ( ) Any person aggrie'ed, by the order or decision of the recogniFed stoc) exchange or the adDudicating officer or any order (ade by the Securities and 7xchange 8oard of India under section $8, (ay prefer an appeal before the Securities Appellate .ribunal and the pro'isions of sections %%8, %%C, %%9 and %%7 of this Act, shall apply, as far as (ay be, to such appeals0 (%) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order or decision is recei'ed by the
appellant and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 (3) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 ($) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the parties to the appeal and to the concerned adDudicating officer0 (") .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: 11=5Offe 'e!. ")@. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws
0> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 0! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
(ade thereunder, for which no punish(ent is pro'ided elsewhere in this Act, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 1115Co.$o!itio of 'ert%i offe 'e!. ")N. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0: 11"54o/er to (r% t i..* it>. ")0O. ( ) .he Central &o'ern(ent (ay, on reco((endation by the Securities and 7xchange 8oard of India, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation,
4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that the reco((endation of the Securities and 7xchange 8oard of India under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under
% Inserted
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
this Act to which such person would ha'e been liable, had not such i((unity been granted0: Offe 'e! ,> 'o.$% ie!. "3. ( ) Khere an offence has been co((itted by a co(pany, e'ery person who, at the ti(e when the offence was co((itted, was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence, and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any gross negligence on the part of any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer of the co(pany, shall also be dee(ed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n0-6or the purpose of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals, and 34(b) 1director2, in relation to(i) a fir(, (eans a partner in the fir(3 (ii) any association of persons or a body of indi'iduals, (eans any (e(ber controlling the affairs thereof0: $4(3) .he pro'isions of this section shall be in addition to, and not in derogation of, the pro'isions of section %%A0: Cert%i offe 'e! to ,e 'o( iL%,le. "5. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, >!> (" of >!>) ", any offence punishable under #4GGG: section %3 shall be dee(ed to be a
cogniFable offence within the (eaning of that Code0
3 Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec /, w0e0f0 %%+%+%0000 <rior to its substitution, sub+clause (b) read as under, N(b) 1director2, in relation to a fir(, (eans a partner in the fir(0J $ Inserted by .he Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec 3, w0e0f0 /+0 + !>#0
iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central &o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or a recognised stoc) exchange or by any person0 >5(")********< 1195E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
ee now the Code of Cri(inal <rocedure, !/3 (% of !/$) 1sub+section ( ) of2 o(itted by the Securities =aws (A(end(ent) Act, %00$, w0e0f0 %+ 0+%00$0 / Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$ & <rior to its substitution section %# read as under ,1%#0 G!ri#dicti$n t$ trF $ffence# !nder thi# Act&-Eo court inferior to that of a presidency (agistrate or a (agistrate of the first class shall ta)e cogniFance of or try any offence punishable under this Act02 > O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JEo court inferior to that of a Court of Session shall try any offence punishable under this Act .K ! I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
" # Kords
/4Co(
A$$e%l % - Re+i!io . "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt. "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel% $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io !. "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< 6: /(99A4(<A Title to -i+i-e -!. "7. ( ) It shall be lawful for the holder of any security whose na(e appears on the boo)s of the co(pany issuing the said security to recei'e and retain any di'idend declared by the co(pany in respect thereof for any year, notwithstanding that the said security has already been transferred by hi( for consideration, unless the transferee who clai(s the di'idend fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the co(pany with the co(pany for being registered in his na(e within fifteen days of the date on which the di'idend beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the di'idend3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security and other docu(ents relating to
the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a co(pany to pay any di'idend which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the co(pany as the holder of the security in respect of which the di'idend has beco(e due3 or (b) the right of the transferee of any security to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security in the na(e of the transferee0 %04Ri(ht to re'ei+e i 'o.e fro. 'olle'ti+e i +e!t.e t !'he.e. "7A. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, whose na(e appears on the boo)s of the collecti'e in'est(ent sche(e issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e declared by the collecti'e in'est(ent sche(e in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e fro( the transfer or has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the collecti'e in'est(ent sche(e with the collecti'e in'est(ent sche(e for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec >, w0e0f0 %%+%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the collecti'e in'est(ent sche(e3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a collecti'e in'est(ent sche(e to pay any inco(e fro( units or other instru(ents issued by the collecti'e in'est(ent sche(e which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the collecti'e in'est(ent sche(e as the holder of the security being
units or other instru(ents issued by the collecti'e in'est(ent sche(e in respect of which the inco(e in respect of units or other instru(ents issued by the collecti'e sche(e has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security being units or other instru(ents issued by the collecti'e in'est(ent sche(e in the na(e of the transferee0: % 4Ri(ht to re'ei+e i 'o.e fro. .*t*%l f* -. "7;. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by any (utual fund, whose na(e appears on the boo)s of the (utual fund issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the (utual fund declared by the (utual fund in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the (utual fund, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the (utual fund fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the (utual fund with the (utual fund for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the (utual fund beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the (utual fund3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the (utual fund, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a (utual fund to pay any inco(e fro( units or other instru(ents issued by the (utual fund which has beco(e due to any person, whose na(e is for the ti(e being registered in the boo)s of the (utual fund as the holder of the security being units or other instru(ents issued by the (utual fund in respect of which the inco(e in respect of units or other instru(ents issued by the (utual fund has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the (utual fund, to enforce against the transferor or any other person, his rights, if any, in relation to the transfer in any case where the (utual fund has refused to register the transfer of the security being units or other instru(ents issued by the (utual fund in the na(e of the transferee0:
1""5A't
ot to %$$l> i 'ert%i '%!e!. ":. ( ) .he pro'isions of this Act shall not apply to(a) the &o'ern(ent, the Reser'e 8an) of India, any local authority or any corporation set up by a special law or any person who has effected any transaction with or through the agency of any such authority as is referred to in this clause3 (b) any con'ertible bond or share warrant or any option or right in relation thereto, in so far as it entitles the person in whose fa'our any of the foregoing has been issued to obtain at his option fro( the co(pany or other body corporate, issuing the sa(e or fro( any of its shareholders or duly appointed agentsJ shares of the co(pany or other body corporate, whether by con'ersion of the bond or warrant or otherwise, on the basis of the price agreed upon when the sa(e was issued0 (%) Kithout preDudice to the pro'isions contained in sub+section ( ), if the Central &o'ern(ent %3 is satisfied that in the interests of trade and co((erce or the
%% Substituted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec 3, w0e0f0 0>+ %+ !"!0
econo(ic de'elop(ent of the country it is necessary or expedient so to do, it (ay, by notification in the Cfficial &aFette, specify any class of contracts as contracts to which this Act or any pro'ision contained therein shall not apply, and also the conditions, li(itations or restrictions, if any, subDect to which it shall not so apply0: 4rote'tio of %'tio t%6e i (oo- f%ith. "9. Eo suit, prosecution or other legal proceeding whatsoe'er shall lie in any court against the go'erning body or any (e(ber, office bearer or ser'ant of any recognised stoc) exchange or against any person or persons appointed under subsection ( ) of section for anything which is in good faith done or intended to be done in pursuance of this Act or of any rules or bye+laws (ade thereunder0 %$44o/er to -ele(%te. "9A. .he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers (except the power under section 30) exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India or the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)0: 4o/er to .%6e r*le!. )=. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for the purpose of carrying into effect the obDects of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for,(a) the (anner in which applications (ay be (ade, the particulars which they should contain and the le'y of a fee in respect of such applications 3 (b) the (anner in which any in*uiry for the purpose of recognising any stoc) exchange (ay be (ade, the conditions which (ay be i(posed for the grant of such recognition, including conditions as to the ad(ission of (e(bers if the
%3 <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %$ Inserted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% and Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec !, w0e0f0 %%+0%+%0000 <rior to its substitution, section %!A read as under , 1%!A0 8$.er t$ delegate&*.he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India02
stoc) exchange concerned is to be the only recognised stoc) exchange in the area3 and the for( in which such recognition shall be granted3 (c) the particulars which should be contained in the periodical returns and annual reports to be furnished to the Central &o'ern(ent3 (d) the docu(ents which should be (aintained and preser'ed under section # and the periods for which they should be preser'ed3 (e) the (anner in which any in*uiry by the go'erning body of a stoc) exchange shall be (ade under section #3 (f) the (anner in which the bye+laws to be (ade or a(ended under this Act shall before being so (ade or a(ended be published for criticis(3 (g) the (anner in which applications (ay be (ade by dealers in securities for licences under section /, the fee payable in respect thereof and the period of such licences, the conditions subDect to which licences (ay be granted, including conditions relating to the for(s which (ay be used in (a)ing contracts, the docu(ents to be (aintained by licensed dealers and the furnishing of periodical infor(ation to such authority as (ay be specified and the re'ocation of licences for breach of conditions3 %"4(h) the re*uire(ents which shall be co(plied with(A) by public co(panies for the purpose of getting their securities listed on any stoc) exchange3 (B) by collecti'e in'est(ent sche(e for the purpose of getting their units listed on any stoc) exchange3: %#4GGG: %/4(ha) the grounds on which the securities of a co(pany (ay be delisted fro( any recognised stoc) exchange under sub+section ( ) of section % A3 (hb) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under sub+section (%) of section % A and the fees payable in respect of such appeal3 (hc) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3
%" Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec 0, w0e0f0 %%+0%+%0000 <rior to its substitution, clause (h) read as under , 1(h) the re*uire(ents which shall be co(plied with by public co(panies for the purpose of getting their securities listed on any stoc) exchange32 %# .he word ;and; o(itted by .he Securities Contracts (Regulation) A(end(ent Act, !>", Sec $, w0e0f0 /+0 + !>#0 %/ Substituted for clause (ha) by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 7arlier clause (ha), as a(ended by the Securities =aws (A(end(ent) Act, !!!, read as
under ,1(ha) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3 and2
(hd) the (anner of in*uiry under sub+section ( ) of section %3+I3 (he) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3= and the fees payable in respect of such appeal3: (i) any other (atter which is to be or (ay be prescribed0 %>4(3) 7'ery rule (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule0: 1"954o/er of Se'*ritie! % - E#'h% (e ;o%r- of I -i% to .%6e re(*l%tio !. )1. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 305(%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,%> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 <rior to its substitution, sub+section (3), as a(ended by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!", read as under , 1(3) 7'ery rule (ade under this section shall, as soon as (ay be, after its publication in the Cfficial &aFette, be laid before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e session aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule02 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0 7arlier it was repealed by the Repealing and A(ending Act, !#0, Sec % and 6irst Sch0 w0e0f0 %>+ %+ !#00 30 Substituted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec ", w0e0f0 %>+ 0"+%00/0 <rior to substitution it read as under , 1(%) In particular and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for the (anner in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section02
(a) the (anner, in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of
publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section3 (b) the eligibility criteria and other re*uire(ents under section /A0 < (3) 7'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the regulation or both Iouses agree that the regulation should not be (ade, the regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that regulation0:
DE4OSITORIES ACT, 1998 SECTIONS /@A81(0 : 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS ). Certificate of co((ence(ent of business by depositories /@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS 3. Agree(ent between depository and participant 5. Ser'ices of depository 8. Surrender of certificate of security 7. Registration of transfer of securities with depositories :. Cptions to recei'e security certificate or hold securities with depository 9. Securities in depositories to be in fungible for( 1=. Rights of depositories and beneficial owner 11. Register of beneficial owner 1". <ledge or hypothecation of securities held in a depository 1). 6urnishing of infor(ation and records by depository and issuer 13. Cption to opt out in respect of any security 15. Act > of >! to apply to depositories 18. 9epositories to inde(nify loss in certain cases 17. Rights and obligations of depositories, etc0 /@A81(0 :: EN9UIRM AND INS4ECTION 1:. <ower of 8oard to call for infor(ation and en*uiry 19. <ower of 8oard to gi'e directions in certain cases 19A. <enalty for failure to furnish infor(ation, return, etc0 19;. <enalty for failure to enter into an agree(ent 19C. <enalty for failure to redress in'estorsJ grie'ances
19D. <enalty for delay in de(aterialisation or issue of certificate of securities 19E. <enalty for failure to reconcile records 192. <enalty for failure to co(ply with directions issued by 8oard under section ! of the Act 19G. <enalty for contra'ention where no separate penalty has been pro'ided 19D. <ower to adDudicate 190I. 6actors to be ta)en into account by adDudicating officer 190IA. Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (! 190I;. Re'o+er> of %.o* t! 190E. Crediting su(s realised by way of penalties to Consolidated 6und of India /@A81(0 D 4ENALTM "=. Cffences "1. Cffences by co(panies /@A81(0 D: @ISCELLANEOUS "". CogniFance of offences by courts ""A. Co(position of certain offences "";. <ower to grant i((unity ""C. E!t%,li!h.e t of S$e'i%l Co*rt! ""D. Offe 'e! tri%,le ,> S$e'i%l Co*rt! ""E. A$$e%l % - re+i!io ""2. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""G. Tr% !itio %l 4ro+i!io ! "). Appeals ")A. Appeal to Securities Appellate .ribunal ")A. Appeal to Securities Appellate .ribunal ");. <rocedure and powers of Securities Appellate .ribunal ")C. Right to =egal Representation ")D. =i(itation ")E. Ci'il court not to ha'e Durisdiction ")2. Appeal to Supre(e Court "3. <ower of Central &o'ern(ent to (a)e rules "5. <ower of 8oard to (a)e regulations "8. <ower of depositories to (a)e bye+laws "7. Rules and regulations to be laid before <arlia(ent ":. Application of other laws not barred "9. Re(o'al of difficulties )=. A(end(ents to certain enact(ents )1. Repeal and sa'ing /@(5A9( A?7E9?7E. .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0: DE4OSITORIES ACT, 1998 5"" O2 1998< 51=th A*(*!t, 1998< An Act to provide $or reg lation o$ depositories in sec rities and $or matters connected there%ith or incidental thereto& B( it enacted bF 8arlia"ent in the E$rtF7#eventh ;ear $f the 0e%!blic $f :ndia a# f$ll$.# ,*
/@A81(0 : 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the 9epositories Act, !!#0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the %0th day of Septe(ber, !!"0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 1beneficial owner2 (eans a person whose na(e is recorded as such with a depository3 (b) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 3 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (c) 1bye+laws2 (eans bye+laws (ade by a depository under section %#3 (d) 1Co(pany =aw 8oard2 (eans the 8oard of Co(pany =aw Ad(inistration constituted under section 07 of the Co(panies Act, !"# ( of !"#)3 (e) 1depository2 (eans a co(pany for(ed and registered under the Co(panies Act, !"# ( of !"#), and which has been granted a certificate of registration under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (f) 1issuer2 (eans any person (a)ing an issue of securities3 (g) 1participant2 (eans a person registered as such under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (h) 1prescribed2 (eans prescribed by rules (ade under this Act3 (i) 1record2 includes the records (aintained in the for( of boo)s or stored in a co(puter or in such other for( as (ay be deter(ined by regulations3 (j) 1registered owner2 (eans a depository whose na(e is entered as such in the register of the issuer3 (k) 1regulations2 (eans the regulations (ade by the 8oard3 4(ka) 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (l) 1security2 (eans such security as (ay be specified by the 8oard3 (") 1ser'ice2 (eans any ser'ice connected with recording of allot(ent of securities or transfer of ownership of securities in the record of a depository0 (%) Kords and expressions used herein and not defined but defined in the Co(panies Act, !"# ( of !"#), or the Securities Contracts (Regulation) Act, !"# ($% of !"#), or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), shall ha'e the (eanings respecti'ely assigned to the( in those Acts0 /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS Certifi'%te of 'o..e 'e.e t of ,*!i e!! ,> -e$o!itorie!. ). ( ) Eo depository shall act as a depository unless it obtains a certificate of co((ence(ent of business fro( the 8oard0 (%) A certificate granted under sub+section ( ) shall be in such for( as (ay be specified by the regulations0 (3) .he 8oard shall not grant a certificate under sub+section ( ) unless it is satisfied that the depository has ade*uate syste(s and safeguards to pre'ent (anipulation of records and transactions , 4ro+i-e- that no certificate shall be refused under this section unless the depository concerned has been gi'en a reasonable opportunity of being heard0
Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
/@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS A(ree.e t ,et/ee -e$o!itor> % - $%rti'i$% t. 3. ( ) A depository shall enter into an agree(ent with one or (ore participants as its agent0 (%) 7'ery agree(ent under sub+section ( ) shall be in such for( as (ay be specified by the bye+laws0 Ser+i'e! of -e$o!itor>. 5. Any person, through a participant, (ay enter into an agree(ent, in such for( as (ay be specified by the bye+laws, with any depository for a'ailing its ser'ices0 S*rre -er of 'ertifi'%te of !e'*rit>. 8. ( ) Any person who has entered into an agree(ent under section " shall surrender the certificate of security, for which he see)s to a'ail the ser'ices of a depository, to the issuer in such (anner as (ay be specified by the regulations0 (%) .he issuer, on receipt of certificate of security under sub+section ( ), shall cancel the certificate of security and substitute in its records the na(e of the depository as a registered owner in respect of that security and infor( the depository accordingly0 (3) A depository shall, on receipt of infor(ation under sub+section (%), enter the na(e of the person referred to in sub+section ( ) in its records, as the beneficial owner0 Re(i!tr%tio of tr% !fer of !e'*ritie! /ith -e$o!itor>. 7. ( ) 7'ery depository shall, on receipt of inti(ation fro( a participant, register the transfer of security in the na(e of the transferee0 (%) If a beneficial owner or a transferee of any security see)s to ha'e custody of such security the depository shall infor( the issuer accordingly0 O$tio ! to re'ei+e !e'*rit> 'ertifi'%te or hol- !e'*ritie! /ith -e$o!itor>. :. ( ) 7'ery person subscribing to securities offered by an issuer shall ha'e the option either to recei'e the security certificates or hold securities with a depository0 (%) Khere a person opts to hold a security with a depository, the issuer shall inti(ate such depository the details of allot(ent of the security, and on receipt of such infor(ation the depository shall enter in its records the na(e of the allottee as the beneficial owner of that security0 Se'*ritie! i -e$o!itorie! to ,e i f* (i,le for.. 9. ( ) All securities held by a depository shall be de(aterialised and shall be in a fungible for(0 %4(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#), shall apply to a depository in respect of securities held by it on behalf of the beneficial owners&: Ri(ht! of -e$o!itorie! % - ,e efi'i%l o/ er. 1=. ( ) Eotwithstanding anything contained in any other law for the ti(e being in force, a depository shall be dee(ed to be the registered owner for the purposes of effecting transfer of ownership of security on behalf of a beneficial owner0 (%) Sa'e as otherwise pro'ided in sub+section ( ), the depository as a registered owner shall not ha'e any 'oting rights or any other rights in respect of securities held by it0 (3) .he beneficial owner shall be entitled to all the rights and benefits and be subDected to all the liabilities in respect of his securities held by a depository0 Re(i!ter of ,e efi'i%l o/ er. 11. 7'ery depository shall (aintain a register and an index of beneficial owners in the
(anner pro'ided in sections "0, " and "% of the Co(panies Act, !"# ( of !"#)0 4le-(e or h>$othe'%tio of !e'*ritie! hel- i % -e$o!itor>. 1". ( ) SubDect to such regulations and bye+laws, as (ay be (ade in this behalf, a beneficial owner (ay with the pre'ious appro'al of the depository create a pledge or hypothecation in respect of a security owned by hi( through a depository0 (%) 7'ery beneficial owner shall gi'e inti(ation of such pledge or hypothecation to the depository and such depository shall thereupon (a)e entries in its records accordingly0 (3) Any entry in the records of a depository under sub+section (%) shall be e'idence of a pledge or hypothecation0 2*r i!hi ( of i for.%tio % - re'or-! ,> -e$o!itor> % - i!!*er. 1). ( ) 7'ery depository shall furnish to the issuer infor(ation about the transfer of securities in the na(e of beneficial owners at such inter'als and in such (anner as (ay be specified by the bye+laws0 (%) 7'ery issuer shall (a)e a'ailable to the depository copies of the rele'ant records in respect of securities held by such depository0 O$tio to o$t o*t i re!$e't of % > !e'*rit>.
% Substituted
by the 9epositories Related =aws (A(end(ent) Act, !!/, Sec %%, w0e0f0 "+0 + !!/0 <rior to its substitution sub+section (%) read as under , 1(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#) shall apply to the securities held by a depository on behalf of the beneficial owners02
13. ( ) If a beneficial owner see)s to opt out of a depository in respect of any security he shall infor( the depository accordingly0 (%) .he depository shall on receipt of inti(ation under sub+section ( ) (a)e appropriate entries in its records and shall infor( the issuer0 (3) 7'ery issuer shall, within thirty days of the receipt of inti(ation fro( the depository and on fulfil(ent of such conditions and on pay(ent of such fees as (ay be specified by the regulations, issue the certificate of securities to the beneficial owner or the transferee, as the case (ay be0 A't 1: of 1:91 to %$$l> to -e$o!itorie!. 15. .he 8an)ersJ 8oo)s 7'idence Act, >! shall apply in relation to a depository as if it were a ban) as defined in section % of that Act0 De$o!itorie! to i -e. if> lo!! i 'ert%i '%!e!. 18. ( ) Kithout preDudice to the pro'isions of any other law for the ti(e being in force, any loss caused to the beneficial owner due to the negligence of the depository or the participant, the depository shall inde(nify such beneficial owner0 (%) Khere the loss due to the negligence of the participant under sub+section ( ) is inde(nified by the depository, the depository shall ha'e the right to reco'er the sa(e fro( such participant0 Ri(ht! % - o,li(%tio ! of -e$o!itorie!, et'. 17. ( ) SubDect to the pro'isions of this Act, the rights and obligations of the depositories, participants and the issuers whose securities are dealt with by a depository shall be specified by the regulations0 (%) .he eligibility criteria for ad(ission of securities into the depository shall be specified by the regulations0 /@A81(0 :D EN9UIRM AND INS4ECTION 4o/er of ;o%r- to '%ll for i for.%tio % - e 7*ir>. 1:. ( ) .he 8oard, on being satisfied that it is necessary in the public interest or in the interest of in'estors so to do, (ay, by order in writing,-
(a) call upon any issuer, depository, participant or beneficial owner to furnish in writing such infor(ation relating to the securities held in a depository as it (ay re*uire3 or (b) authorise any person to (a)e an en*uiry or inspection in relation to the affairs of the issuer, beneficial owner, depository or participant, who shall sub(it a report of such en*uiry or inspection to it within such period as (ay be specified in the order0 (%) 7'ery director, (anager, partner, secretary, officer or e(ployee of the depository or issuer or the participant or beneficial owner shall on de(and produce before the person (a)ing the en*uiry or inspection all infor(ation or such records and other docu(ents in his custody ha'ing a bearing on the subDect+(atter of such en*uiry or inspection0 4o/er of ;o%r- to (i+e -ire'tio ! i 'ert%i '%!e!. 19. Sa'e as pro'ided in this Act, if after (a)ing or causing to be (ade an en*uiry or inspection, the 8oard is satisfied that it is necessary(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any depository or participant being conducted in the (anner detri(ental to the interests of in'estors or securities (ar)et, it (ay issue such directions,(a) to any depository or participant or any person associated with the securities (ar)et3 or (b) to any issuer, as (ay be appropriate in the interest of in'estors or the securities (ar)et0 )5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< $44e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 19A. Any person, who is re*uired under this Act or any rules or regulations or bye+laws (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to the 8oard, fails to furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations or bye+laws, fails to file return or furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0
3I $ Inserted
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the Securities =aws (A(end(ent) Act, %00$, Sec0 /, w0r0e0f0 %+ 0+%00$0
4e %lt> for f%il*re to e ter i to % %(ree.e t. 19;. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and is re*uired under this Act or any rules or regulations (ade thereunder, to enter into an agree(ent, fails to enter into such agree(ent, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0
4e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 19C. If any depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such depository or participant or issuer or its agents or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for -el%> i -e.%teri%li!%tio or i!!*e of 'ertifi'%te of !e'*ritie!. 19D. If any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to de(aterialise or issue the certificate of securities on opting out of a depository by the in'estors, within the ti(e specified under this Act or regulations or bye+laws (ade thereunder or abets in delaying the process of de(aterialisation or issue the certificate of securities on opting out of a depository of securities, such issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to re'o 'ile re'or-!. 19E. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to reconcile the records of de(aterialised securities with all the securities issued by the issuer as specified in the regulations, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to 'o.$l> /ith -ire'tio ! i!!*e- ,> ;o%r- * -er !e'tio 19 of the A't. 192. If any person fails to co(ply with the directions issued by the 8oard under section !, within the ti(e specified by it, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 19G. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations or bye+laws (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0 4o/er to %-G*-i'%te. 19D. ( ) 6or the purpose of adDudging under sections !A, !8, !C, !9, !7, !6 and !&, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the
sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. 190I. Khile adDudging the *uantu( of penalty under section !I, the adDudicating officer shall ha'e due regard to the following factors, na(ely,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 55 Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (!. 190IA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 19, !e'tio 19D, %! the '%!e .%> ,e, .%> file % %$$li'%tio i /riti ( to the ;o%r$ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e-ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h
"I
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re !$e'ifie- ,> the ;o%r* -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")A %(%i !t % > or-er $%!!e- ,> the ;o%r- or the %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 85 Re'o+er> of %.o* t!. 190I;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 19 or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6
%''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hilor !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C!
#I
!erte- ,> The Se'*ritie! L%/! (A.e- .e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
.o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")A of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 19, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 19E. All su(s realiFed by way of penalties under this Act shall be credited to the Consolidated 6und of India0: /@A81(0 D 4ENALTM /4Offe 'e!. "=. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws (ade thereunder, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0
/ Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 >, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %0 read as under,1%00 <ffence#0- Khoe'er contran'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or any regulations or bye+laws (ade thereunder shall be punishable with i(prison(ent for a ter( which (ay extend to fi'e years, or with fine or with both02
(%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with
fine, which (ay extend to twenty+fi'e crore rupees, or with both0: Offe 'e! ,> 'o.$% ie!. "1. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n&-6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and (b) 1director2, in relation to a fir(, (eans a partner in the fir(0 /@A81(0 D: @ISCELLANEOUS >4Co( iL% 'e of offe 'e! ,> 'o*rt!. "". ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central
> Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 !, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %% read as under,1%%0 /$gniCance $f $ffence# bF c$!rt#&*( ) Eo Court shall ta)e cogniFance of any offence punishable under this Act or any regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the 8oard0 (%) Eo court inferior to that of a ?etropolitan ?agistrate or a Dudicial ?agistrate of the first class shall try any offence punishable under this Act02
&o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or by any person0 !5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < Co.$o!itio of 'ert%i offe 'e!. ""A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "";. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any
penalty under this Act with respect to the alleged 'iolation , 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity , 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0: 1=5 E!t%,li!h.e t of S$e'i%l Co*rt!. ""C. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>.
! <rior
to o(ission, Sub+section(%) read 1Eo court inferior to that of a Court of Session shall try any offence punishable under this Act02 0 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. ""D. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-. A$$e%l % - Re+i!io ""E. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""2. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197).
(") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erioof ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! ""G. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< A$$e%l!. "). ( ) Any person aggrie'ed by an order of the 8oard (ade 4before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!: under this Act, or the regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor , 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0 (3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed , 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 %4A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")A. ( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!, under this Act, or the regulations (ade thereunder, 34or by an order (ade by an adDudicating officer under this Act: (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 $5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 8oard is recei'ed by the person referred to in sub+section ( ) and it shall be in such for( and be acco(panied by such fee as (ay be prescribed ,
Substituted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 $, w0e0f0 #+ %+ !!! for ;an order of the 8oard (ade;0 % Sections %3A to %36 inserted by the Securities =aws (Second A(end(ent) Act, !!! , Sec0 ", w0e0f0 #+ %+ !!!& 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %0, w0r0e0f0 %+ 0+%00$0 $ 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JNo %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-e ,> the ;o%r- /ith the 'o !e t of the $%rtie!.K
4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0
($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 (") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. ");. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3 (e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte; (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 Ri(ht to le(%l re$re!e t%tio . ")C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or an attorney of any Iigh Court, and
includes a pleader in practice0 Li.it%tio . ")D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 Ci+il 'o*rt ot to h%+e G*ri!-i'tio . ")E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "4A$$e%l to S*$re.e Co*rt. ")2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order ,
" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 % , w0r0e0f0 %+ 0+%00$0 <rior to its substitution, Section %36, as inserted by Securities =aws (Second A(end(ent) Act, !!!, w0e0f0 #+ %+ !!!, read as under,1%360 A%%eal t$ @igh /$!rt&-Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0:: 4o/er of Ce tr%l Go+er .e t to .%6e r*le!. "3. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for carrying out the pro'isions of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,164(a) the (anner of in*uiry under sub+section ( ) of section !I3 (aa) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %33: (b) the for( in which an appeal (ay be preferred under sub+section (3) of section %3 and the fees payable in respect of such appeal 3 (c) the procedure for disposing of an appeal under sub+section ($) of section %33 /4(d) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3A and the fees payable in respect of such appeal0: 4o/er of ;o%r- to .%6e re(*l%tio !. "5. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the 8oard (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for(a) the for( in which record is to be (aintained under clause ( i) of sub+section ( ) of section %3 (b) the for( in which the certificate of co((ence(ent of business shall be issued under
sub+section (%) of section 33 (c) the (anner in which the certificate of security shall be surrendered under sub+section ( ) of section #3 (d) the (anner of creating a pledge or hypothecation in respect of security owned by a beneficial owner under sub+section ( ) of section %3 (e) the conditions and the fees payable with respect to the issue of certificate of securities under sub+section (3) of section $3
# Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %%, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (a) read as under,1(a) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %332 / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 #, w0e0f0 #+ %+ !!!0
(f) the rights and obligations of the depositories, participants and the issuers under subsection ( ) of section /3 (g) the eligibility criteria for ad(ission of securities into the depository under sub+section (%) of section /0 4o/er of -e$o!itorie! to .%6e ,>e0l%/!. "8. ( ) A depository shall, with the pre'ious appro'al of the 8oard, (a)e bye+laws consistent with the pro'isions of this Act and the regulations0 (%) In particular, and without preDudice to the generality of the foregoing power, such byelaws shall pro'ide for(a) the eligibility criteria for ad(ission and re(o'al of securities in the depository3 (b) the conditions subDect to which the securities shall be dealt with3 (c) the eligibility criteria for ad(ission of any person as a participant3 (d) the (anner and procedure for de(aterialisation of securities3 (e) the procedure for transactions within the depository3 (f) the (anner in which securities shall be dealt with or withdrawn fro( a depository3 (g) the procedure for ensuring safeguards to protect the interests of participants and beneficial owners3 (h) the conditions of ad(ission into and withdrawal fro( a participant by a beneficial owner3 (i) the procedure for con'eying infor(ation to the participants and beneficial owners on di'idend declaration, shareholder (eetings and other (atters of interest to the beneficial owners3 (j) the (anner of distribution of di'idends, interest and (onetary benefits recei'ed fro( the co(pany a(ong beneficial owners3 (k) the (anner of creating pledge or hypothecation in respect of securities held with a depository3 (l) inter #e rights and obligations a(ong the depository, issuer, participants, and beneficial owners3 (") the (anner and the periodicity of furnishing infor(ation to the 8oard, issuer and other persons3 (n) the procedure for resol'ing disputes in'ol'ing depository, issuer, co(pany or a beneficial owner3 ($) the procedure for proceeding against the participant co((itting breach of the regulations and pro'isions for suspension and expulsion of participants fro( the depository and cancellation of agree(ents entered with the depository3 (%) the internal control standards including procedure for auditing, re'iewing and (onitoring0
(3) Khere the 8oard considers it expedient so to do, it (ay, by order in writing, direct a depository to (a)e any bye+laws or to a(end or re'o)e any bye+laws already (ade within such period as it (ay specify in this behalf0 ($) If the depository fails or neglects to co(ply with such order within the specified period, the 8oard (ay (a)e the bye+laws or a(end or re'o)e the bye+laws (ade either in the for( specified in the order or with such (odifications thereof as the 8oard thin)s fit0 R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t. "7. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. ":. .he pro'isions of this Act shall be in addition to, and not in derogation of, any other law for the ti(e being in force relating to the holding and transfer of securities0 Re.o+%l of -iffi'*ltie!. "9. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as appear to it to be necessary or expedient for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of a period of two years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 A.e -.e t! to 'ert%i e %'t.e t!. )=. 40e%ealed bF 0e%ealing H A"ending Act' 20010: Re$e%l % - !%+i (. )1. ( ) .he 9epositories (.hird) Crdinance, !!# (Crd0 %> of !!#), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 /@(5A9( 4 ee section 30: A?7E9?7E.S .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0:
SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 SECTIONS !'APT"R I 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions !'APT"R II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA
). 7stablish(ent and incorporation of 8oard 3. ?anage(ent of the 8oard 5. .er( of office and conditions of ser'ice of Chair(an and (e(bers of the 8oard 8. Re(o'al of (e(ber fro( office 7. ?eetings 7A. ?e(ber not to participate in (eetings in certain cases :. Bacancies, etc0, not to in'alidate proceedings of 8oard 9. Cfficers and e(ployees of the 8oard !'APT"R III TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD 1=. .ransfer of assets, liabilities, etc0, of existing Securities and 7xchange 8oard to the 8oard !'APT"R IV 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 11. 6unctions of 8oard 11A. 8oard to regulate or prohibit issue of prospectus, offer docu(ent or ad'ertise(ent soliciting (oney for issue of securities 11AA. Collecti'e in'est(ent sche(e 11;. <ower to issue directions 11C. In'estigation 11D. Cease and desist proceedings !'APT"R V REGISTRATION CERTI2ICATE 1". Registration of stoc) bro)ers, sub+bro)ers, share transfer agents, etc0
%
!'APT"R VA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 1"A. <rohibition of (anipulati'e and decepti'e de'ices, insider trading and substantial ac*uisition of securities or control !'APT"R VI 2INANCE, ACCOUNTS AND AUDIT 1). &rants by the Central &o'ern(ent 13. 6und 15. Accounts and audit !'APT"R VIA 4ENALTIES AND ADEUDICATION 15A. <enalty for failure to furnish infor(ation, return, etc & 15;. <enalty for failure by any person to enter into agree(ent with clients 15C. <enalty for failure to redress in'estorsJ grie'ances 15D. <enalty for certain defaults in case of (utual funds 15E. <enalty for failure to obser'e rules and regulations by an asset (anage(ent co(pany 152. <enalty for default in case of stoc) bro)ers 15G. <enalty for insider trading 15D. <enalty for non+disclosure of ac*uisition of shares and ta)eo'ers 15DA. <enalty for fraudulent and unfair trade practices 15D;. <enalty for contra'ention where no separate penalty has been pro'ided
150I. <ower to adDudicate 15E. 6actors to be ta)en into account by the AdDudicating Cfficer 15EA. Crediting su(s realised by way of penalties to Consolidated 6und of India 15E;. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! !'APT"R VIB ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL 15F. 7stablish(ent of Securities Appellate .ribunals 15L. Co(position of Securities Appellate .ribunal 15@. Qualification for appoint(ent as <residing Cfficer or ?e(ber of Securities Appellate .ribunal
3
15N. .enure of office of <residing Cfficer and other (e(bers of Securities Appellate .ribunal 150O. Salary and allowances and other ter(s and conditions of ser'ice of <residing Cfficers 154. 6illing up of 'acancies 159. Resignation and re(o'al 15R. Crders constituting Appellate .ribunal to be final and not to in'alidate its proceedings 15S. Staff of the Securities Appellate .ribunal 15T. Appeal to the Securities Appellate .ribunal 15U. <rocedure and powers of the Securities Appellate .ribunal 15I. Right to legal representation 15?. =i(itation 15A. <residing Cfficer, (e(bers and staff of Securities Appellate .ribunals to be public ser'ants 15M. Ci'il Court not to ha'e Durisdiction 15N. Appeal to Supre(e Court !'APT"R VII @ISCELLANEOUS 18. <ower of Central &o'ern(ent to issue directions 17. <ower of Central &o'ern(ent to supersede the 8oard 1:. Returns and reports 19. 9elegation "=. Appeals "=A. 8ar of Durisdiction "1. Sa'ings "". ?e(bers, officers and e(ployees of the 8oard to be public ser'ants "). <rotection of action ta)en in good faith "3. Cffences "3A. Co(position of certain offences "3;. <ower to grant i((unity "5. 7xe(ption fro( tax on wealth and inco(e "8. CogniFance of offences by Courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! "7. Cffences by co(panies
":. 4C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!":
$
":A. Re'o+er> of %.o* t! "9. <ower to (a)e rules )=. <ower to (a)e regulations )1. Rules and regulations to be laid before <arlia(ent )". Application of other laws not barred )). 4Repealed by Repealing R A(ending Act, %00 : )3. <ower to re(o'e difficulties )5. Repeal and sa'ing .I7 SCI79H=7 4Repealed by Repealing R A(ending Act, %00 : SECURITIES AND EACDANGE ;OARD O2 INDIA ACT, 199" 515 O2 199"< 53th A$ril, 199"< A A't to $ro+i-e for the e!t%,li!h.e t of % ;o%r- to $rote't the i tere!t! of i +e!tor! i !e'*ritie! % - to $ro.ote the -e+elo$.e t of, % - to re(*l%te, the !e'*ritie! .%r6et % - for .%tter! 'o e'te- there/ith or i 'i-e t%l thereto B( it enacted bF 8arlia"ent in the E$rtF7third ;ear $f the 0e%!blic $f :ndia a# f$ll$.# , CDA4TER I 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities and 7xchange 8oard of India Act, !!%0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the 30th day of Manuary, !!%0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 33 (b) 1Chair(an2 (eans the Chair(an of the 8oard3 4(ba) 1collecti'e in'est(ent sche(e2 (eans any sche(e or arrange(ent which satisfies the conditions specified in section AA3: (c) 1existing Securities and 7xchange 8oard2 (eans the Securities and 7xchange 8oard of India constituted under the Resolution of the &o'ern(ent of India in the 9epart(ent of 7cono(ic Affairs Eo0 ($$) S7L>#, dated the %th day of April, !>>3 (d) 16und2 (eans the 6und constituted under section $3 (e) 1(e(ber2 (eans a (e(ber of the 8oard and includes the Chair(an3 (f) 1notification2 (eans a notification published in the Cfficial &aFette3 (g) 1prescribed2 (eans prescribed by rules (ade under this Act3
Inserted by the Securities =aws (A(end(ent) Act, !!!, w0e0f0 %%+%+%0000
"
(h) 1regulations2 (eans the regulations (ade by the 8oard under this Act3 4(ha) 1Reser'e 8an)2 (eans the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)3: (i) 1securities2 has the (eaning assigned to it in section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#)0 %4(%) Kords and expressions used and not defined in this Act but defined in the Securities Contracts (Regulation) Act, !"# ($% of !"#) 34or the 9epositories Act, !!#:, shall ha'e the (eanings respecti'ely assigned to the( in that Act:0 CDA4TER II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA E!t%,li!h.e t % - i 'or$or%tio of ;o%r-.
). ( ) Kith effect fro( such date as the Central &o'ern(ent (ay, by notification, appoint, there shall be established, for the purposes of this Act, a 8oard by the na(e of the Securities and 7xchange 8oard of India0 (%) .he 8oard shall be a body corporate by the na(e aforesaid, ha'ing perpetual succession and a co((on seal, with power subDect to the pro'isions of this Act, to ac*uire, hold and dispose of property, both (o'able and i((o'able, and to contract, and shall, by the said na(e, sue or be sued0 (3) .he head office of the 8oard shall be at 8o(bay0 ($) .he 8oard (ay establish offices at other places in India0 @% %(e.e t of the ;o%r-. 3. ( ) .he 8oard shall consist of the following (e(bers, na(ely,(a) a Chair(an3 (b) two (e(bers fro( a(ongst the officials of the $4?inistry: of the Central &o'ern(ent dealing with 6inance "4and ad(inistration of the Co(panies Act, !"# ( of !"#):3 (c) one (e(ber fro( a(ongst the officials of #4the Reser'e 8an):3 /4(d) fi'e other (e(bers of who( at least three shall be the whole+ti(e (e(bers,: to be appointed by the Central &o'ern(ent0
Inserted by the Securities =aws (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0 <rior to its substitution, sub+section (%) reads as under, 1(%) Kords and expressions used and not defined in this Act but defined in the Capital Issues (Control) Act, !$/ or the Securities Contracts Regulation Act, !"# shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts02 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 $ Substituted for 1?inistries2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1and law2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act !3$ (% of !3$)2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 / Substituted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, clause (d) read as, 1(d) two other (e(bers20
% Substituted
#
(%) .he general superintendence, direction and (anage(ent of the affairs of the 8oard shall 'est in a 8oard of (e(bers, which (ay exercise all powers and do all acts and things which (ay be exercised or done by the 8oard0 (3) Sa'e as otherwise deter(ined by regulations, the Chair(an shall also ha'e powers of general superintendence and direction of the affairs of the 8oard and (ay also exercise all powers and do all acts and things which (ay be exercised or done by that 8oard0 ($) .he Chair(an and (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be appointed by the Central &o'ern(ent and the (e(bers referred to in clauses ( b) and (c) of that sub+section shall be no(inated by the Central &o'ern(ent and the 4Reser'e 8an): respecti'ely0 (") .he Chair(an and the other (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be persons of ability, integrity and standing who ha'e shown capacity in dealing with proble(s relating to securities (ar)et or ha'e special )nowledge or experience of law, finance, econo(ics, accountancy, ad(inistration or in any other discipline which, in the opinion of the Central &o'ern(ent, shall be useful to the 8oard0 Ter. of offi'e % - 'o -itio ! of !er+i'e of Ch%ir.% % - .e.,er! of the ;o%r-. 5. ( ) .he ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers referred to in clause (d) of sub+section ( ) of section $ shall be such as (ay be prescribed0 (%) Eotwithstanding anything contained in sub+section ( ), the Central &o'ern(ent shall ha'e the right to ter(inate the ser'ices of the Chair(an or a (e(ber appointed under clause ( d) of
sub+section ( ) of section $, at any ti(e before the expiry of the period prescribed under subsection ( ), by gi'ing hi( notice of not less than three (onths in writing or three (onthsJ salary and allowances in lieu thereof, and the Chair(an or a (e(ber, as the case (ay be, shall also ha'e the right to relin*uish his office, at any ti(e before the expiry of the period prescribed under sub+section ( ), by gi'ing to the Central &o'ern(ent notice of not less than three (onths in writing0 Re.o+%l of .e.,er fro. offi'e. 8. %4G G G: .he Central &o'ern(ent shall re(o'e a (e(ber fro( office if he(a) is, or at any ti(e has been, adDudicated as insol'ent3 (b) is of unsound (ind and stands so declared by a co(petent court3 (c) has been con'icted of an offence which, in the opinion of the Central &o'ern(ent, in'ol'es a (oral turpitude3 (d) 34G G G: (e) has, in the opinion of the Central &o'ern(ent, so abused his position as to render his continuation in office detri(ental to the public interest , 4ro+i-e- that no (e(ber shall be re(o'ed under this clause unless he has been gi'en a reasonable opportunity of being heard in the (atter0
Substituted for 1Reser'e 8an) of India2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 )2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 C(itted, by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to o(ission clause (d) read read as, 1(d) is appointed as a director of a co(pany20
% 1(
/
@eeti (!. 7. ( ) .he 8oard shall (eet at such ti(es and places, and shall obser'e such rules of procedure in regard to the transaction of business at its (eetings (including *uoru( at such (eetings) as (ay be pro'ided by regulations0 (%) .he Chair(an or, if for any reason, he is unable to attend a (eeting of the 8oard, any other (e(ber chosen by the (e(bers present fro( a(ongst the(sel'es at the (eeting shall preside at the (eeting0 (3) All *uestions which co(e up before any (eeting of the 8oard shall be decided by a (aDority 'otes of the (e(bers present and 'oting, and, in the e'ent of an e*uality of 'otes, the Chair(an, or in his absence, the person presiding, shall ha'e a second or casting 'ote0 4@e.,er ot to $%rti'i$%te i .eeti (! i 'ert%i '%!e!. 7A. Any (e(ber, who is a director of a co(pany and who as such director has any direct or indirect pecuniary interest in any (atter co(ing up for consideration at a (eeting of the 8oard, shall, as soon as possible after rele'ant circu(stances ha'e co(e to his )nowledge, disclose the nature of his interest at such (eeting and such disclosure shall be recorded in the proceedings of the 8oard, and the (e(ber shall not ta)e any part in any deliberation or decision of the 8oard with respect to that (atter0: I%'% 'ie!, et'., ot to i +%li-%te $ro'ee-i (! of ;o%r-. :. Eo act or proceeding of the 8oard shall be in'alid (erely by reason of(a) any 'acancy in, or any defect in the constitution of, the 8oard3 or (b) any defect in the appoint(ent of a person acting as a (e(ber of the 8oard3 or (c) any irregularity in the procedure of the 8oard not affecting the (erits of the case0 Offi'er! % - e.$lo>ee! of the ;o%r-. 9. ( ) .he 8oard (ay appoint such other officers and e(ployees as it considers necessary for the efficient discharge of its functions under this Act0 (%) .he ter( and other conditions of ser'ice of officers and e(ployees of the 8oard appointed under sub+section ( ) shall be such as (ay be deter(ined by regulations0 CDA4TER III
TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD Tr% !fer of %!!et!, li%,ilitie!, et'., of e#i!ti ( Se'*ritie! % - E#'h% (e ;o%r- to the ;o%r-. 1=. ( ) Cn and fro( the date of establish(ent of the 8oard,(a) any reference to the existing Securities and 7xchange 8oard in any law other than this Act or in any contract or other instru(ent shall be dee(ed as a reference to the 8oard3 (b) all properties and assets, (o'able and i((o'able, of, or belonging to, the existing Securities and 7xchange 8oard, shall 'est in the 8oard3
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
>
(c) all rights and liabilities of the existing Securities and 7xchange 8oard shall be transferred to, and be the rights and liabilities of, the 8oard3 (d) without preDudice to the pro'isions of clause (c), all debts, obligations and liabilities incurred, all contracts entered into and all (atters and things engaged to be done by, with or for the existing Securities and 7xchange 8oard i((ediately before that date, for or in connection with the purpose of the said existing 8oard shall be dee(ed to ha'e been incurred, entered into, or engaged to be done by, with or for, the 8oard3 (e) all su(s of (oney due to the existing Securities and 7xchange 8oard i((ediately before that date shall be dee(ed to be due to the 8oard3 (f) all suits and other legal proceedings instituted or which could ha'e been instituted by or against the existing Securities and 7xchange 8oard i((ediately before that date (ay be continued or (ay be instituted by or against the 8oard3 and (g) e'ery e(ployee holding any office under the existing Securities and 7xchange 8oard i((ediately before that date shall hold his office in the 8oard by the sa(e tenure and upon the sa(e ter(s and conditions of ser'ice as respects re(uneration, lea'e, pro'ident fund, retire(ent and other ter(inal benefits as he would ha'e held such office if the 8oard had not been established and shall continue to do so as an e(ployee of the 8oard or until the expiry of the period of six (onths fro( that date if such e(ployee opts not to be the e(ployee of the 8oard within such period0 (%) Eotwithstanding anything contained in the Industrial 9isputes Act, !$/ ( $ of !$/), or in any other law for the ti(e being in force, absorption of any e(ployee by the 8oard in its regular ser'ice under this section shall not entitle such e(ployee to any co(pensation under that Act or other law and no such clai( shall be entertained by any court, tribunal or other authority0 CDA4TER II 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 2* 'tio ! of ;o%r-. 11. ( ) SubDect to the pro'isions of this Act, it shall be the duty of the 8oard to protect the interests of in'estors in securities and to pro(ote the de'elop(ent of, and to regulate the securities (ar)et, by such (easures as it thin)s fit0 (%) Kithout preDudice to the generality of the foregoing pro'isions, the (easures referred to therein (ay pro'ide for(a) regulating the business in stoc) exchanges and any other securities (ar)ets3 (b) registering and regulating the wor)ing of stoc) bro)ers, sub+bro)ers, share transfer agents, ban)ers to an issue, trustees of trust deeds, registrars to an issue, (erchant ban)ers, underwriters, portfolio (anagers, in'est(ent ad'isers and such other inter(ediaries who (ay be associated with securities (ar)ets in any (anner3 4(ba) registering and regulating the wor)ing of the depositories, %4participants:, custodians of securities, foreign institutional in'estors, credit rating agencies and such other inter(ediaries as the 8oard (ay, by notification, specify in this behalf3: (c) registering and regulating the wor)ing of 4'enture capital funds and collecti'e
in'est(ent sche(es:, including (utual funds3
% Inserted
Inserted by Securities =aws (A(end(ent) Act !!", w0r0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+!+ !!"0
!
(d) pro(oting and regulating self+regulatory organisations3 (e) prohibiting fraudulent and unfair trade practices relating to securities (ar)ets3 (f) pro(oting in'estorsJ education and training of inter(ediaries of securities (ar)ets3 (g) prohibiting insider trading in securities3 (h) regulating substantial ac*uisition of shares and ta)e o'er of co(panies3 (i) calling for infor(ation fro(, underta)ing inspection, conducting in*uiries and audits of the %4stoc) exchanges, (utual funds, other persons associated with the securities (ar)et:, inter(ediaries and self+regulatory organisations in the securities (ar)et3 34(ia) '%lli ( for i for.%tio % - re'or-! fro. % > $er!o i 'l*-i ( % > ,% 6 or % > other %*thorit> or ,o%r- or 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l or St%te A't /hi'h, i the o$i io of the ;o%r-, !h%ll ,e rele+% t to % > i +e!ti(%tio or i 7*ir> ,> the ;o%r- i re!$e't of % > tr% !%'tio i !e'*ritie! 3: $5(i,) '%lli ( for i for.%tio fro., or f*r i!hi ( i for.%tio to, other %*thoritie!, /hether i I -i% or o*t!i-e I -i%, h%+i ( f* 'tio ! !i.il%r to tho!e of the ;o%r-, i the .%tter! rel%ti ( to the $re+e tio or -ete'tio of +iol%tio ! i re!$e't of !e'*ritie! l%/!, !*,Ge't to the $ro+i!io ! of other l%/! for the ti.e ,ei ( i for'e i thi! re(%r-& 4ro+i-e- th%t the ;o%r-, for the $*r$o!e of f*r i!hi ( % > i for.%tio to % > %*thorit> o*t!i-e I -i%, .%> e ter i to % %rr% (e.e t or %(ree.e t or * -er!t% -i ( /ith !*'h %*thorit> /ith the $rior %$$ro+%l of the Ce tr%l Go+er .e tH< (j) perfor(ing such functions and exercising such powers under the pro'isions of "4G G G: the Securities Contracts (Regulation) Act, !"# ($% of !"#), as (ay be delegated to it by the Central &o'ern(ent3 (k) le'ying fees or other charges for carrying out the purposes of this section3 (l) conducting research for the abo'e purposes3 #4(la) calling fro( or furnishing to any such agencies, as (ay be specified by the 8oard, such infor(ation as (ay be considered necessary by it for the efficient discharge of its functions3: (") perfor(ing such other functions as (ay be prescribed0 /4(%A) Kithout preDudice to the pro'isions contained in sub+section (%), the 8oard (ay ta)e (easures to underta)e inspection of any boo), or register, or other docu(ent or record of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard
Substituted for 1collecti'e in'est(ent sche(es2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % Substituted for 1stoc) exchanges and2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 S*,!tit*te- for J'%lli ( for i for.%tio % - re'or- fro. % > ,% 6 or % > other %*thorit> or ,o%ror 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l, St%te or 4ro+i 'i%l A't i re!$e't of % > tr% !%'tio i !e'*ritie! /hi'h i! * -er i +e!ti(%tio or i 7*ir> ,> the ;o%r-K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). E%rlier Se'tio 11(")(i%) /%! i !erte- ,> the SE;I (A.e -.e t) A't, "==" /.e.f. "901=0"=="0 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. =80=)0 199:) " .he words 1the Capital Issues (Control) Act, !$/ (%! of !$/) and2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
0
has reasonable grounds to belie'e that such co(pany has been indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et0: 4(3) Eotwithstanding anything contained in any other law for the ti(e being in force while exercising the powers under %4clause (i) or clause (ia) of sub+section (%) or sub+ section (2A):, the 8oard shall ha'e the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(i) the disco'ery and production of boo)s of account and other docu(ents, at such place and such ti(e as (ay be specified by the 8oard3 (ii) su((oning and enforcing the attendance of persons and exa(ining the( on oath3 (iii) inspection of any boo)s, registers and other docu(ents of any person referred to in section %, at any place3: 34(iv) inspection of any boo), or register, or other docu(ent or record of the co(pany referred to in sub+section (%A)3 (v) issuing co((issions for the exa(ination of witnesses or docu(ents0: $4($) Kithout preDudice to the pro'isions contained in sub+sections ( ), (%), (%A) and (3) and section 8, the 8oard (ay, by an order, for reasons to be recorded in writing, in the interests of in'estors or securities (ar)et, ta)e any of the following (easures, either pending in'estigation or in*uiry or on co(pletion of such in'estigation or in*uiry, na(ely,(a) suspend the trading of any security in a recognised stoc) exchange3 (b) restrain persons fro( accessing the securities (ar)et and prohibit any person associated with securities (ar)et to buy, sell or deal in securities3 (c) suspend any office+bearer of any stoc) exchange or self+regulatory organisation fro( holding such position3 (d) i(pound and retain the proceeds or securities in respect of any transaction which is under in'estigation3 (e) attach, after passing of an order on an application (ade for appro'al by the Mudicial ?agistrate of the first class ha'ing Durisdiction, for a period not exceeding one (onth, one or (ore ban) account or accounts of any inter(ediary or any person associated with the securities (ar)et in any (anner in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder , 4ro+i-e- that only the ban) account or accounts or any transaction entered therein, so far as it relates to the proceeds actually in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder shall be allowed to be attached3 (f) direct any inter(ediary or any person associated with the securities (ar)et in any (anner not to dispose of or alienate an asset for(ing part of any transaction which is under in'estigation , 4ro+i-e- that the 8oard (ay, without preDudice to the pro'isions contained in sub+section (%) or sub+section (%A), ta)e any of the (easures specified in clause ( d) or clause (e) or clause (f), in respect of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard has reasonable grounds to belie'e that such co(pany has been
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1clause (i) of sub+section (%)2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 3 Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 $ Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
% Substituted
indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et , 4ro+i-e- f*rther that the 8oard shall, either before or after passing such orders, gi'e an
opportunity of hearing to such inter(ediaries or persons concerned0: 15(5) The %.o* t -i!(or(e-, $*r!*% t to % -ire'tio i!!*e- * -er !e'tio 11; or !e'tio 1"A of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 or !e'tio 19 of the De$o!itorie! A't, 1998, %! the '%!e .%> ,e, !h%ll ,e 're-ite- to the I +e!tor 4rote'tio % - E-*'%tio 2* e!t%,li!he- ,> the ;o%r- % - !*'h %.o* t !h%ll ,e *tiliLe- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< %4;o%r- to re(*l%te or $rohi,it i!!*e of $ro!$e't*!, offer -o'*.e t or %-+erti!e.e t !oli'iti ( .o e> for i!!*e of !e'*ritie!. 11A. ( ) Kithout preDudice to the pro'isions of the Co(panies Act, !"# ( of !"#), the 8oard (ay, for the protection of in'estors,(a) specify, by regulations(i) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (ii) the (anner in which such (atters shall be disclosed by the co(panies3 (b) by general or special orders(i) prohibit any co(pany fro( issuing prospectus, any offer docu(ent, or ad'ertise(ent soliciting (oney fro( the public for the issue of securities3 (ii) specify the conditions subDect to which the prospectus, such offer docu(ent or ad'ertise(ent, if not prohibited, (ay be issued0 (%) Kithout preDudice to the pro'isions of section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the 8oard (ay specify the re*uire(ents for listing and transfer of securities and other (atters incidental thereto0: 34Colle'ti+e i +e!t.e t !'he.e. 11AA. ( ) Any sche(e or arrange(ent which satisfies the conditions referred to in subsection (%) $5or !*,0!e'tio ("A)< shall be a collecti'e in'est(ent sche(e0 "44ro+i-e- th%t % > $ooli ( of f* -! * -er % > !'he.e or %rr% (e.e t, /hi'h i! ot re(i!tere- /ith the ;o%r- or i! ot 'o+ere- * -er !*,0!e'tio ()), i +ol+i ( %
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 7arlier S0 A was inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" for S0 A0 <rior to its substitution, S0 A read as under,+ 1 A0 ?atters to be disclosed by the co(panies0+ Kithout <reDudice to the <ro'isions of the Co(panies Act , !"# ( of !"#), the board (ay , for the protection of in'estors, specify, by regulations,+ (a) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (b) the (anner in which such (atters, shall be disclosed by the co(panies02 3 Inserted by S78I (A(end(ent) Act !!!, w0e0f0 %%+%+%0000 $I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% Substituted
%
'or$*! %.o* t of o e h* -re- 'rore r*$ee! or .ore !h%ll ,e -ee.e- to ,e % 'olle'ti+e i +e!t.e t !'he.e.< (%) Any sche(e or arrange(ent (ade or offered by any 5$er!o < under which,(i) the contributions, or pay(ents (ade by the in'estors, by whate'er na(e called, are pooled and utiliFed for the purposes of the sche(e or arrange(ent3 (ii) the contributions or pay(ents are (ade to such sche(e or arrange(ent by the in'estors with a 'iew to recei'e profits, inco(e, produce or property, whether (o'able or i((o'able, fro( such sche(e or arrange(ent3 (iii) the property, contribution or in'est(ent for(ing part of sche(e or arrange(ent, whether identifiable or not, is (anaged on behalf of the in'estors3
(iv) the in'estors do not ha'e day+to+day control o'er the (anage(ent and operation of the sche(e or arrange(ent0 "5("A)< A > !'he.e or %rr% (e.e t .%-e or offere- ,> % > $er!o !%ti!f>i ( the 'o -itio ! %! .%> ,e !$e'ifie- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< (3) Eotwithstanding anything contained in sub+section (%) 35or !*,0!e'tio ("A)<, any sche(e or arrange(ent(i) (ade or offered by a co+operati'e society registered under the Co+operati'e Societies Act, ! % (% of ! %) or a society being a society registered or dee(ed to be registered under any law relating to co+operati'e societies for the ti(e being in force in any State3 (ii) under which deposits are accepted by non+ban)ing financial co(panies as defined in clause (f) of section $"+I of the Reser'e 8an) of India Act, !3$ (% of !3$)3 (iii) being a contract of insurance to which the Insurance Act, !3> ($ of !3>), applies3 (iv) pro'iding for any Sche(e, <ension Sche(e or the Insurance Sche(e fra(ed under the 7(ployees <ro'ident 6und and ?iscellaneous <ro'isions Act, !"% ( ! of !"%)3 (v) under which deposits are accepted under section ">A of the Co(panies Act, !"# ( of !"#)3 (vi) under which deposits are accepted by a co(pany declared as a Eidhi or a (utual benefit society under section #%0A of the Co(panies Act, !"# ( of !"#)3 (vii) falling within the (eaning of Chit business as defined in clause ( d) of section % of the Chit 6und Act, !>% ($0 of !>%)3 (viii) under which contributions (ade are in the nature of subscription to a (utual fund3 35(i#) !*'h other !'he.e or %rr% (e.e t /hi'h the Ce tr%l Go+er .e t .%>, i 'o !*lt%tio /ith the ;o%r-, otif>H< shall not be a collecti'e in'est(ent sche(e0: "54o/er to i!!*e -ire'tio !. 11;. Sa'e as otherwise pro'ided in section , if after (a)ing or causing to be (ade an en*uiry, the 8oard is satisfied that it is necessary,S*,!tit*te- for J'o.$% >K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) 3I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
%I
3
(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any inter(ediary or other persons referred to in section % being conducted in a (anner detri(ental to the interest of in'estors or securities (ar)et3 or (iii) to secure the proper (anage(ent of any such inter(ediary or person, it (ay issue such directions,(a) to any person or class of persons referred to in section %, or associated with the securities (ar)et3 or (b) to any co(pany in respect of (atters specified in section A, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 15E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< %4I +e!ti(%tio . 11C. ( ) Khere the 8oard has reasonable ground to belie'e that-
(a) the transactions in securities are being dealt with in a (anner detri(ental to the in'estors or the securities (ar)et3 or (b) any inter(ediary or any person associated with the securities (ar)et has 'iolated any of the pro'isions of this Act or the rules or the regulations (ade or directions issued by the 8oard thereunder, it (ay, at any ti(e by order in writing, direct any person (hereafter in this section referred to as the In'estigating Authority) specified in the order to in'estigate the affairs of such inter(ediary or persons associated with the securities (ar)et and to report thereon to the 8oard0 (%) Kithout preDudice to the pro'isions of sections %3" to %$ of the Co(panies Act, !"# ( of !"#), it shall be the duty of e'ery (anager, (anaging director, officer and other e(ployee of the co(pany and e'ery inter(ediary referred to in section % or e'ery person associated with the securities (ar)et to preser'e and to produce to the In'estigating Authority or any person authorised by it in this behalf, all the boo)s, registers, other docu(ents and record of, or relating to, the co(pany or, as the case (ay be, of or relating to, the inter(ediary or such person, which are in their custody or power0 (3) .he In'estigating Authority (ay re*uire any inter(ediary or any person associated with securities (ar)et in any (anner to furnish such infor(ation to, or produce such boo)s, or registers, or other docu(ents, or record before hi( or any person authorised by it in this behalf as it (ay consider necessary if the furnishing of such infor(ation or the production of such boo)s, or registers, or other docu(ents, or record is rele'ant or necessary for the purposes of its in'estigation0 ($) .he In'estigating Authority (ay )eep in its custody any boo)s, registers, other docu(ents and record produced under sub+section (%) or sub+section (3) for six (onths and thereafter
% Inserted
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
$
shall return the sa(e to any inter(ediary or any person associated with securities (ar)et by who( or on whose behalf the boo)s, registers, other docu(ents and record are produced , 4ro+i-e- that the In'estigating Authority (ay call for any boo), register, other docu(ent and record if they are needed again , 4ro+i-e- f*rther that if the person on whose behalf the boo)s, registers, other docu(ents and record are produced re*uires certified copies of the boo)s, registers, other docu(ents and record produced before the In'estigating Authority, it shall gi'e certified copies of such boo)s, registers, other docu(ents and record to such person or on whose behalf the boo)s, registers, other docu(ents and record were produced0 (") Any person, directed to (a)e an in'estigation under sub+section ( ), (ay exa(ine on oath, any (anager, (anaging director, officer and other e(ployee of any inter(ediary or any person associated with securities (ar)et in any (anner, in relation to the affairs of his business and (ay ad(inister an oath accordingly and for that purpose (ay re*uire any of those persons to appear before it personally0 (#) If any person fails without reasonable cause or refuses(a) to produce to the In'estigating Authority or any person authorised by it in this behalf any boo), register, other docu(ent and record which is his duty under sub+section (%) or sub+section (3) to produce3 or (b) to furnish any infor(ation which is his duty under sub+section (3) to furnish3 or (c) to appear before the In'estigating Authority personally when re*uired to do so under sub+section (") or to answer any *uestion which is put to hi( by the In'estigating Authority in pursuance of that sub+section3 or (d) to sign the notes of any exa(ination referred to in sub+section (/), he shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with
fine, which (ay extend to one crore rupees, or with both, and also with a further fine which (ay extend to fi'e la)h rupees for e'ery day after the first during which the failure or refusal continues0 (/) Eotes of any exa(ination under sub+section (") shall be ta)en down in writing and shall be read o'er to, or by, and signed by, the person exa(ined, and (ay thereafter be used in e'idence against hi(0 4(:) ?here i the 'o*r!e of % i +e!ti(%tio , the I +e!ti(%ti ( A*thorit> h%! re%!o to ,elie+e th%t % > $er!o or e ter$ri!e, %! the '%!e .%> ,e, to /ho. % oti'e * -er !*,!e'tio ()) h%! ,ee i!!*e- or .i(ht ,e i!!*e-, 0 (%) h%! o.itte- or f%ile- to $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! %! re7*irei the oti'eH or (,) /o*l- ot $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! /hi'h !h%ll ,e *!ef*l for, or rele+% t to, the i +e!ti(%tio H or (') /o*l- -e!tro>, .*til%te, %lter, f%l!if> or !e'rete the i for.%tio or -o'*.e t! *!ef*l for, or rele+% t to, the i +e!ti(%tio ,
S*,!tit*te- for JKhere in the course of in'estigation, the In'estigating Authority has reasonable ground to belie'e that the boo)s, registers, other docu(ents and record of, or relating to, any inter(ediary or any person associated with securities (ar)et in any (anner, (ay be destroyed, (utilated, altered, falsified or secreted, the In'estigating Authority (ay (a)e an application to the Mudicial ?agistrate of the first class ha'ing Durisdiction for an order for the seiFure of such boo)s, registers, other docu(ents and record K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
"
the , the Ch%ir.% .%>, %fter ,ei ( !%ti!fie- th%t it i! e'e!!%r> to -o !o, %*thoriLe the I +e!ti(%ti ( A*thorit> or % > other offi'er of the ;o%r- (the offi'er !o %*thoriLe- i %ll '%!e! ,ei ( herei %fter referre- to %! the %*thori!e- offi'er), to0 (i) e ter % - !e%r'h, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft /here !*'h i for.%tio or -o'*.e t! %re e#$e'te- or ,elie+e- to ,e 6e$tH (ii) ,re%6 o$e the lo'6 of % > -oor, ,o#, lo'6er, !%fe, %l.ir%h or other re'e$t%'le for e#er'i!i ( the $o/er! 'o ferre- ,> !*,0'l%*!e (i), /here the 6e>! thereof %re ot %+%il%,leH (iii) !e%r'h % > $er!o /ho h%! (ot o*t of, or i! %,o*t to (et i to, or i! i , the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft, if the %*thoriLe- offi'er h%! re%!o to !*!$e't th%t !*'h $er!o h%! !e'rete- %,o*t hi! $er!o % > !*'h ,oo6! of %''o* t or other -o'*.e t!H (i+) re7*ire % > $er!o /ho i! fo* - to ,e i $o!!e!!io or 'o trol of % > ,oo6! of %''o* t or other -o'*.e t!, .%i t%i e- i the for. of ele'tro i' re'or-, to $ro+i-e the %*thori!e- offi'er the e'e!!%r> f%'ilit> to i !$e't !*'h ,oo6! of %''o* t or other -o'*.e t!. "#planation0 2or the $*r$o!e of thi! !*,0'l%*!e, the e#$re!!io Jele'tro i' re'or-K !h%ll h%+e the .e% i ( %!!i( e- to it i 'l%*!e (t) of !*,0!e'tio (1) of !e'tio " of the I for.%tio Te'h olo(> A't, "===. (+) !eiLe % > !*'h ,oo6! of %''o* t or other -o'*.e t! fo* - %! % re!*lt of !*'h !e%r'hH (+i) $l%'e .%r6! of i-e tifi'%tio o % > ,oo6! of %''o* t or other -o'*.e t! or .%6e or '%*!e to ,e .%-e e#tr%'t! or 'o$ie! therefro.H (+ii) re'or- o o%th the !t%te.e t of % > $er!o /ho i! fo* - to ,e i $o!!e!!io or i 'o trol of the i for.%tio or -o'*.e t! referre- to i !*,0'l%*!e! (i), (iii) % - (i+).< 4(9) The ;o%r- .%> .%6e re(*l%tio ! i rel%tio to % > !e%r'h or !eiL*re * -er thi! !e'tio H % - i $%rti'*l%r, /itho*t $reG*-i'e to the (e er%lit> of the fore(oi ( $o/er, !*'h re(*l%tio ! .%> $ro+i-e for the $ro'e-*re to ,e follo/e- ,> the %*thori!e- offi'er0
(%) for o,t%i i ( i (re!! i to % > ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft to ,e !e%r'he- /here free i (re!! thereto i! ot %+%il%,leH
1 S*,!tit*te-
,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) for the follo/i (& JAfter 'o !i-eri ( the %$$li'%tio % - he%ri ( the I +e!ti(%ti ( A*thorit>, if e'e!!%r>, the @%(i!tr%te .%>, ,> or-er, %*thori!e the I +e!ti(%ti ( A*thorit>O (a) to e ter, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the $l%'e or $l%'e! /here !*'h ,oo6!, re(i!ter!, other -o'*.e t! % - re'or- %re 6e$tH (b) to !e%r'h th%t $l%'e or tho!e $l%'e! i the .% er !$e'ifie- i the or-erH % (c) to !eiLe ,oo6!, re(i!ter!, other -o'*.e t! % - re'or-, it 'o !i-er! e'e!!%r> for the $*r$o!e! of the i +e!ti(%tio & 4ro+i-e- th%t the @%(i!tr%te !h%ll ot %*thori!e !eiL*re of ,oo6!, re(i!ter!, other -o'*.e t! % re'or-, of % > li!te- $*,li' 'o.$% > or % $*,li' 'o.$% > ( ot ,ei ( the i ter.e-i%rie! !$e'ifie* -er !e'tio 1") /hi'h i te -! to (et it! !e'*ritie! li!te- o % > re'o( i!e- !to'6 e#'h% (e * le!! !*'h 'o.$% > i -*l(e! i i !i-er tr%-i ( or .%r6et .% i$*l%tio .K
#
(,) for e !*ri ( !%fe '*!to-> of % > ,oo6! of %''o* t or other -o'*.e t! or %!!et! !eiLe-.< ( 0) .he In'estigating Authority shall )eep in its custody the boo)s, registers, other docu(ents and record seiFed under this section for such period not later than the conclusion of the in'estigation as it considers necessary and thereafter shall return the sa(e to the co(pany or the other body corporate, or, as the case (ay be, to the (anaging director or the (anager or any other person, fro( whose custody or power they were seiFed 5***<, 4ro+i-e- that the In'estigating Authority (ay, before returning such boo)s, registers, other docu(ents and record as aforesaid, place identification (ar)s on the( or any part thereof0 ( ) Sa'e as otherwise pro'ided in this section, e'ery search or seiFure (ade under this section shall be carried out in accordance with the pro'isions of the Code of Cri(inal <rocedure, !/3 (% of !/$) relating to searches or seiFures (ade under that Code0 Ce%!e % - -e!i!t $ro'ee-i (!. 11D. If the 8oard finds, after causing an in*uiry to be (ade, that any person has 'iolated, or is li)ely to 'iolate, any pro'isions of this Act, or any rules or regulations (ade thereunder, it (ay pass an order re*uiring such person to cease and desist fro( co((itting or causing such 'iolation, 4ro+i-e- that the 8oard shall not pass such order in respect of any listed public co(pany or a public co(pany (other than the inter(ediaries specified under section %) which intends to get its securities listed on any recognised stoc) exchange unless the 8oard has reasonable grounds to belie'e that such co(pany has indulged in insider trading or (ar)et (anipulation0: CDA4TER I REGISTRATION CERTI2ICATE Re(i!tr%tio of !to'6 ,ro6er!, !*,0,ro6er!, !h%re tr% !fer %(e t!, et'. 1". ( ) Eo stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et shall buy, sell or deal in securities except under, and in accordance with, the conditions of a certificate of registration obtained fro( the 8oard in accordance with the %4regulations: (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et i((ediately before the establish(ent of the 8oard for which no registration certificate was
necessary prior to such establish(ent, (ay continue to do so for a period of three (onths fro( such establish(ent or, if he has (ade an application for such registration within the said period of three (onths, till the disposal of such application,
The /or-! P% - i for. the @%(i!tr%te of !*'h ret*r P, o.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) % Substituted for 1rules2 by Securities =aw (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0
/
44ro+i-e- f*rther that any certificate of registration, obtained i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", shall be dee(ed to ha'e been obtained fro( the 8oard in accordance with the regulations pro'iding for such registration0 ( A) Eo depository, %4participant,: custodian of securities, foreign institutional in'estor, credit rating agency, or any other inter(ediary associated with the securities (ar)et as the 8oard (ay by notification in this behalf specify, shall buy or sell or deal in securities except under and in accordance with the conditions of a certificate of registration obtained fro( the 8oard in accordance with the regulations (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a depository, 34participant,: custodian of securities, foreign institutional in'estor or credit rating agency i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to buy or sell securities or otherwise deal with the securities (ar)et until such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300 ( 8) Eo person shall sponsor or cause to be sponsored or carry on or caused to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es including (utual funds, unless he obtains a certificate of registration fro( the 8oard in accordance with the regulations, 4ro+i-e- that any person sponsoring or causing to be sponsored, carrying or causing to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es operating in the securities (ar)et i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to operate till such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300:
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0
% Inserted
>
4()%lanati$n7 6or the re(o'al of doubts, it is hereby declared that, for purposes of this section, a collecti'e in'est(ent sche(e or (utual fund shall not be include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(ponent of in'est(ent besides the co(ponent of insurance issued by the insurer0: (%) 7'ery application for registration shall be in such (anner and on pay(ent of such fees as (ay be deter(ined by regulations0 (3) .he 8oard (ay, by order, suspend or cancel a certificate of registration in such (anner as (ay be deter(ined by regulations, 4ro+i-e- that no order under this sub+section shall be (ade unless the person concerned has been gi'en a reasonable opportunity of being heard0 %4CIA<.7R BA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 4rohi,itio of .% i$*l%ti+e % - -e'e$ti+e -e+i'e!, i !i-er tr%-i ( % - !*,!t% ti%l %'7*i!itio of !e'*ritie! or 'o trol.
1"A. Eo person shall directly or indirectly(a) use or e(ploy, in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recogniFed stoc) exchange, any (anipulati'e or decepti'e de'ice or contri'ance in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3
Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, w0r0e0f !+$+ %0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, reads as under, /@A81(0 D: ?ISC7==AE7CHS #0 Balidation+ Eotwithstanding anything contained in any Dudg(ent, decree or order of any court, tribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 Repeal and sa'ings + (1) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (2) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0 % Chapter BA inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
!
(b) e(ploy any de'ice, sche(e or artifice to defraud in connection with issue or dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange3 (c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange, in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (d) engage in insider trading3 (e) deal in securities while in possession of (aterial or non+public infor(ation or co((unicate such (aterial or non+public infor(ation to any other person, in a (anner which is in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (f) ac*uire control of any co(pany or securities (ore than the percentage of e*uity share capital of a co(pany whose securities are listed or proposed to be listed on a recognised stoc) exchange in contra'ention of the regulations (ade under this Act0: CDA4TER II 2INANCE, ACCOUNTS AND AUDIT Gr% t! ,> the Ce tr%l Go+er .e t. 1). .he Central &o'ern(ent (ay, after due appropriation (ade by <arlia(ent by law in this behalf, (a)e to the 8oard grants of such su(s of (oney as that &o'ern(ent (ay thin) fit for being utiliFed for the purposes of this Act0 2* -. 13. ( ) .here shall be constituted a 6und to be called the Securities and 7xchange 8oard of
India &eneral 6und and there shall be credited thereto(a) all grants, fees and charges recei'ed by the 8oard under this Act3 4G G G: (aa) %4G G G: (b) all su(s recei'ed by the 8oard fro( such other sources as (ay be decided upon by the Central &o'ern(ent0 (%) .he 6und shall be applied for (eeting(a) the salaries, allowances and other re(uneration of the (e(bers, officers and other e(ployees of the 8oard3 (b) the expenses of the 8oard in the discharge of its functions under section 3 (c) the expenses on obDects and for purposes authorised by this Act0
.he word 1and2 o(itted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 (aa) o(itted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 It was inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Clause (aa) reads as under,+ 1(aa) all su(s realiFed by way of <enalties under this Act3 and20
% Clause
%0
A''o* t! % - %*-it. 15. ( ) .he 8oard shall (aintain proper accounts and other rele'ant records and prepare an annual state(ent of accounts in such for( as (ay be prescribed by the Central &o'ern(ent in consultation with the Co(ptroller and Auditor+&eneral of India0 (%) .he accounts of the 8oard shall be audited by the Co(ptroller and Auditor+&eneral of India at such inter'als as (ay be specified by hi( and any expenditure incurred in connection with such audit shall be payable by the 8oard to the Co(ptroller and Auditor+&eneral of India0 (3) .he Co(ptroller and Auditor+&eneral of India and any other person appointed by hi( in connection with the audit of the accounts of the 8oard shall ha'e the sa(e rights and pri'ileges and authority in connection with such audit as the Co(ptroller and Auditor+ &eneral generally has in connection with the audit of the &o'ern(ent accounts and, in particular, shall ha'e the right to de(and the production of boo)s, accounts, connected 'ouchers and other docu(ents and papers and to inspect any of the offices of the 8oard0 ($) .he accounts of the 8oard as certified by the Co(ptroller and Auditor+&eneral of India or any other person appointed by hi( in this behalf together with the audit report thereon shall be forwarded annually to the Central &o'ern(ent and that &o'ern(ent shall cause the sa(e to be laid before each Iouse of <arlia(ent0 5CDA4TER IIA 4ENALTIES AND ADEUDICATION 4e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 15A. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder,(a) to furnish any docu(ent, return or report to the 8oard, fails to furnish the sa(e, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations, fails to file return or furnish the sa(e within the ti(e specified therefor in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0
Chapters BI A and BI 8 containing Ss0 "A to "M and "@ to "S respecti'ely, inserted by Securities =aws (A(end(ent) Act, !!" w0e0f0 %"+ + !!"0 % Substituted for 1a penalty not exceeding one la)h and fifty thousand rupees for each such failure2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding fi'e thousand rupees for e'ery day during which such failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for e'ery day during which the failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%
4e %lt> for f%il*re ,> % > $er!o to e ter i to %(ree.e t /ith 'lie t!. 15;. If any person, who is registered as an inter(ediary and is re*uired under this Act or any rules or regulations (ade thereunder to enter into an agree(ent with his client, fails to enter into such agree(ent, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 %54e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 15C. If any listed co(pany or any person who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such co(pany or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 4e %lt> for 'ert%i -ef%*lt! i '%!e of .*t*%l f* -!. 15D. If any person, who is(a) re*uired under this Act or any rules or regulations (ade thereunder to obtain a certificate of registration fro( the 8oard for sponsoring or carrying on any collecti'e in'est(ent sche(e, including (utual funds, sponsors or carries on any collecti'e in'est(ent sche(e, including (utual funds, without obtaining such certificate of registration, he shall be liable to 34a penalty of one la)h rupees for each day during which he sponsors or carries on any such collecti'e in'est(ent sche(e including (utual funds, or one crore rupees, whiche'er is less:3 (b) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, for sponsoring or carrying on any in'est(ent sche(e, fails to co(ply with the ter(s and conditions of certificate of registration, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, fails to (a)e an application for listing of its sche(es as pro'ided for in the regulations
Substituted for 1a penalty not exceeding fi'e la)h rupees for e'ery such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1If any person, who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing to redress the grie'ances of in'estors, fails to redress such grie'ances, he shall be liable to a penalty not exceeding ten thousand rupees for each such failure2, by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding ten thousand rupees for each day during which he carries on any such collecti'e in'est(ent sche(e including (utual funds, or ten la)h rupees whiche'er is higher02 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for each day during which such failure continues or ten la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0
%%
go'erning such listing, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (d) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to despatch
unit certificates of any sche(e in the (anner pro'ided in the regulation go'erning such despatch, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (e) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to refund the application (onies paid by the in'estors within the period specified in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (f) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to in'est (oney collected by such collecti'e in'est(ent sche(es in the (anner or within the period specified in the regulations, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for f%il*re to o,!er+e r*le! % - re(*l%tio ! ,> % %!!et .% %(e.e t 'o.$% >. 15E. Khere any asset (anage(ent co(pany of a (utual fund registered under this Act, fails to co(ply with any of the regulations pro'iding for restrictions on the acti'ities of the asset (anage(ent co(panies, such asset (anage(ent co(pany shall be liable to "4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for -ef%*lt i '%!e of !to'6 ,ro6er!. 152. If any person, who is registered as a stoc) bro)er under this Act,(a) fails to issue contract notes in the for( and (anner specified by the stoc) exchange of which such bro)er is a (e(ber, he shall be liable to a penalty not exceeding fi'e ti(es the a(ount for which the contract note was re*uired to be issued by that bro)er3 (b) fails to deli'er any security or fails to (a)e pay(ent of the a(ount due to the in'estor in the (anner within the period specified in the regulations, he shall be liable to #4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3
Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues or fi'e la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding one thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%3
(c) charges an a(ount of bro)erage which is in excess of the bro)erage specified in the regulations, he shall be liable to 4a penalty of one la)h rupees: or fi'e ti(es the a(ount of bro)erage charged in excess of the specified bro)erage, whiche'er is higher0 4e %lt> for i !i-er tr%-i (. 15G. If any insider who,(i) either on his own behalf or on behalf of any other person, deals in securities of a body corporate listed on any stoc) exchange on the basis of any unpublished price+sensiti'e infor(ation3 or (ii) co((unicates any unpublished price+sensiti'e infor(ation to any person, with or without his re*uest for such infor(ation except as re*uired in the ordinary course of business or under any law3 or
(iii) counsels, or procures for any other person to deal in any securities of any body corporate on the basis of unpublished price+sensiti'e infor(ation, shall be liable to a penalty %4of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of insider trading, whiche'er is higher:0 4e %lt> for o 0-i!'lo!*re of %'7*i!itio of !h%re! % - t%6eo+er!. 15D. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder, fails to,(i) disclose the aggregate of his shareholding in the body corporate before he ac*uires any shares of that body corporate3 or (ii) (a)e a public announce(ent to ac*uire shares at a (ini(u( price3 or 34(iii) (a)e a public offer by sending letter of offer to the shareholders of the concerned co(pany3 or (iv) (a)e pay(ent of consideration to the shareholders who sold their shares pursuant to letter of offer,: he shall be liable to a penalty $4of twenty+fi'e crore rupees or three ti(es the a(ount of profits profits (ade out of such failure, whiche'er is higher:0 554e %lt> for fr%*-*le t % - * f%ir tr%-e $r%'ti'e!. 15DA. If any person indulges in fraudulent and unfair trade practices relating to securities, he shall be liable to a penalty of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of such practices, whiche'er is higher0
Substituted for 1a penalty not exceeding fi'e thousand rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00% 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00% %00% " Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00%0
%$
4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 15D;. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 4o/er to %-G*-i'%te. 150I. ( ) 6or the purpose of adDudging under sections "A, "8, "C, "9, "7, "6, "& 4, "I, "IA and "I8:, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in subsection ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> the %-G*-i'%ti ( offi'er. 15E. Khile adDudging *uantu( of penalty under section "+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade
as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 "5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 15EA. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: )5Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!. 15E;. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 11, !e'tio 11;, !e'tio 11D, !*,0!e'tio ()) of !e'tio 1" or !e'tio 150I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e- -ef%*lt!.
Substituted for 1and "I2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the S78I (A(end(ent) Act, %00%, S0 ! w0e0f0 %!+ 0+%00%0 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
% Inserted
%"
(") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't. ()) The !ettle.e t $ro'ee-i (! * -er thi! !e'tio !h%ll ,e 'o -*'te- i %''or-% 'e /ith the $ro'e-*re !$e'ifie- i the re(*l%tio ! .%-e * -er thi! A't. (3) No %$$e%l !h%ll lie * -er !e'tio 15T %(%i !t % > or-er $%!!e- ,> the ;o%r- or %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio . < CDA4TER II; ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL E!t%,li!h.e t of Se'*ritie! A$$ell%te Tri,* %l!. 15F. ( ) .he Central &o'ern(ent shall by notification, establish one or (ore Appellate .ribunals to be )nown as the Securities Appellate .ribunal to exercise the Durisdiction, powers and authority conferred on such .ribunal by or under this Act 4or any other law for the ti(e being in force:0 (%) .he Central &o'ern(ent shall also specify in the notification referred to in sub+section ( ) the (atters and places in relation to which the Securities Appellate .ribunal (ay exercise Durisdiction0 "5Co.$o!itio of Se'*ritie! A$$ell%te Tri,* %l. 15L. A Securities Appellate .ribunal shall consist of a <residing Cfficer and two other (e(bers, to be appointed, by notification, by the Central &o'ern(ent, 4ro+i-e- that the Securities Appellate .ribunal, consisting of one person only, established before the co((ence(ent of the Securities and 7xchange 8oard of India (A(end(ent) Act, %00%, shall continue to exercise the Durisdiction, powers and authority conferred on it by or under this Act or any other law for the ti(e being in force till two other ?e(bers are appointed under this section0 9*%lifi'%tio for %$$oi t.e t %! 4re!i-i ( Offi'er or @e.,er of Se'*ritie! A$$ell%te Tri,* %l.
Inserted by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for Sections "= and "? by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "= and "? read as under,+ 1 "+=0 Co(position of securities Appellate .ribunal0 5 A Securities Appellate .ribunal shall consist of
% Substituted
one person only (hereinafter referred to as the <residing Cfficer of the Securities Appellate .ribunal) to be appointed, by notification, by the central &o'ern(ent0 "?0 Qualifications for appoint(ent as <residing Cfficer of the Securities Appellate .ribunal0 5 A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he + (a) is, or has been, or is *ualified to be, a Mudge of a Iigh Court3 or (b) has been a (e(ber of the Indian =egal Ser'ice and has held a post in &rade I of that ser'ice for at least three years3 or (c) has held office as the <residing Cfficer of a tribunal for at least three years02
%#
15@. 15( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of the Securities Appellate .ribunal unless he + (a) is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court3 or (b) is a sitting or retired Mudge of a Iigh Court who has co(pleted not less than se'en years of ser'ice as a Mudge in a Iigh Court0 ( A) .he <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0: (%) A person shall not be *ualified for appoint(ent as (e(ber of a Securities Appellate .ribunal unless he is a person of ability, integrity and standing who has shown capacity in dealing with proble(s relating to securities (ar)et and has *ualification and experience of corporate law, securities laws, finance, econo(ics or accountancy, 4ro+i-e- that a (e(ber of the 8oard or any person holding a post at senior (anage(ent le'el e*ui'alent to 7xecuti'e 9irector in the 8oard shall not be appointed as <residing Cfficer or ?e(ber of a Securities Appellate .ribunal during his ser'ice or tenure as such with the 8oard or within two years fro( the date on which he ceases to hold office as such in the 8oard0: %4Te *re of offi'e of 4re!i-i ( Offi'er % - other @e.,er! of Se'*ritie! A$$ell%te Tri,* %l. 15N. .he <residing Cfficer and e'ery other ?e(ber of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office and shall be eligible for re+appoint(ent, 4ro+i-e- that no person shall hold office as the <residing Cfficer of the Securities Appellate .ribunal after he has attained the age of sixty+eight years, 4ro+i-e- f*rther that no person shall hold office as a ?e(ber of the Securities Appellate .ribunal after he has attained the age of sixty+two years0: S%l%r> % - %llo/% 'e! % - other ter.! % - 'o -itio ! of !er+i'e of 4re!i-i ( Offi'er!. 150O. .he salary and allowances payable to and the other ter(s and conditions of ser'ice including pension, gratuity and other retire(ent benefits of the 4<residing Cfficer and other ?e(bers: of a Securities Appellate .ribunal shall be such as (ay be prescribed,
Substituted for sub+section ( ) of Section "? by the S78I (A(end(ent) Crdinance, %0 3 w0e0f0 % 00 0%0 30 <rior to substitution, it read as under,+ ;( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court , 4ro+i-e- that the <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0; % Substituted for Section "E, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "E read as under,+ 1 "E0 .er( of office0+ .he <residing officer of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office or until he attains the age of sixtyfi'e years, whiche'er is earlier02
%/
4ro+i-e- that neither the salary and allowances nor the other ter(s and conditions of ser'ice of the %4<residing Cfficer and other ?e(bers of a Securities Appellate .ribunal: shall be 'aried to their disad'antage after appoint(ent0 2illi ( *$ of +%'% 'ie!. 154. If, for reason other than te(porary absence, any 'acancy occurs in the 34office of the <residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal, then the Central &o'ern(ent shall appoint another person in accordance with the pro'isions of this Act to fill the 'acancy and the proceedings (ay be continued before the Securities Appellate .ribunal fro( the stage at which the 'acancy is filled0 Re!i( %tio % - re.o+%l. 159. ( ) .he $4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal (ay, by notice in writing under his hand addressed to the Central &o'ern(ent, resign his office, 4ro+i-e- that "4the <residing Cfficer or any other ?e(ber: shall, unless he is per(itted by the Central &o'ern(ent to relin*uish his office sooner, continue to hold office, until the expiry of three (onths fro( the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his ter( of office, whiche'er is the earliest0 (%) .he #4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal shall not be re(o'ed fro( his office except by an order by the Central &o'ern(ent on the ground of pro'ed (isbeha'iour or incapacity after an in*uiry (ade by a Mudge of the Supre(e Court, in which the /4<residing Cfficer or any other ?e(ber: concerned has been infor(ed of the charges against hi( and gi'en a reasonable opportunity of being heard in respect of these charges0 (3) .he Central &o'ern(ent (ay, by rules, regulate the procedure for the in'estigation of (isbeha'iour or incapacity of the >4<residing Cfficer or any other ?e(ber:0 Or-er! 'o !tit*ti ( A$$ell%te Tri,* %l to ,e fi %l % - ot to i +%li-%te it! $ro'ee-i (!. 15R. Eo order of the Central &o'ern(ent appointing any person as the !4<residing Cfficer or a ?e(ber: of a Securities Appellate .ribunal shall be called in *uestion in any (anner, and no act or proceeding before a Securities Appellate .ribunal shall be called in *uestion in any (anner on the ground (erely of any defect in the constitution of a Securities Appellate .ribunal0
Substituted for 1<residing Cfficer of a Securities Appellate .ribunal2 by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 / Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 > Substituted for 1aforesaid <residing Cfficer2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 ! Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0
%>
St%ff of the Se'*ritie! A$$ell%te Tri,* %l. 15S. ( ) .he Central &o'ern(ent shall pro'ide the Securities Appellate .ribunal with such officers and e(ployees as that &o'ern(ent (ay thin) fit0 (%) .he officers and e(ployees of the Securities Appellate .ribunal shall discharge their functions under general superintendence of the <residing Cfficer0 (3) .he salaries and allowances and other conditions of ser'ice of the officers and e(ployees of the Securities Appellate .ribunal shall be such as (ay be prescribed0 A$$e%l to the Se'*ritie! A$$ell%te Tri,* %l. 15T. 4( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed,(a) by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws
(Second A(end(ent) Act, !!!, under this Act, or the rules or regulations (ade thereunder3 or (b) by an order (ade by an adDudicating officer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 "5(") ********< (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 348oard or the AdDudicating Cfficer, as the case case (ay be,: is recei'ed by hi( and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 ($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0
Substituted for Sub+sec ( ) R (%) by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, Sub+sections ( ) R (%) were read as under, 1( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by any order (ade by any AdDudicating Cfficer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 (%) Eo appeal shall lie to the Securities Appellate .ribunal fro( an order (ade by an AdDudicating Cfficer with the consent of the parties02 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , o.i!!io , S*,0!e'tio (") re%- %! * -er& J(") No %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-eO (a) ,> the ;o%r- o % - %fter the 'o..e 'e.e t of the Se'*ritie! L%/! (Se'o - A.e -.e t) A't, 1999H (b) ,> % %-G*-i'%ti ( offi'er, /ith the 'o !e t of the $%rtie!.2 3 Substituted for 1a copy of the order (ade by the adDudicating officer2 by S78I (A(end(ent) Act !!!, !!!, w0e0f0 #+ %+ !!!0
%!
(") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 48oard, the: parties to the appeal and to the concerned AdDudicating Cfficer0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of the Se'*ritie! A$$ell%te Tri,* %l. 15U. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act, and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purposes of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3
(e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte 3 (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0), and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 %4Ri(ht to le(%l re$re!e t%tio . 15I. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,Substituted for 1parties2, S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for S0 "B by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, S0 "B read as under,+ 1 "B0 .he appellant (ay either appear in person or authorise one or (ore legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal02
% Substituted
30
(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of subsection ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or any attorney of any Iigh Court, and includes a pleader in practice0: Li.it%tio . 15?. .he pro'isions of the =i(itation Act, !#3 (3# of !#3), shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 54re!i-i ( Offi'er, @e.,er! % - !t%ff of Se'*ritie! A$$ell%te Tri,* %l! to ,e $*,li' !er+% t!. 15A. .he <residing Cfficer, ?e(bers and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0: Ci+il Co*rt ot to h%+e G*ri!-i'tio . 15M. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which an adDudicating officer appointed under this Act or a Securities Appellate .ribunal constituted under this Act is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "5A$$e%l to S*$re.e Co*rt.
Substituted for S0 "A by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, it read as under, + 1 "A0 .he <residing Cfficer and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian penal Code( $" of >#0)20 % Substituted for S0 "S by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution , it
was read as under,+ 1 "S0 Appeal to Iigh Court0+ Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, <ro'ided that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
3
15N. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order , 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the applicant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: CDA4TER III @ISCELLANEOUS 4o/er of Ce tr%l Go+er .e t to i!!*e -ire'tio !. 18. ( ) Kithout preDudice to the foregoing pro'isions of this Act 4or the 9epositories Act, !!#:, the 8oard shall, in exercise of its powers or the perfor(ance of its functions under this Act, be bound by such directions on *uestions of policy as the Central &o'ern(ent (ay gi'e in writing to it fro( ti(e to ti(e , 4ro+i-e- that the 8oard shall, as far as practicable, be gi'en an opportunity to express its 'iews before any direction is gi'en under this sub+section0 (%) .he decision of the Central &o'ern(ent whether a *uestion is one of policy or not shall be final0 4o/er of Ce tr%l Go+er .e t to !*$er!e-e the ;o%r-. 17. ( ) If at any ti(e the Central &o'ern(ent is of opinion(a) that on account of gra'e e(ergency, the 8oard is unable to discharge the functions and duties i(posed on it by or under the pro'isions of this Act3 or (b) that the 8oard has persistently (ade default in co(plying with any direction issued by the Central &o'ern(ent under this Act or in the discharge of the functions and duties i(posed on it by or under the pro'isions of this Act and as a result of such default the financial position of the 8oard or the ad(inistration of the 8oard has deteriorated3 or (c) that circu(stances exist which render it necessary in the public interest so to do, the Central &o'ern(ent (ay, by notification, supersede the 8oard for such period, not exceeding six (onths, as (ay be specified in the notification0 (%) Hpon the publication of a notification under sub+section ( ) superseding the 8oard,(a) all the (e(bers shall, as fro( the date of supersession, 'acate their offices as such3 (b) all the powers, functions and duties which (ay, by or under the pro'isions of this Act, be exercised or discharged by or on behalf of the 8oard, shall until the 8oard is reconstituted under sub+section (3), be exercised and discharged by such person or persons as the Central &o'ern(ent (ay direct3 and (c) all property owned or controlled by the 8oard shall, until the 8oard is reconstituted under sub+section (3), 'est in the Central &o'ern(ent0
Substituted for 1this Act2 by the 9epositories Act !!#, w0r0e0f0 %0+!+ !!"0
3%
(3) Cn the expiration of the period of supersession specified in the notification issued under sub+section ( ), the Central &o'ern(ent (ay reconstitute the 8oard by a fresh appoint(ent
and in such case any person or persons who 'acated their offices under clause ( a) of subsection (%), shall not be dee(ed dis*ualified for appoint(ent , 4ro+i-e- that the Central &o'ern(ent (ay, at any ti(e, before the expiration of the period of supersession, ta)e action under this sub+section0 ($) .he Central &o'ern(ent shall cause a notification issued under sub+section ( ) and a full report of any action ta)en under this section and the circu(stances leading to such action to be laid before each Iouse of <arlia(ent at the earliest0 Ret*r ! % - re$ort!. 1:. ( ) .he 8oard shall furnish to the Central &o'ern(ent at such ti(e and in such for( and (anner as (ay be prescribed or as the Central &o'ern(ent (ay direct, such returns and state(ents and such particulars in regard to any proposed or existing progra((e for the pro(otion and de'elop(ent of the securities (ar)et, as the Central &o'ern(ent (ay, fro( ti(e to ti(e, re*uire0 (%) Kithout preDudice to the pro'isions of sub+section ( ), the 8oard shall, within 4ninety: days after the end of each financial year, sub(it to the Central &o'ern(ent a report in such for(, as (ay be prescribed, gi'ing a true and full account of its acti'ities, policy and progra((es during the pre'ious financial year0 (3) A copy of the report recei'ed under sub+section (%) shall be laid, as soon as (ay be after it is recei'ed, before each Iouse of <arlia(ent0 Dele(%tio . 19. .he 8oard (ay, by general or special order in writing delegate to any (e(ber, officer of the 8oard or any other person subDect to such conditions, if any, as (ay be specified in the order, such of its powers and functions under this Act (except the powers under section %!) as it (ay dee( necessary0 A$$e%l!. "=. ( ) Any person aggrie'ed by an order of the 8oard (ade %4, before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!,: under this Act, or the rules or regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor, 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0
Substituted for 1sixty days2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1an order of the 8oard (ade2 by Securities =aws (Second A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0
% Substituted
33
(3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed, 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 4;%r of G*ri!-i'tio . "=A. Eo order passed by the 8oard %4or the AdDudicating Cfficer: under this Act shall be appealable except as pro'ided in 34section ". or: section %0 and no ci'il court shall ha'e Durisdiction in respect of any (atter which the 8oard $4or the AdDudicating Cfficer: is e(powered by, or under, this Act to pass any order and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any order passed by the 8oard "4or the AdDudicating Cfficer: by, or under, this Act0: S%+i (!.
"1. Eothing in this Act shall exe(pt any person fro( any suit or other proceedings which (ight, apart fro( this Act, be brought against hi(0 @e.,er!, offi'er! % - e.$lo>ee! of the ;o%r- to ,e $*,li' !er+% t!. "". All (e(bers, officers and other e(ployees of the 8oard shall be dee(ed, when acting or purporting to act in pursuance of any of the pro'isions of this Act, to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0 4rote'tio of %'tio t%6e i (oo- f%ith. "). Eo suit, prosecution or other legal proceedings shall lie against the Central &o'ern(ent #4or 8oard: or any officer of the Central &o'ern(ent or any (e(ber, officer or other e(ployee of the 8oard for anything which is in good faith done or intended to be done under this Act or the rules or regulations (ade thereunder0 /4Offe 'e!. "3. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, he shall be punishable with
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 18oard2 by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 3 Substituted for 1Section %02, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 $ Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 " Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Substituted by for S0 %$, Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" && <rior to its substitution S0%$ read as under, 1%$0 <enalty0+ Khoe'er contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both02
% Substituted
3$
i(prison(ent for a ter( which (ay extend to 4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to %4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 34Co.$o!itio of 'ert%i offe 'e!. "3A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "3;. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of the alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation, 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0
(%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0:
Substituted for 1one year, or with fine, or with both2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%, for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both20 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3"
E#e.$tio fro. t%# o /e%lth % - i 'o.e. "5. Eotwithstanding anything contained in the Kealth+tax Act, !"/ (%/ of !"/), the Inco(etax Act, !# ($3 of !# ) or any other enact(ent for the ti(e being in force relating to tax on wealth, inco(e, profits or gains(a) the 8oard3 (b) the existing Securities and 7xchange 8oard fro( the date of its constitution to the date of establish(ent of the 8oard, shall not be liable to pay wealth+tax, inco(e+tax or any other tax in respect of their wealth, inco(e, profits or gains deri'ed0 Co( iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations (ade thereunder, sa'e on a co(plaint (ade by the 8oard 4G G G:0 "5(") *****< )5 E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
.he words 1with the pre'ious sanction of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to the o.i!!io , S*,0!e'tio (") re%- %! * -er& 1(") No 'o*rt i ferior to th%t of "5% Co*rt of Se!!io < !h%ll tr> % > offe 'e $* i!h%,le * -er thi!
A't.2 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3#
A$$e%l % - re+i!io "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e of Cri.i %l 4ro'e-*re, 197) to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< Offe 'e! ,> 'o.$% ie!. "7. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly, 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n , 6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and
3/
(b) 1director2, in relation to a fir(, (eans a partner in the fir(0 4o/er to e#e.$t. ":. 4GGGGGG: "5 Re'o+er> of %.o* t! ":A. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith %
-ire'tio of -i!(or(e.e t or-er i!!*e- * -er !e'tio 11; or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifiefor. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.et%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't.
C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Section %> read as under, 1%>0 8$.er t$ e)e"%t+ If the central go'ern(ent if of the opinion that it is necessary or expedient so to do in public interest, it (ay, by order published in the Cfficial gaFette, exe(pt any person or class of persons buying or selling securities or otherwise dealing with the securities (ar)et fro( the operation of sub+section ! ) of Section %02 % I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3>
"#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio 15T of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 11;, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% !
% > offi'er of the ;o%r- /ho .%> ,e %*thoriLe-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 4o/er to .%6e r*le!. "9. ( ) .he Central &o'ern(ent (ay, by notification, (a)e rules for carrying out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers under sub+section ( ) of section "3 (b) the additional functions that (ay be perfor(ed by the 8oard under section 3 (c) 4G G G: (d) the (anner in which the accounts of the 8oard shall be (aintained under section "3 %4(da) the (anner of in*uiry under sub+section ( ) of section "+I3 (db) the salaries and allowances and other ter(s and conditions of ser'ice of the 34<residing Cfficers, ?e(bers: and other officers and e(ployees of the Securities Appellate .ribunal under section "+C and sub+section (3) of section "S3 (dc) the procedure for the in'estigation of (isbeha'iour or incapacity of the 4<residing Cfficers, or other ?e(bers: of the Securities Appellate .ribunal under sub+section (3) of section "Q3
Clause (c) o(itted by Securities laws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, clause (c) it read as under, 1(c) the conditions subDect to which registration certificate is to be issued under sub+section ( ) of section %20 % Inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 3 Substituted for 1<residing Cfficers2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3!
(dd) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section ". and the fees payable in respect of such appeal3: (e) the for( and the (anner in which returns and report to be (ade to the Central &o'ern(ent under section >3 (f) any other (atter which is to be, or (ay be, prescribed, or in respect of which pro'ision is to be, or (ay be, (ade by rules0 4o/er to .%6e re(*l%tio !. )=. ( ) .he 8oard (ay, %4GGG: by notification, (a)e regulations consistent with this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ti(es and places of (eetings of the 8oard and the procedure to be followed at such (eetings under sub+section ( ) of section / including *uoru( necessary for the transaction of business3 (b) the ter(s and other conditions of ser'ice of officers and e(ployees of the 8oard under sub+section (%) of section !3 34(c) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto and the (anner in which such (atters shall be disclosed by the co(panies under section A3 35('%) the *tiliL%tio of the %.o* t 're-ite- * -er !*,0!e'tio (5) of !e'tio 11H (',) the f*lfill.e t of other 'o -itio ! rel%ti ( to 'olle'ti+e i +e!t.e t !'he.e * -er !*,0!e'tio ("A) of !e'tio 11AAH ('') the $ro'e-*re to ,e follo/e- ,> the %*thoriLe- offi'er for !e%r'h or !eiL*re * -er !*,0!e'tio (9) of !e'tio 11CH < (d) the conditions subDect to which certificate of registration is to be issued, the a(ount of
fee to be paid for certificate of registration and the (anner of suspension or cancellation of certificate of registration under section %0: 55(-%) the ter.! -eter.i e- ,> the ;o%r- for !ettle.e t of $ro'ee-i (! * -er !*,!e'tio (") % - the $ro'e-*re for 'o -*'ti ( of !ettle.e t $ro'ee-i (! * -er !*,!e'tio ()) of !e'tio 15E;H (-,) % > other .%tter /hi'h i! re7*ire- to ,e, or .%> ,e, !$e'ifie- ,> re(*l%tio ! or i re!$e't of /hi'h $ro+i!io i! to ,e .%-e ,> re(*l%tio !.< R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t.
Substituted for 1<residing Cfficers2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 words 1with the pre'ious appro'al of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 3 Substituted for the existing clause (c) by the Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 <rior to substitution this clause read as under, 1(c) the a(ount of fee to be paid for registration certificate and (anner of suspension or cancellation of registration certificate under sub+section (%) and (3) of section %02 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% .he
$0
)1. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. )". .he pro'isions of this Act shall be in addition to, and not in derogation of, the pro'isions of any other law for the ti(e being in force0 A.e -.e t of 'ert%i e %'t.e t!. )). 40e%ealed bF 0e%ealing H A"ending Act' 2001&: 4o/er to re.o+e -iffi'*ltie!. )3. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order, published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as (ay appear to be necessary for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of fi'e years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 Re$e%l % - !%+i (. )5. ( ) .he Securities and 7xchange 8oard of India Crdinance, !!% (Crd0 " of !!%), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 1@( /@(5A9( 4 ee section 33: A@END@ENT O2 CERTAIN ENACT@ENTS 40e%ealed bF 0e%ealing H A"ending Act' 2001:
*SECURITIES CONTRACTS (REGULATION) RULES, 1957
In exercise of the powers conferred by section 30 of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the Central &o'ern(ent hereby (a)es the following rules, the sa(e ha'ing been pre'iously published as re*uired by sub+section (3) of the said section, na(ely ,Short title. 1. .hese rules (ay be called the Securities Contracts (Regulation) Rules, !"/0 Defi itio !. ". In these rules, unless the context otherwise re*uires,(a) 1for(2 (eans a for( appended to these rules3 (b) 1the Act2 (eans the Securities Contracts (Regulation) Act, !"# ($% of !"#)3 (c) 1&o'ern(ent co(pany2 (eans a co(pany in which not less than fifty+one per cent of the share capital is held by the Central &o'ern(ent or by any State &o'ern(ent or &o'ern(ents or partly by the Central &o'ern(ent and partly by one or (ore State &o'ern(ents ; 4(d) 1public2 (eans persons other than 5 (i) the pro(oter and pro(oter group3 (ii) subsidiaries and associates of the co(pany0 E#$l% %tio & 6or the purpose of this clause the words 1pro(oter2 and 1pro(oter group2 shall ha'e the sa(e (eaning as assigned to the( under the Securities and 7xchange 8oard of India (Issue of Capital and 9isclosure Re*uire(ents) Regulations, %00!3: %4(da) ;public sector co(pany; (eans a body corporate constituted by an Act of <arlia(ent or any State =egislature and includes a go'ern(ent co(pany,: 4(e) 1public shareholding2 (eans e*uity shares of the co(pany held by public and shall exclude shares which are held by custodian against depository receipts issued o'erseas0: A$$li'%tio for re'o( itio . ). An application under section 3 of the Act for recognition of a stoc) exchange shall be (ade to the 34Securities and 7xchange 8oard of India: in 6or( A0
* The!e R*le! h%+e ,ee *$-%te- ,%!e- o the R*le! % - A.e -.e t! %+%il%,le o the /e,!ite of the De$%rt.e t of E'o o.i' Aff%ir!0 htt$&11fi .i . i'.i 1l%/1i -e#.%!$ % - %+%il%,le %.e -.e t otifi'%tio !. Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 % Inserted by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3 Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
2ee! for %$$li'%tio . 3. ( ) .here shall be paid in respect of e'ery application under rule 3 a fee of rupees fi'e hundred0 (%) .he a(ount of the fee shall be deposited in the nearest &o'ern(ent treasury or the nearest branch of the State 8an) of India, 4ro+i-e- that at 8o(bay, Calcutta, ?adras, 9elhi and @anpur, the a(ount shall be deposited in the Reser'e 8an) of India0 (3) .he a(ount of the fee so deposited shall be credited to the receipt head 1A=BI?iscellaneous-Cther fees, fines and forfeitures20 Do'*.e t! to ,e file- %lo ( /ith the %$$li'%tio % - $%rti'*l%r! it !ho*l- 'o t%i . 5. 7'ery application shall be acco(panied by four copies of the rules (including the (e(orandu( and articles of association where the applicant stoc) exchange is an
incorporated body) and bye+laws of the stoc) exchange applying for recognition as specified in section 3 of the Act and the receipt granted by the &o'ern(ent treasury, or as the case (ay be, the State 8an) of India or the Reser'e 8an) of India, in respect of the a(ount of the fee deposited and shall contain clear particulars as to the (atters specified in the Annexure to 6or( A0 $54o/er to .%6e i 7*irie! % - '%ll for i for.%tio . 5A. 8efore granting recognition to a stoc) exchange under section $ of the Act, the "4Securities and 7xchange 8oard of India: (ay (a)e such in*uiries and re*uire such further infor(ation to be furnished, as it dee(s necessary, relating to the infor(ation furnished by the stoc) exchange in the Annexure to its application in 6or( A0: 2or. of re'o( itio . 8. .he recognition granted to a stoc) exchange shall be in 6or( 8 and be subDect to the following conditions, na(ely ,(a) that the recognition unless granted on a per(anent basis, shall be for such period not less than one year as (ay be specified in the recognition3 (b) that the stoc) exchange shall co(ply with such conditions as are or (ay be prescribed or i(posed under the pro'isions of the Act and these rules fro( ti(e to ti(e0
$ Inserted
by &SR 0!# dated $00/0 !#/, w0e0f0 %%00/0 !#/ for 1Central &o'ern(ent2 by the Securities Contracts (Regulation)(A(end(ent )Rules, !!#, w0e0f0 %30 %0 !!#0
" Substituted
Re e/%l of re'o( itio . 7. ( ) .hree (onths before the expiry of the period of recognition, a recognised stoc) exchange desirous of renewal of such recognition (ay (a)e an application to the #4Securities and 7xchange 8oard of India: in 6or( A0 (%) .he pro'isions of rule 3, rule $, rule ", rule "A and rule # shall apply in relation to renewal of recognition as they apply in relation to grant of recognition except that the fee payable in respect of an application for renewal of recognition shall be rupees two hundred0 9*%lifi'%tio ! for .e.,er!hi$ of % re'o( i!e- !to'6 e#'h% (e. :. .he rules relating to ad(ission of (e(bers of a stoc) exchange see)ing recognition shall inter alia pro'ide that , (1) Eo person shall be eligible to be elected as a (e(ber if(a) he is less than twenty+one years of age3 (b) he is not a citiFen of India3 pro'ided that the go'erning body (ay in suitable cases relax this condition with the prior appro'al of the !4Securities and 7xchange 8oard of India:3 (c) he has been adDudged ban)rupt or a recei'ing order in ban)ruptcy has been (ade against hi( or he has been pro'ed to be insol'ent e'en though he has obtained his final discharge3 (d) he has co(pounded with his creditors unless he has paid sixteen annas in the rupee3 (e) he has been con'icted of an offence in'ol'ing fraud or dishonesty3 (f) he is engaged as principal or e(ployee in any business other than that of securities /4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability unless he underta)es on ad(ission to se'er his connection with such business ,
>44ro+i-e-
that no (e(ber (ay conduct business in co((odity deri'ati'es, except by setting up a separate co(pany which shall co(ply with the regulatory re*uire(ents, such as, networth, capital ade*uacy, (argins and exposure nor(s as (ay be specified by the 6orward ?ar)et Co((ission, fro( ti(e to ti(e ,
# Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, w0e0f0 %30 %0 !!#0 / Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 > Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 <rior to its substitution, the pro'iso as a(ended by Securities Contracts (Regulation) (A(end(ent) Rules, !!# w0e0f0 %30 %0 !!#, read as under, 1<ro'ided that the Securities and 7xchange 8oard of India (ay, for reasons sufficient in the opinion of the said 8oard, per(it a recogniFed stoc) exchange to suspend the enforce(ent of this clause for a specified period on condition that the applicant is not associated with or is a (e(ber of or subscriber to or shareholder or debenture holder in or connected through a partner or e(ployee with any other organisation, institution, association, co(pany or corporation in India where forward business of any )ind whether in goods or co((odities or otherwise is carried on or is not engaged as a principal or e(ployee ion any such business02
4ro+i-e- f*rther that nothing herein shall be applicable to any corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to ()) of the pro'iso to sub+rule ($)0:3 (g) !4GGG: (h) he has been at any ti(e expelled or declared a defaulter by any other stoc) exchange3 (i) he has been pre'iously refused ad(ission to (e(bership unless a period of one year has elapsed since the date of such reDection0 (2) Eo person eligible for ad(ission as a (e(ber under sub+rule ( ) shall be ad(itted as a (e(ber unless ,(a) he has wor)ed for not less than two years as a partner with, or an authorised assistant or authorised cler) or re(isier or apprentice to, a (e(ber3 or (b) he agrees to wor) for a (ini(u( period of two years as a partner or representati'e (e(ber with another (e(ber and to enter into bargains on the floor of the stoc) exchange and not in his own na(e but in the na(e of such other (e(ber 3 or (c) he succeeds to the established business of a deceased or retiring (e(ber who is his father, uncle, brother or any other person who is, in the opinion of the go'erning body, a close relati'e , 4ro+i-e- that the rules of the stoc) exchange (ay authorise the go'erning body to wai'e co(pliance with any of the foregoing conditions if the person see)ing ad(ission is in respect of (eans, position, integrity, )nowledge and experience of business in securities, considered by the go'erning body to be otherwise *ualified for (e(bership0 (3) Eo person who is a (e(ber at the ti(e of application for recognition or subse*uently ad(itted as a (e(ber shall continue as such if(a) he ceases to be a citiFen of India , 4ro+i-e- that nothing herein shall affect those who are not citiFens of India but who were (e(bers at the ti(e of such application or were ad(itted subse*uently under the pro'isions of clause (b) of sub+rule ( ) of this rule, subDect to their co(plying with all other re*uire(ents of this rule3
(b) he is adDudged ban)rupt or a recei'ing order in ban)ruptcy is (ade against hi( or he is pro'ed to be insol'ent3 (c) he is con'icted of an offence in'ol'ing fraud or dishonesty3 (d) 04G G G: (e) 4G G G: (f) he engages either as principal or e(ployee in any business other than that of securities %4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability, pro'ided that! C(itted 0 Ibid0
by &SR 0/0(7) dated "0
0 !>>
Ibid0
% Inserted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(i) the go'erning body (ay, for reasons, to be recorded in writing, per(it a (e(ber to engage hi(self as principal or e(ployee in any such business, if the (e(ber in *uestion ceases to carry on business on the stoc) exchange either as an indi'idual or as a partner in a fir(, (ii) in the case of those (e(bers who were under the rules in force at the ti(e of such application per(itted to engage in any such business and were actually so engaged on the date of such application, a period of three years fro( the date of the grant of recognition shall be allowed for se'ering their connection with any such business, 34(iii) nothing herein shall affect (e(bers of a recognised stoc) exchange which are corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to (k) of the pro'iso to sub+rule ($)0: (4) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section 3%% of the said Act3 (ii) a (aDority of the directors of such co(pany are shareholders of such co(pany and also (e(bers of that stoc) exchange3 and (iii) the directors of such co(pany, who are (e(bers of that stoc) exchange, ha'e ulti(ate liability in such co(pany , 4ro+i-e- that where the $4Securities and 7xchange 8oard of India: (a)es a reco((endation in this regard, the go'erning body of a stoc) exchange shall, in relaxation of the re*uire(ents of this clause, ad(it as (e(ber the following corporations "4,bodies corporate:, co(panies or institutions, na(ely ,(a) the Industrial 6inance Corporation, established under the Industrial 6inance Corporation Act, !$> ( " of !$>)3 (b) the Industrial 9e'elop(ent 8an) of India, established under the Industrial 9e'elop(ent 8an) Act, !#$ ( > of !#$)3 (c) the =ife Insurance Corporation of India, established under the =ife Insurance Corporation Act, !"# (3 of !"#)3 (d) the &eneral Insurance Corporation of India constituted under the &eneral Insurance Corporation (Eationalisation) Act, !/% ("/ of !/%)3 (e) the Hnit .rust of India, established under the Hnit .rust of India Act, !#3 ("% of !#3)3
3 Substituted, ibid0 <rior to its substitution, sub+clause (iii) read as under, 1(iii) nothing herein shall affect (e(bers of a recogniFed stoc) exchange per(itted under the pro'iso to clause (f) of sub+rule( ) to suspend the enforce(ent of the aforesaid clause, for so long as such suspension is effecti'e, except that no (e(ber of such exchange shall engage in forward business of any )ind whether in goods or co((odities or otherwise and , if actually so engaged on the date of such application , he shall se'er his connection with any such business within a period of three years fro( the date of the grant of recognition02 $ Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# " Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(f) the Industrial Credit and In'est(ent Corporation of India, a co(pany registered under the Co(panies Act, !"# ( of !"#)3 (g) the subsidiaries of any of the corporations or co(panies specified in (a) to (f) and any subsidiary of the State 8an) of India or any nationalised ban) set up for pro'iding (erchant ban)ing ser'ices, buying and selling securities and other si(ilar acti'ities0 #4(h) any ban) included in the Second Schedule to the Reser'e 8an) of India Act, !3$ (% of !3$)3 (i) the 7xport I(port 8an) of India, established under the 7xport I(port 8an) of India Act, !> (%> of !> )3 (j) the Eational 8an) for Agriculture and Rural 9e'elop(ent, established under the Eational 8an) for Agriculture and Rural 9e'elop(ent Act, !> (# of !> )3 and (k) the Eational Iousing 8an), established under the Eational Iousing 8an) Act, !>/ ("3 of !>/)0: (4A) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall also be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section % of the said Act3 (ii) such co(pany underta)es to co(ply with such financial re*uire(ents and nor(s as (ay be specified by the Securities and 7xchange 8oard of India for the registration of such co(pany under sub+section ( ) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (iii) /4G G G: (iv) the directors of the co(pany are not dis*ualified fro( being (e(bers of a stoc) exchange under >4clause ( ) 4except sub+clause (b) and sub+clause (f) thereof: or clause (3) 4except sub+clause (a) and sub+clause (f) thereof:: and the 9irectors of the co(pany had not held the offices of the 9irectors in any co(pany which had been a (e(ber of the stoc) exchange and had been declared defaulter or expelled by the stoc) exchange3 and (v) not less than two directors of the co(pany are persons who possess a (ini(u( two yearsJ experience , (a) in dealing in securities3 or (b) as portfolio (anagers3 or (c) as in'est(ent consultants0 (5) Khere any (e(ber of a stoc) exchange is a fir(, the pro'isions of sub+rules ( ), (3) and ($), shall, so far as they can, apply to the ad(ission or continuation of any partner in such fir(0
# Inserted, / C(itted
ibid0 by &SR /$! (7), dated %0 00 !!$ > Substituted by &SR /!0(7), dated 0/0 0 !!$
Co tr%'t! ,et/ee .e.,er! of re'o( i!e- !to'6 e#'h% (e. 9. All contracts between the (e(bers of a recognised stoc) exchange shall be confir(ed in writing and shall be enforced in accordance with the rules and bye+laws of the stoc) exchange of which they are (e(bers0 !5No.i ee! of the Se'*ritie! % - E#'h% (e ;o%r- of I -i%< o the (o+er i ( ,o-ie! of re'o( i!e- !to'6 e#'h% (e!. 1=. .he %04Securities and 7xchange 8oard of India: (ay no(inate one or (ore persons not exceeding three in nu(ber, as (e(ber or (e(bers of the go'erning body of e'ery recognised stoc) exchange0 Such (e(ber or (e(bers shall enDoy the sa(e status and powers as other (e(bers of the go'erning body0 O,li(%tio of the (o+er i ( ,o-> to t%6e -i!'i$li %r> %'tio %(%i !t % .e.,er if !o -ire'te- ,> the % 5Se'*ritie! % - E#'h% (e ;o%r- of I -i%<. 11. After recei'ing the report of the result of an en*uiry (ade under clause (b) of subsection (3) of section # of the Act, the % 4Securities and 7xchange 8oard of India: (ay ta)e such action as they dee( proper and, in particular, (ay direct the go'erning body of the stoc) exchange to ta)e such disciplinary action against the offending (e(ber, including fine, expulsion, suspension or any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney, as (ay be specified by the % 4Securities and 7xchange 8oard of India:3 notwithstanding anything to the contrary contained in the rules or bye+laws of the stoc) exchange concerned, the go'erning body shall gi'e effect to the directions of the % 4Securities and 7xchange 8oard of India: in this behalf and shall not in any (anner co((ute, re'o)e or (odify the action ta)en in pursuance of such directions, without the prior appro'al of the % 4Securities and 7xchange 8oard of India:0 .he % 4Securities and 7xchange 8oard of India: (ay, howe'er, either of its own (otion or on the representation of the (e(ber concerned, (odify or withdraw its direction to the go'erning body0 A*-it of %''o* t! of .e.,er!. 1". 7'ery (e(ber shall get his accounts audited by a chartered accountant whene'er such audit is re*uired by the % 4Securities and 7xchange 8oard of India:0 ?ith-r%/%l of re'o( itio . 1). .he written notice referred to in section " of the Act shall be in 6or( C0
! Substituted %0 Ibid0 %
by 60 Eo0 L3/LS7L!$, dated %#0 00 !!$0
Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> re'o( i!e- !to'6 e#'h% (e. 13. 7'ery recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years, (1) ?inute boo)s of the (eetings of(a) (e(bers3 (b) go'erning body3 (c) any standing co((ittee or co((ittees of the go'erning body or of the general body of (e(bers0
(2) Register of (e(bers showing their full na(es and addresses0 Khere any (e(ber of the stoc) exchange is a fir(, full na(es and addresses of all partners shall be shown0 (3) Register of authorised cler)s0 (4) Register of re(isiers of authorised assistants0 (5) Record of security deposits0 (6) ?argin deposits boo)0 (7) =edgers0 (8) Mournals0 (9) Cash boo)0 (10) 8an) pass+boo)0 ;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> .e.,er of % re'o( i!e- !to'6 e#'h% (e. 15. ( ) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years , (a) Register of transactions ( a!da boo))0 (b) ClientsJ ledger0 (c) &eneral ledger0 (d) Mournals0 (e) Cash boo)0 (f) 8an) pass+boo)0 (g) 9ocu(ents register showing full particulars of shares and securities recei'ed and deli'ered0 (2) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following docu(ents for a period of two years, (a) ?e(berJs contract boo)s showing details of all contracts entered into by hi( with other (e(bers of the sa(e exchange or counterfoils or duplicates of (e(os of confir(ation issued to such other (e(bers0 (b) Counterfoils or duplicates of contract notes issued to clients0 (c) Kritten consent of clients in respect of contracts entered into as principals0 @% er of i 7*ir> i rel%tio to the %ff%ir! of the (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e or the %ff%ir! of % > .e.,er of the !to'6 e#'h% (e i rel%tio to the !to'6 e#'h% (e. 18. ( )(a) .he person or persons appointed by the %%4Securities and 7xchange 8oard of India: to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act shall hereafter in this rule be referred to as the Nin*uiring authorityJ3 (b) where the in*uiring authority consists of two or (ore persons, one of the( shall be appointed as the chair(an or senior (e(ber thereof3 (c) the in*uiring authority shall hand o'er a state(ent of issues to be in*uired into to the go'erning body or the (e(ber concerned, as the case (ay be, who will be gi'en a reasonable opportunity to state their or his side of the case3 (d) if any witness is called for exa(ination, an opportunity shall be pro'ided to the go'erning body or the (e(ber whose affairs are being in*uired into, as the case (ay be, to cross+exa(ine such witness3 (e) where the in*uiring authority consists of (ore than one person, the 'iews of the (aDority shall be dee(ed to represent the findings of such authority and, in the e'ent of
an e*uality of 'otes, the chair(an or senior (e(ber shall ha'e a casting 'ote3 (f) the in*uiring authority shall sub(it its report in writing to the %%4Securities and 7xchange 8oard of India: within the period specified in the order of appoint(ent3 (g) te(porary absence fro( any hearing or hearings of any (e(ber of the in*uiring authority shall not 'itiate its proceedings0 (%) Khere the %%4Securities and 7xchange 8oard of India: has directed the go'erning body of a stoc) exchange to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act, the go'erning body concerned shall appoint one or (ore (e(bers thereof to (a)e the in*uiry and the pro'isions of sub+rule ( ) shall apply "!tati# "!tandi# to such in*uiry0 S*,.i!!io of % *%l re$ort. 17. ( ) 7'ery recognised stoc) exchange shall before the 3 st day of Manuary in each year or within such extended ti(e as the %34Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, allow, furnish the %34Securities and 7xchange 8oard of India: annually with a report about its acti'ities during the preceding calendar year, which shall inter alia contain detailed infor(ation about the following (atters , (a) changes in rules and bye+laws, if any3 (b) changes in the co(position of the go'erning body3 (c) any new sub+co((ittees set up and changes in the co(position of existing ones3
%% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# %3 Ibid0
(d) ad(issions, re+ad(issions, deaths or resignations of (e(bers3 (e) disciplinary action against (e(bers3 (f) arbitration of disputes (nature and nu(ber) between (e(bers and non+(e(bers3 (g) defaults3 (h) action ta)en to co(bat any e(ergency in trade3 (i) securities listed and de+listed3 and (j) securities brought on or re(o'ed fro( the forward list0 (%) 7'ery recognised stoc) exchange shall within one (onth of the date of the holding of its annual general (eeting, furnish the %$4Securities and 7xchange 8oard of India: with a copy of its audited balance+sheet and profit and loss account for its preceding financial year0 S*,.i!!io of $erio-i'%l ret*r !. 17A. 7'ery recognised stoc) exchange shall furnish the %$4Securities and 7xchange 8oard of India: periodical returns relating to(i) the official rates for the securities enlisted thereon3 (ii) the nu(ber of shares deli'ered through the clearing house3 (iii) the (a)ing+up prices3 (iv) the clearing house progra((es3 (v) the nu(ber of securities listed and de+listed during the pre'ious three (onths3 (vi) the nu(ber of securities brought on or re(o'ed fro( the forward list during the pre'ious three (onths3 and (vii) any other (atter as (ay be specified by the %$4Securities and 7xchange 8oard of India:0 @% er of $*,li'%tio of ,>e0l%/! for 'riti'i!.. 1:. .he bye+laws to be (ade, a(ended or re'ised under the Act shall be published for
criticis( in accordance with the pro'isions of section %3 of the &eneral Clauses Act, >!/ both in the &aFette of India and Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate0 Re7*ire.e t! /ith re!$e't to the li!ti ( of !e'*ritie! o % re'o( i!e- !to'6 e#'h% (e. 19. ( ) A public co(pany as defined under the Co(panies Act, !"#, desirous of getting its securities listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars ,
%$ Ibid0
(a) ?e(orandu( and articles of association and, in the case of a debenture issue, a copy of the trust deed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any securities for subscription or sale during the last fi'e years0 (d) Copies of balance+sheets and audited accounts for the last fi'e years, or in the case of new co(panies, for such shorter period for which accounts ha'e been (ade up0 (e) A state(ent showing(i) di'idends and cash bonuses, if any, paid during the last ten years (or such shorter period as the co(pany has been in existence, whether as a pri'ate or public co(pany), (ii) di'idends or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents with or between ,(i) 'endors andLor pro(oters, (ii) underwriters and sub+underwriters, (iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents with(i) (anaging agents and secretaries and treasurers, (ii) selling agents, (iii) (anaging directors and technical directors, (iv) general (anager, sales (anager, (anager or secretary0 (h) Certified copy of e'ery letter, report, balance+sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering securities for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents0 (j) A brief history of the co(pany since its incorporation gi'ing details of its acti'ities including any reorganisation, reconstruction or a(alga(ation, changes in its capital structure, (authorised, issued and subscribed) and debenture borrowings, if any0
(k) <articulars of shares and debentures issued-(i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s including an option for the issue of any )ind of the securities granted to any person0 (") Certified copies of%"4(i) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3: (ii) agree(ents, if any, with the Industrial 6inance Corporation, Industrial Credit and In'est(ent Corporation and si(ilar bodies0 (n) <articulars of shares forfeited0 ($) A list of highest ten holders of each class or )ind of securities of the co(pany as on the date of application along with particulars as to the nu(ber of shares or debentures held by and the address of each such holder0 (%) <articulars of shares or debentures for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0 (%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant co(pany shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer, (ii) that the fully paid shares will be free fro( all lien, while in the case of partly paid shares, the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such shares, (iii) that any a(ount paid+up in ad'ance of calls on any share (ay carry interest but shall not entitle the holder of the share to participate in respect thereof, in a di'idend subse*uently declared, (iv) there will be no forfeiture of unclai(ed di'idends before the clai( beco(es barred by law, (v) that option or right to call of shares shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the securities of a co(pany which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0
%" Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 <rior to its substitution, sub+clause (i), read as under, 1(i) letters of consent of the Controller of Capital Issues02
%#4(b)
(i) At least twenty fi'e per cent0 of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent3 or (ii) At least ten per cent of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent if the post issue capital of the
co(pany calculated at offer price is (ore than four thousand crore rupees, <ro'ided that the re*uire(ent of post issue capital being (ore than four thousand crore rupees shall not apply to a co(pany whose draft offer docu(ent is pending with the Securities and 7xchange 8oard of India on or before the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, if it satisfies the conditions prescribed in clause (b) of sub+rule % of rule ! of the Securities Contracts (Regulation) Rules, !"# as existed prior to the date of such co((ence(ent, %/4<ro'ided further that the co(pany, referred to in sub clause (ii), shall increase its public shareholding to at least twenty fi'e per cent, within a
%# Substituted
by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, clause (b) as a(ended by the A(end(ent Rules, %00 , w0e0f0 0/00#0%00 , read as under, 1(b) At least 0 per cent of each class or )ind of securities issued by a co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted subDect to the following conditions, (a) (ini(u( %0 la)h securities (excluding reser'ations, fir( allot(ent and pro(otersJ contribution) was offered to the public3 (b) the siFe of the offer to the public, i&e&' the offer price (ultiplied by the nu(ber of securities offered to the public was (ini(u( Rs0 00 crores3 and (c) the issue was (ade only through boo) building (ethod with allocation of #0 per cent of the issue siFe to the *ualified institutional buyers as specified by the Securities and 7xchange 8oard of India, 4ro+i-e- that if a co(pany does not fulfil the conditions, it shall offer at least %" per cent of each class or )ind of securities to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted, 4ro+i-e- f*rther that a recognised stoc) exchange (ay relax any of the conditions with the pre'ious appro'al of the Securities and 7xchange 8oard of India, in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#), and subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*6or the purpose of this clause, it is hereby clarified that where any part of the securities sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental 6ire and &eneral Insurance Co(pany =i(ited and the Hnited 6ire and &eneral Insurance Co(pany =i(ited or Hnit .rust of India, the total subscription to the securities, whether by one or (ore of such bodies, shall not for( part of the 0 per cent or %" per cent of the securities, as the case (ay be, to be offered to the public02 %/ Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 <rior to its substitution, second pro'iso, read as under, 1<ro'ided further that the co(pany, referred in sub+clause (ii), shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of atleast fi'e per
period of three years fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India0: %>4GGG:: %!4(c) Eotwithstanding anything contained in clause (b), a public sector co(pany, shall offer and allot at least ten per cent, of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares to public in ter(s of an offer docu(ent0: (3) A co(pany applying for listing shall, as a condition precedent, underta)e inter alia(a) (i) that letters of allot(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to
that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been posted, (ii) that letters of right will be issued si(ultaneously, (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the securities to which they relate, (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right, (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or di'idend on the securities will be calculated, (b) to issue, when so re*uired, receipts for all securities deposited with it whether for registration, sub+di'ision, exchange or for other purposes 3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of certificates and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (bb) to issue, when so re*uired, consolidation and renewal certificates in deno(inations of the (ar)et unit of trading to split certificates, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3
cent per annu( beginning fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India,2 %> C(itted, ibid <rior to its o(ission, third pro'iso, read as under, 1<ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase beings its public shareholding to the le'el of twenty fi'e per cent in that year02 %! Inserted, ibid0
(c) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders, and (ii) to 'erify when the co(pany is unable to issue certificates or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (d) on production of the necessary docu(ents by shareholders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or certificate of the Controller of 7state 9uty or si(ilar other docu(ent has been duly exhibited to
and registered by the co(pany3 (e) to issue certificates in respect of shares or debentures lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance certificates within the sa(e period where the transfer is acco(panied by a larger certificate3 (f) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a di'idend or the issue of right or bonus share will be considered3 (g) to reco((end or declare all di'idends andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all di'idends andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (h) to notify the stoc) exchange of any (aterial change in the general character or nature of the co(panyJs business3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (anaging agent or secretaries and treasurers, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued, copies of all other notices and circulars sent to the shareholders including proceedings of ordinary and extraordinary general (eetings of the co(pany and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the shareholders of any new issue of securities whether by way of right, pri'ilege bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited securities or the issue of securities held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of di'idend or issue of right or bonus shares or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s (or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its shareholders or debentureholders) and specifying the purpose or purposes for which the transfer boo)s are to be closed (or the record is to be ta)en)3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority subDect to which the issue is proposed to be (ade ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after each annual general (eeting of at least ten principal holders of each class of security of the co(pany along with particulars as to the nu(ber of shares or debentures held by,
and address of, each such holder3 (+) to grant to shareholders the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e not being less than four wee)s within which to record, exercise, or renounce such rights, pri'ileges and benefits and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3 (r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any securities listed on the exchange, (ii) of the intention to (a)e a drawing of such securities, inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing of the balance) for the drawing, (iii) of the a(ount of securities outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the shareholders to apprise the position of the co(pany and to a'oid the establish(ent of a false (ar)et in the shares of the co(pany3 (t) (t)that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 304($) An application for listing shall be necessary in respect of the following, (a) all new issues of any class or )ind of securities of a co(pany to be offered to the public3 (b) all further issues of any class or )ind of securities of a co(pany if such class or )ind of securities of the co(pany are already listed on a recognised stoc) exchange0: (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the securities of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 3 44ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any security, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and its orders shall be carried out by the stoc) exchange0: 3%4(#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore
or re+ad(it to dealings any securities suspended or withdrawn fro( the list0: 334(#A) 7xcept as otherwise pro'ided in these rules or per(itted by the Securities and 7xchange 8oard of India under sub+rule (/), all re*uire(ents with respect to listing
30 Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, sub+rule ($), read as under, 1($) A fresh application for listing will be necessary in respect of all new issues desired to be dealt in, pro'ided that, where such new securities are identical in all respects with those already listed, ad(ission to dealings will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new issues0 7xplanation, Shares are identical in all respects only if(a) they are of the sa(e no(inal 'alue and the sa(e a(ount per share has been called up3 (b) they are entitled to di'idend at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the di'idend payable on each share will a(ount to exactly the sa(e su(, net and gross3 and (c) they carry the sa(e rights in all other respects02 3 Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%0000 7arlier, the second pro'iso was a(ended by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 3% Substituted by the Securities Contracts (Regulation) (A(end(ent), %000, w0e0f0 0>00>0%0000 7arlier, subrule (#) was a(ended by the Securities Contracts (Regulation) (A(end(ent), !!#, w0e0f0 %30 %0 !!#0 33 Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!0>0%0 00 <rior to its substitution, sub+rule (#A) as a(ended by the Securities Contracts
prescribed by these rules shall, so far as they (ay be, also apply to a public sector co(pany0: 3$4GGG: (/) .he 3"4Securities and 7xchange 8oard of India: (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect to listing prescribed by these rules0 3#4Co ti *o*! Li!ti ( Re7*ire.e t. 19A. ( ) 7'ery listed co(pany 3/4other than public sector co(pany: shall (aintain public shareholding of at least twenty fi'e per cent0, 3>4<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent, on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall increase its public shareholding to at least twenty fi'e per cent, within a period of three years fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India0 7xplanation, 6or the purposes of this sub+rule, a co(pany whose securities has been listed pursuant to an offer and allot(ent (ade to public in ter(s of sub+clause (ii) of clause (b) of sub+rule (%) of rule !, shall (aintain (ini(u( twenty fi'e per cent, public shareholding fro( the date on which the public shareholding in the co(pany reaches the le'el of twenty fi'e percent in ter(s of said sub+clause0: (%) Khere the public shareholding in a listed co(pany falls below twenty fi'e per cent0 at any ti(e, such co(pany shall bring the public shareholding to twenty fi'e per cent0
(Regulations)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 and &SR % (7) w0e0f0 0!0030 !!", read as under, 1(#A) All the re*uire(ents with respect to listing and continuous listing prescribed by these rules, shall so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature ,2 3$ C(itted by the Securities Contracts (Regulation)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its o(ission, pro'iso, as substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# and inserted by &SR %! (7) dated %/0030 !!", read as under,
1<ro'ided that a recognised stoc) exchange (ay relax the re*uire(ent of offer to public for subscription of atleast twenty+fi'e percent of the each class or )ind of securities issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e02 3" Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent), Rules, !!#, w0e0f0 %30 %0 !!#0 3# Inserted by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 3/ Inserted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3> Substituted, ibid0 <rior to substitution, pro'isos, read as under, 1<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of at least fi'e per cent per annu( beginning fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India, <ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase brings its public shareholding to the le'el of twenty fi'e per cent in that year02
within a (axi(u( period of twel'e (onths fro( the date of such fall in the (anner specified by the Securities and 7xchange 8oard of India0: 3!4(3) Eotwithstanding anything contained in this rule, e'ery listed public sector co(pany shall (aintain public shareholding of at least ten per cent0, <ro'ided that a listed public sector co(pany+ (a) which has public shareholding below ten per cent, on the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of three years fro( the date of such co((ence(ent3 (b) whose public shareholding reduces below ten per cent, after the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of twel'e (onths fro( the date of such reduction,0: $04Re7*ire.e t! /ith re!$e't to the li!ti ( of * it! or % > other i !tr*.e t of % Colle'ti+e I +e!t.e t S'he.e o % re'o( i!e- !to'6 e#'h% (e. "=. ( ) A Collecti'e In'est(ent ?anage(ent Co(pany (CI?C) which is desirous of getting its any collecti'e in'est(ent sche(e listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars , (a) Certificate of incorporation, (e(orandu( and articles of association of the co(pany and the copy of the trust deed of the sche(e intended to be listed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any unit or other instru(ent for subscription or sale during the last fi'e years, or in the case of a new co(pany, such shorter period during which the co(pany has been in existence0 (d) Copies of balance sheets and audited accounts for the last fi'e years, or in the case of a new co(pany, for such co(pleted financial year for which accounts ha'e been (ade up0 (e) A state(ent showing,(i) returns and cash bonuses, if any, paid during the last ten years (or such
shorter period as the co(pany has been in existence whether as a pri'ate or public co(pany)3 (ii) returns or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents pertaining to each sche(e of the co(pany with or between,(i) 'endors andLor pro(oters3 (ii) underwriters and sub+underwriters3
3! Inserted $0 Inserted
by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 0 by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%000
(iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents pertaining to each sche(e of a co(pany with(i) selling agents and other ser'ice pro'iders3 (ii) (anaging directors and technical directors3 (iii) general (anager, sales (anager, (anager or secretary0 (h) Certified copies of e'ery letter, report, balance sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering units or any other instru(ents of the sche(e for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents pertaining to such sche(e0 (j) A brief history of the Co(pany since its incorporation gi'ing details of its acti'ities including any re+organisation, reconstruction or a(alga(ation, changes in its capital structure (authorised, issued and subscribed) and debenture borrowings, if any, and the perfor(ance of other collecti'e in'est(ent sche(es of the co(pany0 (k) <articulars of units of the sche(e andLor shares, debentures of the co(pany issued (i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s granted to any person pertaining to such sche(e0 (") Certified copies of(i) certificate of registration granted by the Securities and 7xchange 8oard of India3 (ii) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3 (iii) agree(ents, if any, with any public financial institution as specified in section $A of the Co(panies Act, !"# ( of !"#)0 (n) A list of the highest ten holders of units of each sche(e of the co(pany as on the date of application along with particulars as to the nu(ber of units held by and the address of each such holder0 ($) <articulars of units of the sche(e for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0
(%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer of units of a particular sche(e3 (ii) that the fully paid units issued under the sche(e will be free fro( all lien, while in the case of partly paid units the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such units3 (iii) that any a(ount paid+up in ad'ance of calls on any units (ay carry interest but shall not entitle the holder of the unit to participate in respect thereof, in a return subse*uently declared3 (iv) there will be no forfeiture of unclai(ed returns before the clai( beco(es barred by law3 (v) that option or right to call of units shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the units of a sche(e which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0 (b) At least twenty+fi'e per cent of the units or any other instru(ent of a sche(e issued by the co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and not (ore than ninety days, and that applications recei'ed in pursuance of such offer were allotted fairly and unconditionally , 4ro+i-e- that a recognised stoc) exchange (ay relax this re*uire(ent, with the pre'ious appro'al of the Securities and 7xchange 8oard of India in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#) and subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*Khere any part of the units or any other instru(ents sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely, the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental Insurance Co(pany =i(ited and the Hnited Insurance Co(pany =i(ited, or Hnit .rust of India, the total subscription to the units or any other instru(ent, whether by one or (ore of such bodies, shall not for( part of the twenty+fi'e per cent of the units or any other instru(ent to be offered to the public0 (3) A co(pany applying for listing of a sche(e shall, as a condition precedent, underta)e, inter alia,(a) (i) that letters of allot(ent of units or any other instru(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been
posted3 (ii) that letters of right will be issued si(ultaneously3 (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and, exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the units or any other instru(ent to which they relate3 (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right3 (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or return on the units or any other instru(ent will be calculated3 (b) to issue, when so re*uired, receipts for all units and any other instru(ent deposited with it whether for registration, sub+di'ision, exchange or for other purposes3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of units and any other instru(ent and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (c) to issue, when so re*uired, consolidation and renewal units or any other instru(ent in deno(inations of the (ar)et unit of trading, to split units or any other instru(ent, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3 (d) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders3 and (ii) to 'erify when the co(pany is unable to issue units or any other instru(ents or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (e) on production of the necessary docu(ents by unit holders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or si(ilar other docu(ent has been duly exhibited to and registered by the co(pany3 (f) to issue certificates in respect of units or any other instru(ent lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance units or any other instru(ent within the sa(e period where the transfer is acco(panied by a larger unit or any other instru(ent certificate3 (g) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a return or the issue or right or bonus units or
any other instru(ent will be considered3 (h) to reco((end or declare all returns andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all returns andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts of such sche(e as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued copies of all other notices and circulars sent to the unitLother instru(ent holders regarding any i(portant de'elop(ent or resolutions passed by the co(pany affecting the perfor(ance of the sche(e and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the unitLany other instru(ent holders, of any new issue of unitsLother instru(ents whether by way of right, pri'ilege, bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited unitsLother instru(ents or the issue of unitsLother instru(ents held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of unit capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of returns or issue of right or bonus unitsLany other instru(ents in the sche(e or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its unitLother instru(ent holders and specifying the purpose or purposes for which the transfer boo)s are to be closed or the record is to be ta)en3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority, subDect to which the issue is proposed to be (ade, ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after the preparation of annual accounts of at least ten principal holders of each class of unitsLany other instru(ents of the co(pany along with particulars as to the nu(ber of unitsLany other instru(ent held by, and address of, each such holder3 (+) to grant to unitLany other instru(ent holders of the sche(e the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e, not being less than four wee)s, within which to record, exercise, or renounce such rights, pri'ileges and benefits, and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3
(r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any unitLother instru(ent listed on the exchange3 (ii) of the intention to (a)e a drawing of such unitLother instru(ent inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing off the balance) for the drawing3 (iii) of the a(ount of unitsLother instru(ents outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the unitLany other instru(ent holders to appraise the position of the sche(e and to a'oid the establish(ent of a false (ar)et in the unitsLany other instru(ents of the co(pany3 (t) that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 ($) A fresh application for listing will be necessary in respect of all new sche(es desired to be dealt in , 4ro+i-e- that, where such new unitsLother instru(ents are identical in all respects with those already listed, ad(ission to dealing will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new sche(es0 ()%lanati$n0-HnitsLany other instru(ents are identical in all respects only if(a) they are issued under the sa(e sche(e3 (b) they are of the sa(e no(inal 'alue and the sa(e a(ount per unitLother instru(ents has been called up3 (c) they are entitled to returns at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the return payable on each unitLother issue will a(ount to exactly the sa(e su(, net and gross3 and (d) they carry the sa(e rights in all other respects0 (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the unitsLother instru(ents of a sche(e of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 4ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any unitLother instru(ent of a collecti'e in'est(ent sche(e, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an
opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and thereupon the orders of the Securities Appellate .ribunal shall be carried out by the stoc) exchange0 (#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore or read(it to dealings any unitsLother instru(ents suspended or withdrawn fro( the list0 (/) All the re*uire(ents with respect to listing prescribed by these rules, shall, so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature , 4ro+i-e- that a recognised stoc) exchange (ay relax the re*uire(ent of offer to the public for subscription of at least twenty+fi'e per cent of the units or any other instru(ent of a collecti'e in'est(ent sche(e issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 (>) .he Securities and 7xchange 8oard of India (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect of listing prescribed by these rules0: $ 4Deli!ti ( of !e'*ritie!. "1. A recogniFed stoc) exchange (ay, without preDudice to any other action that (ay be ta)en under the Act or under any other law for the ti(e being in force, delist any securities listed thereon on any of the following grounds in accordance with the regulations (ade by the Securities and 7xchange 8oard of India, na(ely,(a) the co(pany has incurred losses during the preceding three consecuti'e years and it has negati'e networth3 (b) trading in the securities of the co(pany has re(ained suspended for a period of (ore than six (onths3 (c) the securities of the co(pany ha'e re(ained infre*uently traded during the preceding three years3 (d) the co(pany or any of its pro(oters or any of its director has been con'icted for failure to co(ply with any of the pro'isions of the Act or the Securities and 7xchange 8oard of India Act, !!% or the 9epositories Act, !!# (%% of !!#) or rules, regulations, agree(ents (ade thereunder, as the case (ay be and awarded a penalty of not less than rupees one crore or i(prison(ent of not less than three years3 (e) the addresses of the co(pany or any of its pro(oter or any of its directors, are not )nown or false addresses ha'e been furnished or the co(pany has changed its registered office in contra'ention of the pro'isions of the Co(panies Act, !"# ( of !"#)3 or
$
Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %00>, w0e0f0 000#0%00!
(f) shareholding of the co(pany held by the public has co(e below the (ini(u( le'el applicable to the co(pany as per the listing agree(ent under the Act and the co(pany has failed to raise public holding to the re*uired le'el within the ti(e specified by the recogniFed stoc) exchange , 4ro+i-e- that no securities shall be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) If the securities is delisted under clause ( ),
(a) the co(pany, pro(oter and director of the co(pany shall be Dointly and se'erally liable to purchase the outstanding securities fro( those holders who wish to sell the( at a fair price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India, under the Act3 and (b) the said securities shall be delisted fro( all recogniFed stoc) exchanges0 (3) A recogniFed stoc) exchange (ay, on the re*uest of the co(pany, delist any securities listed thereon in accordance with the regulations (ade under the Act by Securities and 7xchange 8oard of India, subDect to the following conditions, na(ely ,(a) the securities of the co(pany ha'e been listed for a (ini(u( period of three years on the recogniFed stoc) exchange3 (b) the delisting of such securities has been appro'ed by the two+third of public shareholders3 and (c) the co(pany, pro(oter andLor the director of the co(pany purchase the outstanding securities fro( those holders who wish to sell the( at a price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India under the Act, 4ro+i-e- that the condition at (c) (ay be dispensed with by Securities and 7xchange 8oard of India if the securities re(ain listed at least on the Eational Stoc) 7xchange of India =i(ited or the 8o(bay Stoc) 7xchange =i(ited0: FORM A ( ee Rules 3 and /) A$$li'%tio for re'o( itio 1re e/%l of re'o( itio of % !to'6 e#'h% (e * -er !e'tio ) of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 .o 00000000000000000000000000000000000000 00000000000000000000000000000000000000 !bject,*A%%licati$n f$r rec$gniti$n-rene.al $f rec$gniti$n $f a #t$ck e)change !nder #ecti$n 3 $f the ec!ritie# /$ntract# (0eg!lati$n) Act' 1956& Sir, <ursuant to the $%4Securities and 7xchange 8oard of India: Eotification Eo0 00000000000000000000000000 00000000000000000 dated 000000000000000000000000000000000LCertificate of recognition dated0000000000000000000000000000000KeLI on behalf of 000000000000000000 (na(e and address of stoc) exchange) being a stoc) exchange as defined in section % of the Securities Contracts
$% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
(Regulation) Act, !"# hereby apply for recognitionLrenewal of recognition for the purposes of the said Act in respect of contracts in securities0 ". 6our copies of the rules, (e(orandu( and articles of association relating in general to the constitution and (anage(ent of the stoc) exchange and four copies of the bye+laws for the regulation and control contracts in securities are enclosed0 ). All the necessary infor(ation re*uired in the Annexure to this 6or( is enclosed0 Any additional infor(ation will be furnished as and when called for by the $34Securities and 7xchange 8oard of India:0 3. KeLI on behalf of the said stoc) exchange hereby underta)e to co(ply with the re*uire(ents of section $ of the said Act and such other conditions and ter(s as (ay be contained in the certificate of recognition or be prescribed or i(posed subse*uently0 5. .reasury Receipt Eo0 000000dated000000for Rs000000000000is attached0
Oours faithfully, Signature of applicant ANNEAURE TO 2OR@ BAC Part I - General 0 Ea(e of the applicant stoc) exchange0 %0 Address0 30 9ate of establish(ent0 $0 Is your exchange a Doint stoc) co(pany (state whether public or pri'ate) registered under the Indian Co(panies Act or an association for profit or otherwise P If it is organised on so(e other basis, this (ay be stated0 "0 &i'e details of your capital structure and attach three copies of the audited balance sheets and profit and loss account of the 7xchange for the preceding three years0 Part II - Membership #0 State the nu(ber of (e(bers at the ti(e of application0 Also specify how (any are inacti'e0 /0 State whether there is any pro'ision, resolution or con'ention for li(iting the nu(ber of (e(bers and whether in pursuance thereof you ha'e fixed a ceiling on the nu(ber of (e(bers that you would ta)e0 >0 9o you insist on any (ini(u( *ualifications and experience before enrolling new (e(bers P If so gi'e details0 !0 State the different classes of (e(bers, if any, the nu(ber thereof and the pri'ileges enDoyed by each class0 Khat is the procedure followed by your exchange for the ad(ission of different classes of new (e(bers P 00 Khat are the rates of your annual subscription in respect of the different classes of (e(bers P 0 9o you collect any security deposit fro( your (e(bers P If so, gi'e details and also state the (anner in which such deposits are utilised and the rate of interest allowed, if any0
$3 Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
%0 9o you collect any ad(ission or entrance fees fro( your (e(bers or fro( partners of fir(s who are (e(bers P If so, how (uch P 30 9o you insist on your (e(bers and partners of fir(s who are (e(bers di'esting the(sel'es of other acti'ities either as principal or as e(ployee P $0 9o your rules per(it fir(s to beco(e (e(bers P If so, is it incu(bent on (e(bers to see) the appro'al of the go'erning body before ad(itting new partners P State the conditions, if any, laid down in your rules for the ad(ission of such partners0 "0 If your rules do not per(it of fir(s being enrolled as (e(bers, do you per(it indi'idual (e(bers to for( a partnership P State the procedure followed for the recognition of such partnership0 #0 9o you per(it (e(bers to wor) in partnership with non+(e(bers P If so, how far such non+(e(bers subDect to the control of the stoc) exchange P Part III - Governing Body /0 Khat is the present strength of your go'erning body P &i'e details of the constitution, powers of (anage(ent, election and tenure of office of (e(bers of the go'erning body, and the (anner in which its business is transacted0 >0 Are any trade or co((ercial interest represented on your go'erning body P If so,
gi'e details of interests represented0 !0 9o you associate shareholders of in'estors associations with the (anage(ent of your exchange P If so, state the (anner in which it is done0 %00 Are there any &o'ern(ent representati'es on your go'erning body P If so, furnish their na(es0 % 0 9o your rules pro'ide for the direct election by (e(bers of any other bodies or co((ittees, apart fro( the go'erning body P If so, gi'e details of their constitution, tenure, powers and functions0 %%0 9o you ha'e any pro'ision for the appoint(ent of standing or ad h$c subco((ittees of the go'erning body P If so, furnish details of the (ethod of their appoint(ent, ter(s of office, powers and functions0 %30 &i'e the designations, powers and duties of principal office+bearers of your exchange0 Are any of these office+bearers in the pay of the stoc) exchange P If so, gi'e details as to the (ode of their appoint(ent, tenure of office and re(uneration0 Part IV - Trading %$0 9o you ha'e a trading ring P If not, how do you carry on the business P &i'e details0 %"0 State the different )inds of contracts in use on your exchange e&g&' spot, ready and forward0 State the period of deli'ery and pay(ent in each case0 %#0 &i'e details of business hours for each type of contract0 %/0 &i'e details of the scale of bro)erage and other charges, if any, prescribed by your exchange0 %>0 9o you prescribe standard for(s of contract for the use of your (e(bers P Attach three copies of each such contract for(0 %!0 9o you classify your (e(bers into bro)ers and Dobbers P If so, specify the bye+law under which this is done0 300 9o you ha'e a syste( of registration of re(isiers andLor authorised cler)s P If so, gi'e details as to their *ualifications, obligations and rights, etc0 3 0 9o you ha'e any regulations regarding dealings by (e(bers on their own account whether in the nature of 1aravani (day+to+day) or otherwise P 3%0 9o you ha'e any pro'isions for regulating the 'olu(e of business done by any indi'idual (e(ber other than through a syste( of (argins P If so, gi'e details0 330 Khat pro'isions ha'e you (ade for periodical settle(ent of contracts and differences thereunder, the deli'ery of, and pay(ent for securities and the passing of deli'ery orders P 3$0 9o you ha'e a clearing house for the settle(ent of contracts P If so, gi'e details of its organisation and (anage(ent0 3"0 If you ha'e clearing house, what returns do the (e(bers of your exchange sub(it regarding the transactions cleared through such clearing house P 9oes the exchange as) for any regular returns in respect of transactions settled outside the clearing house P Sub(it three copies of for(s used in this connection0 3#0 Iow do you fix, alter or postpone the dates of settle(ent P 3/0 Iow do you deter(ine and declare (a)ing+up prices P 3>0 9o you ha'e any arrange(ents for (a)ing or recording of bargains P 3!0 Ia'e you any arrange(ents for recording and publishing (ar)et rates including opening, closing, highest and lowest rates P $00 Khat pro'isions ha'e you (ade for regulating-(a) the entering into contracts, their
perfor(ance and rescission, including contracts , (i) between (e(bers, (ii) between a (e(ber and his constituent, and (iii) between a (e(ber and a non+(e(ber3 (b) the conse*uences of breach, default or insol'ency on the part of (e(bers whether acting as buyers, sellers or inter(ediaries 3 and (c) 2havala#3 and other (atters relating to conduct of business of (e(bers in the exchange P $ 0 9o you prescribe (argin re*uire(ents P If yes, gi'e details0 $%0 9o you prescribe (axi(u( and (ini(u( prices for securities P If so, how and under what conditions0 $30 9o you pro'ide any safeguards for the pre'ention of Nbulls*ueeFesJ and 3 NbearraidsJ and for (eeting e(ergencies in trade P &i'e details0 $$0 Khat are the (easures adopted by you to regulate or prohibit ad'ertising or issue of circulars by your (e(bers P $"0 Khat are the disciplinary power with the go'erning body to enforce due co(pliance by (e(bers of the rules and bye+laws of the exchange and generally to ensure proper standard of business conduct P $#0 9o you re*uire (e(bers to supply such infor(ation or explanation and to produce such boo)s relating to their business as your go'erning body (ay re*uire P $/0 9o you publish any statistics in regard to business done on the exchange including the transactions settled through the clearing house, if (aintained P In particular, ha'e you e'ol'ed any (achinery for co(puting the 'olu(e of transactions in the different )inds of contracts per(itted on your exchange P &i'e details0 $>0 9o you ha'e any bye+laws contra'ention of which (a)es a contract 'oid P Part V - Miscellaneo s $!0 9o you ha'e any (achinery for arbitration of disputes between (e(bers andLor between (e(bers and their constituents P &i'e details0 "00 Khat are the conditions subDect to which securities are listed for dealings on your exchange P " 0 Khat are your re*uire(ents for ad(itting securities to forward+trading P "%0 9o you ha'e the right to prohibit, withdraw or suspend dealings in a listed security P If so, under what circu(stances is this right exercised P "30 Khat pro'isions ha'e you (ade for the le'y and reco'ery of fees, fines and penalties P FORM B ( ee rules # and /) $$5The Se'*ritie! % - E#'h% (e ;o%r- of I -i%< 4e. 5elhi' the 20&&&&&&&&&&&&& Eo0 000000000000000000000000000000000000.he $"4Securities and 7xchange 8oard of India:, ha'ing considered the application for recognitionLrenewal of recognition (ade under section 3 of the Securities Contracts (Regulation) Act, !"# by000000000000000000000000000000 (na(e and address of exchange) and being satisfied that it would be in the interest of the trade and also in the public interest so to do, hereby grants, in exercise of the powers conferred by section $ of the Securities Contracts (Regulation) Act, !"# recognition to the said exchange under section $ of the said Act for 0000000000000000000 yearLyears ending 0000000000000000000000%0 0000000on a per(anent basis in respect of contracts in securities subDect to the conditions stated herein below or as (ay be prescribed or i(posed hereafter0 Seal of the $#48oard: Signature of Cfficer
Note&-Application for renewal of recognition shall be (ade so as to reach the Central &o'ern(ent not less than three (onths before the expiry of the period0 (.his certificate, will also ha'e to be published as a Eotification in the &aFette of India and also in the Cfficial &aFette of the State in which principal office of the recognised stoc) exchange is situate)0 $/5FORM ! ( ee rule 3) Noti'e to !ho/ '%*!e %(%i !t the /ith-r%/%l of re'o( itio .I7 S7CHRI.I7S AE9 7ACIAE&7 8CAR9 C6 IE9IA 6!"bai' the&&&&&&&&&&& .o 0000000000000000000000000000000000000000000000000000000000000000000000000000000000
$$ Substituted
for 1&o'ern(ent of India, ?inistry of 6inance2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 $" Substituted for 1Central &o'ern(ent2, ibid0 $# Substituted for 1?inistry2, ibid0 $/ Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#
0000000000000000000000000000000000000000000000000000000000000000000000000000000000 (na(e and address of the exchange) Oou are hereby called upon to show cause on or before 0000000000000000000000000000000000000 at the office of 0000000000000000000000000000000000000000000000000000 ( designation of the officer) why the recognition granted to you under the ?inistry of 6inanceLthe Securities and 7xchange 8oard of India, Eotification Eo0 0000000000000000000000000000 dated 000000000000000000000000000000000000000 and Certificate Eo0 00000000000000000000000000000 dated 000000000000000000000000000000 should not be withdrawn for the reasons gi'en in the annexure to this notice0 8y order and in the na(e of the Securities and 7xchange 8oard of India0 Seal of the Securities and 7xchange 8oard of India0 Notifi'%tio & 4$& 576' dated 217271957&
SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< SECTIONS
80(9:6:4A0; 1. Short title, extent and co((ence(ent ". 9efinitions 0(/<=4: (5 1</> (?/@A4=( ). Application for recognition of stoc) exchanges 3. &rant of recognition to stoc) exchanges0 3A. Corporatisation and de(utualisation of stoc) exchanges 3;. <rocedure for corporatisation and de(utualisation 5. Kithdrawal of recognition 8. <ower of Central &o'ern(ent to call for periodical returns or direct in*uiries to be (ade 7. Annual reports to be furnished to Central &o'ern(ent by stoc) exchanges 7A. <ower of recognised stoc) exchange to (a)e rules restricting 'oting rights, etc :. <ower of Central &o'ern(ent to direct rules to be (ade or to (a)e rules :A. Clearing corporation 9. <ower of recognised stoc) exchanges to (a)e bye+laws 1=. <ower of Securities and 7xchange 8oard of India to (a)e or a(end byelaws of recognised stoc) exchanges 11. <ower of Central &o'ern(ent to supersede go'erning body of a recognised stoc) exchange 1". <ower to suspend business of recognised stoc) exchanges0 1"A. <ower to issue directions 1). Contracts in notified areas illegal in certain circu(stances 1)A. Additional trading floor 13. Contracts in notified areas to be 'oid in certain circu(stances 15. ?e(bers (ay not act as principals in certain circu(stances 18. <ower to prohibit contracts in certain cases 17. =icensing of dealers in securities in certain areas 17A. <ublic issue and listing of securities referred to in sub+clause ( ie) of clause (h) of section % 1:. 7xclusion of spot deli'ery contracts fro( sections 3, $, " and / 1:A. Contracts in deri'ati'e 19. Stoc) exchanges other than recognised stoc) exchanges prohibited "=. <rohibition of options in securities "1. Conditions for listing "1A. 9elisting of securities "". Right of appeal against refusal of stoc) exchanges to list securities of public co(panies ""A. Right of appeal to Securities Appellate .ribunal against refusal of stoc) exchange to list securities of public co(panies "";. <rocedure and powers of Securities Appellate .ribunal ""C. Right to legal representation ""D. =i(itation ""E. Ci'il court not to ha'e Durisdiction
""2. Appeal to Supre(e Court 8(4A91:( A45 80</(5A0( "). <enalties ")A. <enalty for failure to furnish infor(ation, return, etc0 ");. <enalty for failure by any person to enter into an agree(ent with clients ")C. <enalty for failure to redress in'estorsJ grie'ances ")D. <enalty for failure to segregate securities or (oneys of client or clients ")E. <enalty for failure to co(ply with pro'ision of listing conditions or delisting conditions or grounds ")2. <enalty for excess de(aterialisation or deli'ery of unlisted securities ")G. <enalty for failure to furnish periodical returns, etc0 ")D. <enalty for contra'ention where no separate penalty has been pro'ided ")0I. <ower to adDudicate ")E. 6actors to be ta)en into account by adDudicating officer ")EA. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! ")E;. Re'o+er> of %.o* t! ")F. Crediting su(s realised by way of penalties to Consolidated 6und of India ")L. Appeal to Securities Appellate .ribunal ")@. Cffences ")N. Co(position of certain offences ")0O. <ower to grant i((unity "3. Cffences by co(panies "5. Certain offences to be cogniFable "8. CogniFance of offences by courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! 6: /(99A4(<A "7. .itle to di'idends "7A. Right to recei'e inco(e fro( collecti'e in'est(ent sche(e "7;. Right to recei'e inco(e fro( (utual fund ":. Act not to apply in certain cases "9. <rotection of action ta)en in good faith "9A. <ower to delegate )=. <ower to (a)e rules )1. <ower of Securities and 7xchange 8oard of India to (a)e regulations SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< 53th Se$te.,er, 1958< A A't to $re+e t * -e!ir%,le tr% !%'tio ! i !e'*ritie! ,> re(*l%ti ( the ,*!i e!! of -e%li ( therei , 14***: ,> $ro+i-i ( for 'ert%i other .%tter! 'o e'te- there/ith. 87 it enacted by <arlia(ent in the Se'enth Oear of the Republic of India as follows ,
80(9:6:4A0; Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities Contracts (Regulation) Act, !"#0 (%) It extends to the whole of India0
Kords 1by prohibiting options and2 o(itted by the Securities =aws (A(end(ent) Act, !!", Sec0 >, w0e0f0 %"+0 + !!".
(3) It shall co(e into force on such date% as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 Defi itio !. ". In this Act, unless the context otherwise re*uires,(a) 1contract2 (eans a contract for or relating to the purchase or sale of securities3 3 4(aa) 1corporatisation2 (eans the succession of a recognised stoc) exchange, being a body of indi'iduals or a society registered under the Societies Registration Act, >#0 (% of >#0), by another stoc) exchange, being a co(pany incorporated for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities carried on by such indi'iduals or society3 (ab) 1de(utualisation2 (eans the segregation of ownership and (anage(ent fro( the trading rights of the (e(bers of a recognised stoc) exchange in accordance with a sche(e appro'ed by the Securities and 7xchange 8oard of India3: $4"4(ac): 1deri'ati'e2 includes(A) a security deri'ed fro( a debt instru(ent, share, loan, whether secured or unsecured, ris) instru(ent or contract for differences or any other for( of security3 (B) a contract which deri'es its 'alue fro( the prices, or index of prices, of underlying securities3: (b) 1&o'ern(ent security2 (eans a security created and issued, whether before or after the co((ence(ent of this Act, by the Central &o'ern(ent or a State &o'ern(ent for the purpose of raising a public loan and ha'ing one of the for(s specified in clause (2) of section % of the <ublic 9ebt Act, !$$ ( > of !$$)3 (c) 1(e(ber2 (eans a (e(ber of a recognised stoc) exchange3 (d) 1option in securities2 (eans a contract for the purchase or sale of a right to buy or sell, or a right to buy and sell, securities in future, and includes a teji' a "andi' a teji "andi' a galli' a put, a call or a put and call in securities3 (e) 1prescribed2 (eans prescribed by rules (ade under this Act3
% %0+%+
!"/ vide SRC "%>, dated #+0%+ !"/, published in the &aFette of India, 7xtra0, <t0 II, Sec0 3, p0 "$!, dated #+0%+ !"/0 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 $ Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000 " Clause (aa) renu(bered as clause (ac) by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0
(f) 1recognised stoc) exchange2 (eans a stoc) exchange which is for the ti(e
being recognised by the Central &o'ern(ent under section $3 (g) 1rules2, with reference to the rules relating in general to the constitution and (anage(ent of a stoc) exchange, includes, in the case of a stoc) exchange which is an incorporated association, its (e(orandu( and articles of association3 64(ga) 1sche(e2 (eans a sche(e for corporatisation or de(utualisation of a recognised stoc) exchange which (ay pro'ide for(i) the issue of shares for a lawful consideration and pro'ision of trading rights in lieu of (e(bership cards of (e(bers of a recognised stoc) exchange3 (ii) the restrictions on 'oting rights3 (iii) the transfer of property, business, assets, rights, liabilities, recognitions, contracts of the recognised stoc) exchange, legal proceedings by, or against, the recognised stoc) exchange, whether in the na(e of the recognised stoc) exchange or any trustee or otherwise and any per(ission gi'en to, or by, the recognised stoc) exchange3 (iv) the transfer of e(ployees of a recognised stoc) exchange to another recognised stoc) exchange3 (v) any other (atter re*uired for the purpose of, or in connection with, the corporatisation or de(utualisation, as the case (ay be, of the recognised stoc) exchange3: /4>4(gb): 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (h) 1securities2 include(i) shares, scrips, stoc)s, bonds, debentures, debenture stoc) or other (ar)etable securities of a li)e nature in or of any incorporated co(pany or other body corporate3 !4(ia) deri'ati'e3 (ib) units or any other instru(ent issued by any collecti'e in'est(ent sche(e to the in'estors in such sche(es3:
# Inserted / Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (Second A(end(ent) Act, !!!, Sec %, w0e0f0 #+ %+ !!!0 > Clause (ga) renu(bered as clause (gb) by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 ! Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000
04(ic) security receipt as defined in clause ( Cg) of section % of the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%3: 114(id) units or any other such instru(ent issued to the in'estors under any (utual fund sche(e3: %47xplanation0-6or the re(o'al of doubts, it is hereby declared that ;securities; shall not include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(bined benefit ris) on the life of the persons and in'est(ent by such
persons and issued by an insurer referred to in clause (!) of section % of the Insurance Act, !3> ($ of !3>)3: 35(ie) any certificate or instru(ent (by whate'er na(e called), issued to an in'estor by any issuer being a special purpose distinct entity which possesses any debt or recei'able, including (ortgage debt, assigned to such entity, and ac)nowledging beneficial interest of such in'estor in such debt or recei'able, including (ortgage debt, as the case (ay be3 <
0 Inserted by the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%, Sec0 $ and Schedule, w0r0e0f0 % +#+%00%0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0e0f0 %+ 0+%00$0 % Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, Sec $, w0r0e0f0 0!+0$+%0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, read as under , ;CIA<.7R BI ?ISC7==AE7CHS #0 Dalidati$n&-Eotwithstanding anything contained in any Dudg(ent, decree or order of any Court, .ribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly, any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 0e%eal and #aving#&*( ) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0; 3 Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec %, w0e0f0 %>+"+ %00/0
$4(ii) &o'ern(ent securities3 (iia) such other instru(ents as (ay be declared by the Central &o'ern(ent to be securities3 and: (iii) rights or interest in securities3 "4(i) 1spot deli'ery contract2 (eans a contract which pro'ides for,(a) actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e
town or locality3 (b) transfer of the securities by the depository fro( the account of a beneficial owner to the account of another beneficial owner when such securities are dealt with by a depository3: #4(j) 1stoc) exchange2 (eans(a) any body of indi'iduals, whether incorporated or not, constituted before corporatisation and de(utualisation under sections $A and $8, or (b) a body corporate incorporated under the Co(panies Act, !"# ( of !"#) whether under a sche(e of corporatisation and de(utualisation or otherwise, for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0: /4I ter$ret%tio of 'ert%i /or-! % - e#$re!!io !. "A. Kords and expressions used herein and not defined in this Act but defined in the Co(panies Act, !"# ( of !"#) or the Securities and 7xchange 8oard of India
$ Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, for sub+clause (ii), w0r0e0f0 30+0 + !!%0 " Substituted by the 9epositories Act, !!#, Sec 30 and Schedule, <t0 III, w0r0e0f0 %0+0!+ !!" . <rior to its substitution, clause (i) read as under , N(i) 1spot deli'ery contract2 (eans a contract which pro'ides for the actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e town or locality3J # Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (j) read as under ,N(j) 1stoc) exchange2 (eans any body of indi'iduals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0J / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
Act, !!% ( " of !!%) or the 9epositories Act, !!# (%% of !!#) shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts0: 0(/<=4: (5 1</> (?/@A4=( A$$li'%tio for re'o( itio of !to'6 e#'h% (e!. ). ( ) Any stoc) exchange, which is desirous of being recognised for the purposes of this Act, (ay (a)e an application in the prescribed (anner to the Central &o'ern(ent01: (%) 7'ery application under sub+section ( ) shall contain such particulars as (ay be prescribed, and shall be acco(panied by a copy of the bye+laws of the stoc) exchange for the regulation and control of contracts and also a copy of the rules relating in general to the constitution of the stoc) exchange and in particular, to(a) the go'erning body of such stoc) exchange, its constitution and powers of (anage(ent and the (anner in which its business is to be transacted3 (b) the powers and duties of the office bearers of the stoc) exchange3 (c) the ad(ission into the stoc) exchange of 'arious classes of (e(bers, the *ualifications for (e(bership, and the exclusion, suspension, expulsion and
re+ad(ission of (e(bers therefro( or thereinto3 (d) the procedure for the registration of partnerships as (e(bers of the stoc) exchange in cases where the rules pro'ide for such (e(bership3 and the no(ination and appoint(ent of authorised representati'es and cler)s0 Gr% t of re'o( itio to !to'6 e#'h% (e!. 3. ( ) If the Central &o'ern(ent ! is satisfied, after (a)ing such in*uiry as (ay be necessary in this behalf and after obtaining such further infor(ation, if any, as it (ay re*uire,(a) that the rules and bye+laws of a stoc) exchange applying for registration are in confor(ity with such conditions as (ay be prescribed with a 'iew to ensure fair dealing and to protect in'estors3 (b) that the stoc) exchange is willing to co(ply with any other conditions (including conditions as to the nu(ber of (e(bers) which the Central &o'ern(ent, after consultation with the go'erning body of the stoc) exchange and ha'ing regard to the area ser'ed by the stoc) exchange and its standing and the nature of the securities dealt with by it, (ay i(pose for the purpose of carrying out the obDects of this Act3 and
> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 ! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
(c) that it would be in the interest of the trade and also in the public interest to grant recognition to the stoc) exchange3 it (ay grant recognition to the stoc) exchange subDect to the conditions i(posed upon it as aforesaid and in such for( as (ay be prescribed0 (%) .he conditions which the Central &o'ern(ent %0 (ay prescribe under clause (a) of sub+section ( ) for the grant of recognition to the stoc) exchanges (ay include, a(ong other (atters, conditions relating to,(i) the *ualifications for (e(bership of stoc) exchanges3 (ii) the (anner in which contracts shall be entered into and enforced as between (e(bers3 (iii) the representation of the Central &o'ern(ent on each of the stoc) exchange by such nu(ber of persons not exceeding three as the Central &o'ern(ent (ay no(inate in this behalf3 and (iv) the (aintenance of accounts of (e(bers and their audit by chartered accountants whene'er such audit is re*uired by the Central &o'ern(ent0 (3) 7'ery grant of recognition to a stoc) exchange under this section shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office as of the stoc) exchange is situate, and such recognition shall ha'e effect as fro( the date of its publication in the &aFette of India0 % ($) Eo application for the grant of recognition shall be refused except after gi'ing an opportunity to the stoc) exchange concerned to be heard in the (atter3 and the reasons for such refusal shall be co((unicated to the stoc) exchange in writing0 %% (") Eo rules of a recognised stoc) exchange relating to any of the (atters specified in sub+section (%) of section 3 shall be a(ended except with the appro'al of the
Central &o'ern(ent0%3 "35Cor$or%ti!%tio % - -e.*t*%li!%tio of !to'6 e#'h% (e!. 3A. Cn and fro( the appointed date, all recognised stoc) exchanges (if not corporatised and de(utualised before the appointed date) shall be corporatised and de(utualised in accordance with the pro'isions contained in section $8 ,
%0 <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 % <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %% <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %3 <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 %$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
4ro+i-e- that the Securities and 7xchange 8oard of India (ay, if it is satisfied that any recognised stoc) exchange was pre'ented by sufficient cause fro( being corporatised and de(utualised on or after the appointed date, specify another appointed date in respect of that recognised stoc) exchange and such recognised stoc) exchange (ay continue as such before such appointed date0 ()%lanati$n&*6or the purposes of this section, 1appointed date2 (eans the date which the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, appoint and different appointed dates (ay be appointed for different recognised stoc) exchanges0: "554ro'e-*re for 'or$or%ti!%tio % - -e.*t*%li!%tio . 3;. ( ) All recognised stoc) exchanges referred to in section $A shall, within such ti(e as (ay be specified by the Securities and 7xchange 8oard of India, sub(it a sche(e for corporatisation and de(utualisation for its appro'al , 4ro+i-e- that the Securities and 7xchange 8oard of India, (ay, by notification in the Cfficial &aFette, specify na(e of the recognised stoc) exchange, which had already been corporatised and de(utualised, and such stoc) exchange shall not be re*uired to sub(it the sche(e under this section0 (%) Cn receipt of the sche(e referred to in sub+section ( ), the Securities and 7xchange 8oard of India (ay, after (a)ing such en*uiry as (ay be necessary in this behalf and obtaining such further infor(ation, if any, as it (ay re*uire and if it is satisfied that it would be in the interest of the trade and also in the public interest, appro'e the sche(e with or without (odification0 (3) Eo sche(e under sub+section (%) shall be appro'ed by the Securities and 7xchange 8oard of India if the issue of shares for a lawful consideration or pro'ision of trading rights in lieu of (e(bership card of the (e(bers of a recognised stoc) exchange or pay(ent of di'idends to (e(bers ha'e been proposed out of any reser'es or assets of that stoc) exchange0 ($) Khere the sche(e is appro'ed under sub+section (%), the sche(e so appro'ed shall be published i((ediately by(a) the Securities and 7xchange 8oard of India in the Cfficial &aFette3 (b) the recognised stoc) exchange in such two daily newspapers circulating in India, as (ay be specified by the Securities and 7xchange 8oard of India,
and upon such publication, notwithstanding anything to the contrary contained in this Act or any other law for the ti(e being in force or any agree(ent, award, Dudg(ent, decree or other instru(ent for the ti(e being in force, the sche(e shall ha'e effect and be binding on all persons and authorities including all (e(bers, creditors, depositors and e(ployees of the recognised stoc) exchange and on all
%" Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
persons ha'ing any contract, right, power, obligation or liability with, against, o'er, to, or in connection with, the recognised stoc) exchange or its (e(bers0 (") Khere the Securities and 7xchange 8oard of India is satisfied that it would not be in the interest of the trade and also in the public interest to appro'e the sche(e under sub+section (%), it (ay, by an order, reDect the sche(e and such order of reDection shall be published by it in the Cfficial &aFette , 4ro+i-e- that the Securities and 7xchange 8oard of India shall gi'e a reasonable opportunity of being heard to all the persons concerned and the recognised stoc) exchange concerned before passing an order reDecting the sche(e0 (#) .he Securities and 7xchange 8oard of India (ay, while appro'ing the sche(e under sub+section (%), by an order in writing, restrict(a) the 'oting rights of the shareholders who are also stoc) bro)ers of the reognised stoc) exchange3 (b) the right of shareholders or a stoc) bro)er of the recognised stoc) exchange to appoint the representati'es on the go'erning board of the stoc) exchange3 (c) the (axi(u( nu(ber of representati'es of the stoc) bro)ers of the recognised stoc) exchange to be appointed on the go'erning board of the recognised stoc) exchange, which shall not exceed one+fourth of the total strength of the go'erning board0 (/) .he order (ade under sub+section (#) shall be published in the Cfficial &aFette and on the publication thereof, the order shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#), or any other law for the ti(e being in force, ha'e full effect0 (>) 7'ery recognised stoc) exchange, in respect of which the sche(e for corporatisation or de(utualisation has been appro'ed under sub+section (%), shall, either by fresh issue of e*uity shares to the public or in any other (anner as (ay be specified by the regulations (ade by the Securities and 7xchange 8oard of India %#, ensure that at least fifty+one per cent of its e*uity share capital is held, within twel'e (onths fro( the date of publication of the order under sub+section (/), by the public other than shareholders ha'ing trading rights , 4ro+i-e- that the Securities and 7xchange 8oard of India (ay, on sufficient cause being shown to it and in the public interest, extend the said period by another twel'e (onths0:
ee Securities Contracts (Regulation) (Stoc) 7xchanges and Clearing Corporations) Regulations, %0 %, w0e0f0 %0+0#+%0 % notified vide &aFette Eotification Eo0 =A9+ ERCL&EL%0 %+ 3L0/L 3"$#, 7xtra0, <t0 III, Section $, dtd %0+0#+%0 %0
%#
?ith-r%/%l of re'o( itio .
5. %/4( ): If the Central &o'ern(ent%> is of opinion that the recognition granted to a stoc) exchange under the pro'isions of this Act should, in the interest of the trade or in the public interest, be withdrawn, the Central &o'ern(ent (ay ser'e on the go'erning body of the stoc) exchange a written notice that the Central &o'ern(ent is considering the withdrawal of the recognition for the reasons stated in the notice and after gi'ing an opportunity to the go'erning body to be heard in the (atter, the Central &o'ern(ent (ay withdraw, by notification in the Cfficial &aFette, the recognition granted to the stoc) exchange , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Central &o'ern(ent (ay, after consultation with the stoc) exchange, (a)e such pro'ision as it dee(s fit in the notification of withdrawal or in any subse*uent notification si(ilarly published for the due perfor(ance of any contracts outstanding on that date0 %!4(%) Khere the recognised stoc) exchange has not been corporatised or de(utualised or it fails to sub(it the sche(e referred to in sub+section ( ) of section $8 within the specified ti(e therefor or the sche(e has been reDected by the Securities and 7xchange 8oard of India under sub+section (") of section $8, the recognition granted to such stoc) exchange under section $, shall, notwithstanding anything to the contrary contained in this Act, stand withdrawn and the Central &o'ern(ent shall publish, by notification in the Cfficial &aFette, such withdrawal of recognition , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Securities and 7xchange 8oard of India (ay, after consultation with the stoc) exchange, (a)e such pro'isions as it dee(s fit in the order reDecting the sche(e published in the Cfficial &aFette under sub+section (") of section $80: 4o/er of Ce tr%l Go+er .e t to '%ll for $erio-i'%l ret*r ! or -ire't i 7*irie! to ,e .%-e. 8. ( ) 7'ery recognised stoc) exchange shall furnish to the 304Securities and 7xchange 8oard of India: such periodical returns relating to its affairs as (ay be prescribed0
%/ Section
" renu(bered as sub+section ( ) by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 %> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 30 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(%) 7'ery recognised stoc) exchange and e'ery (e(ber thereof shall (aintain and preser'e for such periods not exceeding fi'e years such boo)s of account, and other docu(ents as the Central &o'ern(ent, after consultation with the stoc) exchange concerned, (ay prescribe in the interest of the trade or in the public interest, and such boo)s of account, and other docu(ents shall be subDect to inspection at all reasonable ti(es 3 4by the Securities and 7xchange 8oard of India:0 (3) Kithout preDudice to the pro'isions contained in sub+sections ( ) and (%), the
3%4Securities
and 7xchange 8oard of India:, if it is satisfied that it is in the interest of the trade or in the public interest so to do, (ay, by order in writing,(a) call upon a recognised stoc) exchange or any (e(ber thereof to furnish in writing such infor(ation or explanation relating to the affairs of the stoc) exchange or of the (e(ber in relation to the stoc) exchange as the 334Securities and 7xchange 8oard of India: (ay re*uire3 or (b) appoint one or (ore persons to (a)e an in*uiry in the prescribed (anner in relation to the affairs of the go'erning body of a stoc) exchange or the affairs of any of the (e(bers of the stoc) exchange in relation to the stoc) exchange and sub(it a report of the result of such in*uiry to the 3$4Securities and 7xchange 8oard of India: within such ti(e as (ay be specified in the order or, in the case of an in*uiry in relation to the affairs of any of the (e(bers of a stoc) exchange, direct the go'erning body to (a)e the in*uiry and sub(it its report to the 3"4Securities and 7xchange 8oard of India:0 ($) Khere an in*uiry in relation to the affairs of a recognised stoc) exchange or the affairs of any of its (e(bers in relation to the stoc) exchange has been underta)en under sub+section (3),(a) e'ery director, (anager, secretary or other officer of such stoc) exchange3 (b) e'ery (e(ber of such stoc) exchange3 (c) if the (e(ber of the stoc) exchange is a fir(, e'ery partner, (anager, secretary or other officer of the fir(3 and (d) e'ery other person or body of persons who has had dealings in the course of business with any of the persons (entioned in clauses ( a), (b) and (c), whether directly or indirectly3
Substituted for ;by the Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3% Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 33 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3" Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
3
shall be bound to produce before the authority (a)ing the in*uiry all such boo)s of account, and other docu(ents in his custody or power relating to or ha'ing a bearing on the subDect+(atter of such in*uiry and also to furnish the authorities within such ti(e as (ay be specified with any such state(ent or infor(ation relating thereto as (ay be re*uired of hi(0 )8A *%l re$ort! to ,e f*r i!he- to Ce tr%l Go+er .e t ,> !to'6 e#'h% (e!. 7. 7'ery recognised stoc) exchange shall furnish the Central &o'ern(ent with a copy of the annual report, and such annual report shall contain such particulars as (ay be prescribed0 )754o/er of re'o( i!e- !to'6 e#'h% (e to .%6e r*le! re!tri'ti ( +oti ( ri(ht!, et'. 7A. ( ) A recognised stoc) exchange (ay (a)e rules or a(end any rules (ade by it
to pro'ide for all or any of the following (atters, na(ely ,(a) the restriction of 'oting rights to (e(bers only in respect of any (atter placed before the stoc) exchange at any (eeting3 (b) the regulation of 'oting rights in respect of any (atter placed before the stoc) exchange at any (eeting so that each (e(ber (ay be entitled to ha'e one 'ote only, irrespecti'e of his share of the paid+up e*uity capital of the stoc) exchange3 (c) the restriction on the right of a (e(ber to appoint another person as his proxy to attend and 'ote at a (eeting of the stoc) exchange3 (d) such incidental, conse*uential and supple(entary (atters as (ay be necessary to gi'e effect to any of the (atters specified in clauses ( a), (b) and (c)0 (%) Eo rules of a recognised stoc) exchange (ade or a(ended in relation to any (atter referred to in clauses (a) to (d) of sub+section ( ) shall ha'e effect until they ha'e been appro'ed by the Central &o'ern(ent 3> and published by that &o'ern(ent in the Cfficial &aFette and, in appro'ing the rules so (ade or a(ended, the Central &o'ern(ent (ay (a)e such (odifications therein as it thin)s fit, and on such publication, the rules as appro'ed by the Central &o'ern(ent shall be dee(ed to ha'e been 'alidly (ade, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#)0:
3# <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 3/ Inserted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec %, w0e0f0 0>+ %+ !"!0 3> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
4o/er of Ce tr%l Go+er .e t )9 to -ire't r*le! to ,e .%-e or to .%6e r*le!. :. ( ) Khere, after consultation with the go'erning bodies of stoc) exchanges generally or with the go'erning body of any stoc) exchange in particular, the Central &o'ern(ent is of opinion that it is necessary or expedient so to do, it (ay, by order in writing together with a state(ent of the reasons therefor, direct recognised stoc) exchanges generally or any recognised stoc) exchange in particular, as the case (ay be, to (a)e any rules or to a(end any rules already (ade in respect of all or any of the (atters specified in sub+section (%) of section 3 within a period of $04two (onths: fro( the date of the order0 (%) If any recognised stoc) exchange fails or neglects to co(ply with any order (ade under sub+section ( ) within the period specified therein, the Central &o'ern(ent (ay (a)e the rules for, or a(end the rules (ade by, the recognised stoc) exchange, either in the for( proposed in the order or with such (odifications thereof as (ay be agreed to between the stoc) exchange and the Central &o'ern(ent0 (3) Khere in pursuance of this section any rules ha'e been (ade or a(ended, the rules so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette or &aFettes of the State or States in which the principal office or offices of the recognised stoc) exchange or exchanges is or are situate, and, on the publication thereof in the &aFette of India, the rules so (ade or a(ended shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# (
of !"#), or in any other law for the ti(e being in force, ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange or stoc) exchanges, as the case (ay be0 315Cle%ri ( 'or$or%tio . :A. ( ) A recognised stoc) exchange (ay, with the prior appro'al of the Securities and 7xchange 8oard of India, transfer the duties and functions of a clearing house to a clearing corporation, being a co(pany incorporated under the Co(panies Act, !"# ( of !"#), for the purpose of(a) the periodical settle(ent of contracts and differences thereunder3 (b) the deli'ery of, and pay(ent for, securities3 (c) any other (atter incidental to, or connected with, such transfer0 (%) 7'ery clearing corporation shall, for the purpose of transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( ),
3! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 $0 Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec !, w0e0f0 %"+ 0 + !!"0 $ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0
(a)e bye+laws and sub(it the sa(e to the Securities and 7xchange 8oard of India for its appro'al0 (3) .he Securities and 7xchange 8oard of India (ay, on being satisfied that it is in the interest of the trade and also in the public interest to transfer the duties and functions of a clearing house to a clearing corporation, grant appro'al to the byelaws sub(itted to it under sub+section (%) and appro'e the transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( )0 ($) .he pro'isions of sections $, ", #, /, >, !, 0, and % shall, as far as (ay be, apply to a clearing corporation referred to in sub+section ( ) as they apply in relation to a recognised stoc) exchange0: 4o/er of re'o( i!e- !to'6 e#'h% (e! to .%6e ,>e0l%/!. 9. ( ) Any recognised stoc) exchange (ay, subDect to the pre'ious appro'al of the $%4Securities and 7xchange 8oard of India:, (a)e bye+laws for the regulation and control of contracts0 (%) In particular, and without preDudice to the generality of the foregoing power, such bye+laws (ay pro'ide for , (a) the opening and closing of (ar)ets and the regulation of the hours of trade3 (b) a clearing house for the periodical settle(ent of contracts and differences thereunder, the deli'ery of and pay(ent for securities, the passing on of deli'ery orders and the regulation and (aintenance of such clearing house3 (c) the sub(ission to the $34Securities and 7xchange 8oard of India: by the clearing house as soon as (ay be after each periodical settle(ent of all or any of the following particulars as the $$4Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, re*uire, na(ely ,(i) the total nu(ber of each category of security carried o'er fro( one settle(ent period to another3 (ii) the total nu(ber of each category of security, contracts in respect of
which ha'e been s*uared up during the course of each settle(ent period3 (iii) the total nu(ber of each category of security actually deli'ered at each clearing3
$% Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(d) the publication by the clearing house of all or any of the particulars sub(itted to the $"4Securities and 7xchange 8oard of India: under clause ( c) subDect to the directions, if any, issued by the $#4Securities and 7xchange 8oard of India: in this behalf3 (e) the regulation or prohibition of blan) transfers3 (f) the nu(ber and classes of contracts in respect of which settle(ents shall be (ade or differences paid through the clearing house3 (g) the regulation, or prohibition of b!dla# or carry+o'er facilities3 (h) the fixing, altering or postponing of days for settle(ents3 (i) the deter(ination and declaration of (ar)et rates, including the opening, closing highest and lowest rates for securities3 (j) the ter(s, conditions and incidents of contracts, including the prescription of (argin re*uire(ents, if any, and conditions relating thereto, and the for(s of contracts in writing3 (k) the regulation of the entering into, (a)ing, perfor(ance, recession and ter(ination, of contracts, including contracts between (e(bers or between a (e(ber and his constituent or between a (e(ber and a person who is not a (e(ber, and the conse*uences of default or insol'ency on the part of a seller or buyer or inter(ediary, the conse*uences of a breach or o(ission by a seller or buyer, and the responsibility of (e(bers who are not parties to such contracts3 (l) the regulation of taravani business including the placing of li(itations thereon3 (") the listing of securities on the stoc) exchange, the inclusion of any security for the purpose of dealings and the suspension or withdrawal of any such securities, and the suspension or prohibition of trading in any specified securities3 (n) the (ethod and procedure for the settle(ent of clai(s or disputes, including settle(ent by arbitration3 ($) the le'y and reco'ery of fees, fines and penalties3 (%) the regulation of the course of business between parties to contracts in any capacity3 (+) the fixing of a scale of bro)erage and other charges3 (r) the (a)ing, co(paring, settling and closing of bargains3 (#) the e(ergencies in trade which (ay arise, whether as a result of pool or syndicated operations or cornering or otherwise, and the exercise of powers in
$" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%,
Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $# Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
such e(ergencies, including the power to fix (axi(u( and (ini(u( prices for securities3 (t) the regulation of dealings by (e(bers for their own account3 (!) the separation of the functions of Dobbers and bro)ers3 (v) the li(itations on the 'olu(e of trade done by any indi'idual (e(ber in exceptional circu(stances3 (.) the obligation of (e(bers to supply such infor(ation or explanation and to produce such docu(ents relating to the business as the go'erning body (ay re*uire0 (3) .he bye+laws (ade under this section (ay(a) specify the bye+laws the contra'ention of which shall (a)e a contract entered into otherwise than in accordance with the bye+laws 'oid under sub+section ( ) of section $3 (b) pro'ide that the contra'ention of any of the bye+laws shall render the (e(ber concerned liable to one or (ore of the following punish(ents, na(ely ,(i) fine, (ii) expulsion fro( (e(bership, (iii) suspension fro( (e(bership for a specified period, (iv) any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney0 ($) Any bye+laws (ade under this section shall be subDect to such conditions in regard to pre'ious publication as (ay be prescribed, and, when appro'ed by the $/4Securities and 7xchange 8oard of India:, shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and shall ha'e effect as fro( the date of its publication in the &aFette of India , 4ro+i-e- that if the $>4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+law should be (ade i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0
$/ Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $> Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4o/er of 395Se'*ritie! % - E#'h% (e ;o%r- of I -i%< to .%6e or %.e - ,>e0l%/! of re'o( i!e- !to'6 e#'h% (e!. 1=. ( ) .he "04Securities and 7xchange 8oard of India: (ay, either on a re*uest in writing recei'ed by it in this behalf fro( the go'erning body of a recognised stoc) exchange or on its own (otion, if it is satisfied after consultation with the go'erning body of the stoc) exchange that it is necessary or expedient so to do and after recording its reasons for so doing, (a)e bye+laws for all or any of the (atters specified in section ! or a(end any bye+laws (ade by such stoc) exchange under that section0
(%) Khere in pursuance of this section any bye+laws ha'e been (ade or a(ended the bye+laws so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and on the publication thereof in the &aFette of India, the bye+laws so (ade or a(ended shall ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange concerned0 (3) Eotwithstanding anything contained in this section, where the go'erning body of a recognised stoc) exchange obDects to any bye+laws (ade or a(ended under this section by the " 4Securities and 7xchange 8oard of India: on its own (otion, it (ay, within "%4two (onths: of the publication thereof in the &aFette of India under subsection (%), apply to the "34Securities and 7xchange 8oard of India: for re'ision thereof, and the "$4Securities and 7xchange 8oard of India: (ay, after gi'ing an opportunity to the go'erning body of the stoc) exchange to be heard in the (atter, re'ise the bye+laws so (ade or a(ended, anywhere any bye+laws so (ade or a(ended are re'ised as a result of any action ta)en under this sub+section, the byelaws so re'ised shall be published and shall beco(e effecti'e as pro'ided in subsection (%)0 ($) .he (a)ing or the a(end(ent or re'ision of any bye+laws under this section shall in all cases be subDect to the condition of pre'ious publication ,
$! Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "0 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 " Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "% Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec %0, w0e0f0 %"+ 0 + !!"0 "3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4ro+i-e- that if the ""4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+laws should be (ade, a(ended or re'ised i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0 4o/er of Ce tr%l Go+er .e t 58 to !*$er!e-e (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e. 11. ( ) Kithout preDudice to any other powers 'ested in the Central &o'ern(ent under this Act, where the Central &o'ern(ent is of opinion that the go'erning body of any recognised stoc) exchange should be superseded, then, notwithstanding anything contained in any other law for the ti(e being in force, in the Central &o'ern(ent (ay ser'e on the go'erning body a written notice that the Central &o'ern(ent is considering the supersession of the go'erning body for the reasons specified in the notice and after gi'ing an opportunity to the go'erning body to be
heard in the (atter, it (ay, by notification in the Cfficial &aFette, declare the go'erning body of such stoc) exchange to be superseded, and (ay appoint any person or persons to exercise and perfor( all the powers and duties of the go'erning body, and, where (ore persons than one are appointed, (ay appoint one of such persons to be the chair(an and another to be the 'ice+chair(an thereof0 (%) Cn the publication of a notification in the Cfficial &aFette under sub+section ( ), the following conse*uences shall ensue, na(ely,(a) the (e(bers of the go'erning body which has been superseded shall, as fro( the date of the notification of supersession, cease to hold office as such (e(bers3 (b) the person or persons appointed under sub+section ( ) (ay exercise and perfor( all the powers and duties of the go'erning body which has been superseded3 (c) all such property of the recognised stoc) exchange as the person or persons appointed under sub+section ( ) (ay, by order in writing, specify in this behalf as being necessary for the purpose of enabling hi( or the( to carry on the business of the stoc) exchange, shall 'est in such person or persons0 (3) Eotwithstanding anything to the contrary contained in any law or the rules or bye+laws of the recognised stoc) exchange the go'erning body of which is superseded under sub+section ( ), the person or persons appointed under that subsection shall hold office for such period as (ay be specified in the notification published under that sub+section and the Central &o'ern(ent (ay fro( ti(e to ti(e, by li)e notification, 'ary such period0
"" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "# <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0
($) .he Central &o'ern(ent (ay at any ti(e before the deter(ination of the period of office of any person or persons appointed under this section call upon the recognised stoc) exchange to re+constitute the go'erning body in accordance with its rules and on such re+constitution all the property of the recognised stoc) exchange which has 'ested in, or was in the possession of, the person or persons appointed under sub+section ( ), shall re+'est or 'est, as the case (ay be, in the go'erning body so re+constituted , 4ro+i-e- that until a go'erning body is so re+constituted, the person or persons appointed under sub+section ( ) shall continue to exercise and perfor( their powers and duties0 4o/er57 to !*!$e - ,*!i e!! of re'o( i!e- !to'6 e#'h% (e!. 1". If in the opinion of the Central &o'ern(ent an e(ergency has arisen and for the purpose of (eeting the e(ergency the Central &o'ern(ent considers it expedient so to do, it (ay, by notification in the Cfficial &aFette, for reasons to be set out therein, direct a recognised stoc) exchange to suspend such of its business for such period not exceeding se'en days and subDect to such conditions as (ay be specified in the notification, and, if, in the opinion of the Central &o'ern(ent, the interest of
the trade or the public interest re*uires that the period should be extended, (ay, by li)e notification extend the said period fro( ti(e to ti(e , 4ro+i-e- that where the period of suspension is to be extended beyond the first period, no notification extending the period of suspension shall be issued unless the go'erning body of the ">4recognised stoc) exchange: has been gi'en an opportunity of being heard in the (atter0 "!54o/er to i!!*e -ire'tio !. 1"A. If, after (a)ing or causing to be (ade an in*uiry, the Securities and 7xchange 8oard of India is satisfied that it is necessary(a) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (b) to pre'ent the affairs of any recognised stoc) exchange or clearing corporation, or such other agency or person, pro'iding trading or clearing or settle(ent facility in respect of securities, being conducted in a (anner detri(ental to the interests of in'estors or securities (ar)et3 or (c) to secure the proper (anage(ent of any such stoc) exchange or clearing corporation or agency or person, referred to in clause ( b),
"/ <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 "> Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 "! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0
it (ay issue such directions,(i) to any stoc) exchange or clearing corporation or agency or person referred to in clause (b) or any person or class of persons associated with the securities (ar)et3 or (ii) to any co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 8=5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< /<410A/1 A45 <81:<4 :4 (/A0:1:( Co tr%'t! i otifie- %re%! ille(%l i 'ert%i 'ir'*.!t% 'e!. 1). If the Central &o'ern(ent# is satisfied, ha'ing regard to the nature or the 'olu(e of transactions in securities in any #%4State or States or area: that it is necessary so to do, it (ay, by notification in the Cfficial &aFette, declared this section to apply to such #34State or States or area:, and thereupon e'ery contract in such #$4State or States or area: which is entered into after the date of the notification otherwise than #"4between (e(bers of a recognised stoc) exchange or recognised stoc) exchanges: in such ##4State or States or area: or through or with such (e(ber shall be illegal ,
#0 I #
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 #% Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #3 Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #$ Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$ for ;between (e(bers of a recognised stoc) exchange; & ## Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0
#/54ro+i-e-
that any contract entered into between (e(bers of two or (ore recognised stoc) exchanges in such State or States or area, shall(i) be subDect to such ter(s and conditions as (ay be stipulated by the respecti'e stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India3 (ii) re*uire prior per(ission fro( the respecti'e stoc) exchanges if so stipulated by the stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India0: #>4A--itio %l tr%-i ( floor. 1)A. A stoc) exchange (ay establish additional trading floor with the prior appro'al of the Securities and 7xchange 8oard of India in accordance with the ter(s and conditions stipulated by the said 8oard0 ()%lanati$n , 6or the purposes of this section, 1additional trading floor2 (eans a trading ring or trading facility offered by a recognised stoc) exchange outside its area of operation to enable the in'estors to buy and sell securities through such trading floor under the regulatory fra(ewor) of that stoc) exchange0: Co tr%'t! i otifie- %re%! to ,e +oi- i 'ert%i 'ir'*.!t% 'e!. 13. ( ) Any contract entered into in any State or area specified in the notification under section 3 which is in contra'ention of any of the bye+laws specified in that behalf under clause (a) of sub+section (3) of section ! shall be 'oid , (i) as respects the rights of any (e(ber of the recognised stoc) exchange who has entered into such contract in contra'ention of any such bye+law, and also (ii) as respects the rights of any other person who has )nowingly participated in the transaction entailing such contra'ention0 (%) Eothing in sub+section ( ) shall be construed to affect the right of any person other than a (e(ber of the recognised stoc) exchange to enforce any such contract or to reco'er any su( under or in respect of such contract if such person had no )nowledge that the transaction was in contra'ention of any of the bye+laws specified in clause (a) of sub+section (3) of section !0 @e.,er! .%> ot %'t %! $ri 'i$%l! i 'ert%i 'ir'*.!t% 'e!. 15. Eo (e(ber of a recognised stoc) exchange shall in respect of any securities enter into any contract as a principal with any person other than a (e(ber of a recognised stoc) exchange, unless he has secured the consent or authority of such
#/ Inserted #> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (A(end(ent) Act, !!", Sec % , w0e0f0 %"+0 + !!"0
person and discloses in the note, (e(orandu( or agree(ent of sale or purchase that he is acting as a principal , 4ro+i-e- that where the (e(ber has secured the consent or authority of such person otherwise than in writing he shall secure written confir(ation by such person or such consent or authority within three days fro( the date of the contract , 4ro+i-e- f*rther that no such written consent or authority of such person shall be necessary for closing out any outstanding contract entered into by such person in accordance with the bye+laws, if the (e(ber discloses in the note, (e(orandu( or agree(ent of sale or purchase in respect of such closing out that he is acting as a principal0 4o/er89 to $rohi,it 'o tr%'t! i 'ert%i '%!e!. 18. ( ) If the Central &o'ern(ent is of opinion that it is necessary to pre'ent undesirable speculation in specified securities in any State or area, it (ay, by notification in the Cfficial &aFette, declare that no person in the State or area specified in the notification shall, sa'e with the per(ission of the Central &o'ern(ent, enter into any contract for the sale or purchase of any security specified in the notification except to the extent and in the (anner, if any, specified therein0 (%) All contracts in contra'ention of the pro'isions of sub+section ( ) entered into after the date of notification issued thereunder shall be illegal0 Li'e !i ( of -e%ler! i !e'*ritie! i 'ert%i %re%!. 17. ( ) SubDect to the pro'isions of sub+section (3) and to the other pro'isions contained in this Act, no person shall carry on or purport to carry on, whether on his own behalf or on behalf of any other person, the business of dealing in securities in any State or area to which section 3 has not been declared to apply and to which the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, declare this section to apply, except under the authority of a /04licence granted by the Securities and 7xchange 8oard of India: in this behalf0 (%) Eo notification under sub+section ( ) shall be issued with respect to any State or area unless the Central &o'ern(ent is satisfied, ha'ing regard to the (anner in which securities are being dealt with in such State or area, that it is desirable or
#! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 <owers are exercisable by R8I also 'ide &o'ern(ent of India Eotification Eo0 >3 (7), 9ated 0 +03+%000 in relation to any contracts in go'ern(ent securities, (oney (ar)et securities etc0 /0 Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% for ;licence granted by the Central &o'ern(ent;0
expedient in the interest of the trade or in the public interest that such dealings should be regulated by a syste( of licensing0 (3) .he restrictions i(posed by sub+section ( ) in relation to dealings in securities shall not apply to the doing of anything by or on behalf of a (e(ber of any recognised stoc) exchange0
7154*,li'
i!!*e % - li!ti ( of !e'*ritie! referre- to i !*,0'l%*!e ( ie) of 'l%*!e (h)
of !e'tio ". 17A. ( ) Kithout preDudice to the pro'isions contained in this Act or any other law for the ti(e being in force, no securities of the nature referred to in sub+clause (ie) of clause (h) of section % shall be offered to the public or listed on any recognised stoc) exchange unless the issuer fulfils such eligibility criteria and co(plies with such other re*uire(ents as (ay be specified by regulations (ade by the Securities and 7xchange 8oard of India0 (%) 7'ery issuer referred to in sub+clause (ie) of clause (h) of section % intending to offer the certificates or instru(ents referred therein to the public shall (a)e an application, before issuing the offer docu(ent to the public, to one or (ore recognised stoc) exchanges for per(ission for such certificates or instru(ents to be listed on the stoc) exchange or each such stoc) exchange0 (3) Khere the per(ission applied for under sub+section (%) for listing has not been granted or refused by the recognised stoc) exchanges or any of the(, the issuer shall forthwith repay all (oneys, if any, recei'ed fro( applicants in pursuance of the offer docu(ent, and if any such (oney is not repaid within eight days after the issuer beco(es liable to repay it, the issuer and e'ery director or trustee thereof, as the case (ay be, who is in default shall, on and fro( the expiry of the eighth day, be Dointly and se'erally liable to repay that (oney with interest at the rate of fifteen per cent per annu(0 7xplanation0-In rec)oning the eighth day after another day, any inter'ening day which is a public holiday under the Eegotiable Instru(ents Act, >> (%# of >> ), shall be disregarded, and if the eighth day (as so rec)oned) is itself such a public holiday, there shall for the said purposes be substituted the first day thereafter which is not a holiday0 ($) All the pro'isions of this Act relating to listing of securities of a public co(pany on a recognised stoc) exchange shall, (utatis (utandis, apply to the listing of the securities of the nature referred to in sub+clause (ie) of clause (h) of section % by the issuer, being a special purpose distinct entity0 <
Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec 3, w0e0f0 %>+0"+ %00/0
/
E#'l*!io of !$ot -eli+er> 'o tr%'t! fro. !e'tio ! 1), 13, 15 % - 17. 1:. ( ) Eothing contained in sections 3, $, " and / shall apply to spot deli'ery contracts0 (%) Eotwithstanding anything contained in sub+section ( ), if the Central &o'ern(ent/% is of opinion that in the interest of the trade or in the public interest it is expedient to regulate and control the business of dealing in spot deli'ery contracts also in any State or area (whether section 3 has been declared to apply to that State or area or not), it (ay, by notification in the Cfficial &aFette, declare that the pro'isions of section / shall also apply to such State or area in respect of spot deli'ery contracts generally or in respect of spot deli'ery contracts for the sale or purchase of such securities as (ay be specified in the notification, and (ay also specify the (anner in which, and the extent to which, the pro'isions of that section
shall so apply0 /34Co tr%'t! i -eri+%ti+e. 1:A. Eotwithstanding anything contained in any other law for the ti(e being in force, contracts in deri'ati'e shall be legal and 'alid if such contracts are(a) traded on a recognised stoc) exchange3 (b) settled on the clearing house of the recognised stoc) exchange, in accordance with the rules and bye+laws of such stoc) exchange0: Sto'6 e#'h% (e! other th% re'o( i!e- !to'6 e#'h% (e! $rohi,ite-. 19. ( ) Eo person shall, except with the per(ission of the Central &o'ern(ent, organise or assist in organising or be a (e(ber of any stoc) exchange (other than a recognised stoc) exchange) for the purpose of assisting in, entering into or perfor(ing any contracts in securities0 (%) .his section shall co(e into force in any State or area on such date as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 4rohi,itio of o$tio ! i !e'*ritie!. "=. 734GGGGG:
/% <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 /3 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec 3, w0e0f0 %%+%+%0000 /$ C(itted by the Securities =aws (A(end(ent) Act, !!", Sec %%, w0e0f0 %"+0 + !!"0 <rior to o(ission, section %0 read as under , 1%00 8r$hibiti$n $f $%ti$n# in #ec!ritie#&-( ) Eotwithstanding anything contained in this Act or in any other law for the ti(e being in force, all options in securities entered into after the co((ence(ent of this Act shall be illegal0
9: 1:4= <E (/A0:1:( 754GGG: /#4Co -itio ! for li!ti (. "1. Khere securities are listed on the application of any person in any recognised stoc) exchange, such person shall co(ply with the conditions of the listing agree(ent with that stoc) exchange&: 775Deli!ti ( of !e'*ritie!. "1A. ( ) A recognised stoc) exchange (ay delist the securities, after recording the reasons therefor, fro( any recognised stoc) exchange on any of the ground or grounds as (ay be prescribed under this Act , 4ro+i-e- that the securities of a co(pany shall not be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) A listed co(pany or an aggrie'ed in'estor (ay file an appeal before the Securities Appellate .ribunal against the decision of the recognised stoc) exchange delisting the securities within fifteen days fro( the date of the decision of the recognised stoc) exchange delisting the securities and the pro'isions of sections %%8 to %%7 of this Act, shall apply, as far as (ay be, to such appeals , 4ro+i-e- that the Securities Appellate .ribunal (ay, if it is satisfied that the co(pany was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding one (onth0:
(%) Any option in securities which has been entered into before such co((ence(ent and which re(ains to be perfor(ed, whether wholly or in part, after such co((ence(ent shall, to that
extent, beco(e 'oid02 /" Kords 18O <H8=IC CC?<AEI7S2 o(itted by the Securities =aws (A(end(ent) Act, !!!, Sec $, w0e0f0 %%+0%+%0000 /# Substituted by the Securities =aws (A(end(ent) Act, !!", Sec 33, w0e0f0 %"+0 + !!" . <rior to substitution, section % read as under , 1% 0 8$.er t$ c$"%el li#ting $f #ec!ritie# bF %!blic c$"%anie#& -Eotwithstanding anything contained in any other law for the ti(e being in force, if the Securities and 7xchange 8oard of India is of opinion, ha'ing regard to the nature of the securities issued by any public co(pany as defined in the Co(panies Act, !"# ( of !"#), or to the dealings in the(, that it is necessary or expedient in the interest of the trade or in the public interest so to do, it (ay re*uire the co(pany, after gi'ing it an opportunity of being heard in the (atter, to co(ply with such re*uire(ents as (ay be prescribed with respect to the listing of its securities on any recognised stoc) exchange02 // Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec >, w0r0e0f0 %+ 0+%00$0
7:5Ri(ht
of %$$e%l %(%i !t ref*!%l of !to'6 e#'h% (e! to li!t !e'*ritie! of $*,li' 'o.$% ie!. 79"". Khere a recognised stoc) exchange acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any public co(pany >04or collecti'e in'est(ent sche(e:, the co(pany > 4or sche(e: shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( ) of section /3 of the Co(panies Act, !"# ( of !"#) (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Central &o'ern(ent (ay, on sufficient cause being shown, allow, appeal to the Central &o'ern(ent against such refusal, o(ission or failure, as the case (ay be, and thereupon the Central &o'ern(ent (ay, after gi'ing the stoc) exchange an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange, or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Central &o'ern(ent sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Central &o'ern(ent: , >%44ro+i-e- that no appeal shall be preferred against refusal, o(ission or failure, as the case (ay be, under this section on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!0: :)5Ri(ht of %$$e%l to Se'*ritie! A$$ell%te Tri,* %l %(%i !t ref*!%l of !to'6 e#'h% (e to li!t !e'*ritie! of $*,li' 'o.$% ie!.
/> Substituted
by .he Co(panies (A(end(ent) Act, !/$ (Act Eo0 $ of !/$), Sec $%, w0e0f0 0 + 0%+ !/"0 /! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the
&aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 >0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%00003 Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 > Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%0000 >% Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec $, w0e0f0 #+ %+ !!!0 >3 Sections %%A, %%8, %%C, %%9, %%7 and %%6 inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!!& 7arlier section %%A was inserted by .he
""A. ( ) Khere a recognised stoc) exchange, acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any co(pany, the co(pany shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( A) of section /3 of the Co(panies Act, !"# ( of !"#), (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Securities Appellate .ribunal (ay, on sufficient cause being shown, allow, appeal to the Securities Appellate .ribunal ha'ing Durisdiction in the (atter against such refusal, o(ission or failure, as the case (ay be, and thereupon the Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange, an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange3 or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Securities Appellate .ribunal sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Securities Appellate .ribunal0 (%) 7'ery appeal under sub+section ( ) shall be in such for( and be acco(panied by such fee as (ay be prescribed0 (3) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 ($) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: :354ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. "";. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of
Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec %, w0e0f0 /+ 0 + !>#, and o(itted by the 9epositories Act, !!#, Sec 30 and Sch0, <t0III, w0r0e0f0 %0+0!+ !!"0 >$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath 3 (b) re*uiring the disco'ery and production of docu(ents 3 (c) recei'ing e'idence on affida'its 3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents 3 (e) re'iewing its decisions 3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte ; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0: :55Ri(ht to le(%l re$re!e t%tio . ""C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of sub+section ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of subsection ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of
>" Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
!"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, vakil or an attorney of any Iigh Court, and includes a pleader in practice0: :85Li.it%tio . ""D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0: :75Ci+il 'o*rt ot to h%+e G*ri!-i'tio .
""E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0: ::5A$$e%l to S*$re.e Co*rt. ""2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order, 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: 8(4A91:( A45 80</(5A0( 4e %ltie!. "). ( ) Any person who+
># Inserted >/ Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & >> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec !, w0r0e0f0 %+ 0+%00$0 7arlier section %%6 as inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", read as under,+ 1""2. A$$e%l to Di(h Co*rt.+Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order , 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
(a) without reasonable excuse (the burden of pro'ing which shall be on hi() fails to co(ply with any re*uisition (ade under sub+section ($) of section #3 or (b) enters into any contract in contra'ention of any of the pro'isions contained in section 3 or section #3 or (c) contra'enes the pro'isions contained in >!5section / or section /A<, or section !3 or 90 4(d) enters into any contract in deri'ati'e in contra'ention of section >A or the rules (ade under section 303: (e) owns or )eeps a place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act and )nowingly per(its such place to be used for such purposes3 or (f) (anages, controls, or assists in )eeping any place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act or at which contracts are recorded or adDusted or rights or liabilities arising out of contracts are adDusted, regulated or enforced in any (anner whatsoe'er3 or (g) not being a (e(ber of a recognised stoc) exchange or his agent authorised as
such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section / wilfully represents to or induces any person to belie'e that contracts can be entered into or perfor(ed under this Act through hi(3 or (h) not being a (e(ber of a recognised stoc) exchange or his agent authorised as such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section /, can'asses, ad'ertises or touts in any (anner either for hi(self or on behalf of any other persons for any business connected with contracts in contra'ention of any of the pro'isions of this Act3 or (i) Doins, gathers or assists in gathering at any place other than the place of business specified in the bye+laws of a recognised stoc) exchange any person or persons for (a)ing bids or offers or for entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act3 ! 4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which
>! Inserted
by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec $, w0e0f0 %>+0"+ %00/ for ;section /;0 !0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec #, w0e0f0 %%+0%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 ! Substituted for 1shall, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0
(ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: (%) Any person who enters into any contract in contra'ention of the pro'isions contained in section " !%4or who fails to co(ply with the pro'isions of !34section % or section % A: or with the orders of: or section %% !$4or with the orders of the Securities Appellate .ribunal: !"4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 9854e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. ")A. Any person, who is re*uired under this Act or any rules (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to a recognised stoc) exchange, fails to furnish the sa(e within the ti(e specified therefor in the listing agree(ent or conditions or bye+laws of the recognised stoc) exchange, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to (aintain boo)s of account or records, as per the listing agree(ent or conditions, or bye+laws of a recognised stoc) exchange, fails to (aintain the sa(e, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0:
9754e
%lt> for f%il*re ,> % > $er!o to e ter i to % %(ree.e t /ith 'lie t!. ");. If any person, who is re*uired under this Act or any bye+laws of a recognised stoc) exchange (ade thereunder, to enter into an agree(ent with his client, fails to enter into such an agree(ent, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0:
!% Substituted
for 1or who fails to co(ply with the orders of the Securities and 7xchange 8oard of India under section % 2 by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 <rior to !!", ;Securities and 7xchange 8oard of India under section % or Central &o'ern(ent under section %%; were substituted for ;Central &o'ern(ent under section % or section %%; vide .he Schedule, <art II of Securities and 7xchange 8oard of India Act, !!%, w0e0f0 30+0 + !!%0 !3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec #, w0e0f0 #+ %+ !!!0 !" Substituted for 1shall, on con'iction, be punishable with fine which (ay extend to one thousand rupees2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !# Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$ & !/ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$0
9:54e
%lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. ")C. If any stoc) bro)er or sub+bro)er or a co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, after ha'ing been called upon by the Securities and 7xchange 8oard of India or a recognised stoc) exchange in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e stipulated by the Securities and 7xchange 8oard of India or a recognised stoc) exchange, he or it shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 9954e %lt> for f%il*re to !e(re(%te !e'*ritie! or .o e>! of 'lie t or 'lie t!. ")D. If any person, who is registered under section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%) as a stoc) bro)er or sub+bro)er, fails to segregate securities or (oneys of the client or clients or uses the securities or (oneys of a client or clients for self or for any other client, he shall be liable to a penalty not exceeding one crore rupees0: 1==54e %lt> for f%il*re to 'o.$l> /ith $ro+i!io of li!ti ( 'o -itio ! or -eli!ti ( 'o -itio ! or (ro* -!. ")E. If a co(pany or any person (anaging collecti'e in'est(ent sche(e or (utual fund, fails to co(ply with the listing conditions or delisting conditions or grounds or co((its a breach thereof, it or he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0: 1=154e %lt> for e#'e!! -e.%teri%li!%tio or -eli+er> of * li!te- !e'*ritie!. ")2. If any issuer de(aterialises securities (ore than the issued securities of a co(pany or deli'ers in the stoc) exchanges the securities which are not listed in the recognised stoc) exchange or deli'ers securities where no trading per(ission has been gi'en by the recognised stoc) exchange, he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0:
!> Inserted !! Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 00 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0
%+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0
1="54e
%lt> for f%il*re to f*r i!h $erio-i'%l ret*r !, et'. ")G. If a recognised stoc) exchange fails or neglects to furnish periodical returns to the Securities and 7xchange 8oard of India or fails or neglects to (a)e or a(end its rules or bye+laws as directed by the Securities and 7xchange 8oard of India or fails to co(ply with directions issued by the Securities and 7xchange 8oard of India, such recognised stoc) exchange shall be liable to a penalty which (ay extend to twenty+fi'e crore rupees0: 1=)54e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. ")D. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or articles or bye+ laws or the regulations of the recognised stoc) exchange or directions issued by the Securities and 7xchange 8oard of India for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 1=354o/er to %-G*-i'%te. ")0I. ( ) 6or the purpose of adDudging under sections %3A, %38, %3C, %39, %37, %36, %3& and %3I, the Securities and 7xchange 8oard of India shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0: 1=552%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. ")E. Khile adDudging the *uantu( of penalty under section %3+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3
0% Inserted 03 Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec 0$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0" Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 , w0r0e0f0 , w0r0e0f0 , w0r0e0f0
%+ %+ %+ %+
0+%00$0 0+%00$0 0+%00$0 0+%00$0
(b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0: 1=85 Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!.
")EA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 1"A or !e'tio ")0I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%tefor the %lle(e- -ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re %! !$e'ifie,> the ;o%r- * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")L %(%i !t % > or-er $%!!e- ,> the ;o%ror %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 1=75Re'o+er> of %.o* t!. ")E;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 1"A or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H
0# I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30"==7) 0/ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %!
.%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - ThirS'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")L of thi! A't. (") The re'o+er> offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ())Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 0'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 1"A, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1),(") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 1=:5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. ")F. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: 1=95A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")L. ( ) Any person aggrie'ed, by the order or decision of the recogniFed stoc) exchange or the adDudicating officer or any order (ade by the Securities and 7xchange 8oard of India under section $8, (ay prefer an appeal before the Securities Appellate .ribunal and the pro'isions of sections %%8, %%C, %%9 and %%7 of this Act, shall apply, as far as (ay be, to such appeals0 (%) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order or decision is recei'ed by the
appellant and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 (3) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 ($) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the parties to the appeal and to the concerned adDudicating officer0 (") .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: 11=5Offe 'e!. ")@. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws
0> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 0! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
(ade thereunder, for which no punish(ent is pro'ided elsewhere in this Act, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 1115Co.$o!itio of 'ert%i offe 'e!. ")N. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0: 11"54o/er to (r% t i..* it>. ")0O. ( ) .he Central &o'ern(ent (ay, on reco((endation by the Securities and 7xchange 8oard of India, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation,
4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that the reco((endation of the Securities and 7xchange 8oard of India under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under
% Inserted
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
this Act to which such person would ha'e been liable, had not such i((unity been granted0: Offe 'e! ,> 'o.$% ie!. "3. ( ) Khere an offence has been co((itted by a co(pany, e'ery person who, at the ti(e when the offence was co((itted, was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence, and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any gross negligence on the part of any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer of the co(pany, shall also be dee(ed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n0-6or the purpose of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals, and 34(b) 1director2, in relation to(i) a fir(, (eans a partner in the fir(3 (ii) any association of persons or a body of indi'iduals, (eans any (e(ber controlling the affairs thereof0: $4(3) .he pro'isions of this section shall be in addition to, and not in derogation of, the pro'isions of section %%A0: Cert%i offe 'e! to ,e 'o( iL%,le. "5. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, >!> (" of >!>) ", any offence punishable under #4GGG: section %3 shall be dee(ed to be a
cogniFable offence within the (eaning of that Code0
3 Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec /, w0e0f0 %%+%+%0000 <rior to its substitution, sub+clause (b) read as under, N(b) 1director2, in relation to a fir(, (eans a partner in the fir(0J $ Inserted by .he Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec 3, w0e0f0 /+0 + !>#0
iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central &o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or a recognised stoc) exchange or by any person0 >5(")********< 1195E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
ee now the Code of Cri(inal <rocedure, !/3 (% of !/$) 1sub+section ( ) of2 o(itted by the Securities =aws (A(end(ent) Act, %00$, w0e0f0 %+ 0+%00$0 / Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$ & <rior to its substitution section %# read as under ,1%#0 G!ri#dicti$n t$ trF $ffence# !nder thi# Act&-Eo court inferior to that of a presidency (agistrate or a (agistrate of the first class shall ta)e cogniFance of or try any offence punishable under this Act02 > O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JEo court inferior to that of a Court of Session shall try any offence punishable under this Act .K ! I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
" # Kords
/4Co(
A$$e%l % - Re+i!io . "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt. "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel% $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io !. "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< 6: /(99A4(<A Title to -i+i-e -!. "7. ( ) It shall be lawful for the holder of any security whose na(e appears on the boo)s of the co(pany issuing the said security to recei'e and retain any di'idend declared by the co(pany in respect thereof for any year, notwithstanding that the said security has already been transferred by hi( for consideration, unless the transferee who clai(s the di'idend fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the co(pany with the co(pany for being registered in his na(e within fifteen days of the date on which the di'idend beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the di'idend3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security and other docu(ents relating to
the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a co(pany to pay any di'idend which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the co(pany as the holder of the security in respect of which the di'idend has beco(e due3 or (b) the right of the transferee of any security to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security in the na(e of the transferee0 %04Ri(ht to re'ei+e i 'o.e fro. 'olle'ti+e i +e!t.e t !'he.e. "7A. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, whose na(e appears on the boo)s of the collecti'e in'est(ent sche(e issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e declared by the collecti'e in'est(ent sche(e in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e fro( the transfer or has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the collecti'e in'est(ent sche(e with the collecti'e in'est(ent sche(e for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec >, w0e0f0 %%+%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the collecti'e in'est(ent sche(e3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a collecti'e in'est(ent sche(e to pay any inco(e fro( units or other instru(ents issued by the collecti'e in'est(ent sche(e which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the collecti'e in'est(ent sche(e as the holder of the security being
units or other instru(ents issued by the collecti'e in'est(ent sche(e in respect of which the inco(e in respect of units or other instru(ents issued by the collecti'e sche(e has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security being units or other instru(ents issued by the collecti'e in'est(ent sche(e in the na(e of the transferee0: % 4Ri(ht to re'ei+e i 'o.e fro. .*t*%l f* -. "7;. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by any (utual fund, whose na(e appears on the boo)s of the (utual fund issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the (utual fund declared by the (utual fund in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the (utual fund, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the (utual fund fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the (utual fund with the (utual fund for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the (utual fund beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the (utual fund3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the (utual fund, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a (utual fund to pay any inco(e fro( units or other instru(ents issued by the (utual fund which has beco(e due to any person, whose na(e is for the ti(e being registered in the boo)s of the (utual fund as the holder of the security being units or other instru(ents issued by the (utual fund in respect of which the inco(e in respect of units or other instru(ents issued by the (utual fund has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the (utual fund, to enforce against the transferor or any other person, his rights, if any, in relation to the transfer in any case where the (utual fund has refused to register the transfer of the security being units or other instru(ents issued by the (utual fund in the na(e of the transferee0:
1""5A't
ot to %$$l> i 'ert%i '%!e!. ":. ( ) .he pro'isions of this Act shall not apply to(a) the &o'ern(ent, the Reser'e 8an) of India, any local authority or any corporation set up by a special law or any person who has effected any transaction with or through the agency of any such authority as is referred to in this clause3 (b) any con'ertible bond or share warrant or any option or right in relation thereto, in so far as it entitles the person in whose fa'our any of the foregoing has been issued to obtain at his option fro( the co(pany or other body corporate, issuing the sa(e or fro( any of its shareholders or duly appointed agentsJ shares of the co(pany or other body corporate, whether by con'ersion of the bond or warrant or otherwise, on the basis of the price agreed upon when the sa(e was issued0 (%) Kithout preDudice to the pro'isions contained in sub+section ( ), if the Central &o'ern(ent %3 is satisfied that in the interests of trade and co((erce or the
%% Substituted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec 3, w0e0f0 0>+ %+ !"!0
econo(ic de'elop(ent of the country it is necessary or expedient so to do, it (ay, by notification in the Cfficial &aFette, specify any class of contracts as contracts to which this Act or any pro'ision contained therein shall not apply, and also the conditions, li(itations or restrictions, if any, subDect to which it shall not so apply0: 4rote'tio of %'tio t%6e i (oo- f%ith. "9. Eo suit, prosecution or other legal proceeding whatsoe'er shall lie in any court against the go'erning body or any (e(ber, office bearer or ser'ant of any recognised stoc) exchange or against any person or persons appointed under subsection ( ) of section for anything which is in good faith done or intended to be done in pursuance of this Act or of any rules or bye+laws (ade thereunder0 %$44o/er to -ele(%te. "9A. .he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers (except the power under section 30) exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India or the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)0: 4o/er to .%6e r*le!. )=. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for the purpose of carrying into effect the obDects of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for,(a) the (anner in which applications (ay be (ade, the particulars which they should contain and the le'y of a fee in respect of such applications 3 (b) the (anner in which any in*uiry for the purpose of recognising any stoc) exchange (ay be (ade, the conditions which (ay be i(posed for the grant of such recognition, including conditions as to the ad(ission of (e(bers if the
%3 <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %$ Inserted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% and Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec !, w0e0f0 %%+0%+%0000 <rior to its substitution, section %!A read as under , 1%!A0 8$.er t$ delegate&*.he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India02
stoc) exchange concerned is to be the only recognised stoc) exchange in the area3 and the for( in which such recognition shall be granted3 (c) the particulars which should be contained in the periodical returns and annual reports to be furnished to the Central &o'ern(ent3 (d) the docu(ents which should be (aintained and preser'ed under section # and the periods for which they should be preser'ed3 (e) the (anner in which any in*uiry by the go'erning body of a stoc) exchange shall be (ade under section #3 (f) the (anner in which the bye+laws to be (ade or a(ended under this Act shall before being so (ade or a(ended be published for criticis(3 (g) the (anner in which applications (ay be (ade by dealers in securities for licences under section /, the fee payable in respect thereof and the period of such licences, the conditions subDect to which licences (ay be granted, including conditions relating to the for(s which (ay be used in (a)ing contracts, the docu(ents to be (aintained by licensed dealers and the furnishing of periodical infor(ation to such authority as (ay be specified and the re'ocation of licences for breach of conditions3 %"4(h) the re*uire(ents which shall be co(plied with(A) by public co(panies for the purpose of getting their securities listed on any stoc) exchange3 (B) by collecti'e in'est(ent sche(e for the purpose of getting their units listed on any stoc) exchange3: %#4GGG: %/4(ha) the grounds on which the securities of a co(pany (ay be delisted fro( any recognised stoc) exchange under sub+section ( ) of section % A3 (hb) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under sub+section (%) of section % A and the fees payable in respect of such appeal3 (hc) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3
%" Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec 0, w0e0f0 %%+0%+%0000 <rior to its substitution, clause (h) read as under , 1(h) the re*uire(ents which shall be co(plied with by public co(panies for the purpose of getting their securities listed on any stoc) exchange32 %# .he word ;and; o(itted by .he Securities Contracts (Regulation) A(end(ent Act, !>", Sec $, w0e0f0 /+0 + !>#0 %/ Substituted for clause (ha) by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 7arlier clause (ha), as a(ended by the Securities =aws (A(end(ent) Act, !!!, read as
under ,1(ha) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3 and2
(hd) the (anner of in*uiry under sub+section ( ) of section %3+I3 (he) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3= and the fees payable in respect of such appeal3: (i) any other (atter which is to be or (ay be prescribed0 %>4(3) 7'ery rule (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule0: 1"954o/er of Se'*ritie! % - E#'h% (e ;o%r- of I -i% to .%6e re(*l%tio !. )1. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 305(%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,%> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 <rior to its substitution, sub+section (3), as a(ended by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!", read as under , 1(3) 7'ery rule (ade under this section shall, as soon as (ay be, after its publication in the Cfficial &aFette, be laid before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e session aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule02 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0 7arlier it was repealed by the Repealing and A(ending Act, !#0, Sec % and 6irst Sch0 w0e0f0 %>+ %+ !#00 30 Substituted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec ", w0e0f0 %>+ 0"+%00/0 <rior to substitution it read as under , 1(%) In particular and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for the (anner in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section02
(a) the (anner, in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of
publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section3 (b) the eligibility criteria and other re*uire(ents under section /A0 < (3) 7'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the regulation or both Iouses agree that the regulation should not be (ade, the regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that regulation0:
DE4OSITORIES ACT, 1998 SECTIONS /@A81(0 : 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS ). Certificate of co((ence(ent of business by depositories /@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS 3. Agree(ent between depository and participant 5. Ser'ices of depository 8. Surrender of certificate of security 7. Registration of transfer of securities with depositories :. Cptions to recei'e security certificate or hold securities with depository 9. Securities in depositories to be in fungible for( 1=. Rights of depositories and beneficial owner 11. Register of beneficial owner 1". <ledge or hypothecation of securities held in a depository 1). 6urnishing of infor(ation and records by depository and issuer 13. Cption to opt out in respect of any security 15. Act > of >! to apply to depositories 18. 9epositories to inde(nify loss in certain cases 17. Rights and obligations of depositories, etc0 /@A81(0 :: EN9UIRM AND INS4ECTION 1:. <ower of 8oard to call for infor(ation and en*uiry 19. <ower of 8oard to gi'e directions in certain cases 19A. <enalty for failure to furnish infor(ation, return, etc0 19;. <enalty for failure to enter into an agree(ent 19C. <enalty for failure to redress in'estorsJ grie'ances
19D. <enalty for delay in de(aterialisation or issue of certificate of securities 19E. <enalty for failure to reconcile records 192. <enalty for failure to co(ply with directions issued by 8oard under section ! of the Act 19G. <enalty for contra'ention where no separate penalty has been pro'ided 19D. <ower to adDudicate 190I. 6actors to be ta)en into account by adDudicating officer 190IA. Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (! 190I;. Re'o+er> of %.o* t! 190E. Crediting su(s realised by way of penalties to Consolidated 6und of India /@A81(0 D 4ENALTM "=. Cffences "1. Cffences by co(panies /@A81(0 D: @ISCELLANEOUS "". CogniFance of offences by courts ""A. Co(position of certain offences "";. <ower to grant i((unity ""C. E!t%,li!h.e t of S$e'i%l Co*rt! ""D. Offe 'e! tri%,le ,> S$e'i%l Co*rt! ""E. A$$e%l % - re+i!io ""2. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""G. Tr% !itio %l 4ro+i!io ! "). Appeals ")A. Appeal to Securities Appellate .ribunal ")A. Appeal to Securities Appellate .ribunal ");. <rocedure and powers of Securities Appellate .ribunal ")C. Right to =egal Representation ")D. =i(itation ")E. Ci'il court not to ha'e Durisdiction ")2. Appeal to Supre(e Court "3. <ower of Central &o'ern(ent to (a)e rules "5. <ower of 8oard to (a)e regulations "8. <ower of depositories to (a)e bye+laws "7. Rules and regulations to be laid before <arlia(ent ":. Application of other laws not barred "9. Re(o'al of difficulties )=. A(end(ents to certain enact(ents )1. Repeal and sa'ing /@(5A9( A?7E9?7E. .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0: DE4OSITORIES ACT, 1998 5"" O2 1998< 51=th A*(*!t, 1998< An Act to provide $or reg lation o$ depositories in sec rities and $or matters connected there%ith or incidental thereto& B( it enacted bF 8arlia"ent in the E$rtF7#eventh ;ear $f the 0e%!blic $f :ndia a# f$ll$.# ,*
/@A81(0 : 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the 9epositories Act, !!#0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the %0th day of Septe(ber, !!"0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 1beneficial owner2 (eans a person whose na(e is recorded as such with a depository3 (b) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 3 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (c) 1bye+laws2 (eans bye+laws (ade by a depository under section %#3 (d) 1Co(pany =aw 8oard2 (eans the 8oard of Co(pany =aw Ad(inistration constituted under section 07 of the Co(panies Act, !"# ( of !"#)3 (e) 1depository2 (eans a co(pany for(ed and registered under the Co(panies Act, !"# ( of !"#), and which has been granted a certificate of registration under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (f) 1issuer2 (eans any person (a)ing an issue of securities3 (g) 1participant2 (eans a person registered as such under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (h) 1prescribed2 (eans prescribed by rules (ade under this Act3 (i) 1record2 includes the records (aintained in the for( of boo)s or stored in a co(puter or in such other for( as (ay be deter(ined by regulations3 (j) 1registered owner2 (eans a depository whose na(e is entered as such in the register of the issuer3 (k) 1regulations2 (eans the regulations (ade by the 8oard3 4(ka) 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (l) 1security2 (eans such security as (ay be specified by the 8oard3 (") 1ser'ice2 (eans any ser'ice connected with recording of allot(ent of securities or transfer of ownership of securities in the record of a depository0 (%) Kords and expressions used herein and not defined but defined in the Co(panies Act, !"# ( of !"#), or the Securities Contracts (Regulation) Act, !"# ($% of !"#), or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), shall ha'e the (eanings respecti'ely assigned to the( in those Acts0 /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS Certifi'%te of 'o..e 'e.e t of ,*!i e!! ,> -e$o!itorie!. ). ( ) Eo depository shall act as a depository unless it obtains a certificate of co((ence(ent of business fro( the 8oard0 (%) A certificate granted under sub+section ( ) shall be in such for( as (ay be specified by the regulations0 (3) .he 8oard shall not grant a certificate under sub+section ( ) unless it is satisfied that the depository has ade*uate syste(s and safeguards to pre'ent (anipulation of records and transactions , 4ro+i-e- that no certificate shall be refused under this section unless the depository concerned has been gi'en a reasonable opportunity of being heard0
Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
/@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS A(ree.e t ,et/ee -e$o!itor> % - $%rti'i$% t. 3. ( ) A depository shall enter into an agree(ent with one or (ore participants as its agent0 (%) 7'ery agree(ent under sub+section ( ) shall be in such for( as (ay be specified by the bye+laws0 Ser+i'e! of -e$o!itor>. 5. Any person, through a participant, (ay enter into an agree(ent, in such for( as (ay be specified by the bye+laws, with any depository for a'ailing its ser'ices0 S*rre -er of 'ertifi'%te of !e'*rit>. 8. ( ) Any person who has entered into an agree(ent under section " shall surrender the certificate of security, for which he see)s to a'ail the ser'ices of a depository, to the issuer in such (anner as (ay be specified by the regulations0 (%) .he issuer, on receipt of certificate of security under sub+section ( ), shall cancel the certificate of security and substitute in its records the na(e of the depository as a registered owner in respect of that security and infor( the depository accordingly0 (3) A depository shall, on receipt of infor(ation under sub+section (%), enter the na(e of the person referred to in sub+section ( ) in its records, as the beneficial owner0 Re(i!tr%tio of tr% !fer of !e'*ritie! /ith -e$o!itor>. 7. ( ) 7'ery depository shall, on receipt of inti(ation fro( a participant, register the transfer of security in the na(e of the transferee0 (%) If a beneficial owner or a transferee of any security see)s to ha'e custody of such security the depository shall infor( the issuer accordingly0 O$tio ! to re'ei+e !e'*rit> 'ertifi'%te or hol- !e'*ritie! /ith -e$o!itor>. :. ( ) 7'ery person subscribing to securities offered by an issuer shall ha'e the option either to recei'e the security certificates or hold securities with a depository0 (%) Khere a person opts to hold a security with a depository, the issuer shall inti(ate such depository the details of allot(ent of the security, and on receipt of such infor(ation the depository shall enter in its records the na(e of the allottee as the beneficial owner of that security0 Se'*ritie! i -e$o!itorie! to ,e i f* (i,le for.. 9. ( ) All securities held by a depository shall be de(aterialised and shall be in a fungible for(0 %4(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#), shall apply to a depository in respect of securities held by it on behalf of the beneficial owners&: Ri(ht! of -e$o!itorie! % - ,e efi'i%l o/ er. 1=. ( ) Eotwithstanding anything contained in any other law for the ti(e being in force, a depository shall be dee(ed to be the registered owner for the purposes of effecting transfer of ownership of security on behalf of a beneficial owner0 (%) Sa'e as otherwise pro'ided in sub+section ( ), the depository as a registered owner shall not ha'e any 'oting rights or any other rights in respect of securities held by it0 (3) .he beneficial owner shall be entitled to all the rights and benefits and be subDected to all the liabilities in respect of his securities held by a depository0 Re(i!ter of ,e efi'i%l o/ er. 11. 7'ery depository shall (aintain a register and an index of beneficial owners in the
(anner pro'ided in sections "0, " and "% of the Co(panies Act, !"# ( of !"#)0 4le-(e or h>$othe'%tio of !e'*ritie! hel- i % -e$o!itor>. 1". ( ) SubDect to such regulations and bye+laws, as (ay be (ade in this behalf, a beneficial owner (ay with the pre'ious appro'al of the depository create a pledge or hypothecation in respect of a security owned by hi( through a depository0 (%) 7'ery beneficial owner shall gi'e inti(ation of such pledge or hypothecation to the depository and such depository shall thereupon (a)e entries in its records accordingly0 (3) Any entry in the records of a depository under sub+section (%) shall be e'idence of a pledge or hypothecation0 2*r i!hi ( of i for.%tio % - re'or-! ,> -e$o!itor> % - i!!*er. 1). ( ) 7'ery depository shall furnish to the issuer infor(ation about the transfer of securities in the na(e of beneficial owners at such inter'als and in such (anner as (ay be specified by the bye+laws0 (%) 7'ery issuer shall (a)e a'ailable to the depository copies of the rele'ant records in respect of securities held by such depository0 O$tio to o$t o*t i re!$e't of % > !e'*rit>.
% Substituted
by the 9epositories Related =aws (A(end(ent) Act, !!/, Sec %%, w0e0f0 "+0 + !!/0 <rior to its substitution sub+section (%) read as under , 1(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#) shall apply to the securities held by a depository on behalf of the beneficial owners02
13. ( ) If a beneficial owner see)s to opt out of a depository in respect of any security he shall infor( the depository accordingly0 (%) .he depository shall on receipt of inti(ation under sub+section ( ) (a)e appropriate entries in its records and shall infor( the issuer0 (3) 7'ery issuer shall, within thirty days of the receipt of inti(ation fro( the depository and on fulfil(ent of such conditions and on pay(ent of such fees as (ay be specified by the regulations, issue the certificate of securities to the beneficial owner or the transferee, as the case (ay be0 A't 1: of 1:91 to %$$l> to -e$o!itorie!. 15. .he 8an)ersJ 8oo)s 7'idence Act, >! shall apply in relation to a depository as if it were a ban) as defined in section % of that Act0 De$o!itorie! to i -e. if> lo!! i 'ert%i '%!e!. 18. ( ) Kithout preDudice to the pro'isions of any other law for the ti(e being in force, any loss caused to the beneficial owner due to the negligence of the depository or the participant, the depository shall inde(nify such beneficial owner0 (%) Khere the loss due to the negligence of the participant under sub+section ( ) is inde(nified by the depository, the depository shall ha'e the right to reco'er the sa(e fro( such participant0 Ri(ht! % - o,li(%tio ! of -e$o!itorie!, et'. 17. ( ) SubDect to the pro'isions of this Act, the rights and obligations of the depositories, participants and the issuers whose securities are dealt with by a depository shall be specified by the regulations0 (%) .he eligibility criteria for ad(ission of securities into the depository shall be specified by the regulations0 /@A81(0 :D EN9UIRM AND INS4ECTION 4o/er of ;o%r- to '%ll for i for.%tio % - e 7*ir>. 1:. ( ) .he 8oard, on being satisfied that it is necessary in the public interest or in the interest of in'estors so to do, (ay, by order in writing,-
(a) call upon any issuer, depository, participant or beneficial owner to furnish in writing such infor(ation relating to the securities held in a depository as it (ay re*uire3 or (b) authorise any person to (a)e an en*uiry or inspection in relation to the affairs of the issuer, beneficial owner, depository or participant, who shall sub(it a report of such en*uiry or inspection to it within such period as (ay be specified in the order0 (%) 7'ery director, (anager, partner, secretary, officer or e(ployee of the depository or issuer or the participant or beneficial owner shall on de(and produce before the person (a)ing the en*uiry or inspection all infor(ation or such records and other docu(ents in his custody ha'ing a bearing on the subDect+(atter of such en*uiry or inspection0 4o/er of ;o%r- to (i+e -ire'tio ! i 'ert%i '%!e!. 19. Sa'e as pro'ided in this Act, if after (a)ing or causing to be (ade an en*uiry or inspection, the 8oard is satisfied that it is necessary(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any depository or participant being conducted in the (anner detri(ental to the interests of in'estors or securities (ar)et, it (ay issue such directions,(a) to any depository or participant or any person associated with the securities (ar)et3 or (b) to any issuer, as (ay be appropriate in the interest of in'estors or the securities (ar)et0 )5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< $44e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 19A. Any person, who is re*uired under this Act or any rules or regulations or bye+laws (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to the 8oard, fails to furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations or bye+laws, fails to file return or furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0
3I $ Inserted
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the Securities =aws (A(end(ent) Act, %00$, Sec0 /, w0r0e0f0 %+ 0+%00$0
4e %lt> for f%il*re to e ter i to % %(ree.e t. 19;. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and is re*uired under this Act or any rules or regulations (ade thereunder, to enter into an agree(ent, fails to enter into such agree(ent, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0
4e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 19C. If any depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such depository or participant or issuer or its agents or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for -el%> i -e.%teri%li!%tio or i!!*e of 'ertifi'%te of !e'*ritie!. 19D. If any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to de(aterialise or issue the certificate of securities on opting out of a depository by the in'estors, within the ti(e specified under this Act or regulations or bye+laws (ade thereunder or abets in delaying the process of de(aterialisation or issue the certificate of securities on opting out of a depository of securities, such issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to re'o 'ile re'or-!. 19E. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to reconcile the records of de(aterialised securities with all the securities issued by the issuer as specified in the regulations, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to 'o.$l> /ith -ire'tio ! i!!*e- ,> ;o%r- * -er !e'tio 19 of the A't. 192. If any person fails to co(ply with the directions issued by the 8oard under section !, within the ti(e specified by it, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 19G. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations or bye+laws (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0 4o/er to %-G*-i'%te. 19D. ( ) 6or the purpose of adDudging under sections !A, !8, !C, !9, !7, !6 and !&, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the
sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. 190I. Khile adDudging the *uantu( of penalty under section !I, the adDudicating officer shall ha'e due regard to the following factors, na(ely,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 55 Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (!. 190IA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 19, !e'tio 19D, %! the '%!e .%> ,e, .%> file % %$$li'%tio i /riti ( to the ;o%r$ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e-ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h
"I
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re !$e'ifie- ,> the ;o%r* -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")A %(%i !t % > or-er $%!!e- ,> the ;o%r- or the %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 85 Re'o+er> of %.o* t!. 190I;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 19 or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6
%''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hilor !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C!
#I
!erte- ,> The Se'*ritie! L%/! (A.e- .e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
.o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")A of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 19, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 19E. All su(s realiFed by way of penalties under this Act shall be credited to the Consolidated 6und of India0: /@A81(0 D 4ENALTM /4Offe 'e!. "=. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws (ade thereunder, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0
/ Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 >, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %0 read as under,1%00 <ffence#0- Khoe'er contran'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or any regulations or bye+laws (ade thereunder shall be punishable with i(prison(ent for a ter( which (ay extend to fi'e years, or with fine or with both02
(%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with
fine, which (ay extend to twenty+fi'e crore rupees, or with both0: Offe 'e! ,> 'o.$% ie!. "1. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n&-6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and (b) 1director2, in relation to a fir(, (eans a partner in the fir(0 /@A81(0 D: @ISCELLANEOUS >4Co( iL% 'e of offe 'e! ,> 'o*rt!. "". ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central
> Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 !, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %% read as under,1%%0 /$gniCance $f $ffence# bF c$!rt#&*( ) Eo Court shall ta)e cogniFance of any offence punishable under this Act or any regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the 8oard0 (%) Eo court inferior to that of a ?etropolitan ?agistrate or a Dudicial ?agistrate of the first class shall try any offence punishable under this Act02
&o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or by any person0 !5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < Co.$o!itio of 'ert%i offe 'e!. ""A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "";. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any
penalty under this Act with respect to the alleged 'iolation , 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity , 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0: 1=5 E!t%,li!h.e t of S$e'i%l Co*rt!. ""C. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>.
! <rior
to o(ission, Sub+section(%) read 1Eo court inferior to that of a Court of Session shall try any offence punishable under this Act02 0 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. ""D. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-. A$$e%l % - Re+i!io ""E. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""2. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197).
(") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erioof ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! ""G. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< A$$e%l!. "). ( ) Any person aggrie'ed by an order of the 8oard (ade 4before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!: under this Act, or the regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor , 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0 (3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed , 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 %4A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")A. ( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!, under this Act, or the regulations (ade thereunder, 34or by an order (ade by an adDudicating officer under this Act: (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 $5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 8oard is recei'ed by the person referred to in sub+section ( ) and it shall be in such for( and be acco(panied by such fee as (ay be prescribed ,
Substituted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 $, w0e0f0 #+ %+ !!! for ;an order of the 8oard (ade;0 % Sections %3A to %36 inserted by the Securities =aws (Second A(end(ent) Act, !!! , Sec0 ", w0e0f0 #+ %+ !!!& 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %0, w0r0e0f0 %+ 0+%00$0 $ 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JNo %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-e ,> the ;o%r- /ith the 'o !e t of the $%rtie!.K
4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0
($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 (") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. ");. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3 (e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte; (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 Ri(ht to le(%l re$re!e t%tio . ")C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or an attorney of any Iigh Court, and
includes a pleader in practice0 Li.it%tio . ")D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 Ci+il 'o*rt ot to h%+e G*ri!-i'tio . ")E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "4A$$e%l to S*$re.e Co*rt. ")2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order ,
" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 % , w0r0e0f0 %+ 0+%00$0 <rior to its substitution, Section %36, as inserted by Securities =aws (Second A(end(ent) Act, !!!, w0e0f0 #+ %+ !!!, read as under,1%360 A%%eal t$ @igh /$!rt&-Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0:: 4o/er of Ce tr%l Go+er .e t to .%6e r*le!. "3. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for carrying out the pro'isions of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,164(a) the (anner of in*uiry under sub+section ( ) of section !I3 (aa) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %33: (b) the for( in which an appeal (ay be preferred under sub+section (3) of section %3 and the fees payable in respect of such appeal 3 (c) the procedure for disposing of an appeal under sub+section ($) of section %33 /4(d) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3A and the fees payable in respect of such appeal0: 4o/er of ;o%r- to .%6e re(*l%tio !. "5. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the 8oard (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for(a) the for( in which record is to be (aintained under clause ( i) of sub+section ( ) of section %3 (b) the for( in which the certificate of co((ence(ent of business shall be issued under
sub+section (%) of section 33 (c) the (anner in which the certificate of security shall be surrendered under sub+section ( ) of section #3 (d) the (anner of creating a pledge or hypothecation in respect of security owned by a beneficial owner under sub+section ( ) of section %3 (e) the conditions and the fees payable with respect to the issue of certificate of securities under sub+section (3) of section $3
# Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %%, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (a) read as under,1(a) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %332 / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 #, w0e0f0 #+ %+ !!!0
(f) the rights and obligations of the depositories, participants and the issuers under subsection ( ) of section /3 (g) the eligibility criteria for ad(ission of securities into the depository under sub+section (%) of section /0 4o/er of -e$o!itorie! to .%6e ,>e0l%/!. "8. ( ) A depository shall, with the pre'ious appro'al of the 8oard, (a)e bye+laws consistent with the pro'isions of this Act and the regulations0 (%) In particular, and without preDudice to the generality of the foregoing power, such byelaws shall pro'ide for(a) the eligibility criteria for ad(ission and re(o'al of securities in the depository3 (b) the conditions subDect to which the securities shall be dealt with3 (c) the eligibility criteria for ad(ission of any person as a participant3 (d) the (anner and procedure for de(aterialisation of securities3 (e) the procedure for transactions within the depository3 (f) the (anner in which securities shall be dealt with or withdrawn fro( a depository3 (g) the procedure for ensuring safeguards to protect the interests of participants and beneficial owners3 (h) the conditions of ad(ission into and withdrawal fro( a participant by a beneficial owner3 (i) the procedure for con'eying infor(ation to the participants and beneficial owners on di'idend declaration, shareholder (eetings and other (atters of interest to the beneficial owners3 (j) the (anner of distribution of di'idends, interest and (onetary benefits recei'ed fro( the co(pany a(ong beneficial owners3 (k) the (anner of creating pledge or hypothecation in respect of securities held with a depository3 (l) inter #e rights and obligations a(ong the depository, issuer, participants, and beneficial owners3 (") the (anner and the periodicity of furnishing infor(ation to the 8oard, issuer and other persons3 (n) the procedure for resol'ing disputes in'ol'ing depository, issuer, co(pany or a beneficial owner3 ($) the procedure for proceeding against the participant co((itting breach of the regulations and pro'isions for suspension and expulsion of participants fro( the depository and cancellation of agree(ents entered with the depository3 (%) the internal control standards including procedure for auditing, re'iewing and (onitoring0
(3) Khere the 8oard considers it expedient so to do, it (ay, by order in writing, direct a depository to (a)e any bye+laws or to a(end or re'o)e any bye+laws already (ade within such period as it (ay specify in this behalf0 ($) If the depository fails or neglects to co(ply with such order within the specified period, the 8oard (ay (a)e the bye+laws or a(end or re'o)e the bye+laws (ade either in the for( specified in the order or with such (odifications thereof as the 8oard thin)s fit0 R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t. "7. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. ":. .he pro'isions of this Act shall be in addition to, and not in derogation of, any other law for the ti(e being in force relating to the holding and transfer of securities0 Re.o+%l of -iffi'*ltie!. "9. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as appear to it to be necessary or expedient for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of a period of two years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 A.e -.e t! to 'ert%i e %'t.e t!. )=. 40e%ealed bF 0e%ealing H A"ending Act' 20010: Re$e%l % - !%+i (. )1. ( ) .he 9epositories (.hird) Crdinance, !!# (Crd0 %> of !!#), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 /@(5A9( 4 ee section 30: A?7E9?7E.S .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0:
SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 SECTIONS !'APT"R I 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions !'APT"R II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA
). 7stablish(ent and incorporation of 8oard 3. ?anage(ent of the 8oard 5. .er( of office and conditions of ser'ice of Chair(an and (e(bers of the 8oard 8. Re(o'al of (e(ber fro( office 7. ?eetings 7A. ?e(ber not to participate in (eetings in certain cases :. Bacancies, etc0, not to in'alidate proceedings of 8oard 9. Cfficers and e(ployees of the 8oard !'APT"R III TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD 1=. .ransfer of assets, liabilities, etc0, of existing Securities and 7xchange 8oard to the 8oard !'APT"R IV 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 11. 6unctions of 8oard 11A. 8oard to regulate or prohibit issue of prospectus, offer docu(ent or ad'ertise(ent soliciting (oney for issue of securities 11AA. Collecti'e in'est(ent sche(e 11;. <ower to issue directions 11C. In'estigation 11D. Cease and desist proceedings !'APT"R V REGISTRATION CERTI2ICATE 1". Registration of stoc) bro)ers, sub+bro)ers, share transfer agents, etc0
%
!'APT"R VA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 1"A. <rohibition of (anipulati'e and decepti'e de'ices, insider trading and substantial ac*uisition of securities or control !'APT"R VI 2INANCE, ACCOUNTS AND AUDIT 1). &rants by the Central &o'ern(ent 13. 6und 15. Accounts and audit !'APT"R VIA 4ENALTIES AND ADEUDICATION 15A. <enalty for failure to furnish infor(ation, return, etc & 15;. <enalty for failure by any person to enter into agree(ent with clients 15C. <enalty for failure to redress in'estorsJ grie'ances 15D. <enalty for certain defaults in case of (utual funds 15E. <enalty for failure to obser'e rules and regulations by an asset (anage(ent co(pany 152. <enalty for default in case of stoc) bro)ers 15G. <enalty for insider trading 15D. <enalty for non+disclosure of ac*uisition of shares and ta)eo'ers 15DA. <enalty for fraudulent and unfair trade practices 15D;. <enalty for contra'ention where no separate penalty has been pro'ided
150I. <ower to adDudicate 15E. 6actors to be ta)en into account by the AdDudicating Cfficer 15EA. Crediting su(s realised by way of penalties to Consolidated 6und of India 15E;. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! !'APT"R VIB ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL 15F. 7stablish(ent of Securities Appellate .ribunals 15L. Co(position of Securities Appellate .ribunal 15@. Qualification for appoint(ent as <residing Cfficer or ?e(ber of Securities Appellate .ribunal
3
15N. .enure of office of <residing Cfficer and other (e(bers of Securities Appellate .ribunal 150O. Salary and allowances and other ter(s and conditions of ser'ice of <residing Cfficers 154. 6illing up of 'acancies 159. Resignation and re(o'al 15R. Crders constituting Appellate .ribunal to be final and not to in'alidate its proceedings 15S. Staff of the Securities Appellate .ribunal 15T. Appeal to the Securities Appellate .ribunal 15U. <rocedure and powers of the Securities Appellate .ribunal 15I. Right to legal representation 15?. =i(itation 15A. <residing Cfficer, (e(bers and staff of Securities Appellate .ribunals to be public ser'ants 15M. Ci'il Court not to ha'e Durisdiction 15N. Appeal to Supre(e Court !'APT"R VII @ISCELLANEOUS 18. <ower of Central &o'ern(ent to issue directions 17. <ower of Central &o'ern(ent to supersede the 8oard 1:. Returns and reports 19. 9elegation "=. Appeals "=A. 8ar of Durisdiction "1. Sa'ings "". ?e(bers, officers and e(ployees of the 8oard to be public ser'ants "). <rotection of action ta)en in good faith "3. Cffences "3A. Co(position of certain offences "3;. <ower to grant i((unity "5. 7xe(ption fro( tax on wealth and inco(e "8. CogniFance of offences by Courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! "7. Cffences by co(panies
":. 4C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!":
$
":A. Re'o+er> of %.o* t! "9. <ower to (a)e rules )=. <ower to (a)e regulations )1. Rules and regulations to be laid before <arlia(ent )". Application of other laws not barred )). 4Repealed by Repealing R A(ending Act, %00 : )3. <ower to re(o'e difficulties )5. Repeal and sa'ing .I7 SCI79H=7 4Repealed by Repealing R A(ending Act, %00 : SECURITIES AND EACDANGE ;OARD O2 INDIA ACT, 199" 515 O2 199"< 53th A$ril, 199"< A A't to $ro+i-e for the e!t%,li!h.e t of % ;o%r- to $rote't the i tere!t! of i +e!tor! i !e'*ritie! % - to $ro.ote the -e+elo$.e t of, % - to re(*l%te, the !e'*ritie! .%r6et % - for .%tter! 'o e'te- there/ith or i 'i-e t%l thereto B( it enacted bF 8arlia"ent in the E$rtF7third ;ear $f the 0e%!blic $f :ndia a# f$ll$.# , CDA4TER I 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities and 7xchange 8oard of India Act, !!%0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the 30th day of Manuary, !!%0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 33 (b) 1Chair(an2 (eans the Chair(an of the 8oard3 4(ba) 1collecti'e in'est(ent sche(e2 (eans any sche(e or arrange(ent which satisfies the conditions specified in section AA3: (c) 1existing Securities and 7xchange 8oard2 (eans the Securities and 7xchange 8oard of India constituted under the Resolution of the &o'ern(ent of India in the 9epart(ent of 7cono(ic Affairs Eo0 ($$) S7L>#, dated the %th day of April, !>>3 (d) 16und2 (eans the 6und constituted under section $3 (e) 1(e(ber2 (eans a (e(ber of the 8oard and includes the Chair(an3 (f) 1notification2 (eans a notification published in the Cfficial &aFette3 (g) 1prescribed2 (eans prescribed by rules (ade under this Act3
Inserted by the Securities =aws (A(end(ent) Act, !!!, w0e0f0 %%+%+%0000
"
(h) 1regulations2 (eans the regulations (ade by the 8oard under this Act3 4(ha) 1Reser'e 8an)2 (eans the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)3: (i) 1securities2 has the (eaning assigned to it in section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#)0 %4(%) Kords and expressions used and not defined in this Act but defined in the Securities Contracts (Regulation) Act, !"# ($% of !"#) 34or the 9epositories Act, !!#:, shall ha'e the (eanings respecti'ely assigned to the( in that Act:0 CDA4TER II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA E!t%,li!h.e t % - i 'or$or%tio of ;o%r-.
). ( ) Kith effect fro( such date as the Central &o'ern(ent (ay, by notification, appoint, there shall be established, for the purposes of this Act, a 8oard by the na(e of the Securities and 7xchange 8oard of India0 (%) .he 8oard shall be a body corporate by the na(e aforesaid, ha'ing perpetual succession and a co((on seal, with power subDect to the pro'isions of this Act, to ac*uire, hold and dispose of property, both (o'able and i((o'able, and to contract, and shall, by the said na(e, sue or be sued0 (3) .he head office of the 8oard shall be at 8o(bay0 ($) .he 8oard (ay establish offices at other places in India0 @% %(e.e t of the ;o%r-. 3. ( ) .he 8oard shall consist of the following (e(bers, na(ely,(a) a Chair(an3 (b) two (e(bers fro( a(ongst the officials of the $4?inistry: of the Central &o'ern(ent dealing with 6inance "4and ad(inistration of the Co(panies Act, !"# ( of !"#):3 (c) one (e(ber fro( a(ongst the officials of #4the Reser'e 8an):3 /4(d) fi'e other (e(bers of who( at least three shall be the whole+ti(e (e(bers,: to be appointed by the Central &o'ern(ent0
Inserted by the Securities =aws (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0 <rior to its substitution, sub+section (%) reads as under, 1(%) Kords and expressions used and not defined in this Act but defined in the Capital Issues (Control) Act, !$/ or the Securities Contracts Regulation Act, !"# shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts02 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 $ Substituted for 1?inistries2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1and law2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act !3$ (% of !3$)2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 / Substituted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, clause (d) read as, 1(d) two other (e(bers20
% Substituted
#
(%) .he general superintendence, direction and (anage(ent of the affairs of the 8oard shall 'est in a 8oard of (e(bers, which (ay exercise all powers and do all acts and things which (ay be exercised or done by the 8oard0 (3) Sa'e as otherwise deter(ined by regulations, the Chair(an shall also ha'e powers of general superintendence and direction of the affairs of the 8oard and (ay also exercise all powers and do all acts and things which (ay be exercised or done by that 8oard0 ($) .he Chair(an and (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be appointed by the Central &o'ern(ent and the (e(bers referred to in clauses ( b) and (c) of that sub+section shall be no(inated by the Central &o'ern(ent and the 4Reser'e 8an): respecti'ely0 (") .he Chair(an and the other (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be persons of ability, integrity and standing who ha'e shown capacity in dealing with proble(s relating to securities (ar)et or ha'e special )nowledge or experience of law, finance, econo(ics, accountancy, ad(inistration or in any other discipline which, in the opinion of the Central &o'ern(ent, shall be useful to the 8oard0 Ter. of offi'e % - 'o -itio ! of !er+i'e of Ch%ir.% % - .e.,er! of the ;o%r-. 5. ( ) .he ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers referred to in clause (d) of sub+section ( ) of section $ shall be such as (ay be prescribed0 (%) Eotwithstanding anything contained in sub+section ( ), the Central &o'ern(ent shall ha'e the right to ter(inate the ser'ices of the Chair(an or a (e(ber appointed under clause ( d) of
sub+section ( ) of section $, at any ti(e before the expiry of the period prescribed under subsection ( ), by gi'ing hi( notice of not less than three (onths in writing or three (onthsJ salary and allowances in lieu thereof, and the Chair(an or a (e(ber, as the case (ay be, shall also ha'e the right to relin*uish his office, at any ti(e before the expiry of the period prescribed under sub+section ( ), by gi'ing to the Central &o'ern(ent notice of not less than three (onths in writing0 Re.o+%l of .e.,er fro. offi'e. 8. %4G G G: .he Central &o'ern(ent shall re(o'e a (e(ber fro( office if he(a) is, or at any ti(e has been, adDudicated as insol'ent3 (b) is of unsound (ind and stands so declared by a co(petent court3 (c) has been con'icted of an offence which, in the opinion of the Central &o'ern(ent, in'ol'es a (oral turpitude3 (d) 34G G G: (e) has, in the opinion of the Central &o'ern(ent, so abused his position as to render his continuation in office detri(ental to the public interest , 4ro+i-e- that no (e(ber shall be re(o'ed under this clause unless he has been gi'en a reasonable opportunity of being heard in the (atter0
Substituted for 1Reser'e 8an) of India2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 )2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 C(itted, by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to o(ission clause (d) read read as, 1(d) is appointed as a director of a co(pany20
% 1(
/
@eeti (!. 7. ( ) .he 8oard shall (eet at such ti(es and places, and shall obser'e such rules of procedure in regard to the transaction of business at its (eetings (including *uoru( at such (eetings) as (ay be pro'ided by regulations0 (%) .he Chair(an or, if for any reason, he is unable to attend a (eeting of the 8oard, any other (e(ber chosen by the (e(bers present fro( a(ongst the(sel'es at the (eeting shall preside at the (eeting0 (3) All *uestions which co(e up before any (eeting of the 8oard shall be decided by a (aDority 'otes of the (e(bers present and 'oting, and, in the e'ent of an e*uality of 'otes, the Chair(an, or in his absence, the person presiding, shall ha'e a second or casting 'ote0 4@e.,er ot to $%rti'i$%te i .eeti (! i 'ert%i '%!e!. 7A. Any (e(ber, who is a director of a co(pany and who as such director has any direct or indirect pecuniary interest in any (atter co(ing up for consideration at a (eeting of the 8oard, shall, as soon as possible after rele'ant circu(stances ha'e co(e to his )nowledge, disclose the nature of his interest at such (eeting and such disclosure shall be recorded in the proceedings of the 8oard, and the (e(ber shall not ta)e any part in any deliberation or decision of the 8oard with respect to that (atter0: I%'% 'ie!, et'., ot to i +%li-%te $ro'ee-i (! of ;o%r-. :. Eo act or proceeding of the 8oard shall be in'alid (erely by reason of(a) any 'acancy in, or any defect in the constitution of, the 8oard3 or (b) any defect in the appoint(ent of a person acting as a (e(ber of the 8oard3 or (c) any irregularity in the procedure of the 8oard not affecting the (erits of the case0 Offi'er! % - e.$lo>ee! of the ;o%r-. 9. ( ) .he 8oard (ay appoint such other officers and e(ployees as it considers necessary for the efficient discharge of its functions under this Act0 (%) .he ter( and other conditions of ser'ice of officers and e(ployees of the 8oard appointed under sub+section ( ) shall be such as (ay be deter(ined by regulations0 CDA4TER III
TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD Tr% !fer of %!!et!, li%,ilitie!, et'., of e#i!ti ( Se'*ritie! % - E#'h% (e ;o%r- to the ;o%r-. 1=. ( ) Cn and fro( the date of establish(ent of the 8oard,(a) any reference to the existing Securities and 7xchange 8oard in any law other than this Act or in any contract or other instru(ent shall be dee(ed as a reference to the 8oard3 (b) all properties and assets, (o'able and i((o'able, of, or belonging to, the existing Securities and 7xchange 8oard, shall 'est in the 8oard3
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
>
(c) all rights and liabilities of the existing Securities and 7xchange 8oard shall be transferred to, and be the rights and liabilities of, the 8oard3 (d) without preDudice to the pro'isions of clause (c), all debts, obligations and liabilities incurred, all contracts entered into and all (atters and things engaged to be done by, with or for the existing Securities and 7xchange 8oard i((ediately before that date, for or in connection with the purpose of the said existing 8oard shall be dee(ed to ha'e been incurred, entered into, or engaged to be done by, with or for, the 8oard3 (e) all su(s of (oney due to the existing Securities and 7xchange 8oard i((ediately before that date shall be dee(ed to be due to the 8oard3 (f) all suits and other legal proceedings instituted or which could ha'e been instituted by or against the existing Securities and 7xchange 8oard i((ediately before that date (ay be continued or (ay be instituted by or against the 8oard3 and (g) e'ery e(ployee holding any office under the existing Securities and 7xchange 8oard i((ediately before that date shall hold his office in the 8oard by the sa(e tenure and upon the sa(e ter(s and conditions of ser'ice as respects re(uneration, lea'e, pro'ident fund, retire(ent and other ter(inal benefits as he would ha'e held such office if the 8oard had not been established and shall continue to do so as an e(ployee of the 8oard or until the expiry of the period of six (onths fro( that date if such e(ployee opts not to be the e(ployee of the 8oard within such period0 (%) Eotwithstanding anything contained in the Industrial 9isputes Act, !$/ ( $ of !$/), or in any other law for the ti(e being in force, absorption of any e(ployee by the 8oard in its regular ser'ice under this section shall not entitle such e(ployee to any co(pensation under that Act or other law and no such clai( shall be entertained by any court, tribunal or other authority0 CDA4TER II 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 2* 'tio ! of ;o%r-. 11. ( ) SubDect to the pro'isions of this Act, it shall be the duty of the 8oard to protect the interests of in'estors in securities and to pro(ote the de'elop(ent of, and to regulate the securities (ar)et, by such (easures as it thin)s fit0 (%) Kithout preDudice to the generality of the foregoing pro'isions, the (easures referred to therein (ay pro'ide for(a) regulating the business in stoc) exchanges and any other securities (ar)ets3 (b) registering and regulating the wor)ing of stoc) bro)ers, sub+bro)ers, share transfer agents, ban)ers to an issue, trustees of trust deeds, registrars to an issue, (erchant ban)ers, underwriters, portfolio (anagers, in'est(ent ad'isers and such other inter(ediaries who (ay be associated with securities (ar)ets in any (anner3 4(ba) registering and regulating the wor)ing of the depositories, %4participants:, custodians of securities, foreign institutional in'estors, credit rating agencies and such other inter(ediaries as the 8oard (ay, by notification, specify in this behalf3: (c) registering and regulating the wor)ing of 4'enture capital funds and collecti'e
in'est(ent sche(es:, including (utual funds3
% Inserted
Inserted by Securities =aws (A(end(ent) Act !!", w0r0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+!+ !!"0
!
(d) pro(oting and regulating self+regulatory organisations3 (e) prohibiting fraudulent and unfair trade practices relating to securities (ar)ets3 (f) pro(oting in'estorsJ education and training of inter(ediaries of securities (ar)ets3 (g) prohibiting insider trading in securities3 (h) regulating substantial ac*uisition of shares and ta)e o'er of co(panies3 (i) calling for infor(ation fro(, underta)ing inspection, conducting in*uiries and audits of the %4stoc) exchanges, (utual funds, other persons associated with the securities (ar)et:, inter(ediaries and self+regulatory organisations in the securities (ar)et3 34(ia) '%lli ( for i for.%tio % - re'or-! fro. % > $er!o i 'l*-i ( % > ,% 6 or % > other %*thorit> or ,o%r- or 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l or St%te A't /hi'h, i the o$i io of the ;o%r-, !h%ll ,e rele+% t to % > i +e!ti(%tio or i 7*ir> ,> the ;o%r- i re!$e't of % > tr% !%'tio i !e'*ritie! 3: $5(i,) '%lli ( for i for.%tio fro., or f*r i!hi ( i for.%tio to, other %*thoritie!, /hether i I -i% or o*t!i-e I -i%, h%+i ( f* 'tio ! !i.il%r to tho!e of the ;o%r-, i the .%tter! rel%ti ( to the $re+e tio or -ete'tio of +iol%tio ! i re!$e't of !e'*ritie! l%/!, !*,Ge't to the $ro+i!io ! of other l%/! for the ti.e ,ei ( i for'e i thi! re(%r-& 4ro+i-e- th%t the ;o%r-, for the $*r$o!e of f*r i!hi ( % > i for.%tio to % > %*thorit> o*t!i-e I -i%, .%> e ter i to % %rr% (e.e t or %(ree.e t or * -er!t% -i ( /ith !*'h %*thorit> /ith the $rior %$$ro+%l of the Ce tr%l Go+er .e tH< (j) perfor(ing such functions and exercising such powers under the pro'isions of "4G G G: the Securities Contracts (Regulation) Act, !"# ($% of !"#), as (ay be delegated to it by the Central &o'ern(ent3 (k) le'ying fees or other charges for carrying out the purposes of this section3 (l) conducting research for the abo'e purposes3 #4(la) calling fro( or furnishing to any such agencies, as (ay be specified by the 8oard, such infor(ation as (ay be considered necessary by it for the efficient discharge of its functions3: (") perfor(ing such other functions as (ay be prescribed0 /4(%A) Kithout preDudice to the pro'isions contained in sub+section (%), the 8oard (ay ta)e (easures to underta)e inspection of any boo), or register, or other docu(ent or record of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard
Substituted for 1collecti'e in'est(ent sche(es2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % Substituted for 1stoc) exchanges and2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 S*,!tit*te- for J'%lli ( for i for.%tio % - re'or- fro. % > ,% 6 or % > other %*thorit> or ,o%ror 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l, St%te or 4ro+i 'i%l A't i re!$e't of % > tr% !%'tio i !e'*ritie! /hi'h i! * -er i +e!ti(%tio or i 7*ir> ,> the ;o%r-K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). E%rlier Se'tio 11(")(i%) /%! i !erte- ,> the SE;I (A.e -.e t) A't, "==" /.e.f. "901=0"=="0 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. =80=)0 199:) " .he words 1the Capital Issues (Control) Act, !$/ (%! of !$/) and2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
0
has reasonable grounds to belie'e that such co(pany has been indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et0: 4(3) Eotwithstanding anything contained in any other law for the ti(e being in force while exercising the powers under %4clause (i) or clause (ia) of sub+section (%) or sub+ section (2A):, the 8oard shall ha'e the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(i) the disco'ery and production of boo)s of account and other docu(ents, at such place and such ti(e as (ay be specified by the 8oard3 (ii) su((oning and enforcing the attendance of persons and exa(ining the( on oath3 (iii) inspection of any boo)s, registers and other docu(ents of any person referred to in section %, at any place3: 34(iv) inspection of any boo), or register, or other docu(ent or record of the co(pany referred to in sub+section (%A)3 (v) issuing co((issions for the exa(ination of witnesses or docu(ents0: $4($) Kithout preDudice to the pro'isions contained in sub+sections ( ), (%), (%A) and (3) and section 8, the 8oard (ay, by an order, for reasons to be recorded in writing, in the interests of in'estors or securities (ar)et, ta)e any of the following (easures, either pending in'estigation or in*uiry or on co(pletion of such in'estigation or in*uiry, na(ely,(a) suspend the trading of any security in a recognised stoc) exchange3 (b) restrain persons fro( accessing the securities (ar)et and prohibit any person associated with securities (ar)et to buy, sell or deal in securities3 (c) suspend any office+bearer of any stoc) exchange or self+regulatory organisation fro( holding such position3 (d) i(pound and retain the proceeds or securities in respect of any transaction which is under in'estigation3 (e) attach, after passing of an order on an application (ade for appro'al by the Mudicial ?agistrate of the first class ha'ing Durisdiction, for a period not exceeding one (onth, one or (ore ban) account or accounts of any inter(ediary or any person associated with the securities (ar)et in any (anner in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder , 4ro+i-e- that only the ban) account or accounts or any transaction entered therein, so far as it relates to the proceeds actually in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder shall be allowed to be attached3 (f) direct any inter(ediary or any person associated with the securities (ar)et in any (anner not to dispose of or alienate an asset for(ing part of any transaction which is under in'estigation , 4ro+i-e- that the 8oard (ay, without preDudice to the pro'isions contained in sub+section (%) or sub+section (%A), ta)e any of the (easures specified in clause ( d) or clause (e) or clause (f), in respect of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard has reasonable grounds to belie'e that such co(pany has been
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1clause (i) of sub+section (%)2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 3 Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 $ Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
% Substituted
indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et , 4ro+i-e- f*rther that the 8oard shall, either before or after passing such orders, gi'e an
opportunity of hearing to such inter(ediaries or persons concerned0: 15(5) The %.o* t -i!(or(e-, $*r!*% t to % -ire'tio i!!*e- * -er !e'tio 11; or !e'tio 1"A of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 or !e'tio 19 of the De$o!itorie! A't, 1998, %! the '%!e .%> ,e, !h%ll ,e 're-ite- to the I +e!tor 4rote'tio % - E-*'%tio 2* e!t%,li!he- ,> the ;o%r- % - !*'h %.o* t !h%ll ,e *tiliLe- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< %4;o%r- to re(*l%te or $rohi,it i!!*e of $ro!$e't*!, offer -o'*.e t or %-+erti!e.e t !oli'iti ( .o e> for i!!*e of !e'*ritie!. 11A. ( ) Kithout preDudice to the pro'isions of the Co(panies Act, !"# ( of !"#), the 8oard (ay, for the protection of in'estors,(a) specify, by regulations(i) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (ii) the (anner in which such (atters shall be disclosed by the co(panies3 (b) by general or special orders(i) prohibit any co(pany fro( issuing prospectus, any offer docu(ent, or ad'ertise(ent soliciting (oney fro( the public for the issue of securities3 (ii) specify the conditions subDect to which the prospectus, such offer docu(ent or ad'ertise(ent, if not prohibited, (ay be issued0 (%) Kithout preDudice to the pro'isions of section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the 8oard (ay specify the re*uire(ents for listing and transfer of securities and other (atters incidental thereto0: 34Colle'ti+e i +e!t.e t !'he.e. 11AA. ( ) Any sche(e or arrange(ent which satisfies the conditions referred to in subsection (%) $5or !*,0!e'tio ("A)< shall be a collecti'e in'est(ent sche(e0 "44ro+i-e- th%t % > $ooli ( of f* -! * -er % > !'he.e or %rr% (e.e t, /hi'h i! ot re(i!tere- /ith the ;o%r- or i! ot 'o+ere- * -er !*,0!e'tio ()), i +ol+i ( %
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 7arlier S0 A was inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" for S0 A0 <rior to its substitution, S0 A read as under,+ 1 A0 ?atters to be disclosed by the co(panies0+ Kithout <reDudice to the <ro'isions of the Co(panies Act , !"# ( of !"#), the board (ay , for the protection of in'estors, specify, by regulations,+ (a) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (b) the (anner in which such (atters, shall be disclosed by the co(panies02 3 Inserted by S78I (A(end(ent) Act !!!, w0e0f0 %%+%+%0000 $I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% Substituted
%
'or$*! %.o* t of o e h* -re- 'rore r*$ee! or .ore !h%ll ,e -ee.e- to ,e % 'olle'ti+e i +e!t.e t !'he.e.< (%) Any sche(e or arrange(ent (ade or offered by any 5$er!o < under which,(i) the contributions, or pay(ents (ade by the in'estors, by whate'er na(e called, are pooled and utiliFed for the purposes of the sche(e or arrange(ent3 (ii) the contributions or pay(ents are (ade to such sche(e or arrange(ent by the in'estors with a 'iew to recei'e profits, inco(e, produce or property, whether (o'able or i((o'able, fro( such sche(e or arrange(ent3 (iii) the property, contribution or in'est(ent for(ing part of sche(e or arrange(ent, whether identifiable or not, is (anaged on behalf of the in'estors3
(iv) the in'estors do not ha'e day+to+day control o'er the (anage(ent and operation of the sche(e or arrange(ent0 "5("A)< A > !'he.e or %rr% (e.e t .%-e or offere- ,> % > $er!o !%ti!f>i ( the 'o -itio ! %! .%> ,e !$e'ifie- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< (3) Eotwithstanding anything contained in sub+section (%) 35or !*,0!e'tio ("A)<, any sche(e or arrange(ent(i) (ade or offered by a co+operati'e society registered under the Co+operati'e Societies Act, ! % (% of ! %) or a society being a society registered or dee(ed to be registered under any law relating to co+operati'e societies for the ti(e being in force in any State3 (ii) under which deposits are accepted by non+ban)ing financial co(panies as defined in clause (f) of section $"+I of the Reser'e 8an) of India Act, !3$ (% of !3$)3 (iii) being a contract of insurance to which the Insurance Act, !3> ($ of !3>), applies3 (iv) pro'iding for any Sche(e, <ension Sche(e or the Insurance Sche(e fra(ed under the 7(ployees <ro'ident 6und and ?iscellaneous <ro'isions Act, !"% ( ! of !"%)3 (v) under which deposits are accepted under section ">A of the Co(panies Act, !"# ( of !"#)3 (vi) under which deposits are accepted by a co(pany declared as a Eidhi or a (utual benefit society under section #%0A of the Co(panies Act, !"# ( of !"#)3 (vii) falling within the (eaning of Chit business as defined in clause ( d) of section % of the Chit 6und Act, !>% ($0 of !>%)3 (viii) under which contributions (ade are in the nature of subscription to a (utual fund3 35(i#) !*'h other !'he.e or %rr% (e.e t /hi'h the Ce tr%l Go+er .e t .%>, i 'o !*lt%tio /ith the ;o%r-, otif>H< shall not be a collecti'e in'est(ent sche(e0: "54o/er to i!!*e -ire'tio !. 11;. Sa'e as otherwise pro'ided in section , if after (a)ing or causing to be (ade an en*uiry, the 8oard is satisfied that it is necessary,S*,!tit*te- for J'o.$% >K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) 3I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
%I
3
(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any inter(ediary or other persons referred to in section % being conducted in a (anner detri(ental to the interest of in'estors or securities (ar)et3 or (iii) to secure the proper (anage(ent of any such inter(ediary or person, it (ay issue such directions,(a) to any person or class of persons referred to in section %, or associated with the securities (ar)et3 or (b) to any co(pany in respect of (atters specified in section A, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 15E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< %4I +e!ti(%tio . 11C. ( ) Khere the 8oard has reasonable ground to belie'e that-
(a) the transactions in securities are being dealt with in a (anner detri(ental to the in'estors or the securities (ar)et3 or (b) any inter(ediary or any person associated with the securities (ar)et has 'iolated any of the pro'isions of this Act or the rules or the regulations (ade or directions issued by the 8oard thereunder, it (ay, at any ti(e by order in writing, direct any person (hereafter in this section referred to as the In'estigating Authority) specified in the order to in'estigate the affairs of such inter(ediary or persons associated with the securities (ar)et and to report thereon to the 8oard0 (%) Kithout preDudice to the pro'isions of sections %3" to %$ of the Co(panies Act, !"# ( of !"#), it shall be the duty of e'ery (anager, (anaging director, officer and other e(ployee of the co(pany and e'ery inter(ediary referred to in section % or e'ery person associated with the securities (ar)et to preser'e and to produce to the In'estigating Authority or any person authorised by it in this behalf, all the boo)s, registers, other docu(ents and record of, or relating to, the co(pany or, as the case (ay be, of or relating to, the inter(ediary or such person, which are in their custody or power0 (3) .he In'estigating Authority (ay re*uire any inter(ediary or any person associated with securities (ar)et in any (anner to furnish such infor(ation to, or produce such boo)s, or registers, or other docu(ents, or record before hi( or any person authorised by it in this behalf as it (ay consider necessary if the furnishing of such infor(ation or the production of such boo)s, or registers, or other docu(ents, or record is rele'ant or necessary for the purposes of its in'estigation0 ($) .he In'estigating Authority (ay )eep in its custody any boo)s, registers, other docu(ents and record produced under sub+section (%) or sub+section (3) for six (onths and thereafter
% Inserted
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
$
shall return the sa(e to any inter(ediary or any person associated with securities (ar)et by who( or on whose behalf the boo)s, registers, other docu(ents and record are produced , 4ro+i-e- that the In'estigating Authority (ay call for any boo), register, other docu(ent and record if they are needed again , 4ro+i-e- f*rther that if the person on whose behalf the boo)s, registers, other docu(ents and record are produced re*uires certified copies of the boo)s, registers, other docu(ents and record produced before the In'estigating Authority, it shall gi'e certified copies of such boo)s, registers, other docu(ents and record to such person or on whose behalf the boo)s, registers, other docu(ents and record were produced0 (") Any person, directed to (a)e an in'estigation under sub+section ( ), (ay exa(ine on oath, any (anager, (anaging director, officer and other e(ployee of any inter(ediary or any person associated with securities (ar)et in any (anner, in relation to the affairs of his business and (ay ad(inister an oath accordingly and for that purpose (ay re*uire any of those persons to appear before it personally0 (#) If any person fails without reasonable cause or refuses(a) to produce to the In'estigating Authority or any person authorised by it in this behalf any boo), register, other docu(ent and record which is his duty under sub+section (%) or sub+section (3) to produce3 or (b) to furnish any infor(ation which is his duty under sub+section (3) to furnish3 or (c) to appear before the In'estigating Authority personally when re*uired to do so under sub+section (") or to answer any *uestion which is put to hi( by the In'estigating Authority in pursuance of that sub+section3 or (d) to sign the notes of any exa(ination referred to in sub+section (/), he shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with
fine, which (ay extend to one crore rupees, or with both, and also with a further fine which (ay extend to fi'e la)h rupees for e'ery day after the first during which the failure or refusal continues0 (/) Eotes of any exa(ination under sub+section (") shall be ta)en down in writing and shall be read o'er to, or by, and signed by, the person exa(ined, and (ay thereafter be used in e'idence against hi(0 4(:) ?here i the 'o*r!e of % i +e!ti(%tio , the I +e!ti(%ti ( A*thorit> h%! re%!o to ,elie+e th%t % > $er!o or e ter$ri!e, %! the '%!e .%> ,e, to /ho. % oti'e * -er !*,!e'tio ()) h%! ,ee i!!*e- or .i(ht ,e i!!*e-, 0 (%) h%! o.itte- or f%ile- to $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! %! re7*irei the oti'eH or (,) /o*l- ot $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! /hi'h !h%ll ,e *!ef*l for, or rele+% t to, the i +e!ti(%tio H or (') /o*l- -e!tro>, .*til%te, %lter, f%l!if> or !e'rete the i for.%tio or -o'*.e t! *!ef*l for, or rele+% t to, the i +e!ti(%tio ,
S*,!tit*te- for JKhere in the course of in'estigation, the In'estigating Authority has reasonable ground to belie'e that the boo)s, registers, other docu(ents and record of, or relating to, any inter(ediary or any person associated with securities (ar)et in any (anner, (ay be destroyed, (utilated, altered, falsified or secreted, the In'estigating Authority (ay (a)e an application to the Mudicial ?agistrate of the first class ha'ing Durisdiction for an order for the seiFure of such boo)s, registers, other docu(ents and record K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
"
the , the Ch%ir.% .%>, %fter ,ei ( !%ti!fie- th%t it i! e'e!!%r> to -o !o, %*thoriLe the I +e!ti(%ti ( A*thorit> or % > other offi'er of the ;o%r- (the offi'er !o %*thoriLe- i %ll '%!e! ,ei ( herei %fter referre- to %! the %*thori!e- offi'er), to0 (i) e ter % - !e%r'h, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft /here !*'h i for.%tio or -o'*.e t! %re e#$e'te- or ,elie+e- to ,e 6e$tH (ii) ,re%6 o$e the lo'6 of % > -oor, ,o#, lo'6er, !%fe, %l.ir%h or other re'e$t%'le for e#er'i!i ( the $o/er! 'o ferre- ,> !*,0'l%*!e (i), /here the 6e>! thereof %re ot %+%il%,leH (iii) !e%r'h % > $er!o /ho h%! (ot o*t of, or i! %,o*t to (et i to, or i! i , the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft, if the %*thoriLe- offi'er h%! re%!o to !*!$e't th%t !*'h $er!o h%! !e'rete- %,o*t hi! $er!o % > !*'h ,oo6! of %''o* t or other -o'*.e t!H (i+) re7*ire % > $er!o /ho i! fo* - to ,e i $o!!e!!io or 'o trol of % > ,oo6! of %''o* t or other -o'*.e t!, .%i t%i e- i the for. of ele'tro i' re'or-, to $ro+i-e the %*thori!e- offi'er the e'e!!%r> f%'ilit> to i !$e't !*'h ,oo6! of %''o* t or other -o'*.e t!. "#planation0 2or the $*r$o!e of thi! !*,0'l%*!e, the e#$re!!io Jele'tro i' re'or-K !h%ll h%+e the .e% i ( %!!i( e- to it i 'l%*!e (t) of !*,0!e'tio (1) of !e'tio " of the I for.%tio Te'h olo(> A't, "===. (+) !eiLe % > !*'h ,oo6! of %''o* t or other -o'*.e t! fo* - %! % re!*lt of !*'h !e%r'hH (+i) $l%'e .%r6! of i-e tifi'%tio o % > ,oo6! of %''o* t or other -o'*.e t! or .%6e or '%*!e to ,e .%-e e#tr%'t! or 'o$ie! therefro.H (+ii) re'or- o o%th the !t%te.e t of % > $er!o /ho i! fo* - to ,e i $o!!e!!io or i 'o trol of the i for.%tio or -o'*.e t! referre- to i !*,0'l%*!e! (i), (iii) % - (i+).< 4(9) The ;o%r- .%> .%6e re(*l%tio ! i rel%tio to % > !e%r'h or !eiL*re * -er thi! !e'tio H % - i $%rti'*l%r, /itho*t $reG*-i'e to the (e er%lit> of the fore(oi ( $o/er, !*'h re(*l%tio ! .%> $ro+i-e for the $ro'e-*re to ,e follo/e- ,> the %*thori!e- offi'er0
(%) for o,t%i i ( i (re!! i to % > ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft to ,e !e%r'he- /here free i (re!! thereto i! ot %+%il%,leH
1 S*,!tit*te-
,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) for the follo/i (& JAfter 'o !i-eri ( the %$$li'%tio % - he%ri ( the I +e!ti(%ti ( A*thorit>, if e'e!!%r>, the @%(i!tr%te .%>, ,> or-er, %*thori!e the I +e!ti(%ti ( A*thorit>O (a) to e ter, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the $l%'e or $l%'e! /here !*'h ,oo6!, re(i!ter!, other -o'*.e t! % - re'or- %re 6e$tH (b) to !e%r'h th%t $l%'e or tho!e $l%'e! i the .% er !$e'ifie- i the or-erH % (c) to !eiLe ,oo6!, re(i!ter!, other -o'*.e t! % - re'or-, it 'o !i-er! e'e!!%r> for the $*r$o!e! of the i +e!ti(%tio & 4ro+i-e- th%t the @%(i!tr%te !h%ll ot %*thori!e !eiL*re of ,oo6!, re(i!ter!, other -o'*.e t! % re'or-, of % > li!te- $*,li' 'o.$% > or % $*,li' 'o.$% > ( ot ,ei ( the i ter.e-i%rie! !$e'ifie* -er !e'tio 1") /hi'h i te -! to (et it! !e'*ritie! li!te- o % > re'o( i!e- !to'6 e#'h% (e * le!! !*'h 'o.$% > i -*l(e! i i !i-er tr%-i ( or .%r6et .% i$*l%tio .K
#
(,) for e !*ri ( !%fe '*!to-> of % > ,oo6! of %''o* t or other -o'*.e t! or %!!et! !eiLe-.< ( 0) .he In'estigating Authority shall )eep in its custody the boo)s, registers, other docu(ents and record seiFed under this section for such period not later than the conclusion of the in'estigation as it considers necessary and thereafter shall return the sa(e to the co(pany or the other body corporate, or, as the case (ay be, to the (anaging director or the (anager or any other person, fro( whose custody or power they were seiFed 5***<, 4ro+i-e- that the In'estigating Authority (ay, before returning such boo)s, registers, other docu(ents and record as aforesaid, place identification (ar)s on the( or any part thereof0 ( ) Sa'e as otherwise pro'ided in this section, e'ery search or seiFure (ade under this section shall be carried out in accordance with the pro'isions of the Code of Cri(inal <rocedure, !/3 (% of !/$) relating to searches or seiFures (ade under that Code0 Ce%!e % - -e!i!t $ro'ee-i (!. 11D. If the 8oard finds, after causing an in*uiry to be (ade, that any person has 'iolated, or is li)ely to 'iolate, any pro'isions of this Act, or any rules or regulations (ade thereunder, it (ay pass an order re*uiring such person to cease and desist fro( co((itting or causing such 'iolation, 4ro+i-e- that the 8oard shall not pass such order in respect of any listed public co(pany or a public co(pany (other than the inter(ediaries specified under section %) which intends to get its securities listed on any recognised stoc) exchange unless the 8oard has reasonable grounds to belie'e that such co(pany has indulged in insider trading or (ar)et (anipulation0: CDA4TER I REGISTRATION CERTI2ICATE Re(i!tr%tio of !to'6 ,ro6er!, !*,0,ro6er!, !h%re tr% !fer %(e t!, et'. 1". ( ) Eo stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et shall buy, sell or deal in securities except under, and in accordance with, the conditions of a certificate of registration obtained fro( the 8oard in accordance with the %4regulations: (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et i((ediately before the establish(ent of the 8oard for which no registration certificate was
necessary prior to such establish(ent, (ay continue to do so for a period of three (onths fro( such establish(ent or, if he has (ade an application for such registration within the said period of three (onths, till the disposal of such application,
The /or-! P% - i for. the @%(i!tr%te of !*'h ret*r P, o.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) % Substituted for 1rules2 by Securities =aw (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0
/
44ro+i-e- f*rther that any certificate of registration, obtained i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", shall be dee(ed to ha'e been obtained fro( the 8oard in accordance with the regulations pro'iding for such registration0 ( A) Eo depository, %4participant,: custodian of securities, foreign institutional in'estor, credit rating agency, or any other inter(ediary associated with the securities (ar)et as the 8oard (ay by notification in this behalf specify, shall buy or sell or deal in securities except under and in accordance with the conditions of a certificate of registration obtained fro( the 8oard in accordance with the regulations (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a depository, 34participant,: custodian of securities, foreign institutional in'estor or credit rating agency i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to buy or sell securities or otherwise deal with the securities (ar)et until such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300 ( 8) Eo person shall sponsor or cause to be sponsored or carry on or caused to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es including (utual funds, unless he obtains a certificate of registration fro( the 8oard in accordance with the regulations, 4ro+i-e- that any person sponsoring or causing to be sponsored, carrying or causing to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es operating in the securities (ar)et i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to operate till such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300:
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0
% Inserted
>
4()%lanati$n7 6or the re(o'al of doubts, it is hereby declared that, for purposes of this section, a collecti'e in'est(ent sche(e or (utual fund shall not be include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(ponent of in'est(ent besides the co(ponent of insurance issued by the insurer0: (%) 7'ery application for registration shall be in such (anner and on pay(ent of such fees as (ay be deter(ined by regulations0 (3) .he 8oard (ay, by order, suspend or cancel a certificate of registration in such (anner as (ay be deter(ined by regulations, 4ro+i-e- that no order under this sub+section shall be (ade unless the person concerned has been gi'en a reasonable opportunity of being heard0 %4CIA<.7R BA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 4rohi,itio of .% i$*l%ti+e % - -e'e$ti+e -e+i'e!, i !i-er tr%-i ( % - !*,!t% ti%l %'7*i!itio of !e'*ritie! or 'o trol.
1"A. Eo person shall directly or indirectly(a) use or e(ploy, in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recogniFed stoc) exchange, any (anipulati'e or decepti'e de'ice or contri'ance in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3
Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, w0r0e0f !+$+ %0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, reads as under, /@A81(0 D: ?ISC7==AE7CHS #0 Balidation+ Eotwithstanding anything contained in any Dudg(ent, decree or order of any court, tribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 Repeal and sa'ings + (1) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (2) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0 % Chapter BA inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
!
(b) e(ploy any de'ice, sche(e or artifice to defraud in connection with issue or dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange3 (c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange, in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (d) engage in insider trading3 (e) deal in securities while in possession of (aterial or non+public infor(ation or co((unicate such (aterial or non+public infor(ation to any other person, in a (anner which is in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (f) ac*uire control of any co(pany or securities (ore than the percentage of e*uity share capital of a co(pany whose securities are listed or proposed to be listed on a recognised stoc) exchange in contra'ention of the regulations (ade under this Act0: CDA4TER II 2INANCE, ACCOUNTS AND AUDIT Gr% t! ,> the Ce tr%l Go+er .e t. 1). .he Central &o'ern(ent (ay, after due appropriation (ade by <arlia(ent by law in this behalf, (a)e to the 8oard grants of such su(s of (oney as that &o'ern(ent (ay thin) fit for being utiliFed for the purposes of this Act0 2* -. 13. ( ) .here shall be constituted a 6und to be called the Securities and 7xchange 8oard of
India &eneral 6und and there shall be credited thereto(a) all grants, fees and charges recei'ed by the 8oard under this Act3 4G G G: (aa) %4G G G: (b) all su(s recei'ed by the 8oard fro( such other sources as (ay be decided upon by the Central &o'ern(ent0 (%) .he 6und shall be applied for (eeting(a) the salaries, allowances and other re(uneration of the (e(bers, officers and other e(ployees of the 8oard3 (b) the expenses of the 8oard in the discharge of its functions under section 3 (c) the expenses on obDects and for purposes authorised by this Act0
.he word 1and2 o(itted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 (aa) o(itted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 It was inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Clause (aa) reads as under,+ 1(aa) all su(s realiFed by way of <enalties under this Act3 and20
% Clause
%0
A''o* t! % - %*-it. 15. ( ) .he 8oard shall (aintain proper accounts and other rele'ant records and prepare an annual state(ent of accounts in such for( as (ay be prescribed by the Central &o'ern(ent in consultation with the Co(ptroller and Auditor+&eneral of India0 (%) .he accounts of the 8oard shall be audited by the Co(ptroller and Auditor+&eneral of India at such inter'als as (ay be specified by hi( and any expenditure incurred in connection with such audit shall be payable by the 8oard to the Co(ptroller and Auditor+&eneral of India0 (3) .he Co(ptroller and Auditor+&eneral of India and any other person appointed by hi( in connection with the audit of the accounts of the 8oard shall ha'e the sa(e rights and pri'ileges and authority in connection with such audit as the Co(ptroller and Auditor+ &eneral generally has in connection with the audit of the &o'ern(ent accounts and, in particular, shall ha'e the right to de(and the production of boo)s, accounts, connected 'ouchers and other docu(ents and papers and to inspect any of the offices of the 8oard0 ($) .he accounts of the 8oard as certified by the Co(ptroller and Auditor+&eneral of India or any other person appointed by hi( in this behalf together with the audit report thereon shall be forwarded annually to the Central &o'ern(ent and that &o'ern(ent shall cause the sa(e to be laid before each Iouse of <arlia(ent0 5CDA4TER IIA 4ENALTIES AND ADEUDICATION 4e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 15A. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder,(a) to furnish any docu(ent, return or report to the 8oard, fails to furnish the sa(e, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations, fails to file return or furnish the sa(e within the ti(e specified therefor in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0
Chapters BI A and BI 8 containing Ss0 "A to "M and "@ to "S respecti'ely, inserted by Securities =aws (A(end(ent) Act, !!" w0e0f0 %"+ + !!"0 % Substituted for 1a penalty not exceeding one la)h and fifty thousand rupees for each such failure2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding fi'e thousand rupees for e'ery day during which such failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for e'ery day during which the failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%
4e %lt> for f%il*re ,> % > $er!o to e ter i to %(ree.e t /ith 'lie t!. 15;. If any person, who is registered as an inter(ediary and is re*uired under this Act or any rules or regulations (ade thereunder to enter into an agree(ent with his client, fails to enter into such agree(ent, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 %54e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 15C. If any listed co(pany or any person who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such co(pany or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 4e %lt> for 'ert%i -ef%*lt! i '%!e of .*t*%l f* -!. 15D. If any person, who is(a) re*uired under this Act or any rules or regulations (ade thereunder to obtain a certificate of registration fro( the 8oard for sponsoring or carrying on any collecti'e in'est(ent sche(e, including (utual funds, sponsors or carries on any collecti'e in'est(ent sche(e, including (utual funds, without obtaining such certificate of registration, he shall be liable to 34a penalty of one la)h rupees for each day during which he sponsors or carries on any such collecti'e in'est(ent sche(e including (utual funds, or one crore rupees, whiche'er is less:3 (b) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, for sponsoring or carrying on any in'est(ent sche(e, fails to co(ply with the ter(s and conditions of certificate of registration, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, fails to (a)e an application for listing of its sche(es as pro'ided for in the regulations
Substituted for 1a penalty not exceeding fi'e la)h rupees for e'ery such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1If any person, who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing to redress the grie'ances of in'estors, fails to redress such grie'ances, he shall be liable to a penalty not exceeding ten thousand rupees for each such failure2, by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding ten thousand rupees for each day during which he carries on any such collecti'e in'est(ent sche(e including (utual funds, or ten la)h rupees whiche'er is higher02 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for each day during which such failure continues or ten la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0
%%
go'erning such listing, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (d) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to despatch
unit certificates of any sche(e in the (anner pro'ided in the regulation go'erning such despatch, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (e) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to refund the application (onies paid by the in'estors within the period specified in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (f) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to in'est (oney collected by such collecti'e in'est(ent sche(es in the (anner or within the period specified in the regulations, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for f%il*re to o,!er+e r*le! % - re(*l%tio ! ,> % %!!et .% %(e.e t 'o.$% >. 15E. Khere any asset (anage(ent co(pany of a (utual fund registered under this Act, fails to co(ply with any of the regulations pro'iding for restrictions on the acti'ities of the asset (anage(ent co(panies, such asset (anage(ent co(pany shall be liable to "4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for -ef%*lt i '%!e of !to'6 ,ro6er!. 152. If any person, who is registered as a stoc) bro)er under this Act,(a) fails to issue contract notes in the for( and (anner specified by the stoc) exchange of which such bro)er is a (e(ber, he shall be liable to a penalty not exceeding fi'e ti(es the a(ount for which the contract note was re*uired to be issued by that bro)er3 (b) fails to deli'er any security or fails to (a)e pay(ent of the a(ount due to the in'estor in the (anner within the period specified in the regulations, he shall be liable to #4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3
Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues or fi'e la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding one thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%3
(c) charges an a(ount of bro)erage which is in excess of the bro)erage specified in the regulations, he shall be liable to 4a penalty of one la)h rupees: or fi'e ti(es the a(ount of bro)erage charged in excess of the specified bro)erage, whiche'er is higher0 4e %lt> for i !i-er tr%-i (. 15G. If any insider who,(i) either on his own behalf or on behalf of any other person, deals in securities of a body corporate listed on any stoc) exchange on the basis of any unpublished price+sensiti'e infor(ation3 or (ii) co((unicates any unpublished price+sensiti'e infor(ation to any person, with or without his re*uest for such infor(ation except as re*uired in the ordinary course of business or under any law3 or
(iii) counsels, or procures for any other person to deal in any securities of any body corporate on the basis of unpublished price+sensiti'e infor(ation, shall be liable to a penalty %4of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of insider trading, whiche'er is higher:0 4e %lt> for o 0-i!'lo!*re of %'7*i!itio of !h%re! % - t%6eo+er!. 15D. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder, fails to,(i) disclose the aggregate of his shareholding in the body corporate before he ac*uires any shares of that body corporate3 or (ii) (a)e a public announce(ent to ac*uire shares at a (ini(u( price3 or 34(iii) (a)e a public offer by sending letter of offer to the shareholders of the concerned co(pany3 or (iv) (a)e pay(ent of consideration to the shareholders who sold their shares pursuant to letter of offer,: he shall be liable to a penalty $4of twenty+fi'e crore rupees or three ti(es the a(ount of profits profits (ade out of such failure, whiche'er is higher:0 554e %lt> for fr%*-*le t % - * f%ir tr%-e $r%'ti'e!. 15DA. If any person indulges in fraudulent and unfair trade practices relating to securities, he shall be liable to a penalty of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of such practices, whiche'er is higher0
Substituted for 1a penalty not exceeding fi'e thousand rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00% 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00% %00% " Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00%0
%$
4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 15D;. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 4o/er to %-G*-i'%te. 150I. ( ) 6or the purpose of adDudging under sections "A, "8, "C, "9, "7, "6, "& 4, "I, "IA and "I8:, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in subsection ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> the %-G*-i'%ti ( offi'er. 15E. Khile adDudging *uantu( of penalty under section "+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade
as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 "5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 15EA. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: )5Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!. 15E;. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 11, !e'tio 11;, !e'tio 11D, !*,0!e'tio ()) of !e'tio 1" or !e'tio 150I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e- -ef%*lt!.
Substituted for 1and "I2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the S78I (A(end(ent) Act, %00%, S0 ! w0e0f0 %!+ 0+%00%0 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
% Inserted
%"
(") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't. ()) The !ettle.e t $ro'ee-i (! * -er thi! !e'tio !h%ll ,e 'o -*'te- i %''or-% 'e /ith the $ro'e-*re !$e'ifie- i the re(*l%tio ! .%-e * -er thi! A't. (3) No %$$e%l !h%ll lie * -er !e'tio 15T %(%i !t % > or-er $%!!e- ,> the ;o%r- or %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio . < CDA4TER II; ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL E!t%,li!h.e t of Se'*ritie! A$$ell%te Tri,* %l!. 15F. ( ) .he Central &o'ern(ent shall by notification, establish one or (ore Appellate .ribunals to be )nown as the Securities Appellate .ribunal to exercise the Durisdiction, powers and authority conferred on such .ribunal by or under this Act 4or any other law for the ti(e being in force:0 (%) .he Central &o'ern(ent shall also specify in the notification referred to in sub+section ( ) the (atters and places in relation to which the Securities Appellate .ribunal (ay exercise Durisdiction0 "5Co.$o!itio of Se'*ritie! A$$ell%te Tri,* %l. 15L. A Securities Appellate .ribunal shall consist of a <residing Cfficer and two other (e(bers, to be appointed, by notification, by the Central &o'ern(ent, 4ro+i-e- that the Securities Appellate .ribunal, consisting of one person only, established before the co((ence(ent of the Securities and 7xchange 8oard of India (A(end(ent) Act, %00%, shall continue to exercise the Durisdiction, powers and authority conferred on it by or under this Act or any other law for the ti(e being in force till two other ?e(bers are appointed under this section0 9*%lifi'%tio for %$$oi t.e t %! 4re!i-i ( Offi'er or @e.,er of Se'*ritie! A$$ell%te Tri,* %l.
Inserted by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for Sections "= and "? by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "= and "? read as under,+ 1 "+=0 Co(position of securities Appellate .ribunal0 5 A Securities Appellate .ribunal shall consist of
% Substituted
one person only (hereinafter referred to as the <residing Cfficer of the Securities Appellate .ribunal) to be appointed, by notification, by the central &o'ern(ent0 "?0 Qualifications for appoint(ent as <residing Cfficer of the Securities Appellate .ribunal0 5 A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he + (a) is, or has been, or is *ualified to be, a Mudge of a Iigh Court3 or (b) has been a (e(ber of the Indian =egal Ser'ice and has held a post in &rade I of that ser'ice for at least three years3 or (c) has held office as the <residing Cfficer of a tribunal for at least three years02
%#
15@. 15( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of the Securities Appellate .ribunal unless he + (a) is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court3 or (b) is a sitting or retired Mudge of a Iigh Court who has co(pleted not less than se'en years of ser'ice as a Mudge in a Iigh Court0 ( A) .he <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0: (%) A person shall not be *ualified for appoint(ent as (e(ber of a Securities Appellate .ribunal unless he is a person of ability, integrity and standing who has shown capacity in dealing with proble(s relating to securities (ar)et and has *ualification and experience of corporate law, securities laws, finance, econo(ics or accountancy, 4ro+i-e- that a (e(ber of the 8oard or any person holding a post at senior (anage(ent le'el e*ui'alent to 7xecuti'e 9irector in the 8oard shall not be appointed as <residing Cfficer or ?e(ber of a Securities Appellate .ribunal during his ser'ice or tenure as such with the 8oard or within two years fro( the date on which he ceases to hold office as such in the 8oard0: %4Te *re of offi'e of 4re!i-i ( Offi'er % - other @e.,er! of Se'*ritie! A$$ell%te Tri,* %l. 15N. .he <residing Cfficer and e'ery other ?e(ber of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office and shall be eligible for re+appoint(ent, 4ro+i-e- that no person shall hold office as the <residing Cfficer of the Securities Appellate .ribunal after he has attained the age of sixty+eight years, 4ro+i-e- f*rther that no person shall hold office as a ?e(ber of the Securities Appellate .ribunal after he has attained the age of sixty+two years0: S%l%r> % - %llo/% 'e! % - other ter.! % - 'o -itio ! of !er+i'e of 4re!i-i ( Offi'er!. 150O. .he salary and allowances payable to and the other ter(s and conditions of ser'ice including pension, gratuity and other retire(ent benefits of the 4<residing Cfficer and other ?e(bers: of a Securities Appellate .ribunal shall be such as (ay be prescribed,
Substituted for sub+section ( ) of Section "? by the S78I (A(end(ent) Crdinance, %0 3 w0e0f0 % 00 0%0 30 <rior to substitution, it read as under,+ ;( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court , 4ro+i-e- that the <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0; % Substituted for Section "E, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "E read as under,+ 1 "E0 .er( of office0+ .he <residing officer of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office or until he attains the age of sixtyfi'e years, whiche'er is earlier02
%/
4ro+i-e- that neither the salary and allowances nor the other ter(s and conditions of ser'ice of the %4<residing Cfficer and other ?e(bers of a Securities Appellate .ribunal: shall be 'aried to their disad'antage after appoint(ent0 2illi ( *$ of +%'% 'ie!. 154. If, for reason other than te(porary absence, any 'acancy occurs in the 34office of the <residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal, then the Central &o'ern(ent shall appoint another person in accordance with the pro'isions of this Act to fill the 'acancy and the proceedings (ay be continued before the Securities Appellate .ribunal fro( the stage at which the 'acancy is filled0 Re!i( %tio % - re.o+%l. 159. ( ) .he $4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal (ay, by notice in writing under his hand addressed to the Central &o'ern(ent, resign his office, 4ro+i-e- that "4the <residing Cfficer or any other ?e(ber: shall, unless he is per(itted by the Central &o'ern(ent to relin*uish his office sooner, continue to hold office, until the expiry of three (onths fro( the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his ter( of office, whiche'er is the earliest0 (%) .he #4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal shall not be re(o'ed fro( his office except by an order by the Central &o'ern(ent on the ground of pro'ed (isbeha'iour or incapacity after an in*uiry (ade by a Mudge of the Supre(e Court, in which the /4<residing Cfficer or any other ?e(ber: concerned has been infor(ed of the charges against hi( and gi'en a reasonable opportunity of being heard in respect of these charges0 (3) .he Central &o'ern(ent (ay, by rules, regulate the procedure for the in'estigation of (isbeha'iour or incapacity of the >4<residing Cfficer or any other ?e(ber:0 Or-er! 'o !tit*ti ( A$$ell%te Tri,* %l to ,e fi %l % - ot to i +%li-%te it! $ro'ee-i (!. 15R. Eo order of the Central &o'ern(ent appointing any person as the !4<residing Cfficer or a ?e(ber: of a Securities Appellate .ribunal shall be called in *uestion in any (anner, and no act or proceeding before a Securities Appellate .ribunal shall be called in *uestion in any (anner on the ground (erely of any defect in the constitution of a Securities Appellate .ribunal0
Substituted for 1<residing Cfficer of a Securities Appellate .ribunal2 by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 / Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 > Substituted for 1aforesaid <residing Cfficer2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 ! Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0
%>
St%ff of the Se'*ritie! A$$ell%te Tri,* %l. 15S. ( ) .he Central &o'ern(ent shall pro'ide the Securities Appellate .ribunal with such officers and e(ployees as that &o'ern(ent (ay thin) fit0 (%) .he officers and e(ployees of the Securities Appellate .ribunal shall discharge their functions under general superintendence of the <residing Cfficer0 (3) .he salaries and allowances and other conditions of ser'ice of the officers and e(ployees of the Securities Appellate .ribunal shall be such as (ay be prescribed0 A$$e%l to the Se'*ritie! A$$ell%te Tri,* %l. 15T. 4( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed,(a) by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws
(Second A(end(ent) Act, !!!, under this Act, or the rules or regulations (ade thereunder3 or (b) by an order (ade by an adDudicating officer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 "5(") ********< (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 348oard or the AdDudicating Cfficer, as the case case (ay be,: is recei'ed by hi( and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 ($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0
Substituted for Sub+sec ( ) R (%) by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, Sub+sections ( ) R (%) were read as under, 1( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by any order (ade by any AdDudicating Cfficer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 (%) Eo appeal shall lie to the Securities Appellate .ribunal fro( an order (ade by an AdDudicating Cfficer with the consent of the parties02 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , o.i!!io , S*,0!e'tio (") re%- %! * -er& J(") No %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-eO (a) ,> the ;o%r- o % - %fter the 'o..e 'e.e t of the Se'*ritie! L%/! (Se'o - A.e -.e t) A't, 1999H (b) ,> % %-G*-i'%ti ( offi'er, /ith the 'o !e t of the $%rtie!.2 3 Substituted for 1a copy of the order (ade by the adDudicating officer2 by S78I (A(end(ent) Act !!!, !!!, w0e0f0 #+ %+ !!!0
%!
(") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 48oard, the: parties to the appeal and to the concerned AdDudicating Cfficer0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of the Se'*ritie! A$$ell%te Tri,* %l. 15U. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act, and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purposes of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3
(e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte 3 (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0), and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 %4Ri(ht to le(%l re$re!e t%tio . 15I. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,Substituted for 1parties2, S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for S0 "B by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, S0 "B read as under,+ 1 "B0 .he appellant (ay either appear in person or authorise one or (ore legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal02
% Substituted
30
(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of subsection ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or any attorney of any Iigh Court, and includes a pleader in practice0: Li.it%tio . 15?. .he pro'isions of the =i(itation Act, !#3 (3# of !#3), shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 54re!i-i ( Offi'er, @e.,er! % - !t%ff of Se'*ritie! A$$ell%te Tri,* %l! to ,e $*,li' !er+% t!. 15A. .he <residing Cfficer, ?e(bers and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0: Ci+il Co*rt ot to h%+e G*ri!-i'tio . 15M. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which an adDudicating officer appointed under this Act or a Securities Appellate .ribunal constituted under this Act is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "5A$$e%l to S*$re.e Co*rt.
Substituted for S0 "A by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, it read as under, + 1 "A0 .he <residing Cfficer and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian penal Code( $" of >#0)20 % Substituted for S0 "S by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution , it
was read as under,+ 1 "S0 Appeal to Iigh Court0+ Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, <ro'ided that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
3
15N. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order , 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the applicant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: CDA4TER III @ISCELLANEOUS 4o/er of Ce tr%l Go+er .e t to i!!*e -ire'tio !. 18. ( ) Kithout preDudice to the foregoing pro'isions of this Act 4or the 9epositories Act, !!#:, the 8oard shall, in exercise of its powers or the perfor(ance of its functions under this Act, be bound by such directions on *uestions of policy as the Central &o'ern(ent (ay gi'e in writing to it fro( ti(e to ti(e , 4ro+i-e- that the 8oard shall, as far as practicable, be gi'en an opportunity to express its 'iews before any direction is gi'en under this sub+section0 (%) .he decision of the Central &o'ern(ent whether a *uestion is one of policy or not shall be final0 4o/er of Ce tr%l Go+er .e t to !*$er!e-e the ;o%r-. 17. ( ) If at any ti(e the Central &o'ern(ent is of opinion(a) that on account of gra'e e(ergency, the 8oard is unable to discharge the functions and duties i(posed on it by or under the pro'isions of this Act3 or (b) that the 8oard has persistently (ade default in co(plying with any direction issued by the Central &o'ern(ent under this Act or in the discharge of the functions and duties i(posed on it by or under the pro'isions of this Act and as a result of such default the financial position of the 8oard or the ad(inistration of the 8oard has deteriorated3 or (c) that circu(stances exist which render it necessary in the public interest so to do, the Central &o'ern(ent (ay, by notification, supersede the 8oard for such period, not exceeding six (onths, as (ay be specified in the notification0 (%) Hpon the publication of a notification under sub+section ( ) superseding the 8oard,(a) all the (e(bers shall, as fro( the date of supersession, 'acate their offices as such3 (b) all the powers, functions and duties which (ay, by or under the pro'isions of this Act, be exercised or discharged by or on behalf of the 8oard, shall until the 8oard is reconstituted under sub+section (3), be exercised and discharged by such person or persons as the Central &o'ern(ent (ay direct3 and (c) all property owned or controlled by the 8oard shall, until the 8oard is reconstituted under sub+section (3), 'est in the Central &o'ern(ent0
Substituted for 1this Act2 by the 9epositories Act !!#, w0r0e0f0 %0+!+ !!"0
3%
(3) Cn the expiration of the period of supersession specified in the notification issued under sub+section ( ), the Central &o'ern(ent (ay reconstitute the 8oard by a fresh appoint(ent
and in such case any person or persons who 'acated their offices under clause ( a) of subsection (%), shall not be dee(ed dis*ualified for appoint(ent , 4ro+i-e- that the Central &o'ern(ent (ay, at any ti(e, before the expiration of the period of supersession, ta)e action under this sub+section0 ($) .he Central &o'ern(ent shall cause a notification issued under sub+section ( ) and a full report of any action ta)en under this section and the circu(stances leading to such action to be laid before each Iouse of <arlia(ent at the earliest0 Ret*r ! % - re$ort!. 1:. ( ) .he 8oard shall furnish to the Central &o'ern(ent at such ti(e and in such for( and (anner as (ay be prescribed or as the Central &o'ern(ent (ay direct, such returns and state(ents and such particulars in regard to any proposed or existing progra((e for the pro(otion and de'elop(ent of the securities (ar)et, as the Central &o'ern(ent (ay, fro( ti(e to ti(e, re*uire0 (%) Kithout preDudice to the pro'isions of sub+section ( ), the 8oard shall, within 4ninety: days after the end of each financial year, sub(it to the Central &o'ern(ent a report in such for(, as (ay be prescribed, gi'ing a true and full account of its acti'ities, policy and progra((es during the pre'ious financial year0 (3) A copy of the report recei'ed under sub+section (%) shall be laid, as soon as (ay be after it is recei'ed, before each Iouse of <arlia(ent0 Dele(%tio . 19. .he 8oard (ay, by general or special order in writing delegate to any (e(ber, officer of the 8oard or any other person subDect to such conditions, if any, as (ay be specified in the order, such of its powers and functions under this Act (except the powers under section %!) as it (ay dee( necessary0 A$$e%l!. "=. ( ) Any person aggrie'ed by an order of the 8oard (ade %4, before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!,: under this Act, or the rules or regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor, 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0
Substituted for 1sixty days2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1an order of the 8oard (ade2 by Securities =aws (Second A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0
% Substituted
33
(3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed, 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 4;%r of G*ri!-i'tio . "=A. Eo order passed by the 8oard %4or the AdDudicating Cfficer: under this Act shall be appealable except as pro'ided in 34section ". or: section %0 and no ci'il court shall ha'e Durisdiction in respect of any (atter which the 8oard $4or the AdDudicating Cfficer: is e(powered by, or under, this Act to pass any order and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any order passed by the 8oard "4or the AdDudicating Cfficer: by, or under, this Act0: S%+i (!.
"1. Eothing in this Act shall exe(pt any person fro( any suit or other proceedings which (ight, apart fro( this Act, be brought against hi(0 @e.,er!, offi'er! % - e.$lo>ee! of the ;o%r- to ,e $*,li' !er+% t!. "". All (e(bers, officers and other e(ployees of the 8oard shall be dee(ed, when acting or purporting to act in pursuance of any of the pro'isions of this Act, to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0 4rote'tio of %'tio t%6e i (oo- f%ith. "). Eo suit, prosecution or other legal proceedings shall lie against the Central &o'ern(ent #4or 8oard: or any officer of the Central &o'ern(ent or any (e(ber, officer or other e(ployee of the 8oard for anything which is in good faith done or intended to be done under this Act or the rules or regulations (ade thereunder0 /4Offe 'e!. "3. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, he shall be punishable with
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 18oard2 by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 3 Substituted for 1Section %02, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 $ Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 " Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Substituted by for S0 %$, Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" && <rior to its substitution S0%$ read as under, 1%$0 <enalty0+ Khoe'er contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both02
% Substituted
3$
i(prison(ent for a ter( which (ay extend to 4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to %4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 34Co.$o!itio of 'ert%i offe 'e!. "3A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "3;. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of the alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation, 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0
(%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0:
Substituted for 1one year, or with fine, or with both2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%, for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both20 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3"
E#e.$tio fro. t%# o /e%lth % - i 'o.e. "5. Eotwithstanding anything contained in the Kealth+tax Act, !"/ (%/ of !"/), the Inco(etax Act, !# ($3 of !# ) or any other enact(ent for the ti(e being in force relating to tax on wealth, inco(e, profits or gains(a) the 8oard3 (b) the existing Securities and 7xchange 8oard fro( the date of its constitution to the date of establish(ent of the 8oard, shall not be liable to pay wealth+tax, inco(e+tax or any other tax in respect of their wealth, inco(e, profits or gains deri'ed0 Co( iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations (ade thereunder, sa'e on a co(plaint (ade by the 8oard 4G G G:0 "5(") *****< )5 E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
.he words 1with the pre'ious sanction of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to the o.i!!io , S*,0!e'tio (") re%- %! * -er& 1(") No 'o*rt i ferior to th%t of "5% Co*rt of Se!!io < !h%ll tr> % > offe 'e $* i!h%,le * -er thi!
A't.2 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3#
A$$e%l % - re+i!io "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e of Cri.i %l 4ro'e-*re, 197) to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< Offe 'e! ,> 'o.$% ie!. "7. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly, 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n , 6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and
3/
(b) 1director2, in relation to a fir(, (eans a partner in the fir(0 4o/er to e#e.$t. ":. 4GGGGGG: "5 Re'o+er> of %.o* t! ":A. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith %
-ire'tio of -i!(or(e.e t or-er i!!*e- * -er !e'tio 11; or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifiefor. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.et%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't.
C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Section %> read as under, 1%>0 8$.er t$ e)e"%t+ If the central go'ern(ent if of the opinion that it is necessary or expedient so to do in public interest, it (ay, by order published in the Cfficial gaFette, exe(pt any person or class of persons buying or selling securities or otherwise dealing with the securities (ar)et fro( the operation of sub+section ! ) of Section %02 % I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3>
"#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio 15T of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 11;, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% !
% > offi'er of the ;o%r- /ho .%> ,e %*thoriLe-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 4o/er to .%6e r*le!. "9. ( ) .he Central &o'ern(ent (ay, by notification, (a)e rules for carrying out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers under sub+section ( ) of section "3 (b) the additional functions that (ay be perfor(ed by the 8oard under section 3 (c) 4G G G: (d) the (anner in which the accounts of the 8oard shall be (aintained under section "3 %4(da) the (anner of in*uiry under sub+section ( ) of section "+I3 (db) the salaries and allowances and other ter(s and conditions of ser'ice of the 34<residing Cfficers, ?e(bers: and other officers and e(ployees of the Securities Appellate .ribunal under section "+C and sub+section (3) of section "S3 (dc) the procedure for the in'estigation of (isbeha'iour or incapacity of the 4<residing Cfficers, or other ?e(bers: of the Securities Appellate .ribunal under sub+section (3) of section "Q3
Clause (c) o(itted by Securities laws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, clause (c) it read as under, 1(c) the conditions subDect to which registration certificate is to be issued under sub+section ( ) of section %20 % Inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 3 Substituted for 1<residing Cfficers2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3!
(dd) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section ". and the fees payable in respect of such appeal3: (e) the for( and the (anner in which returns and report to be (ade to the Central &o'ern(ent under section >3 (f) any other (atter which is to be, or (ay be, prescribed, or in respect of which pro'ision is to be, or (ay be, (ade by rules0 4o/er to .%6e re(*l%tio !. )=. ( ) .he 8oard (ay, %4GGG: by notification, (a)e regulations consistent with this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ti(es and places of (eetings of the 8oard and the procedure to be followed at such (eetings under sub+section ( ) of section / including *uoru( necessary for the transaction of business3 (b) the ter(s and other conditions of ser'ice of officers and e(ployees of the 8oard under sub+section (%) of section !3 34(c) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto and the (anner in which such (atters shall be disclosed by the co(panies under section A3 35('%) the *tiliL%tio of the %.o* t 're-ite- * -er !*,0!e'tio (5) of !e'tio 11H (',) the f*lfill.e t of other 'o -itio ! rel%ti ( to 'olle'ti+e i +e!t.e t !'he.e * -er !*,0!e'tio ("A) of !e'tio 11AAH ('') the $ro'e-*re to ,e follo/e- ,> the %*thoriLe- offi'er for !e%r'h or !eiL*re * -er !*,0!e'tio (9) of !e'tio 11CH < (d) the conditions subDect to which certificate of registration is to be issued, the a(ount of
fee to be paid for certificate of registration and the (anner of suspension or cancellation of certificate of registration under section %0: 55(-%) the ter.! -eter.i e- ,> the ;o%r- for !ettle.e t of $ro'ee-i (! * -er !*,!e'tio (") % - the $ro'e-*re for 'o -*'ti ( of !ettle.e t $ro'ee-i (! * -er !*,!e'tio ()) of !e'tio 15E;H (-,) % > other .%tter /hi'h i! re7*ire- to ,e, or .%> ,e, !$e'ifie- ,> re(*l%tio ! or i re!$e't of /hi'h $ro+i!io i! to ,e .%-e ,> re(*l%tio !.< R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t.
Substituted for 1<residing Cfficers2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 words 1with the pre'ious appro'al of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 3 Substituted for the existing clause (c) by the Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 <rior to substitution this clause read as under, 1(c) the a(ount of fee to be paid for registration certificate and (anner of suspension or cancellation of registration certificate under sub+section (%) and (3) of section %02 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% .he
$0
)1. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. )". .he pro'isions of this Act shall be in addition to, and not in derogation of, the pro'isions of any other law for the ti(e being in force0 A.e -.e t of 'ert%i e %'t.e t!. )). 40e%ealed bF 0e%ealing H A"ending Act' 2001&: 4o/er to re.o+e -iffi'*ltie!. )3. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order, published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as (ay appear to be necessary for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of fi'e years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 Re$e%l % - !%+i (. )5. ( ) .he Securities and 7xchange 8oard of India Crdinance, !!% (Crd0 " of !!%), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 1@( /@(5A9( 4 ee section 33: A@END@ENT O2 CERTAIN ENACT@ENTS 40e%ealed bF 0e%ealing H A"ending Act' 2001:
*SECURITIES CONTRACTS (REGULATION) RULES, 1957
In exercise of the powers conferred by section 30 of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the Central &o'ern(ent hereby (a)es the following rules, the sa(e ha'ing been pre'iously published as re*uired by sub+section (3) of the said section, na(ely ,Short title. 1. .hese rules (ay be called the Securities Contracts (Regulation) Rules, !"/0 Defi itio !. ". In these rules, unless the context otherwise re*uires,(a) 1for(2 (eans a for( appended to these rules3 (b) 1the Act2 (eans the Securities Contracts (Regulation) Act, !"# ($% of !"#)3 (c) 1&o'ern(ent co(pany2 (eans a co(pany in which not less than fifty+one per cent of the share capital is held by the Central &o'ern(ent or by any State &o'ern(ent or &o'ern(ents or partly by the Central &o'ern(ent and partly by one or (ore State &o'ern(ents ; 4(d) 1public2 (eans persons other than 5 (i) the pro(oter and pro(oter group3 (ii) subsidiaries and associates of the co(pany0 E#$l% %tio & 6or the purpose of this clause the words 1pro(oter2 and 1pro(oter group2 shall ha'e the sa(e (eaning as assigned to the( under the Securities and 7xchange 8oard of India (Issue of Capital and 9isclosure Re*uire(ents) Regulations, %00!3: %4(da) ;public sector co(pany; (eans a body corporate constituted by an Act of <arlia(ent or any State =egislature and includes a go'ern(ent co(pany,: 4(e) 1public shareholding2 (eans e*uity shares of the co(pany held by public and shall exclude shares which are held by custodian against depository receipts issued o'erseas0: A$$li'%tio for re'o( itio . ). An application under section 3 of the Act for recognition of a stoc) exchange shall be (ade to the 34Securities and 7xchange 8oard of India: in 6or( A0
* The!e R*le! h%+e ,ee *$-%te- ,%!e- o the R*le! % - A.e -.e t! %+%il%,le o the /e,!ite of the De$%rt.e t of E'o o.i' Aff%ir!0 htt$&11fi .i . i'.i 1l%/1i -e#.%!$ % - %+%il%,le %.e -.e t otifi'%tio !. Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 % Inserted by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3 Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
2ee! for %$$li'%tio . 3. ( ) .here shall be paid in respect of e'ery application under rule 3 a fee of rupees fi'e hundred0 (%) .he a(ount of the fee shall be deposited in the nearest &o'ern(ent treasury or the nearest branch of the State 8an) of India, 4ro+i-e- that at 8o(bay, Calcutta, ?adras, 9elhi and @anpur, the a(ount shall be deposited in the Reser'e 8an) of India0 (3) .he a(ount of the fee so deposited shall be credited to the receipt head 1A=BI?iscellaneous-Cther fees, fines and forfeitures20 Do'*.e t! to ,e file- %lo ( /ith the %$$li'%tio % - $%rti'*l%r! it !ho*l- 'o t%i . 5. 7'ery application shall be acco(panied by four copies of the rules (including the (e(orandu( and articles of association where the applicant stoc) exchange is an
incorporated body) and bye+laws of the stoc) exchange applying for recognition as specified in section 3 of the Act and the receipt granted by the &o'ern(ent treasury, or as the case (ay be, the State 8an) of India or the Reser'e 8an) of India, in respect of the a(ount of the fee deposited and shall contain clear particulars as to the (atters specified in the Annexure to 6or( A0 $54o/er to .%6e i 7*irie! % - '%ll for i for.%tio . 5A. 8efore granting recognition to a stoc) exchange under section $ of the Act, the "4Securities and 7xchange 8oard of India: (ay (a)e such in*uiries and re*uire such further infor(ation to be furnished, as it dee(s necessary, relating to the infor(ation furnished by the stoc) exchange in the Annexure to its application in 6or( A0: 2or. of re'o( itio . 8. .he recognition granted to a stoc) exchange shall be in 6or( 8 and be subDect to the following conditions, na(ely ,(a) that the recognition unless granted on a per(anent basis, shall be for such period not less than one year as (ay be specified in the recognition3 (b) that the stoc) exchange shall co(ply with such conditions as are or (ay be prescribed or i(posed under the pro'isions of the Act and these rules fro( ti(e to ti(e0
$ Inserted
by &SR 0!# dated $00/0 !#/, w0e0f0 %%00/0 !#/ for 1Central &o'ern(ent2 by the Securities Contracts (Regulation)(A(end(ent )Rules, !!#, w0e0f0 %30 %0 !!#0
" Substituted
Re e/%l of re'o( itio . 7. ( ) .hree (onths before the expiry of the period of recognition, a recognised stoc) exchange desirous of renewal of such recognition (ay (a)e an application to the #4Securities and 7xchange 8oard of India: in 6or( A0 (%) .he pro'isions of rule 3, rule $, rule ", rule "A and rule # shall apply in relation to renewal of recognition as they apply in relation to grant of recognition except that the fee payable in respect of an application for renewal of recognition shall be rupees two hundred0 9*%lifi'%tio ! for .e.,er!hi$ of % re'o( i!e- !to'6 e#'h% (e. :. .he rules relating to ad(ission of (e(bers of a stoc) exchange see)ing recognition shall inter alia pro'ide that , (1) Eo person shall be eligible to be elected as a (e(ber if(a) he is less than twenty+one years of age3 (b) he is not a citiFen of India3 pro'ided that the go'erning body (ay in suitable cases relax this condition with the prior appro'al of the !4Securities and 7xchange 8oard of India:3 (c) he has been adDudged ban)rupt or a recei'ing order in ban)ruptcy has been (ade against hi( or he has been pro'ed to be insol'ent e'en though he has obtained his final discharge3 (d) he has co(pounded with his creditors unless he has paid sixteen annas in the rupee3 (e) he has been con'icted of an offence in'ol'ing fraud or dishonesty3 (f) he is engaged as principal or e(ployee in any business other than that of securities /4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability unless he underta)es on ad(ission to se'er his connection with such business ,
>44ro+i-e-
that no (e(ber (ay conduct business in co((odity deri'ati'es, except by setting up a separate co(pany which shall co(ply with the regulatory re*uire(ents, such as, networth, capital ade*uacy, (argins and exposure nor(s as (ay be specified by the 6orward ?ar)et Co((ission, fro( ti(e to ti(e ,
# Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, w0e0f0 %30 %0 !!#0 / Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 > Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 <rior to its substitution, the pro'iso as a(ended by Securities Contracts (Regulation) (A(end(ent) Rules, !!# w0e0f0 %30 %0 !!#, read as under, 1<ro'ided that the Securities and 7xchange 8oard of India (ay, for reasons sufficient in the opinion of the said 8oard, per(it a recogniFed stoc) exchange to suspend the enforce(ent of this clause for a specified period on condition that the applicant is not associated with or is a (e(ber of or subscriber to or shareholder or debenture holder in or connected through a partner or e(ployee with any other organisation, institution, association, co(pany or corporation in India where forward business of any )ind whether in goods or co((odities or otherwise is carried on or is not engaged as a principal or e(ployee ion any such business02
4ro+i-e- f*rther that nothing herein shall be applicable to any corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to ()) of the pro'iso to sub+rule ($)0:3 (g) !4GGG: (h) he has been at any ti(e expelled or declared a defaulter by any other stoc) exchange3 (i) he has been pre'iously refused ad(ission to (e(bership unless a period of one year has elapsed since the date of such reDection0 (2) Eo person eligible for ad(ission as a (e(ber under sub+rule ( ) shall be ad(itted as a (e(ber unless ,(a) he has wor)ed for not less than two years as a partner with, or an authorised assistant or authorised cler) or re(isier or apprentice to, a (e(ber3 or (b) he agrees to wor) for a (ini(u( period of two years as a partner or representati'e (e(ber with another (e(ber and to enter into bargains on the floor of the stoc) exchange and not in his own na(e but in the na(e of such other (e(ber 3 or (c) he succeeds to the established business of a deceased or retiring (e(ber who is his father, uncle, brother or any other person who is, in the opinion of the go'erning body, a close relati'e , 4ro+i-e- that the rules of the stoc) exchange (ay authorise the go'erning body to wai'e co(pliance with any of the foregoing conditions if the person see)ing ad(ission is in respect of (eans, position, integrity, )nowledge and experience of business in securities, considered by the go'erning body to be otherwise *ualified for (e(bership0 (3) Eo person who is a (e(ber at the ti(e of application for recognition or subse*uently ad(itted as a (e(ber shall continue as such if(a) he ceases to be a citiFen of India , 4ro+i-e- that nothing herein shall affect those who are not citiFens of India but who were (e(bers at the ti(e of such application or were ad(itted subse*uently under the pro'isions of clause (b) of sub+rule ( ) of this rule, subDect to their co(plying with all other re*uire(ents of this rule3
(b) he is adDudged ban)rupt or a recei'ing order in ban)ruptcy is (ade against hi( or he is pro'ed to be insol'ent3 (c) he is con'icted of an offence in'ol'ing fraud or dishonesty3 (d) 04G G G: (e) 4G G G: (f) he engages either as principal or e(ployee in any business other than that of securities %4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability, pro'ided that! C(itted 0 Ibid0
by &SR 0/0(7) dated "0
0 !>>
Ibid0
% Inserted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(i) the go'erning body (ay, for reasons, to be recorded in writing, per(it a (e(ber to engage hi(self as principal or e(ployee in any such business, if the (e(ber in *uestion ceases to carry on business on the stoc) exchange either as an indi'idual or as a partner in a fir(, (ii) in the case of those (e(bers who were under the rules in force at the ti(e of such application per(itted to engage in any such business and were actually so engaged on the date of such application, a period of three years fro( the date of the grant of recognition shall be allowed for se'ering their connection with any such business, 34(iii) nothing herein shall affect (e(bers of a recognised stoc) exchange which are corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to (k) of the pro'iso to sub+rule ($)0: (4) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section 3%% of the said Act3 (ii) a (aDority of the directors of such co(pany are shareholders of such co(pany and also (e(bers of that stoc) exchange3 and (iii) the directors of such co(pany, who are (e(bers of that stoc) exchange, ha'e ulti(ate liability in such co(pany , 4ro+i-e- that where the $4Securities and 7xchange 8oard of India: (a)es a reco((endation in this regard, the go'erning body of a stoc) exchange shall, in relaxation of the re*uire(ents of this clause, ad(it as (e(ber the following corporations "4,bodies corporate:, co(panies or institutions, na(ely ,(a) the Industrial 6inance Corporation, established under the Industrial 6inance Corporation Act, !$> ( " of !$>)3 (b) the Industrial 9e'elop(ent 8an) of India, established under the Industrial 9e'elop(ent 8an) Act, !#$ ( > of !#$)3 (c) the =ife Insurance Corporation of India, established under the =ife Insurance Corporation Act, !"# (3 of !"#)3 (d) the &eneral Insurance Corporation of India constituted under the &eneral Insurance Corporation (Eationalisation) Act, !/% ("/ of !/%)3 (e) the Hnit .rust of India, established under the Hnit .rust of India Act, !#3 ("% of !#3)3
3 Substituted, ibid0 <rior to its substitution, sub+clause (iii) read as under, 1(iii) nothing herein shall affect (e(bers of a recogniFed stoc) exchange per(itted under the pro'iso to clause (f) of sub+rule( ) to suspend the enforce(ent of the aforesaid clause, for so long as such suspension is effecti'e, except that no (e(ber of such exchange shall engage in forward business of any )ind whether in goods or co((odities or otherwise and , if actually so engaged on the date of such application , he shall se'er his connection with any such business within a period of three years fro( the date of the grant of recognition02 $ Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# " Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(f) the Industrial Credit and In'est(ent Corporation of India, a co(pany registered under the Co(panies Act, !"# ( of !"#)3 (g) the subsidiaries of any of the corporations or co(panies specified in (a) to (f) and any subsidiary of the State 8an) of India or any nationalised ban) set up for pro'iding (erchant ban)ing ser'ices, buying and selling securities and other si(ilar acti'ities0 #4(h) any ban) included in the Second Schedule to the Reser'e 8an) of India Act, !3$ (% of !3$)3 (i) the 7xport I(port 8an) of India, established under the 7xport I(port 8an) of India Act, !> (%> of !> )3 (j) the Eational 8an) for Agriculture and Rural 9e'elop(ent, established under the Eational 8an) for Agriculture and Rural 9e'elop(ent Act, !> (# of !> )3 and (k) the Eational Iousing 8an), established under the Eational Iousing 8an) Act, !>/ ("3 of !>/)0: (4A) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall also be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section % of the said Act3 (ii) such co(pany underta)es to co(ply with such financial re*uire(ents and nor(s as (ay be specified by the Securities and 7xchange 8oard of India for the registration of such co(pany under sub+section ( ) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (iii) /4G G G: (iv) the directors of the co(pany are not dis*ualified fro( being (e(bers of a stoc) exchange under >4clause ( ) 4except sub+clause (b) and sub+clause (f) thereof: or clause (3) 4except sub+clause (a) and sub+clause (f) thereof:: and the 9irectors of the co(pany had not held the offices of the 9irectors in any co(pany which had been a (e(ber of the stoc) exchange and had been declared defaulter or expelled by the stoc) exchange3 and (v) not less than two directors of the co(pany are persons who possess a (ini(u( two yearsJ experience , (a) in dealing in securities3 or (b) as portfolio (anagers3 or (c) as in'est(ent consultants0 (5) Khere any (e(ber of a stoc) exchange is a fir(, the pro'isions of sub+rules ( ), (3) and ($), shall, so far as they can, apply to the ad(ission or continuation of any partner in such fir(0
# Inserted, / C(itted
ibid0 by &SR /$! (7), dated %0 00 !!$ > Substituted by &SR /!0(7), dated 0/0 0 !!$
Co tr%'t! ,et/ee .e.,er! of re'o( i!e- !to'6 e#'h% (e. 9. All contracts between the (e(bers of a recognised stoc) exchange shall be confir(ed in writing and shall be enforced in accordance with the rules and bye+laws of the stoc) exchange of which they are (e(bers0 !5No.i ee! of the Se'*ritie! % - E#'h% (e ;o%r- of I -i%< o the (o+er i ( ,o-ie! of re'o( i!e- !to'6 e#'h% (e!. 1=. .he %04Securities and 7xchange 8oard of India: (ay no(inate one or (ore persons not exceeding three in nu(ber, as (e(ber or (e(bers of the go'erning body of e'ery recognised stoc) exchange0 Such (e(ber or (e(bers shall enDoy the sa(e status and powers as other (e(bers of the go'erning body0 O,li(%tio of the (o+er i ( ,o-> to t%6e -i!'i$li %r> %'tio %(%i !t % .e.,er if !o -ire'te- ,> the % 5Se'*ritie! % - E#'h% (e ;o%r- of I -i%<. 11. After recei'ing the report of the result of an en*uiry (ade under clause (b) of subsection (3) of section # of the Act, the % 4Securities and 7xchange 8oard of India: (ay ta)e such action as they dee( proper and, in particular, (ay direct the go'erning body of the stoc) exchange to ta)e such disciplinary action against the offending (e(ber, including fine, expulsion, suspension or any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney, as (ay be specified by the % 4Securities and 7xchange 8oard of India:3 notwithstanding anything to the contrary contained in the rules or bye+laws of the stoc) exchange concerned, the go'erning body shall gi'e effect to the directions of the % 4Securities and 7xchange 8oard of India: in this behalf and shall not in any (anner co((ute, re'o)e or (odify the action ta)en in pursuance of such directions, without the prior appro'al of the % 4Securities and 7xchange 8oard of India:0 .he % 4Securities and 7xchange 8oard of India: (ay, howe'er, either of its own (otion or on the representation of the (e(ber concerned, (odify or withdraw its direction to the go'erning body0 A*-it of %''o* t! of .e.,er!. 1". 7'ery (e(ber shall get his accounts audited by a chartered accountant whene'er such audit is re*uired by the % 4Securities and 7xchange 8oard of India:0 ?ith-r%/%l of re'o( itio . 1). .he written notice referred to in section " of the Act shall be in 6or( C0
! Substituted %0 Ibid0 %
by 60 Eo0 L3/LS7L!$, dated %#0 00 !!$0
Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> re'o( i!e- !to'6 e#'h% (e. 13. 7'ery recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years, (1) ?inute boo)s of the (eetings of(a) (e(bers3 (b) go'erning body3 (c) any standing co((ittee or co((ittees of the go'erning body or of the general body of (e(bers0
(2) Register of (e(bers showing their full na(es and addresses0 Khere any (e(ber of the stoc) exchange is a fir(, full na(es and addresses of all partners shall be shown0 (3) Register of authorised cler)s0 (4) Register of re(isiers of authorised assistants0 (5) Record of security deposits0 (6) ?argin deposits boo)0 (7) =edgers0 (8) Mournals0 (9) Cash boo)0 (10) 8an) pass+boo)0 ;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> .e.,er of % re'o( i!e- !to'6 e#'h% (e. 15. ( ) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years , (a) Register of transactions ( a!da boo))0 (b) ClientsJ ledger0 (c) &eneral ledger0 (d) Mournals0 (e) Cash boo)0 (f) 8an) pass+boo)0 (g) 9ocu(ents register showing full particulars of shares and securities recei'ed and deli'ered0 (2) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following docu(ents for a period of two years, (a) ?e(berJs contract boo)s showing details of all contracts entered into by hi( with other (e(bers of the sa(e exchange or counterfoils or duplicates of (e(os of confir(ation issued to such other (e(bers0 (b) Counterfoils or duplicates of contract notes issued to clients0 (c) Kritten consent of clients in respect of contracts entered into as principals0 @% er of i 7*ir> i rel%tio to the %ff%ir! of the (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e or the %ff%ir! of % > .e.,er of the !to'6 e#'h% (e i rel%tio to the !to'6 e#'h% (e. 18. ( )(a) .he person or persons appointed by the %%4Securities and 7xchange 8oard of India: to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act shall hereafter in this rule be referred to as the Nin*uiring authorityJ3 (b) where the in*uiring authority consists of two or (ore persons, one of the( shall be appointed as the chair(an or senior (e(ber thereof3 (c) the in*uiring authority shall hand o'er a state(ent of issues to be in*uired into to the go'erning body or the (e(ber concerned, as the case (ay be, who will be gi'en a reasonable opportunity to state their or his side of the case3 (d) if any witness is called for exa(ination, an opportunity shall be pro'ided to the go'erning body or the (e(ber whose affairs are being in*uired into, as the case (ay be, to cross+exa(ine such witness3 (e) where the in*uiring authority consists of (ore than one person, the 'iews of the (aDority shall be dee(ed to represent the findings of such authority and, in the e'ent of
an e*uality of 'otes, the chair(an or senior (e(ber shall ha'e a casting 'ote3 (f) the in*uiring authority shall sub(it its report in writing to the %%4Securities and 7xchange 8oard of India: within the period specified in the order of appoint(ent3 (g) te(porary absence fro( any hearing or hearings of any (e(ber of the in*uiring authority shall not 'itiate its proceedings0 (%) Khere the %%4Securities and 7xchange 8oard of India: has directed the go'erning body of a stoc) exchange to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act, the go'erning body concerned shall appoint one or (ore (e(bers thereof to (a)e the in*uiry and the pro'isions of sub+rule ( ) shall apply "!tati# "!tandi# to such in*uiry0 S*,.i!!io of % *%l re$ort. 17. ( ) 7'ery recognised stoc) exchange shall before the 3 st day of Manuary in each year or within such extended ti(e as the %34Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, allow, furnish the %34Securities and 7xchange 8oard of India: annually with a report about its acti'ities during the preceding calendar year, which shall inter alia contain detailed infor(ation about the following (atters , (a) changes in rules and bye+laws, if any3 (b) changes in the co(position of the go'erning body3 (c) any new sub+co((ittees set up and changes in the co(position of existing ones3
%% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# %3 Ibid0
(d) ad(issions, re+ad(issions, deaths or resignations of (e(bers3 (e) disciplinary action against (e(bers3 (f) arbitration of disputes (nature and nu(ber) between (e(bers and non+(e(bers3 (g) defaults3 (h) action ta)en to co(bat any e(ergency in trade3 (i) securities listed and de+listed3 and (j) securities brought on or re(o'ed fro( the forward list0 (%) 7'ery recognised stoc) exchange shall within one (onth of the date of the holding of its annual general (eeting, furnish the %$4Securities and 7xchange 8oard of India: with a copy of its audited balance+sheet and profit and loss account for its preceding financial year0 S*,.i!!io of $erio-i'%l ret*r !. 17A. 7'ery recognised stoc) exchange shall furnish the %$4Securities and 7xchange 8oard of India: periodical returns relating to(i) the official rates for the securities enlisted thereon3 (ii) the nu(ber of shares deli'ered through the clearing house3 (iii) the (a)ing+up prices3 (iv) the clearing house progra((es3 (v) the nu(ber of securities listed and de+listed during the pre'ious three (onths3 (vi) the nu(ber of securities brought on or re(o'ed fro( the forward list during the pre'ious three (onths3 and (vii) any other (atter as (ay be specified by the %$4Securities and 7xchange 8oard of India:0 @% er of $*,li'%tio of ,>e0l%/! for 'riti'i!.. 1:. .he bye+laws to be (ade, a(ended or re'ised under the Act shall be published for
criticis( in accordance with the pro'isions of section %3 of the &eneral Clauses Act, >!/ both in the &aFette of India and Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate0 Re7*ire.e t! /ith re!$e't to the li!ti ( of !e'*ritie! o % re'o( i!e- !to'6 e#'h% (e. 19. ( ) A public co(pany as defined under the Co(panies Act, !"#, desirous of getting its securities listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars ,
%$ Ibid0
(a) ?e(orandu( and articles of association and, in the case of a debenture issue, a copy of the trust deed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any securities for subscription or sale during the last fi'e years0 (d) Copies of balance+sheets and audited accounts for the last fi'e years, or in the case of new co(panies, for such shorter period for which accounts ha'e been (ade up0 (e) A state(ent showing(i) di'idends and cash bonuses, if any, paid during the last ten years (or such shorter period as the co(pany has been in existence, whether as a pri'ate or public co(pany), (ii) di'idends or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents with or between ,(i) 'endors andLor pro(oters, (ii) underwriters and sub+underwriters, (iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents with(i) (anaging agents and secretaries and treasurers, (ii) selling agents, (iii) (anaging directors and technical directors, (iv) general (anager, sales (anager, (anager or secretary0 (h) Certified copy of e'ery letter, report, balance+sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering securities for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents0 (j) A brief history of the co(pany since its incorporation gi'ing details of its acti'ities including any reorganisation, reconstruction or a(alga(ation, changes in its capital structure, (authorised, issued and subscribed) and debenture borrowings, if any0
(k) <articulars of shares and debentures issued-(i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s including an option for the issue of any )ind of the securities granted to any person0 (") Certified copies of%"4(i) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3: (ii) agree(ents, if any, with the Industrial 6inance Corporation, Industrial Credit and In'est(ent Corporation and si(ilar bodies0 (n) <articulars of shares forfeited0 ($) A list of highest ten holders of each class or )ind of securities of the co(pany as on the date of application along with particulars as to the nu(ber of shares or debentures held by and the address of each such holder0 (%) <articulars of shares or debentures for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0 (%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant co(pany shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer, (ii) that the fully paid shares will be free fro( all lien, while in the case of partly paid shares, the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such shares, (iii) that any a(ount paid+up in ad'ance of calls on any share (ay carry interest but shall not entitle the holder of the share to participate in respect thereof, in a di'idend subse*uently declared, (iv) there will be no forfeiture of unclai(ed di'idends before the clai( beco(es barred by law, (v) that option or right to call of shares shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the securities of a co(pany which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0
%" Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 <rior to its substitution, sub+clause (i), read as under, 1(i) letters of consent of the Controller of Capital Issues02
%#4(b)
(i) At least twenty fi'e per cent0 of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent3 or (ii) At least ten per cent of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent if the post issue capital of the
co(pany calculated at offer price is (ore than four thousand crore rupees, <ro'ided that the re*uire(ent of post issue capital being (ore than four thousand crore rupees shall not apply to a co(pany whose draft offer docu(ent is pending with the Securities and 7xchange 8oard of India on or before the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, if it satisfies the conditions prescribed in clause (b) of sub+rule % of rule ! of the Securities Contracts (Regulation) Rules, !"# as existed prior to the date of such co((ence(ent, %/4<ro'ided further that the co(pany, referred to in sub clause (ii), shall increase its public shareholding to at least twenty fi'e per cent, within a
%# Substituted
by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, clause (b) as a(ended by the A(end(ent Rules, %00 , w0e0f0 0/00#0%00 , read as under, 1(b) At least 0 per cent of each class or )ind of securities issued by a co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted subDect to the following conditions, (a) (ini(u( %0 la)h securities (excluding reser'ations, fir( allot(ent and pro(otersJ contribution) was offered to the public3 (b) the siFe of the offer to the public, i&e&' the offer price (ultiplied by the nu(ber of securities offered to the public was (ini(u( Rs0 00 crores3 and (c) the issue was (ade only through boo) building (ethod with allocation of #0 per cent of the issue siFe to the *ualified institutional buyers as specified by the Securities and 7xchange 8oard of India, 4ro+i-e- that if a co(pany does not fulfil the conditions, it shall offer at least %" per cent of each class or )ind of securities to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted, 4ro+i-e- f*rther that a recognised stoc) exchange (ay relax any of the conditions with the pre'ious appro'al of the Securities and 7xchange 8oard of India, in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#), and subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*6or the purpose of this clause, it is hereby clarified that where any part of the securities sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental 6ire and &eneral Insurance Co(pany =i(ited and the Hnited 6ire and &eneral Insurance Co(pany =i(ited or Hnit .rust of India, the total subscription to the securities, whether by one or (ore of such bodies, shall not for( part of the 0 per cent or %" per cent of the securities, as the case (ay be, to be offered to the public02 %/ Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 <rior to its substitution, second pro'iso, read as under, 1<ro'ided further that the co(pany, referred in sub+clause (ii), shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of atleast fi'e per
period of three years fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India0: %>4GGG:: %!4(c) Eotwithstanding anything contained in clause (b), a public sector co(pany, shall offer and allot at least ten per cent, of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares to public in ter(s of an offer docu(ent0: (3) A co(pany applying for listing shall, as a condition precedent, underta)e inter alia(a) (i) that letters of allot(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to
that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been posted, (ii) that letters of right will be issued si(ultaneously, (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the securities to which they relate, (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right, (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or di'idend on the securities will be calculated, (b) to issue, when so re*uired, receipts for all securities deposited with it whether for registration, sub+di'ision, exchange or for other purposes 3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of certificates and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (bb) to issue, when so re*uired, consolidation and renewal certificates in deno(inations of the (ar)et unit of trading to split certificates, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3
cent per annu( beginning fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India,2 %> C(itted, ibid <rior to its o(ission, third pro'iso, read as under, 1<ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase beings its public shareholding to the le'el of twenty fi'e per cent in that year02 %! Inserted, ibid0
(c) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders, and (ii) to 'erify when the co(pany is unable to issue certificates or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (d) on production of the necessary docu(ents by shareholders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or certificate of the Controller of 7state 9uty or si(ilar other docu(ent has been duly exhibited to
and registered by the co(pany3 (e) to issue certificates in respect of shares or debentures lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance certificates within the sa(e period where the transfer is acco(panied by a larger certificate3 (f) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a di'idend or the issue of right or bonus share will be considered3 (g) to reco((end or declare all di'idends andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all di'idends andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (h) to notify the stoc) exchange of any (aterial change in the general character or nature of the co(panyJs business3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (anaging agent or secretaries and treasurers, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued, copies of all other notices and circulars sent to the shareholders including proceedings of ordinary and extraordinary general (eetings of the co(pany and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the shareholders of any new issue of securities whether by way of right, pri'ilege bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited securities or the issue of securities held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of di'idend or issue of right or bonus shares or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s (or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its shareholders or debentureholders) and specifying the purpose or purposes for which the transfer boo)s are to be closed (or the record is to be ta)en)3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority subDect to which the issue is proposed to be (ade ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after each annual general (eeting of at least ten principal holders of each class of security of the co(pany along with particulars as to the nu(ber of shares or debentures held by,
and address of, each such holder3 (+) to grant to shareholders the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e not being less than four wee)s within which to record, exercise, or renounce such rights, pri'ileges and benefits and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3 (r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any securities listed on the exchange, (ii) of the intention to (a)e a drawing of such securities, inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing of the balance) for the drawing, (iii) of the a(ount of securities outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the shareholders to apprise the position of the co(pany and to a'oid the establish(ent of a false (ar)et in the shares of the co(pany3 (t) (t)that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 304($) An application for listing shall be necessary in respect of the following, (a) all new issues of any class or )ind of securities of a co(pany to be offered to the public3 (b) all further issues of any class or )ind of securities of a co(pany if such class or )ind of securities of the co(pany are already listed on a recognised stoc) exchange0: (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the securities of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 3 44ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any security, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and its orders shall be carried out by the stoc) exchange0: 3%4(#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore
or re+ad(it to dealings any securities suspended or withdrawn fro( the list0: 334(#A) 7xcept as otherwise pro'ided in these rules or per(itted by the Securities and 7xchange 8oard of India under sub+rule (/), all re*uire(ents with respect to listing
30 Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, sub+rule ($), read as under, 1($) A fresh application for listing will be necessary in respect of all new issues desired to be dealt in, pro'ided that, where such new securities are identical in all respects with those already listed, ad(ission to dealings will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new issues0 7xplanation, Shares are identical in all respects only if(a) they are of the sa(e no(inal 'alue and the sa(e a(ount per share has been called up3 (b) they are entitled to di'idend at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the di'idend payable on each share will a(ount to exactly the sa(e su(, net and gross3 and (c) they carry the sa(e rights in all other respects02 3 Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%0000 7arlier, the second pro'iso was a(ended by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 3% Substituted by the Securities Contracts (Regulation) (A(end(ent), %000, w0e0f0 0>00>0%0000 7arlier, subrule (#) was a(ended by the Securities Contracts (Regulation) (A(end(ent), !!#, w0e0f0 %30 %0 !!#0 33 Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!0>0%0 00 <rior to its substitution, sub+rule (#A) as a(ended by the Securities Contracts
prescribed by these rules shall, so far as they (ay be, also apply to a public sector co(pany0: 3$4GGG: (/) .he 3"4Securities and 7xchange 8oard of India: (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect to listing prescribed by these rules0 3#4Co ti *o*! Li!ti ( Re7*ire.e t. 19A. ( ) 7'ery listed co(pany 3/4other than public sector co(pany: shall (aintain public shareholding of at least twenty fi'e per cent0, 3>4<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent, on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall increase its public shareholding to at least twenty fi'e per cent, within a period of three years fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India0 7xplanation, 6or the purposes of this sub+rule, a co(pany whose securities has been listed pursuant to an offer and allot(ent (ade to public in ter(s of sub+clause (ii) of clause (b) of sub+rule (%) of rule !, shall (aintain (ini(u( twenty fi'e per cent, public shareholding fro( the date on which the public shareholding in the co(pany reaches the le'el of twenty fi'e percent in ter(s of said sub+clause0: (%) Khere the public shareholding in a listed co(pany falls below twenty fi'e per cent0 at any ti(e, such co(pany shall bring the public shareholding to twenty fi'e per cent0
(Regulations)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 and &SR % (7) w0e0f0 0!0030 !!", read as under, 1(#A) All the re*uire(ents with respect to listing and continuous listing prescribed by these rules, shall so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature ,2 3$ C(itted by the Securities Contracts (Regulation)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its o(ission, pro'iso, as substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# and inserted by &SR %! (7) dated %/0030 !!", read as under,
1<ro'ided that a recognised stoc) exchange (ay relax the re*uire(ent of offer to public for subscription of atleast twenty+fi'e percent of the each class or )ind of securities issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e02 3" Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent), Rules, !!#, w0e0f0 %30 %0 !!#0 3# Inserted by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 3/ Inserted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3> Substituted, ibid0 <rior to substitution, pro'isos, read as under, 1<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of at least fi'e per cent per annu( beginning fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India, <ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase brings its public shareholding to the le'el of twenty fi'e per cent in that year02
within a (axi(u( period of twel'e (onths fro( the date of such fall in the (anner specified by the Securities and 7xchange 8oard of India0: 3!4(3) Eotwithstanding anything contained in this rule, e'ery listed public sector co(pany shall (aintain public shareholding of at least ten per cent0, <ro'ided that a listed public sector co(pany+ (a) which has public shareholding below ten per cent, on the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of three years fro( the date of such co((ence(ent3 (b) whose public shareholding reduces below ten per cent, after the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of twel'e (onths fro( the date of such reduction,0: $04Re7*ire.e t! /ith re!$e't to the li!ti ( of * it! or % > other i !tr*.e t of % Colle'ti+e I +e!t.e t S'he.e o % re'o( i!e- !to'6 e#'h% (e. "=. ( ) A Collecti'e In'est(ent ?anage(ent Co(pany (CI?C) which is desirous of getting its any collecti'e in'est(ent sche(e listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars , (a) Certificate of incorporation, (e(orandu( and articles of association of the co(pany and the copy of the trust deed of the sche(e intended to be listed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any unit or other instru(ent for subscription or sale during the last fi'e years, or in the case of a new co(pany, such shorter period during which the co(pany has been in existence0 (d) Copies of balance sheets and audited accounts for the last fi'e years, or in the case of a new co(pany, for such co(pleted financial year for which accounts ha'e been (ade up0 (e) A state(ent showing,(i) returns and cash bonuses, if any, paid during the last ten years (or such
shorter period as the co(pany has been in existence whether as a pri'ate or public co(pany)3 (ii) returns or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents pertaining to each sche(e of the co(pany with or between,(i) 'endors andLor pro(oters3 (ii) underwriters and sub+underwriters3
3! Inserted $0 Inserted
by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 0 by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%000
(iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents pertaining to each sche(e of a co(pany with(i) selling agents and other ser'ice pro'iders3 (ii) (anaging directors and technical directors3 (iii) general (anager, sales (anager, (anager or secretary0 (h) Certified copies of e'ery letter, report, balance sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering units or any other instru(ents of the sche(e for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents pertaining to such sche(e0 (j) A brief history of the Co(pany since its incorporation gi'ing details of its acti'ities including any re+organisation, reconstruction or a(alga(ation, changes in its capital structure (authorised, issued and subscribed) and debenture borrowings, if any, and the perfor(ance of other collecti'e in'est(ent sche(es of the co(pany0 (k) <articulars of units of the sche(e andLor shares, debentures of the co(pany issued (i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s granted to any person pertaining to such sche(e0 (") Certified copies of(i) certificate of registration granted by the Securities and 7xchange 8oard of India3 (ii) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3 (iii) agree(ents, if any, with any public financial institution as specified in section $A of the Co(panies Act, !"# ( of !"#)0 (n) A list of the highest ten holders of units of each sche(e of the co(pany as on the date of application along with particulars as to the nu(ber of units held by and the address of each such holder0 ($) <articulars of units of the sche(e for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0
(%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer of units of a particular sche(e3 (ii) that the fully paid units issued under the sche(e will be free fro( all lien, while in the case of partly paid units the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such units3 (iii) that any a(ount paid+up in ad'ance of calls on any units (ay carry interest but shall not entitle the holder of the unit to participate in respect thereof, in a return subse*uently declared3 (iv) there will be no forfeiture of unclai(ed returns before the clai( beco(es barred by law3 (v) that option or right to call of units shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the units of a sche(e which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0 (b) At least twenty+fi'e per cent of the units or any other instru(ent of a sche(e issued by the co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and not (ore than ninety days, and that applications recei'ed in pursuance of such offer were allotted fairly and unconditionally , 4ro+i-e- that a recognised stoc) exchange (ay relax this re*uire(ent, with the pre'ious appro'al of the Securities and 7xchange 8oard of India in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#) and subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*Khere any part of the units or any other instru(ents sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely, the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental Insurance Co(pany =i(ited and the Hnited Insurance Co(pany =i(ited, or Hnit .rust of India, the total subscription to the units or any other instru(ent, whether by one or (ore of such bodies, shall not for( part of the twenty+fi'e per cent of the units or any other instru(ent to be offered to the public0 (3) A co(pany applying for listing of a sche(e shall, as a condition precedent, underta)e, inter alia,(a) (i) that letters of allot(ent of units or any other instru(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been
posted3 (ii) that letters of right will be issued si(ultaneously3 (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and, exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the units or any other instru(ent to which they relate3 (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right3 (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or return on the units or any other instru(ent will be calculated3 (b) to issue, when so re*uired, receipts for all units and any other instru(ent deposited with it whether for registration, sub+di'ision, exchange or for other purposes3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of units and any other instru(ent and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (c) to issue, when so re*uired, consolidation and renewal units or any other instru(ent in deno(inations of the (ar)et unit of trading, to split units or any other instru(ent, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3 (d) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders3 and (ii) to 'erify when the co(pany is unable to issue units or any other instru(ents or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (e) on production of the necessary docu(ents by unit holders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or si(ilar other docu(ent has been duly exhibited to and registered by the co(pany3 (f) to issue certificates in respect of units or any other instru(ent lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance units or any other instru(ent within the sa(e period where the transfer is acco(panied by a larger unit or any other instru(ent certificate3 (g) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a return or the issue or right or bonus units or
any other instru(ent will be considered3 (h) to reco((end or declare all returns andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all returns andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts of such sche(e as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued copies of all other notices and circulars sent to the unitLother instru(ent holders regarding any i(portant de'elop(ent or resolutions passed by the co(pany affecting the perfor(ance of the sche(e and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the unitLany other instru(ent holders, of any new issue of unitsLother instru(ents whether by way of right, pri'ilege, bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited unitsLother instru(ents or the issue of unitsLother instru(ents held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of unit capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of returns or issue of right or bonus unitsLany other instru(ents in the sche(e or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its unitLother instru(ent holders and specifying the purpose or purposes for which the transfer boo)s are to be closed or the record is to be ta)en3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority, subDect to which the issue is proposed to be (ade, ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after the preparation of annual accounts of at least ten principal holders of each class of unitsLany other instru(ents of the co(pany along with particulars as to the nu(ber of unitsLany other instru(ent held by, and address of, each such holder3 (+) to grant to unitLany other instru(ent holders of the sche(e the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e, not being less than four wee)s, within which to record, exercise, or renounce such rights, pri'ileges and benefits, and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3
(r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any unitLother instru(ent listed on the exchange3 (ii) of the intention to (a)e a drawing of such unitLother instru(ent inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing off the balance) for the drawing3 (iii) of the a(ount of unitsLother instru(ents outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the unitLany other instru(ent holders to appraise the position of the sche(e and to a'oid the establish(ent of a false (ar)et in the unitsLany other instru(ents of the co(pany3 (t) that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 ($) A fresh application for listing will be necessary in respect of all new sche(es desired to be dealt in , 4ro+i-e- that, where such new unitsLother instru(ents are identical in all respects with those already listed, ad(ission to dealing will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new sche(es0 ()%lanati$n0-HnitsLany other instru(ents are identical in all respects only if(a) they are issued under the sa(e sche(e3 (b) they are of the sa(e no(inal 'alue and the sa(e a(ount per unitLother instru(ents has been called up3 (c) they are entitled to returns at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the return payable on each unitLother issue will a(ount to exactly the sa(e su(, net and gross3 and (d) they carry the sa(e rights in all other respects0 (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the unitsLother instru(ents of a sche(e of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 4ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any unitLother instru(ent of a collecti'e in'est(ent sche(e, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an
opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and thereupon the orders of the Securities Appellate .ribunal shall be carried out by the stoc) exchange0 (#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore or read(it to dealings any unitsLother instru(ents suspended or withdrawn fro( the list0 (/) All the re*uire(ents with respect to listing prescribed by these rules, shall, so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature , 4ro+i-e- that a recognised stoc) exchange (ay relax the re*uire(ent of offer to the public for subscription of at least twenty+fi'e per cent of the units or any other instru(ent of a collecti'e in'est(ent sche(e issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 (>) .he Securities and 7xchange 8oard of India (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect of listing prescribed by these rules0: $ 4Deli!ti ( of !e'*ritie!. "1. A recogniFed stoc) exchange (ay, without preDudice to any other action that (ay be ta)en under the Act or under any other law for the ti(e being in force, delist any securities listed thereon on any of the following grounds in accordance with the regulations (ade by the Securities and 7xchange 8oard of India, na(ely,(a) the co(pany has incurred losses during the preceding three consecuti'e years and it has negati'e networth3 (b) trading in the securities of the co(pany has re(ained suspended for a period of (ore than six (onths3 (c) the securities of the co(pany ha'e re(ained infre*uently traded during the preceding three years3 (d) the co(pany or any of its pro(oters or any of its director has been con'icted for failure to co(ply with any of the pro'isions of the Act or the Securities and 7xchange 8oard of India Act, !!% or the 9epositories Act, !!# (%% of !!#) or rules, regulations, agree(ents (ade thereunder, as the case (ay be and awarded a penalty of not less than rupees one crore or i(prison(ent of not less than three years3 (e) the addresses of the co(pany or any of its pro(oter or any of its directors, are not )nown or false addresses ha'e been furnished or the co(pany has changed its registered office in contra'ention of the pro'isions of the Co(panies Act, !"# ( of !"#)3 or
$
Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %00>, w0e0f0 000#0%00!
(f) shareholding of the co(pany held by the public has co(e below the (ini(u( le'el applicable to the co(pany as per the listing agree(ent under the Act and the co(pany has failed to raise public holding to the re*uired le'el within the ti(e specified by the recogniFed stoc) exchange , 4ro+i-e- that no securities shall be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) If the securities is delisted under clause ( ),
(a) the co(pany, pro(oter and director of the co(pany shall be Dointly and se'erally liable to purchase the outstanding securities fro( those holders who wish to sell the( at a fair price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India, under the Act3 and (b) the said securities shall be delisted fro( all recogniFed stoc) exchanges0 (3) A recogniFed stoc) exchange (ay, on the re*uest of the co(pany, delist any securities listed thereon in accordance with the regulations (ade under the Act by Securities and 7xchange 8oard of India, subDect to the following conditions, na(ely ,(a) the securities of the co(pany ha'e been listed for a (ini(u( period of three years on the recogniFed stoc) exchange3 (b) the delisting of such securities has been appro'ed by the two+third of public shareholders3 and (c) the co(pany, pro(oter andLor the director of the co(pany purchase the outstanding securities fro( those holders who wish to sell the( at a price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India under the Act, 4ro+i-e- that the condition at (c) (ay be dispensed with by Securities and 7xchange 8oard of India if the securities re(ain listed at least on the Eational Stoc) 7xchange of India =i(ited or the 8o(bay Stoc) 7xchange =i(ited0: FORM A ( ee Rules 3 and /) A$$li'%tio for re'o( itio 1re e/%l of re'o( itio of % !to'6 e#'h% (e * -er !e'tio ) of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 .o 00000000000000000000000000000000000000 00000000000000000000000000000000000000 !bject,*A%%licati$n f$r rec$gniti$n-rene.al $f rec$gniti$n $f a #t$ck e)change !nder #ecti$n 3 $f the ec!ritie# /$ntract# (0eg!lati$n) Act' 1956& Sir, <ursuant to the $%4Securities and 7xchange 8oard of India: Eotification Eo0 00000000000000000000000000 00000000000000000 dated 000000000000000000000000000000000LCertificate of recognition dated0000000000000000000000000000000KeLI on behalf of 000000000000000000 (na(e and address of stoc) exchange) being a stoc) exchange as defined in section % of the Securities Contracts
$% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
(Regulation) Act, !"# hereby apply for recognitionLrenewal of recognition for the purposes of the said Act in respect of contracts in securities0 ". 6our copies of the rules, (e(orandu( and articles of association relating in general to the constitution and (anage(ent of the stoc) exchange and four copies of the bye+laws for the regulation and control contracts in securities are enclosed0 ). All the necessary infor(ation re*uired in the Annexure to this 6or( is enclosed0 Any additional infor(ation will be furnished as and when called for by the $34Securities and 7xchange 8oard of India:0 3. KeLI on behalf of the said stoc) exchange hereby underta)e to co(ply with the re*uire(ents of section $ of the said Act and such other conditions and ter(s as (ay be contained in the certificate of recognition or be prescribed or i(posed subse*uently0 5. .reasury Receipt Eo0 000000dated000000for Rs000000000000is attached0
Oours faithfully, Signature of applicant ANNEAURE TO 2OR@ BAC Part I - General 0 Ea(e of the applicant stoc) exchange0 %0 Address0 30 9ate of establish(ent0 $0 Is your exchange a Doint stoc) co(pany (state whether public or pri'ate) registered under the Indian Co(panies Act or an association for profit or otherwise P If it is organised on so(e other basis, this (ay be stated0 "0 &i'e details of your capital structure and attach three copies of the audited balance sheets and profit and loss account of the 7xchange for the preceding three years0 Part II - Membership #0 State the nu(ber of (e(bers at the ti(e of application0 Also specify how (any are inacti'e0 /0 State whether there is any pro'ision, resolution or con'ention for li(iting the nu(ber of (e(bers and whether in pursuance thereof you ha'e fixed a ceiling on the nu(ber of (e(bers that you would ta)e0 >0 9o you insist on any (ini(u( *ualifications and experience before enrolling new (e(bers P If so gi'e details0 !0 State the different classes of (e(bers, if any, the nu(ber thereof and the pri'ileges enDoyed by each class0 Khat is the procedure followed by your exchange for the ad(ission of different classes of new (e(bers P 00 Khat are the rates of your annual subscription in respect of the different classes of (e(bers P 0 9o you collect any security deposit fro( your (e(bers P If so, gi'e details and also state the (anner in which such deposits are utilised and the rate of interest allowed, if any0
$3 Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
%0 9o you collect any ad(ission or entrance fees fro( your (e(bers or fro( partners of fir(s who are (e(bers P If so, how (uch P 30 9o you insist on your (e(bers and partners of fir(s who are (e(bers di'esting the(sel'es of other acti'ities either as principal or as e(ployee P $0 9o your rules per(it fir(s to beco(e (e(bers P If so, is it incu(bent on (e(bers to see) the appro'al of the go'erning body before ad(itting new partners P State the conditions, if any, laid down in your rules for the ad(ission of such partners0 "0 If your rules do not per(it of fir(s being enrolled as (e(bers, do you per(it indi'idual (e(bers to for( a partnership P State the procedure followed for the recognition of such partnership0 #0 9o you per(it (e(bers to wor) in partnership with non+(e(bers P If so, how far such non+(e(bers subDect to the control of the stoc) exchange P Part III - Governing Body /0 Khat is the present strength of your go'erning body P &i'e details of the constitution, powers of (anage(ent, election and tenure of office of (e(bers of the go'erning body, and the (anner in which its business is transacted0 >0 Are any trade or co((ercial interest represented on your go'erning body P If so,
gi'e details of interests represented0 !0 9o you associate shareholders of in'estors associations with the (anage(ent of your exchange P If so, state the (anner in which it is done0 %00 Are there any &o'ern(ent representati'es on your go'erning body P If so, furnish their na(es0 % 0 9o your rules pro'ide for the direct election by (e(bers of any other bodies or co((ittees, apart fro( the go'erning body P If so, gi'e details of their constitution, tenure, powers and functions0 %%0 9o you ha'e any pro'ision for the appoint(ent of standing or ad h$c subco((ittees of the go'erning body P If so, furnish details of the (ethod of their appoint(ent, ter(s of office, powers and functions0 %30 &i'e the designations, powers and duties of principal office+bearers of your exchange0 Are any of these office+bearers in the pay of the stoc) exchange P If so, gi'e details as to the (ode of their appoint(ent, tenure of office and re(uneration0 Part IV - Trading %$0 9o you ha'e a trading ring P If not, how do you carry on the business P &i'e details0 %"0 State the different )inds of contracts in use on your exchange e&g&' spot, ready and forward0 State the period of deli'ery and pay(ent in each case0 %#0 &i'e details of business hours for each type of contract0 %/0 &i'e details of the scale of bro)erage and other charges, if any, prescribed by your exchange0 %>0 9o you prescribe standard for(s of contract for the use of your (e(bers P Attach three copies of each such contract for(0 %!0 9o you classify your (e(bers into bro)ers and Dobbers P If so, specify the bye+law under which this is done0 300 9o you ha'e a syste( of registration of re(isiers andLor authorised cler)s P If so, gi'e details as to their *ualifications, obligations and rights, etc0 3 0 9o you ha'e any regulations regarding dealings by (e(bers on their own account whether in the nature of 1aravani (day+to+day) or otherwise P 3%0 9o you ha'e any pro'isions for regulating the 'olu(e of business done by any indi'idual (e(ber other than through a syste( of (argins P If so, gi'e details0 330 Khat pro'isions ha'e you (ade for periodical settle(ent of contracts and differences thereunder, the deli'ery of, and pay(ent for securities and the passing of deli'ery orders P 3$0 9o you ha'e a clearing house for the settle(ent of contracts P If so, gi'e details of its organisation and (anage(ent0 3"0 If you ha'e clearing house, what returns do the (e(bers of your exchange sub(it regarding the transactions cleared through such clearing house P 9oes the exchange as) for any regular returns in respect of transactions settled outside the clearing house P Sub(it three copies of for(s used in this connection0 3#0 Iow do you fix, alter or postpone the dates of settle(ent P 3/0 Iow do you deter(ine and declare (a)ing+up prices P 3>0 9o you ha'e any arrange(ents for (a)ing or recording of bargains P 3!0 Ia'e you any arrange(ents for recording and publishing (ar)et rates including opening, closing, highest and lowest rates P $00 Khat pro'isions ha'e you (ade for regulating-(a) the entering into contracts, their
perfor(ance and rescission, including contracts , (i) between (e(bers, (ii) between a (e(ber and his constituent, and (iii) between a (e(ber and a non+(e(ber3 (b) the conse*uences of breach, default or insol'ency on the part of (e(bers whether acting as buyers, sellers or inter(ediaries 3 and (c) 2havala#3 and other (atters relating to conduct of business of (e(bers in the exchange P $ 0 9o you prescribe (argin re*uire(ents P If yes, gi'e details0 $%0 9o you prescribe (axi(u( and (ini(u( prices for securities P If so, how and under what conditions0 $30 9o you pro'ide any safeguards for the pre'ention of Nbulls*ueeFesJ and 3 NbearraidsJ and for (eeting e(ergencies in trade P &i'e details0 $$0 Khat are the (easures adopted by you to regulate or prohibit ad'ertising or issue of circulars by your (e(bers P $"0 Khat are the disciplinary power with the go'erning body to enforce due co(pliance by (e(bers of the rules and bye+laws of the exchange and generally to ensure proper standard of business conduct P $#0 9o you re*uire (e(bers to supply such infor(ation or explanation and to produce such boo)s relating to their business as your go'erning body (ay re*uire P $/0 9o you publish any statistics in regard to business done on the exchange including the transactions settled through the clearing house, if (aintained P In particular, ha'e you e'ol'ed any (achinery for co(puting the 'olu(e of transactions in the different )inds of contracts per(itted on your exchange P &i'e details0 $>0 9o you ha'e any bye+laws contra'ention of which (a)es a contract 'oid P Part V - Miscellaneo s $!0 9o you ha'e any (achinery for arbitration of disputes between (e(bers andLor between (e(bers and their constituents P &i'e details0 "00 Khat are the conditions subDect to which securities are listed for dealings on your exchange P " 0 Khat are your re*uire(ents for ad(itting securities to forward+trading P "%0 9o you ha'e the right to prohibit, withdraw or suspend dealings in a listed security P If so, under what circu(stances is this right exercised P "30 Khat pro'isions ha'e you (ade for the le'y and reco'ery of fees, fines and penalties P FORM B ( ee rules # and /) $$5The Se'*ritie! % - E#'h% (e ;o%r- of I -i%< 4e. 5elhi' the 20&&&&&&&&&&&&& Eo0 000000000000000000000000000000000000.he $"4Securities and 7xchange 8oard of India:, ha'ing considered the application for recognitionLrenewal of recognition (ade under section 3 of the Securities Contracts (Regulation) Act, !"# by000000000000000000000000000000 (na(e and address of exchange) and being satisfied that it would be in the interest of the trade and also in the public interest so to do, hereby grants, in exercise of the powers conferred by section $ of the Securities Contracts (Regulation) Act, !"# recognition to the said exchange under section $ of the said Act for 0000000000000000000 yearLyears ending 0000000000000000000000%0 0000000on a per(anent basis in respect of contracts in securities subDect to the conditions stated herein below or as (ay be prescribed or i(posed hereafter0 Seal of the $#48oard: Signature of Cfficer
Note&-Application for renewal of recognition shall be (ade so as to reach the Central &o'ern(ent not less than three (onths before the expiry of the period0 (.his certificate, will also ha'e to be published as a Eotification in the &aFette of India and also in the Cfficial &aFette of the State in which principal office of the recognised stoc) exchange is situate)0 $/5FORM ! ( ee rule 3) Noti'e to !ho/ '%*!e %(%i !t the /ith-r%/%l of re'o( itio .I7 S7CHRI.I7S AE9 7ACIAE&7 8CAR9 C6 IE9IA 6!"bai' the&&&&&&&&&&& .o 0000000000000000000000000000000000000000000000000000000000000000000000000000000000
$$ Substituted
for 1&o'ern(ent of India, ?inistry of 6inance2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 $" Substituted for 1Central &o'ern(ent2, ibid0 $# Substituted for 1?inistry2, ibid0 $/ Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#
0000000000000000000000000000000000000000000000000000000000000000000000000000000000 (na(e and address of the exchange) Oou are hereby called upon to show cause on or before 0000000000000000000000000000000000000 at the office of 0000000000000000000000000000000000000000000000000000 ( designation of the officer) why the recognition granted to you under the ?inistry of 6inanceLthe Securities and 7xchange 8oard of India, Eotification Eo0 0000000000000000000000000000 dated 000000000000000000000000000000000000000 and Certificate Eo0 00000000000000000000000000000 dated 000000000000000000000000000000 should not be withdrawn for the reasons gi'en in the annexure to this notice0 8y order and in the na(e of the Securities and 7xchange 8oard of India0 Seal of the Securities and 7xchange 8oard of India0 Notifi'%tio & 4$& 576' dated 217271957&
SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< SECTIONS
80(9:6:4A0; 1. Short title, extent and co((ence(ent ". 9efinitions 0(/<=4: (5 1</> (?/@A4=( ). Application for recognition of stoc) exchanges 3. &rant of recognition to stoc) exchanges0 3A. Corporatisation and de(utualisation of stoc) exchanges 3;. <rocedure for corporatisation and de(utualisation 5. Kithdrawal of recognition 8. <ower of Central &o'ern(ent to call for periodical returns or direct in*uiries to be (ade 7. Annual reports to be furnished to Central &o'ern(ent by stoc) exchanges 7A. <ower of recognised stoc) exchange to (a)e rules restricting 'oting rights, etc :. <ower of Central &o'ern(ent to direct rules to be (ade or to (a)e rules :A. Clearing corporation 9. <ower of recognised stoc) exchanges to (a)e bye+laws 1=. <ower of Securities and 7xchange 8oard of India to (a)e or a(end byelaws of recognised stoc) exchanges 11. <ower of Central &o'ern(ent to supersede go'erning body of a recognised stoc) exchange 1". <ower to suspend business of recognised stoc) exchanges0 1"A. <ower to issue directions 1). Contracts in notified areas illegal in certain circu(stances 1)A. Additional trading floor 13. Contracts in notified areas to be 'oid in certain circu(stances 15. ?e(bers (ay not act as principals in certain circu(stances 18. <ower to prohibit contracts in certain cases 17. =icensing of dealers in securities in certain areas 17A. <ublic issue and listing of securities referred to in sub+clause ( ie) of clause (h) of section % 1:. 7xclusion of spot deli'ery contracts fro( sections 3, $, " and / 1:A. Contracts in deri'ati'e 19. Stoc) exchanges other than recognised stoc) exchanges prohibited "=. <rohibition of options in securities "1. Conditions for listing "1A. 9elisting of securities "". Right of appeal against refusal of stoc) exchanges to list securities of public co(panies ""A. Right of appeal to Securities Appellate .ribunal against refusal of stoc) exchange to list securities of public co(panies "";. <rocedure and powers of Securities Appellate .ribunal ""C. Right to legal representation ""D. =i(itation ""E. Ci'il court not to ha'e Durisdiction
""2. Appeal to Supre(e Court 8(4A91:( A45 80</(5A0( "). <enalties ")A. <enalty for failure to furnish infor(ation, return, etc0 ");. <enalty for failure by any person to enter into an agree(ent with clients ")C. <enalty for failure to redress in'estorsJ grie'ances ")D. <enalty for failure to segregate securities or (oneys of client or clients ")E. <enalty for failure to co(ply with pro'ision of listing conditions or delisting conditions or grounds ")2. <enalty for excess de(aterialisation or deli'ery of unlisted securities ")G. <enalty for failure to furnish periodical returns, etc0 ")D. <enalty for contra'ention where no separate penalty has been pro'ided ")0I. <ower to adDudicate ")E. 6actors to be ta)en into account by adDudicating officer ")EA. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! ")E;. Re'o+er> of %.o* t! ")F. Crediting su(s realised by way of penalties to Consolidated 6und of India ")L. Appeal to Securities Appellate .ribunal ")@. Cffences ")N. Co(position of certain offences ")0O. <ower to grant i((unity "3. Cffences by co(panies "5. Certain offences to be cogniFable "8. CogniFance of offences by courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! 6: /(99A4(<A "7. .itle to di'idends "7A. Right to recei'e inco(e fro( collecti'e in'est(ent sche(e "7;. Right to recei'e inco(e fro( (utual fund ":. Act not to apply in certain cases "9. <rotection of action ta)en in good faith "9A. <ower to delegate )=. <ower to (a)e rules )1. <ower of Securities and 7xchange 8oard of India to (a)e regulations SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< 53th Se$te.,er, 1958< A A't to $re+e t * -e!ir%,le tr% !%'tio ! i !e'*ritie! ,> re(*l%ti ( the ,*!i e!! of -e%li ( therei , 14***: ,> $ro+i-i ( for 'ert%i other .%tter! 'o e'te- there/ith. 87 it enacted by <arlia(ent in the Se'enth Oear of the Republic of India as follows ,
80(9:6:4A0; Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities Contracts (Regulation) Act, !"#0 (%) It extends to the whole of India0
Kords 1by prohibiting options and2 o(itted by the Securities =aws (A(end(ent) Act, !!", Sec0 >, w0e0f0 %"+0 + !!".
(3) It shall co(e into force on such date% as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 Defi itio !. ". In this Act, unless the context otherwise re*uires,(a) 1contract2 (eans a contract for or relating to the purchase or sale of securities3 3 4(aa) 1corporatisation2 (eans the succession of a recognised stoc) exchange, being a body of indi'iduals or a society registered under the Societies Registration Act, >#0 (% of >#0), by another stoc) exchange, being a co(pany incorporated for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities carried on by such indi'iduals or society3 (ab) 1de(utualisation2 (eans the segregation of ownership and (anage(ent fro( the trading rights of the (e(bers of a recognised stoc) exchange in accordance with a sche(e appro'ed by the Securities and 7xchange 8oard of India3: $4"4(ac): 1deri'ati'e2 includes(A) a security deri'ed fro( a debt instru(ent, share, loan, whether secured or unsecured, ris) instru(ent or contract for differences or any other for( of security3 (B) a contract which deri'es its 'alue fro( the prices, or index of prices, of underlying securities3: (b) 1&o'ern(ent security2 (eans a security created and issued, whether before or after the co((ence(ent of this Act, by the Central &o'ern(ent or a State &o'ern(ent for the purpose of raising a public loan and ha'ing one of the for(s specified in clause (2) of section % of the <ublic 9ebt Act, !$$ ( > of !$$)3 (c) 1(e(ber2 (eans a (e(ber of a recognised stoc) exchange3 (d) 1option in securities2 (eans a contract for the purchase or sale of a right to buy or sell, or a right to buy and sell, securities in future, and includes a teji' a "andi' a teji "andi' a galli' a put, a call or a put and call in securities3 (e) 1prescribed2 (eans prescribed by rules (ade under this Act3
% %0+%+
!"/ vide SRC "%>, dated #+0%+ !"/, published in the &aFette of India, 7xtra0, <t0 II, Sec0 3, p0 "$!, dated #+0%+ !"/0 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 $ Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000 " Clause (aa) renu(bered as clause (ac) by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0
(f) 1recognised stoc) exchange2 (eans a stoc) exchange which is for the ti(e
being recognised by the Central &o'ern(ent under section $3 (g) 1rules2, with reference to the rules relating in general to the constitution and (anage(ent of a stoc) exchange, includes, in the case of a stoc) exchange which is an incorporated association, its (e(orandu( and articles of association3 64(ga) 1sche(e2 (eans a sche(e for corporatisation or de(utualisation of a recognised stoc) exchange which (ay pro'ide for(i) the issue of shares for a lawful consideration and pro'ision of trading rights in lieu of (e(bership cards of (e(bers of a recognised stoc) exchange3 (ii) the restrictions on 'oting rights3 (iii) the transfer of property, business, assets, rights, liabilities, recognitions, contracts of the recognised stoc) exchange, legal proceedings by, or against, the recognised stoc) exchange, whether in the na(e of the recognised stoc) exchange or any trustee or otherwise and any per(ission gi'en to, or by, the recognised stoc) exchange3 (iv) the transfer of e(ployees of a recognised stoc) exchange to another recognised stoc) exchange3 (v) any other (atter re*uired for the purpose of, or in connection with, the corporatisation or de(utualisation, as the case (ay be, of the recognised stoc) exchange3: /4>4(gb): 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (h) 1securities2 include(i) shares, scrips, stoc)s, bonds, debentures, debenture stoc) or other (ar)etable securities of a li)e nature in or of any incorporated co(pany or other body corporate3 !4(ia) deri'ati'e3 (ib) units or any other instru(ent issued by any collecti'e in'est(ent sche(e to the in'estors in such sche(es3:
# Inserted / Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (Second A(end(ent) Act, !!!, Sec %, w0e0f0 #+ %+ !!!0 > Clause (ga) renu(bered as clause (gb) by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 ! Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000
04(ic) security receipt as defined in clause ( Cg) of section % of the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%3: 114(id) units or any other such instru(ent issued to the in'estors under any (utual fund sche(e3: %47xplanation0-6or the re(o'al of doubts, it is hereby declared that ;securities; shall not include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(bined benefit ris) on the life of the persons and in'est(ent by such
persons and issued by an insurer referred to in clause (!) of section % of the Insurance Act, !3> ($ of !3>)3: 35(ie) any certificate or instru(ent (by whate'er na(e called), issued to an in'estor by any issuer being a special purpose distinct entity which possesses any debt or recei'able, including (ortgage debt, assigned to such entity, and ac)nowledging beneficial interest of such in'estor in such debt or recei'able, including (ortgage debt, as the case (ay be3 <
0 Inserted by the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%, Sec0 $ and Schedule, w0r0e0f0 % +#+%00%0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0e0f0 %+ 0+%00$0 % Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, Sec $, w0r0e0f0 0!+0$+%0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, read as under , ;CIA<.7R BI ?ISC7==AE7CHS #0 Dalidati$n&-Eotwithstanding anything contained in any Dudg(ent, decree or order of any Court, .ribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly, any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 0e%eal and #aving#&*( ) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0; 3 Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec %, w0e0f0 %>+"+ %00/0
$4(ii) &o'ern(ent securities3 (iia) such other instru(ents as (ay be declared by the Central &o'ern(ent to be securities3 and: (iii) rights or interest in securities3 "4(i) 1spot deli'ery contract2 (eans a contract which pro'ides for,(a) actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e
town or locality3 (b) transfer of the securities by the depository fro( the account of a beneficial owner to the account of another beneficial owner when such securities are dealt with by a depository3: #4(j) 1stoc) exchange2 (eans(a) any body of indi'iduals, whether incorporated or not, constituted before corporatisation and de(utualisation under sections $A and $8, or (b) a body corporate incorporated under the Co(panies Act, !"# ( of !"#) whether under a sche(e of corporatisation and de(utualisation or otherwise, for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0: /4I ter$ret%tio of 'ert%i /or-! % - e#$re!!io !. "A. Kords and expressions used herein and not defined in this Act but defined in the Co(panies Act, !"# ( of !"#) or the Securities and 7xchange 8oard of India
$ Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, for sub+clause (ii), w0r0e0f0 30+0 + !!%0 " Substituted by the 9epositories Act, !!#, Sec 30 and Schedule, <t0 III, w0r0e0f0 %0+0!+ !!" . <rior to its substitution, clause (i) read as under , N(i) 1spot deli'ery contract2 (eans a contract which pro'ides for the actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e town or locality3J # Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (j) read as under ,N(j) 1stoc) exchange2 (eans any body of indi'iduals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0J / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
Act, !!% ( " of !!%) or the 9epositories Act, !!# (%% of !!#) shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts0: 0(/<=4: (5 1</> (?/@A4=( A$$li'%tio for re'o( itio of !to'6 e#'h% (e!. ). ( ) Any stoc) exchange, which is desirous of being recognised for the purposes of this Act, (ay (a)e an application in the prescribed (anner to the Central &o'ern(ent01: (%) 7'ery application under sub+section ( ) shall contain such particulars as (ay be prescribed, and shall be acco(panied by a copy of the bye+laws of the stoc) exchange for the regulation and control of contracts and also a copy of the rules relating in general to the constitution of the stoc) exchange and in particular, to(a) the go'erning body of such stoc) exchange, its constitution and powers of (anage(ent and the (anner in which its business is to be transacted3 (b) the powers and duties of the office bearers of the stoc) exchange3 (c) the ad(ission into the stoc) exchange of 'arious classes of (e(bers, the *ualifications for (e(bership, and the exclusion, suspension, expulsion and
re+ad(ission of (e(bers therefro( or thereinto3 (d) the procedure for the registration of partnerships as (e(bers of the stoc) exchange in cases where the rules pro'ide for such (e(bership3 and the no(ination and appoint(ent of authorised representati'es and cler)s0 Gr% t of re'o( itio to !to'6 e#'h% (e!. 3. ( ) If the Central &o'ern(ent ! is satisfied, after (a)ing such in*uiry as (ay be necessary in this behalf and after obtaining such further infor(ation, if any, as it (ay re*uire,(a) that the rules and bye+laws of a stoc) exchange applying for registration are in confor(ity with such conditions as (ay be prescribed with a 'iew to ensure fair dealing and to protect in'estors3 (b) that the stoc) exchange is willing to co(ply with any other conditions (including conditions as to the nu(ber of (e(bers) which the Central &o'ern(ent, after consultation with the go'erning body of the stoc) exchange and ha'ing regard to the area ser'ed by the stoc) exchange and its standing and the nature of the securities dealt with by it, (ay i(pose for the purpose of carrying out the obDects of this Act3 and
> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 ! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
(c) that it would be in the interest of the trade and also in the public interest to grant recognition to the stoc) exchange3 it (ay grant recognition to the stoc) exchange subDect to the conditions i(posed upon it as aforesaid and in such for( as (ay be prescribed0 (%) .he conditions which the Central &o'ern(ent %0 (ay prescribe under clause (a) of sub+section ( ) for the grant of recognition to the stoc) exchanges (ay include, a(ong other (atters, conditions relating to,(i) the *ualifications for (e(bership of stoc) exchanges3 (ii) the (anner in which contracts shall be entered into and enforced as between (e(bers3 (iii) the representation of the Central &o'ern(ent on each of the stoc) exchange by such nu(ber of persons not exceeding three as the Central &o'ern(ent (ay no(inate in this behalf3 and (iv) the (aintenance of accounts of (e(bers and their audit by chartered accountants whene'er such audit is re*uired by the Central &o'ern(ent0 (3) 7'ery grant of recognition to a stoc) exchange under this section shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office as of the stoc) exchange is situate, and such recognition shall ha'e effect as fro( the date of its publication in the &aFette of India0 % ($) Eo application for the grant of recognition shall be refused except after gi'ing an opportunity to the stoc) exchange concerned to be heard in the (atter3 and the reasons for such refusal shall be co((unicated to the stoc) exchange in writing0 %% (") Eo rules of a recognised stoc) exchange relating to any of the (atters specified in sub+section (%) of section 3 shall be a(ended except with the appro'al of the
Central &o'ern(ent0%3 "35Cor$or%ti!%tio % - -e.*t*%li!%tio of !to'6 e#'h% (e!. 3A. Cn and fro( the appointed date, all recognised stoc) exchanges (if not corporatised and de(utualised before the appointed date) shall be corporatised and de(utualised in accordance with the pro'isions contained in section $8 ,
%0 <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 % <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %% <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %3 <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 %$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
4ro+i-e- that the Securities and 7xchange 8oard of India (ay, if it is satisfied that any recognised stoc) exchange was pre'ented by sufficient cause fro( being corporatised and de(utualised on or after the appointed date, specify another appointed date in respect of that recognised stoc) exchange and such recognised stoc) exchange (ay continue as such before such appointed date0 ()%lanati$n&*6or the purposes of this section, 1appointed date2 (eans the date which the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, appoint and different appointed dates (ay be appointed for different recognised stoc) exchanges0: "554ro'e-*re for 'or$or%ti!%tio % - -e.*t*%li!%tio . 3;. ( ) All recognised stoc) exchanges referred to in section $A shall, within such ti(e as (ay be specified by the Securities and 7xchange 8oard of India, sub(it a sche(e for corporatisation and de(utualisation for its appro'al , 4ro+i-e- that the Securities and 7xchange 8oard of India, (ay, by notification in the Cfficial &aFette, specify na(e of the recognised stoc) exchange, which had already been corporatised and de(utualised, and such stoc) exchange shall not be re*uired to sub(it the sche(e under this section0 (%) Cn receipt of the sche(e referred to in sub+section ( ), the Securities and 7xchange 8oard of India (ay, after (a)ing such en*uiry as (ay be necessary in this behalf and obtaining such further infor(ation, if any, as it (ay re*uire and if it is satisfied that it would be in the interest of the trade and also in the public interest, appro'e the sche(e with or without (odification0 (3) Eo sche(e under sub+section (%) shall be appro'ed by the Securities and 7xchange 8oard of India if the issue of shares for a lawful consideration or pro'ision of trading rights in lieu of (e(bership card of the (e(bers of a recognised stoc) exchange or pay(ent of di'idends to (e(bers ha'e been proposed out of any reser'es or assets of that stoc) exchange0 ($) Khere the sche(e is appro'ed under sub+section (%), the sche(e so appro'ed shall be published i((ediately by(a) the Securities and 7xchange 8oard of India in the Cfficial &aFette3 (b) the recognised stoc) exchange in such two daily newspapers circulating in India, as (ay be specified by the Securities and 7xchange 8oard of India,
and upon such publication, notwithstanding anything to the contrary contained in this Act or any other law for the ti(e being in force or any agree(ent, award, Dudg(ent, decree or other instru(ent for the ti(e being in force, the sche(e shall ha'e effect and be binding on all persons and authorities including all (e(bers, creditors, depositors and e(ployees of the recognised stoc) exchange and on all
%" Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
persons ha'ing any contract, right, power, obligation or liability with, against, o'er, to, or in connection with, the recognised stoc) exchange or its (e(bers0 (") Khere the Securities and 7xchange 8oard of India is satisfied that it would not be in the interest of the trade and also in the public interest to appro'e the sche(e under sub+section (%), it (ay, by an order, reDect the sche(e and such order of reDection shall be published by it in the Cfficial &aFette , 4ro+i-e- that the Securities and 7xchange 8oard of India shall gi'e a reasonable opportunity of being heard to all the persons concerned and the recognised stoc) exchange concerned before passing an order reDecting the sche(e0 (#) .he Securities and 7xchange 8oard of India (ay, while appro'ing the sche(e under sub+section (%), by an order in writing, restrict(a) the 'oting rights of the shareholders who are also stoc) bro)ers of the reognised stoc) exchange3 (b) the right of shareholders or a stoc) bro)er of the recognised stoc) exchange to appoint the representati'es on the go'erning board of the stoc) exchange3 (c) the (axi(u( nu(ber of representati'es of the stoc) bro)ers of the recognised stoc) exchange to be appointed on the go'erning board of the recognised stoc) exchange, which shall not exceed one+fourth of the total strength of the go'erning board0 (/) .he order (ade under sub+section (#) shall be published in the Cfficial &aFette and on the publication thereof, the order shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#), or any other law for the ti(e being in force, ha'e full effect0 (>) 7'ery recognised stoc) exchange, in respect of which the sche(e for corporatisation or de(utualisation has been appro'ed under sub+section (%), shall, either by fresh issue of e*uity shares to the public or in any other (anner as (ay be specified by the regulations (ade by the Securities and 7xchange 8oard of India %#, ensure that at least fifty+one per cent of its e*uity share capital is held, within twel'e (onths fro( the date of publication of the order under sub+section (/), by the public other than shareholders ha'ing trading rights , 4ro+i-e- that the Securities and 7xchange 8oard of India (ay, on sufficient cause being shown to it and in the public interest, extend the said period by another twel'e (onths0:
ee Securities Contracts (Regulation) (Stoc) 7xchanges and Clearing Corporations) Regulations, %0 %, w0e0f0 %0+0#+%0 % notified vide &aFette Eotification Eo0 =A9+ ERCL&EL%0 %+ 3L0/L 3"$#, 7xtra0, <t0 III, Section $, dtd %0+0#+%0 %0
%#
?ith-r%/%l of re'o( itio .
5. %/4( ): If the Central &o'ern(ent%> is of opinion that the recognition granted to a stoc) exchange under the pro'isions of this Act should, in the interest of the trade or in the public interest, be withdrawn, the Central &o'ern(ent (ay ser'e on the go'erning body of the stoc) exchange a written notice that the Central &o'ern(ent is considering the withdrawal of the recognition for the reasons stated in the notice and after gi'ing an opportunity to the go'erning body to be heard in the (atter, the Central &o'ern(ent (ay withdraw, by notification in the Cfficial &aFette, the recognition granted to the stoc) exchange , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Central &o'ern(ent (ay, after consultation with the stoc) exchange, (a)e such pro'ision as it dee(s fit in the notification of withdrawal or in any subse*uent notification si(ilarly published for the due perfor(ance of any contracts outstanding on that date0 %!4(%) Khere the recognised stoc) exchange has not been corporatised or de(utualised or it fails to sub(it the sche(e referred to in sub+section ( ) of section $8 within the specified ti(e therefor or the sche(e has been reDected by the Securities and 7xchange 8oard of India under sub+section (") of section $8, the recognition granted to such stoc) exchange under section $, shall, notwithstanding anything to the contrary contained in this Act, stand withdrawn and the Central &o'ern(ent shall publish, by notification in the Cfficial &aFette, such withdrawal of recognition , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Securities and 7xchange 8oard of India (ay, after consultation with the stoc) exchange, (a)e such pro'isions as it dee(s fit in the order reDecting the sche(e published in the Cfficial &aFette under sub+section (") of section $80: 4o/er of Ce tr%l Go+er .e t to '%ll for $erio-i'%l ret*r ! or -ire't i 7*irie! to ,e .%-e. 8. ( ) 7'ery recognised stoc) exchange shall furnish to the 304Securities and 7xchange 8oard of India: such periodical returns relating to its affairs as (ay be prescribed0
%/ Section
" renu(bered as sub+section ( ) by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 %> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 30 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(%) 7'ery recognised stoc) exchange and e'ery (e(ber thereof shall (aintain and preser'e for such periods not exceeding fi'e years such boo)s of account, and other docu(ents as the Central &o'ern(ent, after consultation with the stoc) exchange concerned, (ay prescribe in the interest of the trade or in the public interest, and such boo)s of account, and other docu(ents shall be subDect to inspection at all reasonable ti(es 3 4by the Securities and 7xchange 8oard of India:0 (3) Kithout preDudice to the pro'isions contained in sub+sections ( ) and (%), the
3%4Securities
and 7xchange 8oard of India:, if it is satisfied that it is in the interest of the trade or in the public interest so to do, (ay, by order in writing,(a) call upon a recognised stoc) exchange or any (e(ber thereof to furnish in writing such infor(ation or explanation relating to the affairs of the stoc) exchange or of the (e(ber in relation to the stoc) exchange as the 334Securities and 7xchange 8oard of India: (ay re*uire3 or (b) appoint one or (ore persons to (a)e an in*uiry in the prescribed (anner in relation to the affairs of the go'erning body of a stoc) exchange or the affairs of any of the (e(bers of the stoc) exchange in relation to the stoc) exchange and sub(it a report of the result of such in*uiry to the 3$4Securities and 7xchange 8oard of India: within such ti(e as (ay be specified in the order or, in the case of an in*uiry in relation to the affairs of any of the (e(bers of a stoc) exchange, direct the go'erning body to (a)e the in*uiry and sub(it its report to the 3"4Securities and 7xchange 8oard of India:0 ($) Khere an in*uiry in relation to the affairs of a recognised stoc) exchange or the affairs of any of its (e(bers in relation to the stoc) exchange has been underta)en under sub+section (3),(a) e'ery director, (anager, secretary or other officer of such stoc) exchange3 (b) e'ery (e(ber of such stoc) exchange3 (c) if the (e(ber of the stoc) exchange is a fir(, e'ery partner, (anager, secretary or other officer of the fir(3 and (d) e'ery other person or body of persons who has had dealings in the course of business with any of the persons (entioned in clauses ( a), (b) and (c), whether directly or indirectly3
Substituted for ;by the Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3% Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 33 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3" Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
3
shall be bound to produce before the authority (a)ing the in*uiry all such boo)s of account, and other docu(ents in his custody or power relating to or ha'ing a bearing on the subDect+(atter of such in*uiry and also to furnish the authorities within such ti(e as (ay be specified with any such state(ent or infor(ation relating thereto as (ay be re*uired of hi(0 )8A *%l re$ort! to ,e f*r i!he- to Ce tr%l Go+er .e t ,> !to'6 e#'h% (e!. 7. 7'ery recognised stoc) exchange shall furnish the Central &o'ern(ent with a copy of the annual report, and such annual report shall contain such particulars as (ay be prescribed0 )754o/er of re'o( i!e- !to'6 e#'h% (e to .%6e r*le! re!tri'ti ( +oti ( ri(ht!, et'. 7A. ( ) A recognised stoc) exchange (ay (a)e rules or a(end any rules (ade by it
to pro'ide for all or any of the following (atters, na(ely ,(a) the restriction of 'oting rights to (e(bers only in respect of any (atter placed before the stoc) exchange at any (eeting3 (b) the regulation of 'oting rights in respect of any (atter placed before the stoc) exchange at any (eeting so that each (e(ber (ay be entitled to ha'e one 'ote only, irrespecti'e of his share of the paid+up e*uity capital of the stoc) exchange3 (c) the restriction on the right of a (e(ber to appoint another person as his proxy to attend and 'ote at a (eeting of the stoc) exchange3 (d) such incidental, conse*uential and supple(entary (atters as (ay be necessary to gi'e effect to any of the (atters specified in clauses ( a), (b) and (c)0 (%) Eo rules of a recognised stoc) exchange (ade or a(ended in relation to any (atter referred to in clauses (a) to (d) of sub+section ( ) shall ha'e effect until they ha'e been appro'ed by the Central &o'ern(ent 3> and published by that &o'ern(ent in the Cfficial &aFette and, in appro'ing the rules so (ade or a(ended, the Central &o'ern(ent (ay (a)e such (odifications therein as it thin)s fit, and on such publication, the rules as appro'ed by the Central &o'ern(ent shall be dee(ed to ha'e been 'alidly (ade, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#)0:
3# <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 3/ Inserted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec %, w0e0f0 0>+ %+ !"!0 3> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
4o/er of Ce tr%l Go+er .e t )9 to -ire't r*le! to ,e .%-e or to .%6e r*le!. :. ( ) Khere, after consultation with the go'erning bodies of stoc) exchanges generally or with the go'erning body of any stoc) exchange in particular, the Central &o'ern(ent is of opinion that it is necessary or expedient so to do, it (ay, by order in writing together with a state(ent of the reasons therefor, direct recognised stoc) exchanges generally or any recognised stoc) exchange in particular, as the case (ay be, to (a)e any rules or to a(end any rules already (ade in respect of all or any of the (atters specified in sub+section (%) of section 3 within a period of $04two (onths: fro( the date of the order0 (%) If any recognised stoc) exchange fails or neglects to co(ply with any order (ade under sub+section ( ) within the period specified therein, the Central &o'ern(ent (ay (a)e the rules for, or a(end the rules (ade by, the recognised stoc) exchange, either in the for( proposed in the order or with such (odifications thereof as (ay be agreed to between the stoc) exchange and the Central &o'ern(ent0 (3) Khere in pursuance of this section any rules ha'e been (ade or a(ended, the rules so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette or &aFettes of the State or States in which the principal office or offices of the recognised stoc) exchange or exchanges is or are situate, and, on the publication thereof in the &aFette of India, the rules so (ade or a(ended shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# (
of !"#), or in any other law for the ti(e being in force, ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange or stoc) exchanges, as the case (ay be0 315Cle%ri ( 'or$or%tio . :A. ( ) A recognised stoc) exchange (ay, with the prior appro'al of the Securities and 7xchange 8oard of India, transfer the duties and functions of a clearing house to a clearing corporation, being a co(pany incorporated under the Co(panies Act, !"# ( of !"#), for the purpose of(a) the periodical settle(ent of contracts and differences thereunder3 (b) the deli'ery of, and pay(ent for, securities3 (c) any other (atter incidental to, or connected with, such transfer0 (%) 7'ery clearing corporation shall, for the purpose of transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( ),
3! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 $0 Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec !, w0e0f0 %"+ 0 + !!"0 $ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0
(a)e bye+laws and sub(it the sa(e to the Securities and 7xchange 8oard of India for its appro'al0 (3) .he Securities and 7xchange 8oard of India (ay, on being satisfied that it is in the interest of the trade and also in the public interest to transfer the duties and functions of a clearing house to a clearing corporation, grant appro'al to the byelaws sub(itted to it under sub+section (%) and appro'e the transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( )0 ($) .he pro'isions of sections $, ", #, /, >, !, 0, and % shall, as far as (ay be, apply to a clearing corporation referred to in sub+section ( ) as they apply in relation to a recognised stoc) exchange0: 4o/er of re'o( i!e- !to'6 e#'h% (e! to .%6e ,>e0l%/!. 9. ( ) Any recognised stoc) exchange (ay, subDect to the pre'ious appro'al of the $%4Securities and 7xchange 8oard of India:, (a)e bye+laws for the regulation and control of contracts0 (%) In particular, and without preDudice to the generality of the foregoing power, such bye+laws (ay pro'ide for , (a) the opening and closing of (ar)ets and the regulation of the hours of trade3 (b) a clearing house for the periodical settle(ent of contracts and differences thereunder, the deli'ery of and pay(ent for securities, the passing on of deli'ery orders and the regulation and (aintenance of such clearing house3 (c) the sub(ission to the $34Securities and 7xchange 8oard of India: by the clearing house as soon as (ay be after each periodical settle(ent of all or any of the following particulars as the $$4Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, re*uire, na(ely ,(i) the total nu(ber of each category of security carried o'er fro( one settle(ent period to another3 (ii) the total nu(ber of each category of security, contracts in respect of
which ha'e been s*uared up during the course of each settle(ent period3 (iii) the total nu(ber of each category of security actually deli'ered at each clearing3
$% Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(d) the publication by the clearing house of all or any of the particulars sub(itted to the $"4Securities and 7xchange 8oard of India: under clause ( c) subDect to the directions, if any, issued by the $#4Securities and 7xchange 8oard of India: in this behalf3 (e) the regulation or prohibition of blan) transfers3 (f) the nu(ber and classes of contracts in respect of which settle(ents shall be (ade or differences paid through the clearing house3 (g) the regulation, or prohibition of b!dla# or carry+o'er facilities3 (h) the fixing, altering or postponing of days for settle(ents3 (i) the deter(ination and declaration of (ar)et rates, including the opening, closing highest and lowest rates for securities3 (j) the ter(s, conditions and incidents of contracts, including the prescription of (argin re*uire(ents, if any, and conditions relating thereto, and the for(s of contracts in writing3 (k) the regulation of the entering into, (a)ing, perfor(ance, recession and ter(ination, of contracts, including contracts between (e(bers or between a (e(ber and his constituent or between a (e(ber and a person who is not a (e(ber, and the conse*uences of default or insol'ency on the part of a seller or buyer or inter(ediary, the conse*uences of a breach or o(ission by a seller or buyer, and the responsibility of (e(bers who are not parties to such contracts3 (l) the regulation of taravani business including the placing of li(itations thereon3 (") the listing of securities on the stoc) exchange, the inclusion of any security for the purpose of dealings and the suspension or withdrawal of any such securities, and the suspension or prohibition of trading in any specified securities3 (n) the (ethod and procedure for the settle(ent of clai(s or disputes, including settle(ent by arbitration3 ($) the le'y and reco'ery of fees, fines and penalties3 (%) the regulation of the course of business between parties to contracts in any capacity3 (+) the fixing of a scale of bro)erage and other charges3 (r) the (a)ing, co(paring, settling and closing of bargains3 (#) the e(ergencies in trade which (ay arise, whether as a result of pool or syndicated operations or cornering or otherwise, and the exercise of powers in
$" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%,
Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $# Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
such e(ergencies, including the power to fix (axi(u( and (ini(u( prices for securities3 (t) the regulation of dealings by (e(bers for their own account3 (!) the separation of the functions of Dobbers and bro)ers3 (v) the li(itations on the 'olu(e of trade done by any indi'idual (e(ber in exceptional circu(stances3 (.) the obligation of (e(bers to supply such infor(ation or explanation and to produce such docu(ents relating to the business as the go'erning body (ay re*uire0 (3) .he bye+laws (ade under this section (ay(a) specify the bye+laws the contra'ention of which shall (a)e a contract entered into otherwise than in accordance with the bye+laws 'oid under sub+section ( ) of section $3 (b) pro'ide that the contra'ention of any of the bye+laws shall render the (e(ber concerned liable to one or (ore of the following punish(ents, na(ely ,(i) fine, (ii) expulsion fro( (e(bership, (iii) suspension fro( (e(bership for a specified period, (iv) any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney0 ($) Any bye+laws (ade under this section shall be subDect to such conditions in regard to pre'ious publication as (ay be prescribed, and, when appro'ed by the $/4Securities and 7xchange 8oard of India:, shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and shall ha'e effect as fro( the date of its publication in the &aFette of India , 4ro+i-e- that if the $>4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+law should be (ade i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0
$/ Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $> Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4o/er of 395Se'*ritie! % - E#'h% (e ;o%r- of I -i%< to .%6e or %.e - ,>e0l%/! of re'o( i!e- !to'6 e#'h% (e!. 1=. ( ) .he "04Securities and 7xchange 8oard of India: (ay, either on a re*uest in writing recei'ed by it in this behalf fro( the go'erning body of a recognised stoc) exchange or on its own (otion, if it is satisfied after consultation with the go'erning body of the stoc) exchange that it is necessary or expedient so to do and after recording its reasons for so doing, (a)e bye+laws for all or any of the (atters specified in section ! or a(end any bye+laws (ade by such stoc) exchange under that section0
(%) Khere in pursuance of this section any bye+laws ha'e been (ade or a(ended the bye+laws so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and on the publication thereof in the &aFette of India, the bye+laws so (ade or a(ended shall ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange concerned0 (3) Eotwithstanding anything contained in this section, where the go'erning body of a recognised stoc) exchange obDects to any bye+laws (ade or a(ended under this section by the " 4Securities and 7xchange 8oard of India: on its own (otion, it (ay, within "%4two (onths: of the publication thereof in the &aFette of India under subsection (%), apply to the "34Securities and 7xchange 8oard of India: for re'ision thereof, and the "$4Securities and 7xchange 8oard of India: (ay, after gi'ing an opportunity to the go'erning body of the stoc) exchange to be heard in the (atter, re'ise the bye+laws so (ade or a(ended, anywhere any bye+laws so (ade or a(ended are re'ised as a result of any action ta)en under this sub+section, the byelaws so re'ised shall be published and shall beco(e effecti'e as pro'ided in subsection (%)0 ($) .he (a)ing or the a(end(ent or re'ision of any bye+laws under this section shall in all cases be subDect to the condition of pre'ious publication ,
$! Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "0 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 " Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "% Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec %0, w0e0f0 %"+ 0 + !!"0 "3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4ro+i-e- that if the ""4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+laws should be (ade, a(ended or re'ised i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0 4o/er of Ce tr%l Go+er .e t 58 to !*$er!e-e (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e. 11. ( ) Kithout preDudice to any other powers 'ested in the Central &o'ern(ent under this Act, where the Central &o'ern(ent is of opinion that the go'erning body of any recognised stoc) exchange should be superseded, then, notwithstanding anything contained in any other law for the ti(e being in force, in the Central &o'ern(ent (ay ser'e on the go'erning body a written notice that the Central &o'ern(ent is considering the supersession of the go'erning body for the reasons specified in the notice and after gi'ing an opportunity to the go'erning body to be
heard in the (atter, it (ay, by notification in the Cfficial &aFette, declare the go'erning body of such stoc) exchange to be superseded, and (ay appoint any person or persons to exercise and perfor( all the powers and duties of the go'erning body, and, where (ore persons than one are appointed, (ay appoint one of such persons to be the chair(an and another to be the 'ice+chair(an thereof0 (%) Cn the publication of a notification in the Cfficial &aFette under sub+section ( ), the following conse*uences shall ensue, na(ely,(a) the (e(bers of the go'erning body which has been superseded shall, as fro( the date of the notification of supersession, cease to hold office as such (e(bers3 (b) the person or persons appointed under sub+section ( ) (ay exercise and perfor( all the powers and duties of the go'erning body which has been superseded3 (c) all such property of the recognised stoc) exchange as the person or persons appointed under sub+section ( ) (ay, by order in writing, specify in this behalf as being necessary for the purpose of enabling hi( or the( to carry on the business of the stoc) exchange, shall 'est in such person or persons0 (3) Eotwithstanding anything to the contrary contained in any law or the rules or bye+laws of the recognised stoc) exchange the go'erning body of which is superseded under sub+section ( ), the person or persons appointed under that subsection shall hold office for such period as (ay be specified in the notification published under that sub+section and the Central &o'ern(ent (ay fro( ti(e to ti(e, by li)e notification, 'ary such period0
"" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "# <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0
($) .he Central &o'ern(ent (ay at any ti(e before the deter(ination of the period of office of any person or persons appointed under this section call upon the recognised stoc) exchange to re+constitute the go'erning body in accordance with its rules and on such re+constitution all the property of the recognised stoc) exchange which has 'ested in, or was in the possession of, the person or persons appointed under sub+section ( ), shall re+'est or 'est, as the case (ay be, in the go'erning body so re+constituted , 4ro+i-e- that until a go'erning body is so re+constituted, the person or persons appointed under sub+section ( ) shall continue to exercise and perfor( their powers and duties0 4o/er57 to !*!$e - ,*!i e!! of re'o( i!e- !to'6 e#'h% (e!. 1". If in the opinion of the Central &o'ern(ent an e(ergency has arisen and for the purpose of (eeting the e(ergency the Central &o'ern(ent considers it expedient so to do, it (ay, by notification in the Cfficial &aFette, for reasons to be set out therein, direct a recognised stoc) exchange to suspend such of its business for such period not exceeding se'en days and subDect to such conditions as (ay be specified in the notification, and, if, in the opinion of the Central &o'ern(ent, the interest of
the trade or the public interest re*uires that the period should be extended, (ay, by li)e notification extend the said period fro( ti(e to ti(e , 4ro+i-e- that where the period of suspension is to be extended beyond the first period, no notification extending the period of suspension shall be issued unless the go'erning body of the ">4recognised stoc) exchange: has been gi'en an opportunity of being heard in the (atter0 "!54o/er to i!!*e -ire'tio !. 1"A. If, after (a)ing or causing to be (ade an in*uiry, the Securities and 7xchange 8oard of India is satisfied that it is necessary(a) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (b) to pre'ent the affairs of any recognised stoc) exchange or clearing corporation, or such other agency or person, pro'iding trading or clearing or settle(ent facility in respect of securities, being conducted in a (anner detri(ental to the interests of in'estors or securities (ar)et3 or (c) to secure the proper (anage(ent of any such stoc) exchange or clearing corporation or agency or person, referred to in clause ( b),
"/ <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 "> Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 "! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0
it (ay issue such directions,(i) to any stoc) exchange or clearing corporation or agency or person referred to in clause (b) or any person or class of persons associated with the securities (ar)et3 or (ii) to any co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 8=5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< /<410A/1 A45 <81:<4 :4 (/A0:1:( Co tr%'t! i otifie- %re%! ille(%l i 'ert%i 'ir'*.!t% 'e!. 1). If the Central &o'ern(ent# is satisfied, ha'ing regard to the nature or the 'olu(e of transactions in securities in any #%4State or States or area: that it is necessary so to do, it (ay, by notification in the Cfficial &aFette, declared this section to apply to such #34State or States or area:, and thereupon e'ery contract in such #$4State or States or area: which is entered into after the date of the notification otherwise than #"4between (e(bers of a recognised stoc) exchange or recognised stoc) exchanges: in such ##4State or States or area: or through or with such (e(ber shall be illegal ,
#0 I #
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 #% Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #3 Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #$ Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$ for ;between (e(bers of a recognised stoc) exchange; & ## Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0
#/54ro+i-e-
that any contract entered into between (e(bers of two or (ore recognised stoc) exchanges in such State or States or area, shall(i) be subDect to such ter(s and conditions as (ay be stipulated by the respecti'e stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India3 (ii) re*uire prior per(ission fro( the respecti'e stoc) exchanges if so stipulated by the stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India0: #>4A--itio %l tr%-i ( floor. 1)A. A stoc) exchange (ay establish additional trading floor with the prior appro'al of the Securities and 7xchange 8oard of India in accordance with the ter(s and conditions stipulated by the said 8oard0 ()%lanati$n , 6or the purposes of this section, 1additional trading floor2 (eans a trading ring or trading facility offered by a recognised stoc) exchange outside its area of operation to enable the in'estors to buy and sell securities through such trading floor under the regulatory fra(ewor) of that stoc) exchange0: Co tr%'t! i otifie- %re%! to ,e +oi- i 'ert%i 'ir'*.!t% 'e!. 13. ( ) Any contract entered into in any State or area specified in the notification under section 3 which is in contra'ention of any of the bye+laws specified in that behalf under clause (a) of sub+section (3) of section ! shall be 'oid , (i) as respects the rights of any (e(ber of the recognised stoc) exchange who has entered into such contract in contra'ention of any such bye+law, and also (ii) as respects the rights of any other person who has )nowingly participated in the transaction entailing such contra'ention0 (%) Eothing in sub+section ( ) shall be construed to affect the right of any person other than a (e(ber of the recognised stoc) exchange to enforce any such contract or to reco'er any su( under or in respect of such contract if such person had no )nowledge that the transaction was in contra'ention of any of the bye+laws specified in clause (a) of sub+section (3) of section !0 @e.,er! .%> ot %'t %! $ri 'i$%l! i 'ert%i 'ir'*.!t% 'e!. 15. Eo (e(ber of a recognised stoc) exchange shall in respect of any securities enter into any contract as a principal with any person other than a (e(ber of a recognised stoc) exchange, unless he has secured the consent or authority of such
#/ Inserted #> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (A(end(ent) Act, !!", Sec % , w0e0f0 %"+0 + !!"0
person and discloses in the note, (e(orandu( or agree(ent of sale or purchase that he is acting as a principal , 4ro+i-e- that where the (e(ber has secured the consent or authority of such person otherwise than in writing he shall secure written confir(ation by such person or such consent or authority within three days fro( the date of the contract , 4ro+i-e- f*rther that no such written consent or authority of such person shall be necessary for closing out any outstanding contract entered into by such person in accordance with the bye+laws, if the (e(ber discloses in the note, (e(orandu( or agree(ent of sale or purchase in respect of such closing out that he is acting as a principal0 4o/er89 to $rohi,it 'o tr%'t! i 'ert%i '%!e!. 18. ( ) If the Central &o'ern(ent is of opinion that it is necessary to pre'ent undesirable speculation in specified securities in any State or area, it (ay, by notification in the Cfficial &aFette, declare that no person in the State or area specified in the notification shall, sa'e with the per(ission of the Central &o'ern(ent, enter into any contract for the sale or purchase of any security specified in the notification except to the extent and in the (anner, if any, specified therein0 (%) All contracts in contra'ention of the pro'isions of sub+section ( ) entered into after the date of notification issued thereunder shall be illegal0 Li'e !i ( of -e%ler! i !e'*ritie! i 'ert%i %re%!. 17. ( ) SubDect to the pro'isions of sub+section (3) and to the other pro'isions contained in this Act, no person shall carry on or purport to carry on, whether on his own behalf or on behalf of any other person, the business of dealing in securities in any State or area to which section 3 has not been declared to apply and to which the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, declare this section to apply, except under the authority of a /04licence granted by the Securities and 7xchange 8oard of India: in this behalf0 (%) Eo notification under sub+section ( ) shall be issued with respect to any State or area unless the Central &o'ern(ent is satisfied, ha'ing regard to the (anner in which securities are being dealt with in such State or area, that it is desirable or
#! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 <owers are exercisable by R8I also 'ide &o'ern(ent of India Eotification Eo0 >3 (7), 9ated 0 +03+%000 in relation to any contracts in go'ern(ent securities, (oney (ar)et securities etc0 /0 Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% for ;licence granted by the Central &o'ern(ent;0
expedient in the interest of the trade or in the public interest that such dealings should be regulated by a syste( of licensing0 (3) .he restrictions i(posed by sub+section ( ) in relation to dealings in securities shall not apply to the doing of anything by or on behalf of a (e(ber of any recognised stoc) exchange0
7154*,li'
i!!*e % - li!ti ( of !e'*ritie! referre- to i !*,0'l%*!e ( ie) of 'l%*!e (h)
of !e'tio ". 17A. ( ) Kithout preDudice to the pro'isions contained in this Act or any other law for the ti(e being in force, no securities of the nature referred to in sub+clause (ie) of clause (h) of section % shall be offered to the public or listed on any recognised stoc) exchange unless the issuer fulfils such eligibility criteria and co(plies with such other re*uire(ents as (ay be specified by regulations (ade by the Securities and 7xchange 8oard of India0 (%) 7'ery issuer referred to in sub+clause (ie) of clause (h) of section % intending to offer the certificates or instru(ents referred therein to the public shall (a)e an application, before issuing the offer docu(ent to the public, to one or (ore recognised stoc) exchanges for per(ission for such certificates or instru(ents to be listed on the stoc) exchange or each such stoc) exchange0 (3) Khere the per(ission applied for under sub+section (%) for listing has not been granted or refused by the recognised stoc) exchanges or any of the(, the issuer shall forthwith repay all (oneys, if any, recei'ed fro( applicants in pursuance of the offer docu(ent, and if any such (oney is not repaid within eight days after the issuer beco(es liable to repay it, the issuer and e'ery director or trustee thereof, as the case (ay be, who is in default shall, on and fro( the expiry of the eighth day, be Dointly and se'erally liable to repay that (oney with interest at the rate of fifteen per cent per annu(0 7xplanation0-In rec)oning the eighth day after another day, any inter'ening day which is a public holiday under the Eegotiable Instru(ents Act, >> (%# of >> ), shall be disregarded, and if the eighth day (as so rec)oned) is itself such a public holiday, there shall for the said purposes be substituted the first day thereafter which is not a holiday0 ($) All the pro'isions of this Act relating to listing of securities of a public co(pany on a recognised stoc) exchange shall, (utatis (utandis, apply to the listing of the securities of the nature referred to in sub+clause (ie) of clause (h) of section % by the issuer, being a special purpose distinct entity0 <
Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec 3, w0e0f0 %>+0"+ %00/0
/
E#'l*!io of !$ot -eli+er> 'o tr%'t! fro. !e'tio ! 1), 13, 15 % - 17. 1:. ( ) Eothing contained in sections 3, $, " and / shall apply to spot deli'ery contracts0 (%) Eotwithstanding anything contained in sub+section ( ), if the Central &o'ern(ent/% is of opinion that in the interest of the trade or in the public interest it is expedient to regulate and control the business of dealing in spot deli'ery contracts also in any State or area (whether section 3 has been declared to apply to that State or area or not), it (ay, by notification in the Cfficial &aFette, declare that the pro'isions of section / shall also apply to such State or area in respect of spot deli'ery contracts generally or in respect of spot deli'ery contracts for the sale or purchase of such securities as (ay be specified in the notification, and (ay also specify the (anner in which, and the extent to which, the pro'isions of that section
shall so apply0 /34Co tr%'t! i -eri+%ti+e. 1:A. Eotwithstanding anything contained in any other law for the ti(e being in force, contracts in deri'ati'e shall be legal and 'alid if such contracts are(a) traded on a recognised stoc) exchange3 (b) settled on the clearing house of the recognised stoc) exchange, in accordance with the rules and bye+laws of such stoc) exchange0: Sto'6 e#'h% (e! other th% re'o( i!e- !to'6 e#'h% (e! $rohi,ite-. 19. ( ) Eo person shall, except with the per(ission of the Central &o'ern(ent, organise or assist in organising or be a (e(ber of any stoc) exchange (other than a recognised stoc) exchange) for the purpose of assisting in, entering into or perfor(ing any contracts in securities0 (%) .his section shall co(e into force in any State or area on such date as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 4rohi,itio of o$tio ! i !e'*ritie!. "=. 734GGGGG:
/% <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 /3 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec 3, w0e0f0 %%+%+%0000 /$ C(itted by the Securities =aws (A(end(ent) Act, !!", Sec %%, w0e0f0 %"+0 + !!"0 <rior to o(ission, section %0 read as under , 1%00 8r$hibiti$n $f $%ti$n# in #ec!ritie#&-( ) Eotwithstanding anything contained in this Act or in any other law for the ti(e being in force, all options in securities entered into after the co((ence(ent of this Act shall be illegal0
9: 1:4= <E (/A0:1:( 754GGG: /#4Co -itio ! for li!ti (. "1. Khere securities are listed on the application of any person in any recognised stoc) exchange, such person shall co(ply with the conditions of the listing agree(ent with that stoc) exchange&: 775Deli!ti ( of !e'*ritie!. "1A. ( ) A recognised stoc) exchange (ay delist the securities, after recording the reasons therefor, fro( any recognised stoc) exchange on any of the ground or grounds as (ay be prescribed under this Act , 4ro+i-e- that the securities of a co(pany shall not be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) A listed co(pany or an aggrie'ed in'estor (ay file an appeal before the Securities Appellate .ribunal against the decision of the recognised stoc) exchange delisting the securities within fifteen days fro( the date of the decision of the recognised stoc) exchange delisting the securities and the pro'isions of sections %%8 to %%7 of this Act, shall apply, as far as (ay be, to such appeals , 4ro+i-e- that the Securities Appellate .ribunal (ay, if it is satisfied that the co(pany was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding one (onth0:
(%) Any option in securities which has been entered into before such co((ence(ent and which re(ains to be perfor(ed, whether wholly or in part, after such co((ence(ent shall, to that
extent, beco(e 'oid02 /" Kords 18O <H8=IC CC?<AEI7S2 o(itted by the Securities =aws (A(end(ent) Act, !!!, Sec $, w0e0f0 %%+0%+%0000 /# Substituted by the Securities =aws (A(end(ent) Act, !!", Sec 33, w0e0f0 %"+0 + !!" . <rior to substitution, section % read as under , 1% 0 8$.er t$ c$"%el li#ting $f #ec!ritie# bF %!blic c$"%anie#& -Eotwithstanding anything contained in any other law for the ti(e being in force, if the Securities and 7xchange 8oard of India is of opinion, ha'ing regard to the nature of the securities issued by any public co(pany as defined in the Co(panies Act, !"# ( of !"#), or to the dealings in the(, that it is necessary or expedient in the interest of the trade or in the public interest so to do, it (ay re*uire the co(pany, after gi'ing it an opportunity of being heard in the (atter, to co(ply with such re*uire(ents as (ay be prescribed with respect to the listing of its securities on any recognised stoc) exchange02 // Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec >, w0r0e0f0 %+ 0+%00$0
7:5Ri(ht
of %$$e%l %(%i !t ref*!%l of !to'6 e#'h% (e! to li!t !e'*ritie! of $*,li' 'o.$% ie!. 79"". Khere a recognised stoc) exchange acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any public co(pany >04or collecti'e in'est(ent sche(e:, the co(pany > 4or sche(e: shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( ) of section /3 of the Co(panies Act, !"# ( of !"#) (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Central &o'ern(ent (ay, on sufficient cause being shown, allow, appeal to the Central &o'ern(ent against such refusal, o(ission or failure, as the case (ay be, and thereupon the Central &o'ern(ent (ay, after gi'ing the stoc) exchange an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange, or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Central &o'ern(ent sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Central &o'ern(ent: , >%44ro+i-e- that no appeal shall be preferred against refusal, o(ission or failure, as the case (ay be, under this section on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!0: :)5Ri(ht of %$$e%l to Se'*ritie! A$$ell%te Tri,* %l %(%i !t ref*!%l of !to'6 e#'h% (e to li!t !e'*ritie! of $*,li' 'o.$% ie!.
/> Substituted
by .he Co(panies (A(end(ent) Act, !/$ (Act Eo0 $ of !/$), Sec $%, w0e0f0 0 + 0%+ !/"0 /! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the
&aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 >0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%00003 Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 > Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%0000 >% Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec $, w0e0f0 #+ %+ !!!0 >3 Sections %%A, %%8, %%C, %%9, %%7 and %%6 inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!!& 7arlier section %%A was inserted by .he
""A. ( ) Khere a recognised stoc) exchange, acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any co(pany, the co(pany shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( A) of section /3 of the Co(panies Act, !"# ( of !"#), (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Securities Appellate .ribunal (ay, on sufficient cause being shown, allow, appeal to the Securities Appellate .ribunal ha'ing Durisdiction in the (atter against such refusal, o(ission or failure, as the case (ay be, and thereupon the Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange, an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange3 or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Securities Appellate .ribunal sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Securities Appellate .ribunal0 (%) 7'ery appeal under sub+section ( ) shall be in such for( and be acco(panied by such fee as (ay be prescribed0 (3) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 ($) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: :354ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. "";. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of
Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec %, w0e0f0 /+ 0 + !>#, and o(itted by the 9epositories Act, !!#, Sec 30 and Sch0, <t0III, w0r0e0f0 %0+0!+ !!"0 >$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath 3 (b) re*uiring the disco'ery and production of docu(ents 3 (c) recei'ing e'idence on affida'its 3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents 3 (e) re'iewing its decisions 3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte ; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0: :55Ri(ht to le(%l re$re!e t%tio . ""C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of sub+section ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of subsection ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of
>" Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
!"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, vakil or an attorney of any Iigh Court, and includes a pleader in practice0: :85Li.it%tio . ""D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0: :75Ci+il 'o*rt ot to h%+e G*ri!-i'tio .
""E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0: ::5A$$e%l to S*$re.e Co*rt. ""2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order, 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: 8(4A91:( A45 80</(5A0( 4e %ltie!. "). ( ) Any person who+
># Inserted >/ Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & >> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec !, w0r0e0f0 %+ 0+%00$0 7arlier section %%6 as inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", read as under,+ 1""2. A$$e%l to Di(h Co*rt.+Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order , 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
(a) without reasonable excuse (the burden of pro'ing which shall be on hi() fails to co(ply with any re*uisition (ade under sub+section ($) of section #3 or (b) enters into any contract in contra'ention of any of the pro'isions contained in section 3 or section #3 or (c) contra'enes the pro'isions contained in >!5section / or section /A<, or section !3 or 90 4(d) enters into any contract in deri'ati'e in contra'ention of section >A or the rules (ade under section 303: (e) owns or )eeps a place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act and )nowingly per(its such place to be used for such purposes3 or (f) (anages, controls, or assists in )eeping any place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act or at which contracts are recorded or adDusted or rights or liabilities arising out of contracts are adDusted, regulated or enforced in any (anner whatsoe'er3 or (g) not being a (e(ber of a recognised stoc) exchange or his agent authorised as
such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section / wilfully represents to or induces any person to belie'e that contracts can be entered into or perfor(ed under this Act through hi(3 or (h) not being a (e(ber of a recognised stoc) exchange or his agent authorised as such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section /, can'asses, ad'ertises or touts in any (anner either for hi(self or on behalf of any other persons for any business connected with contracts in contra'ention of any of the pro'isions of this Act3 or (i) Doins, gathers or assists in gathering at any place other than the place of business specified in the bye+laws of a recognised stoc) exchange any person or persons for (a)ing bids or offers or for entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act3 ! 4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which
>! Inserted
by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec $, w0e0f0 %>+0"+ %00/ for ;section /;0 !0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec #, w0e0f0 %%+0%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 ! Substituted for 1shall, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0
(ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: (%) Any person who enters into any contract in contra'ention of the pro'isions contained in section " !%4or who fails to co(ply with the pro'isions of !34section % or section % A: or with the orders of: or section %% !$4or with the orders of the Securities Appellate .ribunal: !"4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 9854e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. ")A. Any person, who is re*uired under this Act or any rules (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to a recognised stoc) exchange, fails to furnish the sa(e within the ti(e specified therefor in the listing agree(ent or conditions or bye+laws of the recognised stoc) exchange, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to (aintain boo)s of account or records, as per the listing agree(ent or conditions, or bye+laws of a recognised stoc) exchange, fails to (aintain the sa(e, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0:
9754e
%lt> for f%il*re ,> % > $er!o to e ter i to % %(ree.e t /ith 'lie t!. ");. If any person, who is re*uired under this Act or any bye+laws of a recognised stoc) exchange (ade thereunder, to enter into an agree(ent with his client, fails to enter into such an agree(ent, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0:
!% Substituted
for 1or who fails to co(ply with the orders of the Securities and 7xchange 8oard of India under section % 2 by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 <rior to !!", ;Securities and 7xchange 8oard of India under section % or Central &o'ern(ent under section %%; were substituted for ;Central &o'ern(ent under section % or section %%; vide .he Schedule, <art II of Securities and 7xchange 8oard of India Act, !!%, w0e0f0 30+0 + !!%0 !3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec #, w0e0f0 #+ %+ !!!0 !" Substituted for 1shall, on con'iction, be punishable with fine which (ay extend to one thousand rupees2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !# Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$ & !/ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$0
9:54e
%lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. ")C. If any stoc) bro)er or sub+bro)er or a co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, after ha'ing been called upon by the Securities and 7xchange 8oard of India or a recognised stoc) exchange in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e stipulated by the Securities and 7xchange 8oard of India or a recognised stoc) exchange, he or it shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 9954e %lt> for f%il*re to !e(re(%te !e'*ritie! or .o e>! of 'lie t or 'lie t!. ")D. If any person, who is registered under section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%) as a stoc) bro)er or sub+bro)er, fails to segregate securities or (oneys of the client or clients or uses the securities or (oneys of a client or clients for self or for any other client, he shall be liable to a penalty not exceeding one crore rupees0: 1==54e %lt> for f%il*re to 'o.$l> /ith $ro+i!io of li!ti ( 'o -itio ! or -eli!ti ( 'o -itio ! or (ro* -!. ")E. If a co(pany or any person (anaging collecti'e in'est(ent sche(e or (utual fund, fails to co(ply with the listing conditions or delisting conditions or grounds or co((its a breach thereof, it or he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0: 1=154e %lt> for e#'e!! -e.%teri%li!%tio or -eli+er> of * li!te- !e'*ritie!. ")2. If any issuer de(aterialises securities (ore than the issued securities of a co(pany or deli'ers in the stoc) exchanges the securities which are not listed in the recognised stoc) exchange or deli'ers securities where no trading per(ission has been gi'en by the recognised stoc) exchange, he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0:
!> Inserted !! Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 00 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0
%+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0
1="54e
%lt> for f%il*re to f*r i!h $erio-i'%l ret*r !, et'. ")G. If a recognised stoc) exchange fails or neglects to furnish periodical returns to the Securities and 7xchange 8oard of India or fails or neglects to (a)e or a(end its rules or bye+laws as directed by the Securities and 7xchange 8oard of India or fails to co(ply with directions issued by the Securities and 7xchange 8oard of India, such recognised stoc) exchange shall be liable to a penalty which (ay extend to twenty+fi'e crore rupees0: 1=)54e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. ")D. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or articles or bye+ laws or the regulations of the recognised stoc) exchange or directions issued by the Securities and 7xchange 8oard of India for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 1=354o/er to %-G*-i'%te. ")0I. ( ) 6or the purpose of adDudging under sections %3A, %38, %3C, %39, %37, %36, %3& and %3I, the Securities and 7xchange 8oard of India shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0: 1=552%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. ")E. Khile adDudging the *uantu( of penalty under section %3+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3
0% Inserted 03 Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec 0$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0" Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 , w0r0e0f0 , w0r0e0f0 , w0r0e0f0
%+ %+ %+ %+
0+%00$0 0+%00$0 0+%00$0 0+%00$0
(b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0: 1=85 Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!.
")EA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 1"A or !e'tio ")0I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%tefor the %lle(e- -ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re %! !$e'ifie,> the ;o%r- * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")L %(%i !t % > or-er $%!!e- ,> the ;o%ror %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 1=75Re'o+er> of %.o* t!. ")E;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 1"A or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H
0# I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30"==7) 0/ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %!
.%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - ThirS'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")L of thi! A't. (") The re'o+er> offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ())Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 0'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 1"A, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1),(") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 1=:5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. ")F. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: 1=95A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")L. ( ) Any person aggrie'ed, by the order or decision of the recogniFed stoc) exchange or the adDudicating officer or any order (ade by the Securities and 7xchange 8oard of India under section $8, (ay prefer an appeal before the Securities Appellate .ribunal and the pro'isions of sections %%8, %%C, %%9 and %%7 of this Act, shall apply, as far as (ay be, to such appeals0 (%) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order or decision is recei'ed by the
appellant and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 (3) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 ($) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the parties to the appeal and to the concerned adDudicating officer0 (") .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: 11=5Offe 'e!. ")@. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws
0> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 0! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
(ade thereunder, for which no punish(ent is pro'ided elsewhere in this Act, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 1115Co.$o!itio of 'ert%i offe 'e!. ")N. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0: 11"54o/er to (r% t i..* it>. ")0O. ( ) .he Central &o'ern(ent (ay, on reco((endation by the Securities and 7xchange 8oard of India, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation,
4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that the reco((endation of the Securities and 7xchange 8oard of India under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under
% Inserted
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
this Act to which such person would ha'e been liable, had not such i((unity been granted0: Offe 'e! ,> 'o.$% ie!. "3. ( ) Khere an offence has been co((itted by a co(pany, e'ery person who, at the ti(e when the offence was co((itted, was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence, and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any gross negligence on the part of any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer of the co(pany, shall also be dee(ed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n0-6or the purpose of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals, and 34(b) 1director2, in relation to(i) a fir(, (eans a partner in the fir(3 (ii) any association of persons or a body of indi'iduals, (eans any (e(ber controlling the affairs thereof0: $4(3) .he pro'isions of this section shall be in addition to, and not in derogation of, the pro'isions of section %%A0: Cert%i offe 'e! to ,e 'o( iL%,le. "5. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, >!> (" of >!>) ", any offence punishable under #4GGG: section %3 shall be dee(ed to be a
cogniFable offence within the (eaning of that Code0
3 Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec /, w0e0f0 %%+%+%0000 <rior to its substitution, sub+clause (b) read as under, N(b) 1director2, in relation to a fir(, (eans a partner in the fir(0J $ Inserted by .he Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec 3, w0e0f0 /+0 + !>#0
iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central &o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or a recognised stoc) exchange or by any person0 >5(")********< 1195E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
ee now the Code of Cri(inal <rocedure, !/3 (% of !/$) 1sub+section ( ) of2 o(itted by the Securities =aws (A(end(ent) Act, %00$, w0e0f0 %+ 0+%00$0 / Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$ & <rior to its substitution section %# read as under ,1%#0 G!ri#dicti$n t$ trF $ffence# !nder thi# Act&-Eo court inferior to that of a presidency (agistrate or a (agistrate of the first class shall ta)e cogniFance of or try any offence punishable under this Act02 > O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JEo court inferior to that of a Court of Session shall try any offence punishable under this Act .K ! I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
" # Kords
/4Co(
A$$e%l % - Re+i!io . "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt. "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel% $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io !. "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< 6: /(99A4(<A Title to -i+i-e -!. "7. ( ) It shall be lawful for the holder of any security whose na(e appears on the boo)s of the co(pany issuing the said security to recei'e and retain any di'idend declared by the co(pany in respect thereof for any year, notwithstanding that the said security has already been transferred by hi( for consideration, unless the transferee who clai(s the di'idend fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the co(pany with the co(pany for being registered in his na(e within fifteen days of the date on which the di'idend beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the di'idend3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security and other docu(ents relating to
the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a co(pany to pay any di'idend which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the co(pany as the holder of the security in respect of which the di'idend has beco(e due3 or (b) the right of the transferee of any security to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security in the na(e of the transferee0 %04Ri(ht to re'ei+e i 'o.e fro. 'olle'ti+e i +e!t.e t !'he.e. "7A. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, whose na(e appears on the boo)s of the collecti'e in'est(ent sche(e issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e declared by the collecti'e in'est(ent sche(e in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e fro( the transfer or has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the collecti'e in'est(ent sche(e with the collecti'e in'est(ent sche(e for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec >, w0e0f0 %%+%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the collecti'e in'est(ent sche(e3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a collecti'e in'est(ent sche(e to pay any inco(e fro( units or other instru(ents issued by the collecti'e in'est(ent sche(e which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the collecti'e in'est(ent sche(e as the holder of the security being
units or other instru(ents issued by the collecti'e in'est(ent sche(e in respect of which the inco(e in respect of units or other instru(ents issued by the collecti'e sche(e has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security being units or other instru(ents issued by the collecti'e in'est(ent sche(e in the na(e of the transferee0: % 4Ri(ht to re'ei+e i 'o.e fro. .*t*%l f* -. "7;. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by any (utual fund, whose na(e appears on the boo)s of the (utual fund issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the (utual fund declared by the (utual fund in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the (utual fund, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the (utual fund fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the (utual fund with the (utual fund for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the (utual fund beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the (utual fund3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the (utual fund, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a (utual fund to pay any inco(e fro( units or other instru(ents issued by the (utual fund which has beco(e due to any person, whose na(e is for the ti(e being registered in the boo)s of the (utual fund as the holder of the security being units or other instru(ents issued by the (utual fund in respect of which the inco(e in respect of units or other instru(ents issued by the (utual fund has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the (utual fund, to enforce against the transferor or any other person, his rights, if any, in relation to the transfer in any case where the (utual fund has refused to register the transfer of the security being units or other instru(ents issued by the (utual fund in the na(e of the transferee0:
1""5A't
ot to %$$l> i 'ert%i '%!e!. ":. ( ) .he pro'isions of this Act shall not apply to(a) the &o'ern(ent, the Reser'e 8an) of India, any local authority or any corporation set up by a special law or any person who has effected any transaction with or through the agency of any such authority as is referred to in this clause3 (b) any con'ertible bond or share warrant or any option or right in relation thereto, in so far as it entitles the person in whose fa'our any of the foregoing has been issued to obtain at his option fro( the co(pany or other body corporate, issuing the sa(e or fro( any of its shareholders or duly appointed agentsJ shares of the co(pany or other body corporate, whether by con'ersion of the bond or warrant or otherwise, on the basis of the price agreed upon when the sa(e was issued0 (%) Kithout preDudice to the pro'isions contained in sub+section ( ), if the Central &o'ern(ent %3 is satisfied that in the interests of trade and co((erce or the
%% Substituted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec 3, w0e0f0 0>+ %+ !"!0
econo(ic de'elop(ent of the country it is necessary or expedient so to do, it (ay, by notification in the Cfficial &aFette, specify any class of contracts as contracts to which this Act or any pro'ision contained therein shall not apply, and also the conditions, li(itations or restrictions, if any, subDect to which it shall not so apply0: 4rote'tio of %'tio t%6e i (oo- f%ith. "9. Eo suit, prosecution or other legal proceeding whatsoe'er shall lie in any court against the go'erning body or any (e(ber, office bearer or ser'ant of any recognised stoc) exchange or against any person or persons appointed under subsection ( ) of section for anything which is in good faith done or intended to be done in pursuance of this Act or of any rules or bye+laws (ade thereunder0 %$44o/er to -ele(%te. "9A. .he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers (except the power under section 30) exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India or the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)0: 4o/er to .%6e r*le!. )=. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for the purpose of carrying into effect the obDects of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for,(a) the (anner in which applications (ay be (ade, the particulars which they should contain and the le'y of a fee in respect of such applications 3 (b) the (anner in which any in*uiry for the purpose of recognising any stoc) exchange (ay be (ade, the conditions which (ay be i(posed for the grant of such recognition, including conditions as to the ad(ission of (e(bers if the
%3 <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %$ Inserted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% and Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec !, w0e0f0 %%+0%+%0000 <rior to its substitution, section %!A read as under , 1%!A0 8$.er t$ delegate&*.he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India02
stoc) exchange concerned is to be the only recognised stoc) exchange in the area3 and the for( in which such recognition shall be granted3 (c) the particulars which should be contained in the periodical returns and annual reports to be furnished to the Central &o'ern(ent3 (d) the docu(ents which should be (aintained and preser'ed under section # and the periods for which they should be preser'ed3 (e) the (anner in which any in*uiry by the go'erning body of a stoc) exchange shall be (ade under section #3 (f) the (anner in which the bye+laws to be (ade or a(ended under this Act shall before being so (ade or a(ended be published for criticis(3 (g) the (anner in which applications (ay be (ade by dealers in securities for licences under section /, the fee payable in respect thereof and the period of such licences, the conditions subDect to which licences (ay be granted, including conditions relating to the for(s which (ay be used in (a)ing contracts, the docu(ents to be (aintained by licensed dealers and the furnishing of periodical infor(ation to such authority as (ay be specified and the re'ocation of licences for breach of conditions3 %"4(h) the re*uire(ents which shall be co(plied with(A) by public co(panies for the purpose of getting their securities listed on any stoc) exchange3 (B) by collecti'e in'est(ent sche(e for the purpose of getting their units listed on any stoc) exchange3: %#4GGG: %/4(ha) the grounds on which the securities of a co(pany (ay be delisted fro( any recognised stoc) exchange under sub+section ( ) of section % A3 (hb) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under sub+section (%) of section % A and the fees payable in respect of such appeal3 (hc) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3
%" Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec 0, w0e0f0 %%+0%+%0000 <rior to its substitution, clause (h) read as under , 1(h) the re*uire(ents which shall be co(plied with by public co(panies for the purpose of getting their securities listed on any stoc) exchange32 %# .he word ;and; o(itted by .he Securities Contracts (Regulation) A(end(ent Act, !>", Sec $, w0e0f0 /+0 + !>#0 %/ Substituted for clause (ha) by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 7arlier clause (ha), as a(ended by the Securities =aws (A(end(ent) Act, !!!, read as
under ,1(ha) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3 and2
(hd) the (anner of in*uiry under sub+section ( ) of section %3+I3 (he) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3= and the fees payable in respect of such appeal3: (i) any other (atter which is to be or (ay be prescribed0 %>4(3) 7'ery rule (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule0: 1"954o/er of Se'*ritie! % - E#'h% (e ;o%r- of I -i% to .%6e re(*l%tio !. )1. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 305(%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,%> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 <rior to its substitution, sub+section (3), as a(ended by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!", read as under , 1(3) 7'ery rule (ade under this section shall, as soon as (ay be, after its publication in the Cfficial &aFette, be laid before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e session aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule02 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0 7arlier it was repealed by the Repealing and A(ending Act, !#0, Sec % and 6irst Sch0 w0e0f0 %>+ %+ !#00 30 Substituted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec ", w0e0f0 %>+ 0"+%00/0 <rior to substitution it read as under , 1(%) In particular and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for the (anner in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section02
(a) the (anner, in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of
publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section3 (b) the eligibility criteria and other re*uire(ents under section /A0 < (3) 7'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the regulation or both Iouses agree that the regulation should not be (ade, the regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that regulation0:
DE4OSITORIES ACT, 1998 SECTIONS /@A81(0 : 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS ). Certificate of co((ence(ent of business by depositories /@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS 3. Agree(ent between depository and participant 5. Ser'ices of depository 8. Surrender of certificate of security 7. Registration of transfer of securities with depositories :. Cptions to recei'e security certificate or hold securities with depository 9. Securities in depositories to be in fungible for( 1=. Rights of depositories and beneficial owner 11. Register of beneficial owner 1". <ledge or hypothecation of securities held in a depository 1). 6urnishing of infor(ation and records by depository and issuer 13. Cption to opt out in respect of any security 15. Act > of >! to apply to depositories 18. 9epositories to inde(nify loss in certain cases 17. Rights and obligations of depositories, etc0 /@A81(0 :: EN9UIRM AND INS4ECTION 1:. <ower of 8oard to call for infor(ation and en*uiry 19. <ower of 8oard to gi'e directions in certain cases 19A. <enalty for failure to furnish infor(ation, return, etc0 19;. <enalty for failure to enter into an agree(ent 19C. <enalty for failure to redress in'estorsJ grie'ances
19D. <enalty for delay in de(aterialisation or issue of certificate of securities 19E. <enalty for failure to reconcile records 192. <enalty for failure to co(ply with directions issued by 8oard under section ! of the Act 19G. <enalty for contra'ention where no separate penalty has been pro'ided 19D. <ower to adDudicate 190I. 6actors to be ta)en into account by adDudicating officer 190IA. Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (! 190I;. Re'o+er> of %.o* t! 190E. Crediting su(s realised by way of penalties to Consolidated 6und of India /@A81(0 D 4ENALTM "=. Cffences "1. Cffences by co(panies /@A81(0 D: @ISCELLANEOUS "". CogniFance of offences by courts ""A. Co(position of certain offences "";. <ower to grant i((unity ""C. E!t%,li!h.e t of S$e'i%l Co*rt! ""D. Offe 'e! tri%,le ,> S$e'i%l Co*rt! ""E. A$$e%l % - re+i!io ""2. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""G. Tr% !itio %l 4ro+i!io ! "). Appeals ")A. Appeal to Securities Appellate .ribunal ")A. Appeal to Securities Appellate .ribunal ");. <rocedure and powers of Securities Appellate .ribunal ")C. Right to =egal Representation ")D. =i(itation ")E. Ci'il court not to ha'e Durisdiction ")2. Appeal to Supre(e Court "3. <ower of Central &o'ern(ent to (a)e rules "5. <ower of 8oard to (a)e regulations "8. <ower of depositories to (a)e bye+laws "7. Rules and regulations to be laid before <arlia(ent ":. Application of other laws not barred "9. Re(o'al of difficulties )=. A(end(ents to certain enact(ents )1. Repeal and sa'ing /@(5A9( A?7E9?7E. .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0: DE4OSITORIES ACT, 1998 5"" O2 1998< 51=th A*(*!t, 1998< An Act to provide $or reg lation o$ depositories in sec rities and $or matters connected there%ith or incidental thereto& B( it enacted bF 8arlia"ent in the E$rtF7#eventh ;ear $f the 0e%!blic $f :ndia a# f$ll$.# ,*
/@A81(0 : 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the 9epositories Act, !!#0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the %0th day of Septe(ber, !!"0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 1beneficial owner2 (eans a person whose na(e is recorded as such with a depository3 (b) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 3 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (c) 1bye+laws2 (eans bye+laws (ade by a depository under section %#3 (d) 1Co(pany =aw 8oard2 (eans the 8oard of Co(pany =aw Ad(inistration constituted under section 07 of the Co(panies Act, !"# ( of !"#)3 (e) 1depository2 (eans a co(pany for(ed and registered under the Co(panies Act, !"# ( of !"#), and which has been granted a certificate of registration under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (f) 1issuer2 (eans any person (a)ing an issue of securities3 (g) 1participant2 (eans a person registered as such under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (h) 1prescribed2 (eans prescribed by rules (ade under this Act3 (i) 1record2 includes the records (aintained in the for( of boo)s or stored in a co(puter or in such other for( as (ay be deter(ined by regulations3 (j) 1registered owner2 (eans a depository whose na(e is entered as such in the register of the issuer3 (k) 1regulations2 (eans the regulations (ade by the 8oard3 4(ka) 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (l) 1security2 (eans such security as (ay be specified by the 8oard3 (") 1ser'ice2 (eans any ser'ice connected with recording of allot(ent of securities or transfer of ownership of securities in the record of a depository0 (%) Kords and expressions used herein and not defined but defined in the Co(panies Act, !"# ( of !"#), or the Securities Contracts (Regulation) Act, !"# ($% of !"#), or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), shall ha'e the (eanings respecti'ely assigned to the( in those Acts0 /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS Certifi'%te of 'o..e 'e.e t of ,*!i e!! ,> -e$o!itorie!. ). ( ) Eo depository shall act as a depository unless it obtains a certificate of co((ence(ent of business fro( the 8oard0 (%) A certificate granted under sub+section ( ) shall be in such for( as (ay be specified by the regulations0 (3) .he 8oard shall not grant a certificate under sub+section ( ) unless it is satisfied that the depository has ade*uate syste(s and safeguards to pre'ent (anipulation of records and transactions , 4ro+i-e- that no certificate shall be refused under this section unless the depository concerned has been gi'en a reasonable opportunity of being heard0
Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
/@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS A(ree.e t ,et/ee -e$o!itor> % - $%rti'i$% t. 3. ( ) A depository shall enter into an agree(ent with one or (ore participants as its agent0 (%) 7'ery agree(ent under sub+section ( ) shall be in such for( as (ay be specified by the bye+laws0 Ser+i'e! of -e$o!itor>. 5. Any person, through a participant, (ay enter into an agree(ent, in such for( as (ay be specified by the bye+laws, with any depository for a'ailing its ser'ices0 S*rre -er of 'ertifi'%te of !e'*rit>. 8. ( ) Any person who has entered into an agree(ent under section " shall surrender the certificate of security, for which he see)s to a'ail the ser'ices of a depository, to the issuer in such (anner as (ay be specified by the regulations0 (%) .he issuer, on receipt of certificate of security under sub+section ( ), shall cancel the certificate of security and substitute in its records the na(e of the depository as a registered owner in respect of that security and infor( the depository accordingly0 (3) A depository shall, on receipt of infor(ation under sub+section (%), enter the na(e of the person referred to in sub+section ( ) in its records, as the beneficial owner0 Re(i!tr%tio of tr% !fer of !e'*ritie! /ith -e$o!itor>. 7. ( ) 7'ery depository shall, on receipt of inti(ation fro( a participant, register the transfer of security in the na(e of the transferee0 (%) If a beneficial owner or a transferee of any security see)s to ha'e custody of such security the depository shall infor( the issuer accordingly0 O$tio ! to re'ei+e !e'*rit> 'ertifi'%te or hol- !e'*ritie! /ith -e$o!itor>. :. ( ) 7'ery person subscribing to securities offered by an issuer shall ha'e the option either to recei'e the security certificates or hold securities with a depository0 (%) Khere a person opts to hold a security with a depository, the issuer shall inti(ate such depository the details of allot(ent of the security, and on receipt of such infor(ation the depository shall enter in its records the na(e of the allottee as the beneficial owner of that security0 Se'*ritie! i -e$o!itorie! to ,e i f* (i,le for.. 9. ( ) All securities held by a depository shall be de(aterialised and shall be in a fungible for(0 %4(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#), shall apply to a depository in respect of securities held by it on behalf of the beneficial owners&: Ri(ht! of -e$o!itorie! % - ,e efi'i%l o/ er. 1=. ( ) Eotwithstanding anything contained in any other law for the ti(e being in force, a depository shall be dee(ed to be the registered owner for the purposes of effecting transfer of ownership of security on behalf of a beneficial owner0 (%) Sa'e as otherwise pro'ided in sub+section ( ), the depository as a registered owner shall not ha'e any 'oting rights or any other rights in respect of securities held by it0 (3) .he beneficial owner shall be entitled to all the rights and benefits and be subDected to all the liabilities in respect of his securities held by a depository0 Re(i!ter of ,e efi'i%l o/ er. 11. 7'ery depository shall (aintain a register and an index of beneficial owners in the
(anner pro'ided in sections "0, " and "% of the Co(panies Act, !"# ( of !"#)0 4le-(e or h>$othe'%tio of !e'*ritie! hel- i % -e$o!itor>. 1". ( ) SubDect to such regulations and bye+laws, as (ay be (ade in this behalf, a beneficial owner (ay with the pre'ious appro'al of the depository create a pledge or hypothecation in respect of a security owned by hi( through a depository0 (%) 7'ery beneficial owner shall gi'e inti(ation of such pledge or hypothecation to the depository and such depository shall thereupon (a)e entries in its records accordingly0 (3) Any entry in the records of a depository under sub+section (%) shall be e'idence of a pledge or hypothecation0 2*r i!hi ( of i for.%tio % - re'or-! ,> -e$o!itor> % - i!!*er. 1). ( ) 7'ery depository shall furnish to the issuer infor(ation about the transfer of securities in the na(e of beneficial owners at such inter'als and in such (anner as (ay be specified by the bye+laws0 (%) 7'ery issuer shall (a)e a'ailable to the depository copies of the rele'ant records in respect of securities held by such depository0 O$tio to o$t o*t i re!$e't of % > !e'*rit>.
% Substituted
by the 9epositories Related =aws (A(end(ent) Act, !!/, Sec %%, w0e0f0 "+0 + !!/0 <rior to its substitution sub+section (%) read as under , 1(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#) shall apply to the securities held by a depository on behalf of the beneficial owners02
13. ( ) If a beneficial owner see)s to opt out of a depository in respect of any security he shall infor( the depository accordingly0 (%) .he depository shall on receipt of inti(ation under sub+section ( ) (a)e appropriate entries in its records and shall infor( the issuer0 (3) 7'ery issuer shall, within thirty days of the receipt of inti(ation fro( the depository and on fulfil(ent of such conditions and on pay(ent of such fees as (ay be specified by the regulations, issue the certificate of securities to the beneficial owner or the transferee, as the case (ay be0 A't 1: of 1:91 to %$$l> to -e$o!itorie!. 15. .he 8an)ersJ 8oo)s 7'idence Act, >! shall apply in relation to a depository as if it were a ban) as defined in section % of that Act0 De$o!itorie! to i -e. if> lo!! i 'ert%i '%!e!. 18. ( ) Kithout preDudice to the pro'isions of any other law for the ti(e being in force, any loss caused to the beneficial owner due to the negligence of the depository or the participant, the depository shall inde(nify such beneficial owner0 (%) Khere the loss due to the negligence of the participant under sub+section ( ) is inde(nified by the depository, the depository shall ha'e the right to reco'er the sa(e fro( such participant0 Ri(ht! % - o,li(%tio ! of -e$o!itorie!, et'. 17. ( ) SubDect to the pro'isions of this Act, the rights and obligations of the depositories, participants and the issuers whose securities are dealt with by a depository shall be specified by the regulations0 (%) .he eligibility criteria for ad(ission of securities into the depository shall be specified by the regulations0 /@A81(0 :D EN9UIRM AND INS4ECTION 4o/er of ;o%r- to '%ll for i for.%tio % - e 7*ir>. 1:. ( ) .he 8oard, on being satisfied that it is necessary in the public interest or in the interest of in'estors so to do, (ay, by order in writing,-
(a) call upon any issuer, depository, participant or beneficial owner to furnish in writing such infor(ation relating to the securities held in a depository as it (ay re*uire3 or (b) authorise any person to (a)e an en*uiry or inspection in relation to the affairs of the issuer, beneficial owner, depository or participant, who shall sub(it a report of such en*uiry or inspection to it within such period as (ay be specified in the order0 (%) 7'ery director, (anager, partner, secretary, officer or e(ployee of the depository or issuer or the participant or beneficial owner shall on de(and produce before the person (a)ing the en*uiry or inspection all infor(ation or such records and other docu(ents in his custody ha'ing a bearing on the subDect+(atter of such en*uiry or inspection0 4o/er of ;o%r- to (i+e -ire'tio ! i 'ert%i '%!e!. 19. Sa'e as pro'ided in this Act, if after (a)ing or causing to be (ade an en*uiry or inspection, the 8oard is satisfied that it is necessary(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any depository or participant being conducted in the (anner detri(ental to the interests of in'estors or securities (ar)et, it (ay issue such directions,(a) to any depository or participant or any person associated with the securities (ar)et3 or (b) to any issuer, as (ay be appropriate in the interest of in'estors or the securities (ar)et0 )5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< $44e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 19A. Any person, who is re*uired under this Act or any rules or regulations or bye+laws (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to the 8oard, fails to furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations or bye+laws, fails to file return or furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0
3I $ Inserted
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the Securities =aws (A(end(ent) Act, %00$, Sec0 /, w0r0e0f0 %+ 0+%00$0
4e %lt> for f%il*re to e ter i to % %(ree.e t. 19;. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and is re*uired under this Act or any rules or regulations (ade thereunder, to enter into an agree(ent, fails to enter into such agree(ent, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0
4e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 19C. If any depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such depository or participant or issuer or its agents or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for -el%> i -e.%teri%li!%tio or i!!*e of 'ertifi'%te of !e'*ritie!. 19D. If any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to de(aterialise or issue the certificate of securities on opting out of a depository by the in'estors, within the ti(e specified under this Act or regulations or bye+laws (ade thereunder or abets in delaying the process of de(aterialisation or issue the certificate of securities on opting out of a depository of securities, such issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to re'o 'ile re'or-!. 19E. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to reconcile the records of de(aterialised securities with all the securities issued by the issuer as specified in the regulations, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to 'o.$l> /ith -ire'tio ! i!!*e- ,> ;o%r- * -er !e'tio 19 of the A't. 192. If any person fails to co(ply with the directions issued by the 8oard under section !, within the ti(e specified by it, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 19G. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations or bye+laws (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0 4o/er to %-G*-i'%te. 19D. ( ) 6or the purpose of adDudging under sections !A, !8, !C, !9, !7, !6 and !&, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the
sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. 190I. Khile adDudging the *uantu( of penalty under section !I, the adDudicating officer shall ha'e due regard to the following factors, na(ely,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 55 Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (!. 190IA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 19, !e'tio 19D, %! the '%!e .%> ,e, .%> file % %$$li'%tio i /riti ( to the ;o%r$ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e-ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h
"I
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re !$e'ifie- ,> the ;o%r* -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")A %(%i !t % > or-er $%!!e- ,> the ;o%r- or the %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 85 Re'o+er> of %.o* t!. 190I;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 19 or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6
%''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hilor !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C!
#I
!erte- ,> The Se'*ritie! L%/! (A.e- .e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
.o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")A of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 19, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 19E. All su(s realiFed by way of penalties under this Act shall be credited to the Consolidated 6und of India0: /@A81(0 D 4ENALTM /4Offe 'e!. "=. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws (ade thereunder, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0
/ Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 >, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %0 read as under,1%00 <ffence#0- Khoe'er contran'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or any regulations or bye+laws (ade thereunder shall be punishable with i(prison(ent for a ter( which (ay extend to fi'e years, or with fine or with both02
(%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with
fine, which (ay extend to twenty+fi'e crore rupees, or with both0: Offe 'e! ,> 'o.$% ie!. "1. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n&-6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and (b) 1director2, in relation to a fir(, (eans a partner in the fir(0 /@A81(0 D: @ISCELLANEOUS >4Co( iL% 'e of offe 'e! ,> 'o*rt!. "". ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central
> Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 !, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %% read as under,1%%0 /$gniCance $f $ffence# bF c$!rt#&*( ) Eo Court shall ta)e cogniFance of any offence punishable under this Act or any regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the 8oard0 (%) Eo court inferior to that of a ?etropolitan ?agistrate or a Dudicial ?agistrate of the first class shall try any offence punishable under this Act02
&o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or by any person0 !5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < Co.$o!itio of 'ert%i offe 'e!. ""A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "";. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any
penalty under this Act with respect to the alleged 'iolation , 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity , 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0: 1=5 E!t%,li!h.e t of S$e'i%l Co*rt!. ""C. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>.
! <rior
to o(ission, Sub+section(%) read 1Eo court inferior to that of a Court of Session shall try any offence punishable under this Act02 0 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. ""D. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-. A$$e%l % - Re+i!io ""E. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""2. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197).
(") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erioof ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! ""G. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< A$$e%l!. "). ( ) Any person aggrie'ed by an order of the 8oard (ade 4before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!: under this Act, or the regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor , 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0 (3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed , 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 %4A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")A. ( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!, under this Act, or the regulations (ade thereunder, 34or by an order (ade by an adDudicating officer under this Act: (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 $5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 8oard is recei'ed by the person referred to in sub+section ( ) and it shall be in such for( and be acco(panied by such fee as (ay be prescribed ,
Substituted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 $, w0e0f0 #+ %+ !!! for ;an order of the 8oard (ade;0 % Sections %3A to %36 inserted by the Securities =aws (Second A(end(ent) Act, !!! , Sec0 ", w0e0f0 #+ %+ !!!& 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %0, w0r0e0f0 %+ 0+%00$0 $ 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JNo %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-e ,> the ;o%r- /ith the 'o !e t of the $%rtie!.K
4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0
($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 (") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. ");. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3 (e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte; (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 Ri(ht to le(%l re$re!e t%tio . ")C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or an attorney of any Iigh Court, and
includes a pleader in practice0 Li.it%tio . ")D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 Ci+il 'o*rt ot to h%+e G*ri!-i'tio . ")E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "4A$$e%l to S*$re.e Co*rt. ")2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order ,
" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 % , w0r0e0f0 %+ 0+%00$0 <rior to its substitution, Section %36, as inserted by Securities =aws (Second A(end(ent) Act, !!!, w0e0f0 #+ %+ !!!, read as under,1%360 A%%eal t$ @igh /$!rt&-Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0:: 4o/er of Ce tr%l Go+er .e t to .%6e r*le!. "3. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for carrying out the pro'isions of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,164(a) the (anner of in*uiry under sub+section ( ) of section !I3 (aa) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %33: (b) the for( in which an appeal (ay be preferred under sub+section (3) of section %3 and the fees payable in respect of such appeal 3 (c) the procedure for disposing of an appeal under sub+section ($) of section %33 /4(d) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3A and the fees payable in respect of such appeal0: 4o/er of ;o%r- to .%6e re(*l%tio !. "5. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the 8oard (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for(a) the for( in which record is to be (aintained under clause ( i) of sub+section ( ) of section %3 (b) the for( in which the certificate of co((ence(ent of business shall be issued under
sub+section (%) of section 33 (c) the (anner in which the certificate of security shall be surrendered under sub+section ( ) of section #3 (d) the (anner of creating a pledge or hypothecation in respect of security owned by a beneficial owner under sub+section ( ) of section %3 (e) the conditions and the fees payable with respect to the issue of certificate of securities under sub+section (3) of section $3
# Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %%, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (a) read as under,1(a) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %332 / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 #, w0e0f0 #+ %+ !!!0
(f) the rights and obligations of the depositories, participants and the issuers under subsection ( ) of section /3 (g) the eligibility criteria for ad(ission of securities into the depository under sub+section (%) of section /0 4o/er of -e$o!itorie! to .%6e ,>e0l%/!. "8. ( ) A depository shall, with the pre'ious appro'al of the 8oard, (a)e bye+laws consistent with the pro'isions of this Act and the regulations0 (%) In particular, and without preDudice to the generality of the foregoing power, such byelaws shall pro'ide for(a) the eligibility criteria for ad(ission and re(o'al of securities in the depository3 (b) the conditions subDect to which the securities shall be dealt with3 (c) the eligibility criteria for ad(ission of any person as a participant3 (d) the (anner and procedure for de(aterialisation of securities3 (e) the procedure for transactions within the depository3 (f) the (anner in which securities shall be dealt with or withdrawn fro( a depository3 (g) the procedure for ensuring safeguards to protect the interests of participants and beneficial owners3 (h) the conditions of ad(ission into and withdrawal fro( a participant by a beneficial owner3 (i) the procedure for con'eying infor(ation to the participants and beneficial owners on di'idend declaration, shareholder (eetings and other (atters of interest to the beneficial owners3 (j) the (anner of distribution of di'idends, interest and (onetary benefits recei'ed fro( the co(pany a(ong beneficial owners3 (k) the (anner of creating pledge or hypothecation in respect of securities held with a depository3 (l) inter #e rights and obligations a(ong the depository, issuer, participants, and beneficial owners3 (") the (anner and the periodicity of furnishing infor(ation to the 8oard, issuer and other persons3 (n) the procedure for resol'ing disputes in'ol'ing depository, issuer, co(pany or a beneficial owner3 ($) the procedure for proceeding against the participant co((itting breach of the regulations and pro'isions for suspension and expulsion of participants fro( the depository and cancellation of agree(ents entered with the depository3 (%) the internal control standards including procedure for auditing, re'iewing and (onitoring0
(3) Khere the 8oard considers it expedient so to do, it (ay, by order in writing, direct a depository to (a)e any bye+laws or to a(end or re'o)e any bye+laws already (ade within such period as it (ay specify in this behalf0 ($) If the depository fails or neglects to co(ply with such order within the specified period, the 8oard (ay (a)e the bye+laws or a(end or re'o)e the bye+laws (ade either in the for( specified in the order or with such (odifications thereof as the 8oard thin)s fit0 R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t. "7. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. ":. .he pro'isions of this Act shall be in addition to, and not in derogation of, any other law for the ti(e being in force relating to the holding and transfer of securities0 Re.o+%l of -iffi'*ltie!. "9. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as appear to it to be necessary or expedient for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of a period of two years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 A.e -.e t! to 'ert%i e %'t.e t!. )=. 40e%ealed bF 0e%ealing H A"ending Act' 20010: Re$e%l % - !%+i (. )1. ( ) .he 9epositories (.hird) Crdinance, !!# (Crd0 %> of !!#), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 /@(5A9( 4 ee section 30: A?7E9?7E.S .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0:
SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 SECTIONS !'APT"R I 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions !'APT"R II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA
). 7stablish(ent and incorporation of 8oard 3. ?anage(ent of the 8oard 5. .er( of office and conditions of ser'ice of Chair(an and (e(bers of the 8oard 8. Re(o'al of (e(ber fro( office 7. ?eetings 7A. ?e(ber not to participate in (eetings in certain cases :. Bacancies, etc0, not to in'alidate proceedings of 8oard 9. Cfficers and e(ployees of the 8oard !'APT"R III TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD 1=. .ransfer of assets, liabilities, etc0, of existing Securities and 7xchange 8oard to the 8oard !'APT"R IV 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 11. 6unctions of 8oard 11A. 8oard to regulate or prohibit issue of prospectus, offer docu(ent or ad'ertise(ent soliciting (oney for issue of securities 11AA. Collecti'e in'est(ent sche(e 11;. <ower to issue directions 11C. In'estigation 11D. Cease and desist proceedings !'APT"R V REGISTRATION CERTI2ICATE 1". Registration of stoc) bro)ers, sub+bro)ers, share transfer agents, etc0
%
!'APT"R VA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 1"A. <rohibition of (anipulati'e and decepti'e de'ices, insider trading and substantial ac*uisition of securities or control !'APT"R VI 2INANCE, ACCOUNTS AND AUDIT 1). &rants by the Central &o'ern(ent 13. 6und 15. Accounts and audit !'APT"R VIA 4ENALTIES AND ADEUDICATION 15A. <enalty for failure to furnish infor(ation, return, etc & 15;. <enalty for failure by any person to enter into agree(ent with clients 15C. <enalty for failure to redress in'estorsJ grie'ances 15D. <enalty for certain defaults in case of (utual funds 15E. <enalty for failure to obser'e rules and regulations by an asset (anage(ent co(pany 152. <enalty for default in case of stoc) bro)ers 15G. <enalty for insider trading 15D. <enalty for non+disclosure of ac*uisition of shares and ta)eo'ers 15DA. <enalty for fraudulent and unfair trade practices 15D;. <enalty for contra'ention where no separate penalty has been pro'ided
150I. <ower to adDudicate 15E. 6actors to be ta)en into account by the AdDudicating Cfficer 15EA. Crediting su(s realised by way of penalties to Consolidated 6und of India 15E;. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! !'APT"R VIB ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL 15F. 7stablish(ent of Securities Appellate .ribunals 15L. Co(position of Securities Appellate .ribunal 15@. Qualification for appoint(ent as <residing Cfficer or ?e(ber of Securities Appellate .ribunal
3
15N. .enure of office of <residing Cfficer and other (e(bers of Securities Appellate .ribunal 150O. Salary and allowances and other ter(s and conditions of ser'ice of <residing Cfficers 154. 6illing up of 'acancies 159. Resignation and re(o'al 15R. Crders constituting Appellate .ribunal to be final and not to in'alidate its proceedings 15S. Staff of the Securities Appellate .ribunal 15T. Appeal to the Securities Appellate .ribunal 15U. <rocedure and powers of the Securities Appellate .ribunal 15I. Right to legal representation 15?. =i(itation 15A. <residing Cfficer, (e(bers and staff of Securities Appellate .ribunals to be public ser'ants 15M. Ci'il Court not to ha'e Durisdiction 15N. Appeal to Supre(e Court !'APT"R VII @ISCELLANEOUS 18. <ower of Central &o'ern(ent to issue directions 17. <ower of Central &o'ern(ent to supersede the 8oard 1:. Returns and reports 19. 9elegation "=. Appeals "=A. 8ar of Durisdiction "1. Sa'ings "". ?e(bers, officers and e(ployees of the 8oard to be public ser'ants "). <rotection of action ta)en in good faith "3. Cffences "3A. Co(position of certain offences "3;. <ower to grant i((unity "5. 7xe(ption fro( tax on wealth and inco(e "8. CogniFance of offences by Courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! "7. Cffences by co(panies
":. 4C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!":
$
":A. Re'o+er> of %.o* t! "9. <ower to (a)e rules )=. <ower to (a)e regulations )1. Rules and regulations to be laid before <arlia(ent )". Application of other laws not barred )). 4Repealed by Repealing R A(ending Act, %00 : )3. <ower to re(o'e difficulties )5. Repeal and sa'ing .I7 SCI79H=7 4Repealed by Repealing R A(ending Act, %00 : SECURITIES AND EACDANGE ;OARD O2 INDIA ACT, 199" 515 O2 199"< 53th A$ril, 199"< A A't to $ro+i-e for the e!t%,li!h.e t of % ;o%r- to $rote't the i tere!t! of i +e!tor! i !e'*ritie! % - to $ro.ote the -e+elo$.e t of, % - to re(*l%te, the !e'*ritie! .%r6et % - for .%tter! 'o e'te- there/ith or i 'i-e t%l thereto B( it enacted bF 8arlia"ent in the E$rtF7third ;ear $f the 0e%!blic $f :ndia a# f$ll$.# , CDA4TER I 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities and 7xchange 8oard of India Act, !!%0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the 30th day of Manuary, !!%0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 33 (b) 1Chair(an2 (eans the Chair(an of the 8oard3 4(ba) 1collecti'e in'est(ent sche(e2 (eans any sche(e or arrange(ent which satisfies the conditions specified in section AA3: (c) 1existing Securities and 7xchange 8oard2 (eans the Securities and 7xchange 8oard of India constituted under the Resolution of the &o'ern(ent of India in the 9epart(ent of 7cono(ic Affairs Eo0 ($$) S7L>#, dated the %th day of April, !>>3 (d) 16und2 (eans the 6und constituted under section $3 (e) 1(e(ber2 (eans a (e(ber of the 8oard and includes the Chair(an3 (f) 1notification2 (eans a notification published in the Cfficial &aFette3 (g) 1prescribed2 (eans prescribed by rules (ade under this Act3
Inserted by the Securities =aws (A(end(ent) Act, !!!, w0e0f0 %%+%+%0000
"
(h) 1regulations2 (eans the regulations (ade by the 8oard under this Act3 4(ha) 1Reser'e 8an)2 (eans the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)3: (i) 1securities2 has the (eaning assigned to it in section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#)0 %4(%) Kords and expressions used and not defined in this Act but defined in the Securities Contracts (Regulation) Act, !"# ($% of !"#) 34or the 9epositories Act, !!#:, shall ha'e the (eanings respecti'ely assigned to the( in that Act:0 CDA4TER II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA E!t%,li!h.e t % - i 'or$or%tio of ;o%r-.
). ( ) Kith effect fro( such date as the Central &o'ern(ent (ay, by notification, appoint, there shall be established, for the purposes of this Act, a 8oard by the na(e of the Securities and 7xchange 8oard of India0 (%) .he 8oard shall be a body corporate by the na(e aforesaid, ha'ing perpetual succession and a co((on seal, with power subDect to the pro'isions of this Act, to ac*uire, hold and dispose of property, both (o'able and i((o'able, and to contract, and shall, by the said na(e, sue or be sued0 (3) .he head office of the 8oard shall be at 8o(bay0 ($) .he 8oard (ay establish offices at other places in India0 @% %(e.e t of the ;o%r-. 3. ( ) .he 8oard shall consist of the following (e(bers, na(ely,(a) a Chair(an3 (b) two (e(bers fro( a(ongst the officials of the $4?inistry: of the Central &o'ern(ent dealing with 6inance "4and ad(inistration of the Co(panies Act, !"# ( of !"#):3 (c) one (e(ber fro( a(ongst the officials of #4the Reser'e 8an):3 /4(d) fi'e other (e(bers of who( at least three shall be the whole+ti(e (e(bers,: to be appointed by the Central &o'ern(ent0
Inserted by the Securities =aws (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0 <rior to its substitution, sub+section (%) reads as under, 1(%) Kords and expressions used and not defined in this Act but defined in the Capital Issues (Control) Act, !$/ or the Securities Contracts Regulation Act, !"# shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts02 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 $ Substituted for 1?inistries2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1and law2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act !3$ (% of !3$)2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 / Substituted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, clause (d) read as, 1(d) two other (e(bers20
% Substituted
#
(%) .he general superintendence, direction and (anage(ent of the affairs of the 8oard shall 'est in a 8oard of (e(bers, which (ay exercise all powers and do all acts and things which (ay be exercised or done by the 8oard0 (3) Sa'e as otherwise deter(ined by regulations, the Chair(an shall also ha'e powers of general superintendence and direction of the affairs of the 8oard and (ay also exercise all powers and do all acts and things which (ay be exercised or done by that 8oard0 ($) .he Chair(an and (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be appointed by the Central &o'ern(ent and the (e(bers referred to in clauses ( b) and (c) of that sub+section shall be no(inated by the Central &o'ern(ent and the 4Reser'e 8an): respecti'ely0 (") .he Chair(an and the other (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be persons of ability, integrity and standing who ha'e shown capacity in dealing with proble(s relating to securities (ar)et or ha'e special )nowledge or experience of law, finance, econo(ics, accountancy, ad(inistration or in any other discipline which, in the opinion of the Central &o'ern(ent, shall be useful to the 8oard0 Ter. of offi'e % - 'o -itio ! of !er+i'e of Ch%ir.% % - .e.,er! of the ;o%r-. 5. ( ) .he ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers referred to in clause (d) of sub+section ( ) of section $ shall be such as (ay be prescribed0 (%) Eotwithstanding anything contained in sub+section ( ), the Central &o'ern(ent shall ha'e the right to ter(inate the ser'ices of the Chair(an or a (e(ber appointed under clause ( d) of
sub+section ( ) of section $, at any ti(e before the expiry of the period prescribed under subsection ( ), by gi'ing hi( notice of not less than three (onths in writing or three (onthsJ salary and allowances in lieu thereof, and the Chair(an or a (e(ber, as the case (ay be, shall also ha'e the right to relin*uish his office, at any ti(e before the expiry of the period prescribed under sub+section ( ), by gi'ing to the Central &o'ern(ent notice of not less than three (onths in writing0 Re.o+%l of .e.,er fro. offi'e. 8. %4G G G: .he Central &o'ern(ent shall re(o'e a (e(ber fro( office if he(a) is, or at any ti(e has been, adDudicated as insol'ent3 (b) is of unsound (ind and stands so declared by a co(petent court3 (c) has been con'icted of an offence which, in the opinion of the Central &o'ern(ent, in'ol'es a (oral turpitude3 (d) 34G G G: (e) has, in the opinion of the Central &o'ern(ent, so abused his position as to render his continuation in office detri(ental to the public interest , 4ro+i-e- that no (e(ber shall be re(o'ed under this clause unless he has been gi'en a reasonable opportunity of being heard in the (atter0
Substituted for 1Reser'e 8an) of India2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 )2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 C(itted, by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to o(ission clause (d) read read as, 1(d) is appointed as a director of a co(pany20
% 1(
/
@eeti (!. 7. ( ) .he 8oard shall (eet at such ti(es and places, and shall obser'e such rules of procedure in regard to the transaction of business at its (eetings (including *uoru( at such (eetings) as (ay be pro'ided by regulations0 (%) .he Chair(an or, if for any reason, he is unable to attend a (eeting of the 8oard, any other (e(ber chosen by the (e(bers present fro( a(ongst the(sel'es at the (eeting shall preside at the (eeting0 (3) All *uestions which co(e up before any (eeting of the 8oard shall be decided by a (aDority 'otes of the (e(bers present and 'oting, and, in the e'ent of an e*uality of 'otes, the Chair(an, or in his absence, the person presiding, shall ha'e a second or casting 'ote0 4@e.,er ot to $%rti'i$%te i .eeti (! i 'ert%i '%!e!. 7A. Any (e(ber, who is a director of a co(pany and who as such director has any direct or indirect pecuniary interest in any (atter co(ing up for consideration at a (eeting of the 8oard, shall, as soon as possible after rele'ant circu(stances ha'e co(e to his )nowledge, disclose the nature of his interest at such (eeting and such disclosure shall be recorded in the proceedings of the 8oard, and the (e(ber shall not ta)e any part in any deliberation or decision of the 8oard with respect to that (atter0: I%'% 'ie!, et'., ot to i +%li-%te $ro'ee-i (! of ;o%r-. :. Eo act or proceeding of the 8oard shall be in'alid (erely by reason of(a) any 'acancy in, or any defect in the constitution of, the 8oard3 or (b) any defect in the appoint(ent of a person acting as a (e(ber of the 8oard3 or (c) any irregularity in the procedure of the 8oard not affecting the (erits of the case0 Offi'er! % - e.$lo>ee! of the ;o%r-. 9. ( ) .he 8oard (ay appoint such other officers and e(ployees as it considers necessary for the efficient discharge of its functions under this Act0 (%) .he ter( and other conditions of ser'ice of officers and e(ployees of the 8oard appointed under sub+section ( ) shall be such as (ay be deter(ined by regulations0 CDA4TER III
TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD Tr% !fer of %!!et!, li%,ilitie!, et'., of e#i!ti ( Se'*ritie! % - E#'h% (e ;o%r- to the ;o%r-. 1=. ( ) Cn and fro( the date of establish(ent of the 8oard,(a) any reference to the existing Securities and 7xchange 8oard in any law other than this Act or in any contract or other instru(ent shall be dee(ed as a reference to the 8oard3 (b) all properties and assets, (o'able and i((o'able, of, or belonging to, the existing Securities and 7xchange 8oard, shall 'est in the 8oard3
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
>
(c) all rights and liabilities of the existing Securities and 7xchange 8oard shall be transferred to, and be the rights and liabilities of, the 8oard3 (d) without preDudice to the pro'isions of clause (c), all debts, obligations and liabilities incurred, all contracts entered into and all (atters and things engaged to be done by, with or for the existing Securities and 7xchange 8oard i((ediately before that date, for or in connection with the purpose of the said existing 8oard shall be dee(ed to ha'e been incurred, entered into, or engaged to be done by, with or for, the 8oard3 (e) all su(s of (oney due to the existing Securities and 7xchange 8oard i((ediately before that date shall be dee(ed to be due to the 8oard3 (f) all suits and other legal proceedings instituted or which could ha'e been instituted by or against the existing Securities and 7xchange 8oard i((ediately before that date (ay be continued or (ay be instituted by or against the 8oard3 and (g) e'ery e(ployee holding any office under the existing Securities and 7xchange 8oard i((ediately before that date shall hold his office in the 8oard by the sa(e tenure and upon the sa(e ter(s and conditions of ser'ice as respects re(uneration, lea'e, pro'ident fund, retire(ent and other ter(inal benefits as he would ha'e held such office if the 8oard had not been established and shall continue to do so as an e(ployee of the 8oard or until the expiry of the period of six (onths fro( that date if such e(ployee opts not to be the e(ployee of the 8oard within such period0 (%) Eotwithstanding anything contained in the Industrial 9isputes Act, !$/ ( $ of !$/), or in any other law for the ti(e being in force, absorption of any e(ployee by the 8oard in its regular ser'ice under this section shall not entitle such e(ployee to any co(pensation under that Act or other law and no such clai( shall be entertained by any court, tribunal or other authority0 CDA4TER II 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 2* 'tio ! of ;o%r-. 11. ( ) SubDect to the pro'isions of this Act, it shall be the duty of the 8oard to protect the interests of in'estors in securities and to pro(ote the de'elop(ent of, and to regulate the securities (ar)et, by such (easures as it thin)s fit0 (%) Kithout preDudice to the generality of the foregoing pro'isions, the (easures referred to therein (ay pro'ide for(a) regulating the business in stoc) exchanges and any other securities (ar)ets3 (b) registering and regulating the wor)ing of stoc) bro)ers, sub+bro)ers, share transfer agents, ban)ers to an issue, trustees of trust deeds, registrars to an issue, (erchant ban)ers, underwriters, portfolio (anagers, in'est(ent ad'isers and such other inter(ediaries who (ay be associated with securities (ar)ets in any (anner3 4(ba) registering and regulating the wor)ing of the depositories, %4participants:, custodians of securities, foreign institutional in'estors, credit rating agencies and such other inter(ediaries as the 8oard (ay, by notification, specify in this behalf3: (c) registering and regulating the wor)ing of 4'enture capital funds and collecti'e
in'est(ent sche(es:, including (utual funds3
% Inserted
Inserted by Securities =aws (A(end(ent) Act !!", w0r0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+!+ !!"0
!
(d) pro(oting and regulating self+regulatory organisations3 (e) prohibiting fraudulent and unfair trade practices relating to securities (ar)ets3 (f) pro(oting in'estorsJ education and training of inter(ediaries of securities (ar)ets3 (g) prohibiting insider trading in securities3 (h) regulating substantial ac*uisition of shares and ta)e o'er of co(panies3 (i) calling for infor(ation fro(, underta)ing inspection, conducting in*uiries and audits of the %4stoc) exchanges, (utual funds, other persons associated with the securities (ar)et:, inter(ediaries and self+regulatory organisations in the securities (ar)et3 34(ia) '%lli ( for i for.%tio % - re'or-! fro. % > $er!o i 'l*-i ( % > ,% 6 or % > other %*thorit> or ,o%r- or 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l or St%te A't /hi'h, i the o$i io of the ;o%r-, !h%ll ,e rele+% t to % > i +e!ti(%tio or i 7*ir> ,> the ;o%r- i re!$e't of % > tr% !%'tio i !e'*ritie! 3: $5(i,) '%lli ( for i for.%tio fro., or f*r i!hi ( i for.%tio to, other %*thoritie!, /hether i I -i% or o*t!i-e I -i%, h%+i ( f* 'tio ! !i.il%r to tho!e of the ;o%r-, i the .%tter! rel%ti ( to the $re+e tio or -ete'tio of +iol%tio ! i re!$e't of !e'*ritie! l%/!, !*,Ge't to the $ro+i!io ! of other l%/! for the ti.e ,ei ( i for'e i thi! re(%r-& 4ro+i-e- th%t the ;o%r-, for the $*r$o!e of f*r i!hi ( % > i for.%tio to % > %*thorit> o*t!i-e I -i%, .%> e ter i to % %rr% (e.e t or %(ree.e t or * -er!t% -i ( /ith !*'h %*thorit> /ith the $rior %$$ro+%l of the Ce tr%l Go+er .e tH< (j) perfor(ing such functions and exercising such powers under the pro'isions of "4G G G: the Securities Contracts (Regulation) Act, !"# ($% of !"#), as (ay be delegated to it by the Central &o'ern(ent3 (k) le'ying fees or other charges for carrying out the purposes of this section3 (l) conducting research for the abo'e purposes3 #4(la) calling fro( or furnishing to any such agencies, as (ay be specified by the 8oard, such infor(ation as (ay be considered necessary by it for the efficient discharge of its functions3: (") perfor(ing such other functions as (ay be prescribed0 /4(%A) Kithout preDudice to the pro'isions contained in sub+section (%), the 8oard (ay ta)e (easures to underta)e inspection of any boo), or register, or other docu(ent or record of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard
Substituted for 1collecti'e in'est(ent sche(es2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % Substituted for 1stoc) exchanges and2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 S*,!tit*te- for J'%lli ( for i for.%tio % - re'or- fro. % > ,% 6 or % > other %*thorit> or ,o%ror 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l, St%te or 4ro+i 'i%l A't i re!$e't of % > tr% !%'tio i !e'*ritie! /hi'h i! * -er i +e!ti(%tio or i 7*ir> ,> the ;o%r-K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). E%rlier Se'tio 11(")(i%) /%! i !erte- ,> the SE;I (A.e -.e t) A't, "==" /.e.f. "901=0"=="0 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. =80=)0 199:) " .he words 1the Capital Issues (Control) Act, !$/ (%! of !$/) and2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
0
has reasonable grounds to belie'e that such co(pany has been indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et0: 4(3) Eotwithstanding anything contained in any other law for the ti(e being in force while exercising the powers under %4clause (i) or clause (ia) of sub+section (%) or sub+ section (2A):, the 8oard shall ha'e the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(i) the disco'ery and production of boo)s of account and other docu(ents, at such place and such ti(e as (ay be specified by the 8oard3 (ii) su((oning and enforcing the attendance of persons and exa(ining the( on oath3 (iii) inspection of any boo)s, registers and other docu(ents of any person referred to in section %, at any place3: 34(iv) inspection of any boo), or register, or other docu(ent or record of the co(pany referred to in sub+section (%A)3 (v) issuing co((issions for the exa(ination of witnesses or docu(ents0: $4($) Kithout preDudice to the pro'isions contained in sub+sections ( ), (%), (%A) and (3) and section 8, the 8oard (ay, by an order, for reasons to be recorded in writing, in the interests of in'estors or securities (ar)et, ta)e any of the following (easures, either pending in'estigation or in*uiry or on co(pletion of such in'estigation or in*uiry, na(ely,(a) suspend the trading of any security in a recognised stoc) exchange3 (b) restrain persons fro( accessing the securities (ar)et and prohibit any person associated with securities (ar)et to buy, sell or deal in securities3 (c) suspend any office+bearer of any stoc) exchange or self+regulatory organisation fro( holding such position3 (d) i(pound and retain the proceeds or securities in respect of any transaction which is under in'estigation3 (e) attach, after passing of an order on an application (ade for appro'al by the Mudicial ?agistrate of the first class ha'ing Durisdiction, for a period not exceeding one (onth, one or (ore ban) account or accounts of any inter(ediary or any person associated with the securities (ar)et in any (anner in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder , 4ro+i-e- that only the ban) account or accounts or any transaction entered therein, so far as it relates to the proceeds actually in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder shall be allowed to be attached3 (f) direct any inter(ediary or any person associated with the securities (ar)et in any (anner not to dispose of or alienate an asset for(ing part of any transaction which is under in'estigation , 4ro+i-e- that the 8oard (ay, without preDudice to the pro'isions contained in sub+section (%) or sub+section (%A), ta)e any of the (easures specified in clause ( d) or clause (e) or clause (f), in respect of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard has reasonable grounds to belie'e that such co(pany has been
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1clause (i) of sub+section (%)2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 3 Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 $ Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
% Substituted
indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et , 4ro+i-e- f*rther that the 8oard shall, either before or after passing such orders, gi'e an
opportunity of hearing to such inter(ediaries or persons concerned0: 15(5) The %.o* t -i!(or(e-, $*r!*% t to % -ire'tio i!!*e- * -er !e'tio 11; or !e'tio 1"A of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 or !e'tio 19 of the De$o!itorie! A't, 1998, %! the '%!e .%> ,e, !h%ll ,e 're-ite- to the I +e!tor 4rote'tio % - E-*'%tio 2* e!t%,li!he- ,> the ;o%r- % - !*'h %.o* t !h%ll ,e *tiliLe- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< %4;o%r- to re(*l%te or $rohi,it i!!*e of $ro!$e't*!, offer -o'*.e t or %-+erti!e.e t !oli'iti ( .o e> for i!!*e of !e'*ritie!. 11A. ( ) Kithout preDudice to the pro'isions of the Co(panies Act, !"# ( of !"#), the 8oard (ay, for the protection of in'estors,(a) specify, by regulations(i) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (ii) the (anner in which such (atters shall be disclosed by the co(panies3 (b) by general or special orders(i) prohibit any co(pany fro( issuing prospectus, any offer docu(ent, or ad'ertise(ent soliciting (oney fro( the public for the issue of securities3 (ii) specify the conditions subDect to which the prospectus, such offer docu(ent or ad'ertise(ent, if not prohibited, (ay be issued0 (%) Kithout preDudice to the pro'isions of section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the 8oard (ay specify the re*uire(ents for listing and transfer of securities and other (atters incidental thereto0: 34Colle'ti+e i +e!t.e t !'he.e. 11AA. ( ) Any sche(e or arrange(ent which satisfies the conditions referred to in subsection (%) $5or !*,0!e'tio ("A)< shall be a collecti'e in'est(ent sche(e0 "44ro+i-e- th%t % > $ooli ( of f* -! * -er % > !'he.e or %rr% (e.e t, /hi'h i! ot re(i!tere- /ith the ;o%r- or i! ot 'o+ere- * -er !*,0!e'tio ()), i +ol+i ( %
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 7arlier S0 A was inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" for S0 A0 <rior to its substitution, S0 A read as under,+ 1 A0 ?atters to be disclosed by the co(panies0+ Kithout <reDudice to the <ro'isions of the Co(panies Act , !"# ( of !"#), the board (ay , for the protection of in'estors, specify, by regulations,+ (a) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (b) the (anner in which such (atters, shall be disclosed by the co(panies02 3 Inserted by S78I (A(end(ent) Act !!!, w0e0f0 %%+%+%0000 $I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% Substituted
%
'or$*! %.o* t of o e h* -re- 'rore r*$ee! or .ore !h%ll ,e -ee.e- to ,e % 'olle'ti+e i +e!t.e t !'he.e.< (%) Any sche(e or arrange(ent (ade or offered by any 5$er!o < under which,(i) the contributions, or pay(ents (ade by the in'estors, by whate'er na(e called, are pooled and utiliFed for the purposes of the sche(e or arrange(ent3 (ii) the contributions or pay(ents are (ade to such sche(e or arrange(ent by the in'estors with a 'iew to recei'e profits, inco(e, produce or property, whether (o'able or i((o'able, fro( such sche(e or arrange(ent3 (iii) the property, contribution or in'est(ent for(ing part of sche(e or arrange(ent, whether identifiable or not, is (anaged on behalf of the in'estors3
(iv) the in'estors do not ha'e day+to+day control o'er the (anage(ent and operation of the sche(e or arrange(ent0 "5("A)< A > !'he.e or %rr% (e.e t .%-e or offere- ,> % > $er!o !%ti!f>i ( the 'o -itio ! %! .%> ,e !$e'ifie- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< (3) Eotwithstanding anything contained in sub+section (%) 35or !*,0!e'tio ("A)<, any sche(e or arrange(ent(i) (ade or offered by a co+operati'e society registered under the Co+operati'e Societies Act, ! % (% of ! %) or a society being a society registered or dee(ed to be registered under any law relating to co+operati'e societies for the ti(e being in force in any State3 (ii) under which deposits are accepted by non+ban)ing financial co(panies as defined in clause (f) of section $"+I of the Reser'e 8an) of India Act, !3$ (% of !3$)3 (iii) being a contract of insurance to which the Insurance Act, !3> ($ of !3>), applies3 (iv) pro'iding for any Sche(e, <ension Sche(e or the Insurance Sche(e fra(ed under the 7(ployees <ro'ident 6und and ?iscellaneous <ro'isions Act, !"% ( ! of !"%)3 (v) under which deposits are accepted under section ">A of the Co(panies Act, !"# ( of !"#)3 (vi) under which deposits are accepted by a co(pany declared as a Eidhi or a (utual benefit society under section #%0A of the Co(panies Act, !"# ( of !"#)3 (vii) falling within the (eaning of Chit business as defined in clause ( d) of section % of the Chit 6und Act, !>% ($0 of !>%)3 (viii) under which contributions (ade are in the nature of subscription to a (utual fund3 35(i#) !*'h other !'he.e or %rr% (e.e t /hi'h the Ce tr%l Go+er .e t .%>, i 'o !*lt%tio /ith the ;o%r-, otif>H< shall not be a collecti'e in'est(ent sche(e0: "54o/er to i!!*e -ire'tio !. 11;. Sa'e as otherwise pro'ided in section , if after (a)ing or causing to be (ade an en*uiry, the 8oard is satisfied that it is necessary,S*,!tit*te- for J'o.$% >K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) 3I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
%I
3
(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any inter(ediary or other persons referred to in section % being conducted in a (anner detri(ental to the interest of in'estors or securities (ar)et3 or (iii) to secure the proper (anage(ent of any such inter(ediary or person, it (ay issue such directions,(a) to any person or class of persons referred to in section %, or associated with the securities (ar)et3 or (b) to any co(pany in respect of (atters specified in section A, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 15E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< %4I +e!ti(%tio . 11C. ( ) Khere the 8oard has reasonable ground to belie'e that-
(a) the transactions in securities are being dealt with in a (anner detri(ental to the in'estors or the securities (ar)et3 or (b) any inter(ediary or any person associated with the securities (ar)et has 'iolated any of the pro'isions of this Act or the rules or the regulations (ade or directions issued by the 8oard thereunder, it (ay, at any ti(e by order in writing, direct any person (hereafter in this section referred to as the In'estigating Authority) specified in the order to in'estigate the affairs of such inter(ediary or persons associated with the securities (ar)et and to report thereon to the 8oard0 (%) Kithout preDudice to the pro'isions of sections %3" to %$ of the Co(panies Act, !"# ( of !"#), it shall be the duty of e'ery (anager, (anaging director, officer and other e(ployee of the co(pany and e'ery inter(ediary referred to in section % or e'ery person associated with the securities (ar)et to preser'e and to produce to the In'estigating Authority or any person authorised by it in this behalf, all the boo)s, registers, other docu(ents and record of, or relating to, the co(pany or, as the case (ay be, of or relating to, the inter(ediary or such person, which are in their custody or power0 (3) .he In'estigating Authority (ay re*uire any inter(ediary or any person associated with securities (ar)et in any (anner to furnish such infor(ation to, or produce such boo)s, or registers, or other docu(ents, or record before hi( or any person authorised by it in this behalf as it (ay consider necessary if the furnishing of such infor(ation or the production of such boo)s, or registers, or other docu(ents, or record is rele'ant or necessary for the purposes of its in'estigation0 ($) .he In'estigating Authority (ay )eep in its custody any boo)s, registers, other docu(ents and record produced under sub+section (%) or sub+section (3) for six (onths and thereafter
% Inserted
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
$
shall return the sa(e to any inter(ediary or any person associated with securities (ar)et by who( or on whose behalf the boo)s, registers, other docu(ents and record are produced , 4ro+i-e- that the In'estigating Authority (ay call for any boo), register, other docu(ent and record if they are needed again , 4ro+i-e- f*rther that if the person on whose behalf the boo)s, registers, other docu(ents and record are produced re*uires certified copies of the boo)s, registers, other docu(ents and record produced before the In'estigating Authority, it shall gi'e certified copies of such boo)s, registers, other docu(ents and record to such person or on whose behalf the boo)s, registers, other docu(ents and record were produced0 (") Any person, directed to (a)e an in'estigation under sub+section ( ), (ay exa(ine on oath, any (anager, (anaging director, officer and other e(ployee of any inter(ediary or any person associated with securities (ar)et in any (anner, in relation to the affairs of his business and (ay ad(inister an oath accordingly and for that purpose (ay re*uire any of those persons to appear before it personally0 (#) If any person fails without reasonable cause or refuses(a) to produce to the In'estigating Authority or any person authorised by it in this behalf any boo), register, other docu(ent and record which is his duty under sub+section (%) or sub+section (3) to produce3 or (b) to furnish any infor(ation which is his duty under sub+section (3) to furnish3 or (c) to appear before the In'estigating Authority personally when re*uired to do so under sub+section (") or to answer any *uestion which is put to hi( by the In'estigating Authority in pursuance of that sub+section3 or (d) to sign the notes of any exa(ination referred to in sub+section (/), he shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with
fine, which (ay extend to one crore rupees, or with both, and also with a further fine which (ay extend to fi'e la)h rupees for e'ery day after the first during which the failure or refusal continues0 (/) Eotes of any exa(ination under sub+section (") shall be ta)en down in writing and shall be read o'er to, or by, and signed by, the person exa(ined, and (ay thereafter be used in e'idence against hi(0 4(:) ?here i the 'o*r!e of % i +e!ti(%tio , the I +e!ti(%ti ( A*thorit> h%! re%!o to ,elie+e th%t % > $er!o or e ter$ri!e, %! the '%!e .%> ,e, to /ho. % oti'e * -er !*,!e'tio ()) h%! ,ee i!!*e- or .i(ht ,e i!!*e-, 0 (%) h%! o.itte- or f%ile- to $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! %! re7*irei the oti'eH or (,) /o*l- ot $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! /hi'h !h%ll ,e *!ef*l for, or rele+% t to, the i +e!ti(%tio H or (') /o*l- -e!tro>, .*til%te, %lter, f%l!if> or !e'rete the i for.%tio or -o'*.e t! *!ef*l for, or rele+% t to, the i +e!ti(%tio ,
S*,!tit*te- for JKhere in the course of in'estigation, the In'estigating Authority has reasonable ground to belie'e that the boo)s, registers, other docu(ents and record of, or relating to, any inter(ediary or any person associated with securities (ar)et in any (anner, (ay be destroyed, (utilated, altered, falsified or secreted, the In'estigating Authority (ay (a)e an application to the Mudicial ?agistrate of the first class ha'ing Durisdiction for an order for the seiFure of such boo)s, registers, other docu(ents and record K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
"
the , the Ch%ir.% .%>, %fter ,ei ( !%ti!fie- th%t it i! e'e!!%r> to -o !o, %*thoriLe the I +e!ti(%ti ( A*thorit> or % > other offi'er of the ;o%r- (the offi'er !o %*thoriLe- i %ll '%!e! ,ei ( herei %fter referre- to %! the %*thori!e- offi'er), to0 (i) e ter % - !e%r'h, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft /here !*'h i for.%tio or -o'*.e t! %re e#$e'te- or ,elie+e- to ,e 6e$tH (ii) ,re%6 o$e the lo'6 of % > -oor, ,o#, lo'6er, !%fe, %l.ir%h or other re'e$t%'le for e#er'i!i ( the $o/er! 'o ferre- ,> !*,0'l%*!e (i), /here the 6e>! thereof %re ot %+%il%,leH (iii) !e%r'h % > $er!o /ho h%! (ot o*t of, or i! %,o*t to (et i to, or i! i , the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft, if the %*thoriLe- offi'er h%! re%!o to !*!$e't th%t !*'h $er!o h%! !e'rete- %,o*t hi! $er!o % > !*'h ,oo6! of %''o* t or other -o'*.e t!H (i+) re7*ire % > $er!o /ho i! fo* - to ,e i $o!!e!!io or 'o trol of % > ,oo6! of %''o* t or other -o'*.e t!, .%i t%i e- i the for. of ele'tro i' re'or-, to $ro+i-e the %*thori!e- offi'er the e'e!!%r> f%'ilit> to i !$e't !*'h ,oo6! of %''o* t or other -o'*.e t!. "#planation0 2or the $*r$o!e of thi! !*,0'l%*!e, the e#$re!!io Jele'tro i' re'or-K !h%ll h%+e the .e% i ( %!!i( e- to it i 'l%*!e (t) of !*,0!e'tio (1) of !e'tio " of the I for.%tio Te'h olo(> A't, "===. (+) !eiLe % > !*'h ,oo6! of %''o* t or other -o'*.e t! fo* - %! % re!*lt of !*'h !e%r'hH (+i) $l%'e .%r6! of i-e tifi'%tio o % > ,oo6! of %''o* t or other -o'*.e t! or .%6e or '%*!e to ,e .%-e e#tr%'t! or 'o$ie! therefro.H (+ii) re'or- o o%th the !t%te.e t of % > $er!o /ho i! fo* - to ,e i $o!!e!!io or i 'o trol of the i for.%tio or -o'*.e t! referre- to i !*,0'l%*!e! (i), (iii) % - (i+).< 4(9) The ;o%r- .%> .%6e re(*l%tio ! i rel%tio to % > !e%r'h or !eiL*re * -er thi! !e'tio H % - i $%rti'*l%r, /itho*t $reG*-i'e to the (e er%lit> of the fore(oi ( $o/er, !*'h re(*l%tio ! .%> $ro+i-e for the $ro'e-*re to ,e follo/e- ,> the %*thori!e- offi'er0
(%) for o,t%i i ( i (re!! i to % > ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft to ,e !e%r'he- /here free i (re!! thereto i! ot %+%il%,leH
1 S*,!tit*te-
,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) for the follo/i (& JAfter 'o !i-eri ( the %$$li'%tio % - he%ri ( the I +e!ti(%ti ( A*thorit>, if e'e!!%r>, the @%(i!tr%te .%>, ,> or-er, %*thori!e the I +e!ti(%ti ( A*thorit>O (a) to e ter, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the $l%'e or $l%'e! /here !*'h ,oo6!, re(i!ter!, other -o'*.e t! % - re'or- %re 6e$tH (b) to !e%r'h th%t $l%'e or tho!e $l%'e! i the .% er !$e'ifie- i the or-erH % (c) to !eiLe ,oo6!, re(i!ter!, other -o'*.e t! % - re'or-, it 'o !i-er! e'e!!%r> for the $*r$o!e! of the i +e!ti(%tio & 4ro+i-e- th%t the @%(i!tr%te !h%ll ot %*thori!e !eiL*re of ,oo6!, re(i!ter!, other -o'*.e t! % re'or-, of % > li!te- $*,li' 'o.$% > or % $*,li' 'o.$% > ( ot ,ei ( the i ter.e-i%rie! !$e'ifie* -er !e'tio 1") /hi'h i te -! to (et it! !e'*ritie! li!te- o % > re'o( i!e- !to'6 e#'h% (e * le!! !*'h 'o.$% > i -*l(e! i i !i-er tr%-i ( or .%r6et .% i$*l%tio .K
#
(,) for e !*ri ( !%fe '*!to-> of % > ,oo6! of %''o* t or other -o'*.e t! or %!!et! !eiLe-.< ( 0) .he In'estigating Authority shall )eep in its custody the boo)s, registers, other docu(ents and record seiFed under this section for such period not later than the conclusion of the in'estigation as it considers necessary and thereafter shall return the sa(e to the co(pany or the other body corporate, or, as the case (ay be, to the (anaging director or the (anager or any other person, fro( whose custody or power they were seiFed 5***<, 4ro+i-e- that the In'estigating Authority (ay, before returning such boo)s, registers, other docu(ents and record as aforesaid, place identification (ar)s on the( or any part thereof0 ( ) Sa'e as otherwise pro'ided in this section, e'ery search or seiFure (ade under this section shall be carried out in accordance with the pro'isions of the Code of Cri(inal <rocedure, !/3 (% of !/$) relating to searches or seiFures (ade under that Code0 Ce%!e % - -e!i!t $ro'ee-i (!. 11D. If the 8oard finds, after causing an in*uiry to be (ade, that any person has 'iolated, or is li)ely to 'iolate, any pro'isions of this Act, or any rules or regulations (ade thereunder, it (ay pass an order re*uiring such person to cease and desist fro( co((itting or causing such 'iolation, 4ro+i-e- that the 8oard shall not pass such order in respect of any listed public co(pany or a public co(pany (other than the inter(ediaries specified under section %) which intends to get its securities listed on any recognised stoc) exchange unless the 8oard has reasonable grounds to belie'e that such co(pany has indulged in insider trading or (ar)et (anipulation0: CDA4TER I REGISTRATION CERTI2ICATE Re(i!tr%tio of !to'6 ,ro6er!, !*,0,ro6er!, !h%re tr% !fer %(e t!, et'. 1". ( ) Eo stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et shall buy, sell or deal in securities except under, and in accordance with, the conditions of a certificate of registration obtained fro( the 8oard in accordance with the %4regulations: (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et i((ediately before the establish(ent of the 8oard for which no registration certificate was
necessary prior to such establish(ent, (ay continue to do so for a period of three (onths fro( such establish(ent or, if he has (ade an application for such registration within the said period of three (onths, till the disposal of such application,
The /or-! P% - i for. the @%(i!tr%te of !*'h ret*r P, o.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) % Substituted for 1rules2 by Securities =aw (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0
/
44ro+i-e- f*rther that any certificate of registration, obtained i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", shall be dee(ed to ha'e been obtained fro( the 8oard in accordance with the regulations pro'iding for such registration0 ( A) Eo depository, %4participant,: custodian of securities, foreign institutional in'estor, credit rating agency, or any other inter(ediary associated with the securities (ar)et as the 8oard (ay by notification in this behalf specify, shall buy or sell or deal in securities except under and in accordance with the conditions of a certificate of registration obtained fro( the 8oard in accordance with the regulations (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a depository, 34participant,: custodian of securities, foreign institutional in'estor or credit rating agency i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to buy or sell securities or otherwise deal with the securities (ar)et until such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300 ( 8) Eo person shall sponsor or cause to be sponsored or carry on or caused to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es including (utual funds, unless he obtains a certificate of registration fro( the 8oard in accordance with the regulations, 4ro+i-e- that any person sponsoring or causing to be sponsored, carrying or causing to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es operating in the securities (ar)et i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to operate till such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300:
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0
% Inserted
>
4()%lanati$n7 6or the re(o'al of doubts, it is hereby declared that, for purposes of this section, a collecti'e in'est(ent sche(e or (utual fund shall not be include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(ponent of in'est(ent besides the co(ponent of insurance issued by the insurer0: (%) 7'ery application for registration shall be in such (anner and on pay(ent of such fees as (ay be deter(ined by regulations0 (3) .he 8oard (ay, by order, suspend or cancel a certificate of registration in such (anner as (ay be deter(ined by regulations, 4ro+i-e- that no order under this sub+section shall be (ade unless the person concerned has been gi'en a reasonable opportunity of being heard0 %4CIA<.7R BA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 4rohi,itio of .% i$*l%ti+e % - -e'e$ti+e -e+i'e!, i !i-er tr%-i ( % - !*,!t% ti%l %'7*i!itio of !e'*ritie! or 'o trol.
1"A. Eo person shall directly or indirectly(a) use or e(ploy, in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recogniFed stoc) exchange, any (anipulati'e or decepti'e de'ice or contri'ance in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3
Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, w0r0e0f !+$+ %0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, reads as under, /@A81(0 D: ?ISC7==AE7CHS #0 Balidation+ Eotwithstanding anything contained in any Dudg(ent, decree or order of any court, tribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 Repeal and sa'ings + (1) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (2) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0 % Chapter BA inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
!
(b) e(ploy any de'ice, sche(e or artifice to defraud in connection with issue or dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange3 (c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange, in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (d) engage in insider trading3 (e) deal in securities while in possession of (aterial or non+public infor(ation or co((unicate such (aterial or non+public infor(ation to any other person, in a (anner which is in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (f) ac*uire control of any co(pany or securities (ore than the percentage of e*uity share capital of a co(pany whose securities are listed or proposed to be listed on a recognised stoc) exchange in contra'ention of the regulations (ade under this Act0: CDA4TER II 2INANCE, ACCOUNTS AND AUDIT Gr% t! ,> the Ce tr%l Go+er .e t. 1). .he Central &o'ern(ent (ay, after due appropriation (ade by <arlia(ent by law in this behalf, (a)e to the 8oard grants of such su(s of (oney as that &o'ern(ent (ay thin) fit for being utiliFed for the purposes of this Act0 2* -. 13. ( ) .here shall be constituted a 6und to be called the Securities and 7xchange 8oard of
India &eneral 6und and there shall be credited thereto(a) all grants, fees and charges recei'ed by the 8oard under this Act3 4G G G: (aa) %4G G G: (b) all su(s recei'ed by the 8oard fro( such other sources as (ay be decided upon by the Central &o'ern(ent0 (%) .he 6und shall be applied for (eeting(a) the salaries, allowances and other re(uneration of the (e(bers, officers and other e(ployees of the 8oard3 (b) the expenses of the 8oard in the discharge of its functions under section 3 (c) the expenses on obDects and for purposes authorised by this Act0
.he word 1and2 o(itted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 (aa) o(itted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 It was inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Clause (aa) reads as under,+ 1(aa) all su(s realiFed by way of <enalties under this Act3 and20
% Clause
%0
A''o* t! % - %*-it. 15. ( ) .he 8oard shall (aintain proper accounts and other rele'ant records and prepare an annual state(ent of accounts in such for( as (ay be prescribed by the Central &o'ern(ent in consultation with the Co(ptroller and Auditor+&eneral of India0 (%) .he accounts of the 8oard shall be audited by the Co(ptroller and Auditor+&eneral of India at such inter'als as (ay be specified by hi( and any expenditure incurred in connection with such audit shall be payable by the 8oard to the Co(ptroller and Auditor+&eneral of India0 (3) .he Co(ptroller and Auditor+&eneral of India and any other person appointed by hi( in connection with the audit of the accounts of the 8oard shall ha'e the sa(e rights and pri'ileges and authority in connection with such audit as the Co(ptroller and Auditor+ &eneral generally has in connection with the audit of the &o'ern(ent accounts and, in particular, shall ha'e the right to de(and the production of boo)s, accounts, connected 'ouchers and other docu(ents and papers and to inspect any of the offices of the 8oard0 ($) .he accounts of the 8oard as certified by the Co(ptroller and Auditor+&eneral of India or any other person appointed by hi( in this behalf together with the audit report thereon shall be forwarded annually to the Central &o'ern(ent and that &o'ern(ent shall cause the sa(e to be laid before each Iouse of <arlia(ent0 5CDA4TER IIA 4ENALTIES AND ADEUDICATION 4e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 15A. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder,(a) to furnish any docu(ent, return or report to the 8oard, fails to furnish the sa(e, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations, fails to file return or furnish the sa(e within the ti(e specified therefor in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0
Chapters BI A and BI 8 containing Ss0 "A to "M and "@ to "S respecti'ely, inserted by Securities =aws (A(end(ent) Act, !!" w0e0f0 %"+ + !!"0 % Substituted for 1a penalty not exceeding one la)h and fifty thousand rupees for each such failure2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding fi'e thousand rupees for e'ery day during which such failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for e'ery day during which the failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%
4e %lt> for f%il*re ,> % > $er!o to e ter i to %(ree.e t /ith 'lie t!. 15;. If any person, who is registered as an inter(ediary and is re*uired under this Act or any rules or regulations (ade thereunder to enter into an agree(ent with his client, fails to enter into such agree(ent, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 %54e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 15C. If any listed co(pany or any person who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such co(pany or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 4e %lt> for 'ert%i -ef%*lt! i '%!e of .*t*%l f* -!. 15D. If any person, who is(a) re*uired under this Act or any rules or regulations (ade thereunder to obtain a certificate of registration fro( the 8oard for sponsoring or carrying on any collecti'e in'est(ent sche(e, including (utual funds, sponsors or carries on any collecti'e in'est(ent sche(e, including (utual funds, without obtaining such certificate of registration, he shall be liable to 34a penalty of one la)h rupees for each day during which he sponsors or carries on any such collecti'e in'est(ent sche(e including (utual funds, or one crore rupees, whiche'er is less:3 (b) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, for sponsoring or carrying on any in'est(ent sche(e, fails to co(ply with the ter(s and conditions of certificate of registration, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, fails to (a)e an application for listing of its sche(es as pro'ided for in the regulations
Substituted for 1a penalty not exceeding fi'e la)h rupees for e'ery such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1If any person, who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing to redress the grie'ances of in'estors, fails to redress such grie'ances, he shall be liable to a penalty not exceeding ten thousand rupees for each such failure2, by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding ten thousand rupees for each day during which he carries on any such collecti'e in'est(ent sche(e including (utual funds, or ten la)h rupees whiche'er is higher02 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for each day during which such failure continues or ten la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0
%%
go'erning such listing, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (d) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to despatch
unit certificates of any sche(e in the (anner pro'ided in the regulation go'erning such despatch, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (e) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to refund the application (onies paid by the in'estors within the period specified in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (f) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to in'est (oney collected by such collecti'e in'est(ent sche(es in the (anner or within the period specified in the regulations, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for f%il*re to o,!er+e r*le! % - re(*l%tio ! ,> % %!!et .% %(e.e t 'o.$% >. 15E. Khere any asset (anage(ent co(pany of a (utual fund registered under this Act, fails to co(ply with any of the regulations pro'iding for restrictions on the acti'ities of the asset (anage(ent co(panies, such asset (anage(ent co(pany shall be liable to "4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for -ef%*lt i '%!e of !to'6 ,ro6er!. 152. If any person, who is registered as a stoc) bro)er under this Act,(a) fails to issue contract notes in the for( and (anner specified by the stoc) exchange of which such bro)er is a (e(ber, he shall be liable to a penalty not exceeding fi'e ti(es the a(ount for which the contract note was re*uired to be issued by that bro)er3 (b) fails to deli'er any security or fails to (a)e pay(ent of the a(ount due to the in'estor in the (anner within the period specified in the regulations, he shall be liable to #4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3
Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues or fi'e la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding one thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%3
(c) charges an a(ount of bro)erage which is in excess of the bro)erage specified in the regulations, he shall be liable to 4a penalty of one la)h rupees: or fi'e ti(es the a(ount of bro)erage charged in excess of the specified bro)erage, whiche'er is higher0 4e %lt> for i !i-er tr%-i (. 15G. If any insider who,(i) either on his own behalf or on behalf of any other person, deals in securities of a body corporate listed on any stoc) exchange on the basis of any unpublished price+sensiti'e infor(ation3 or (ii) co((unicates any unpublished price+sensiti'e infor(ation to any person, with or without his re*uest for such infor(ation except as re*uired in the ordinary course of business or under any law3 or
(iii) counsels, or procures for any other person to deal in any securities of any body corporate on the basis of unpublished price+sensiti'e infor(ation, shall be liable to a penalty %4of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of insider trading, whiche'er is higher:0 4e %lt> for o 0-i!'lo!*re of %'7*i!itio of !h%re! % - t%6eo+er!. 15D. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder, fails to,(i) disclose the aggregate of his shareholding in the body corporate before he ac*uires any shares of that body corporate3 or (ii) (a)e a public announce(ent to ac*uire shares at a (ini(u( price3 or 34(iii) (a)e a public offer by sending letter of offer to the shareholders of the concerned co(pany3 or (iv) (a)e pay(ent of consideration to the shareholders who sold their shares pursuant to letter of offer,: he shall be liable to a penalty $4of twenty+fi'e crore rupees or three ti(es the a(ount of profits profits (ade out of such failure, whiche'er is higher:0 554e %lt> for fr%*-*le t % - * f%ir tr%-e $r%'ti'e!. 15DA. If any person indulges in fraudulent and unfair trade practices relating to securities, he shall be liable to a penalty of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of such practices, whiche'er is higher0
Substituted for 1a penalty not exceeding fi'e thousand rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00% 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00% %00% " Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00%0
%$
4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 15D;. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 4o/er to %-G*-i'%te. 150I. ( ) 6or the purpose of adDudging under sections "A, "8, "C, "9, "7, "6, "& 4, "I, "IA and "I8:, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in subsection ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> the %-G*-i'%ti ( offi'er. 15E. Khile adDudging *uantu( of penalty under section "+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade
as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 "5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 15EA. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: )5Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!. 15E;. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 11, !e'tio 11;, !e'tio 11D, !*,0!e'tio ()) of !e'tio 1" or !e'tio 150I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e- -ef%*lt!.
Substituted for 1and "I2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the S78I (A(end(ent) Act, %00%, S0 ! w0e0f0 %!+ 0+%00%0 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
% Inserted
%"
(") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't. ()) The !ettle.e t $ro'ee-i (! * -er thi! !e'tio !h%ll ,e 'o -*'te- i %''or-% 'e /ith the $ro'e-*re !$e'ifie- i the re(*l%tio ! .%-e * -er thi! A't. (3) No %$$e%l !h%ll lie * -er !e'tio 15T %(%i !t % > or-er $%!!e- ,> the ;o%r- or %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio . < CDA4TER II; ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL E!t%,li!h.e t of Se'*ritie! A$$ell%te Tri,* %l!. 15F. ( ) .he Central &o'ern(ent shall by notification, establish one or (ore Appellate .ribunals to be )nown as the Securities Appellate .ribunal to exercise the Durisdiction, powers and authority conferred on such .ribunal by or under this Act 4or any other law for the ti(e being in force:0 (%) .he Central &o'ern(ent shall also specify in the notification referred to in sub+section ( ) the (atters and places in relation to which the Securities Appellate .ribunal (ay exercise Durisdiction0 "5Co.$o!itio of Se'*ritie! A$$ell%te Tri,* %l. 15L. A Securities Appellate .ribunal shall consist of a <residing Cfficer and two other (e(bers, to be appointed, by notification, by the Central &o'ern(ent, 4ro+i-e- that the Securities Appellate .ribunal, consisting of one person only, established before the co((ence(ent of the Securities and 7xchange 8oard of India (A(end(ent) Act, %00%, shall continue to exercise the Durisdiction, powers and authority conferred on it by or under this Act or any other law for the ti(e being in force till two other ?e(bers are appointed under this section0 9*%lifi'%tio for %$$oi t.e t %! 4re!i-i ( Offi'er or @e.,er of Se'*ritie! A$$ell%te Tri,* %l.
Inserted by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for Sections "= and "? by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "= and "? read as under,+ 1 "+=0 Co(position of securities Appellate .ribunal0 5 A Securities Appellate .ribunal shall consist of
% Substituted
one person only (hereinafter referred to as the <residing Cfficer of the Securities Appellate .ribunal) to be appointed, by notification, by the central &o'ern(ent0 "?0 Qualifications for appoint(ent as <residing Cfficer of the Securities Appellate .ribunal0 5 A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he + (a) is, or has been, or is *ualified to be, a Mudge of a Iigh Court3 or (b) has been a (e(ber of the Indian =egal Ser'ice and has held a post in &rade I of that ser'ice for at least three years3 or (c) has held office as the <residing Cfficer of a tribunal for at least three years02
%#
15@. 15( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of the Securities Appellate .ribunal unless he + (a) is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court3 or (b) is a sitting or retired Mudge of a Iigh Court who has co(pleted not less than se'en years of ser'ice as a Mudge in a Iigh Court0 ( A) .he <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0: (%) A person shall not be *ualified for appoint(ent as (e(ber of a Securities Appellate .ribunal unless he is a person of ability, integrity and standing who has shown capacity in dealing with proble(s relating to securities (ar)et and has *ualification and experience of corporate law, securities laws, finance, econo(ics or accountancy, 4ro+i-e- that a (e(ber of the 8oard or any person holding a post at senior (anage(ent le'el e*ui'alent to 7xecuti'e 9irector in the 8oard shall not be appointed as <residing Cfficer or ?e(ber of a Securities Appellate .ribunal during his ser'ice or tenure as such with the 8oard or within two years fro( the date on which he ceases to hold office as such in the 8oard0: %4Te *re of offi'e of 4re!i-i ( Offi'er % - other @e.,er! of Se'*ritie! A$$ell%te Tri,* %l. 15N. .he <residing Cfficer and e'ery other ?e(ber of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office and shall be eligible for re+appoint(ent, 4ro+i-e- that no person shall hold office as the <residing Cfficer of the Securities Appellate .ribunal after he has attained the age of sixty+eight years, 4ro+i-e- f*rther that no person shall hold office as a ?e(ber of the Securities Appellate .ribunal after he has attained the age of sixty+two years0: S%l%r> % - %llo/% 'e! % - other ter.! % - 'o -itio ! of !er+i'e of 4re!i-i ( Offi'er!. 150O. .he salary and allowances payable to and the other ter(s and conditions of ser'ice including pension, gratuity and other retire(ent benefits of the 4<residing Cfficer and other ?e(bers: of a Securities Appellate .ribunal shall be such as (ay be prescribed,
Substituted for sub+section ( ) of Section "? by the S78I (A(end(ent) Crdinance, %0 3 w0e0f0 % 00 0%0 30 <rior to substitution, it read as under,+ ;( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court , 4ro+i-e- that the <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0; % Substituted for Section "E, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "E read as under,+ 1 "E0 .er( of office0+ .he <residing officer of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office or until he attains the age of sixtyfi'e years, whiche'er is earlier02
%/
4ro+i-e- that neither the salary and allowances nor the other ter(s and conditions of ser'ice of the %4<residing Cfficer and other ?e(bers of a Securities Appellate .ribunal: shall be 'aried to their disad'antage after appoint(ent0 2illi ( *$ of +%'% 'ie!. 154. If, for reason other than te(porary absence, any 'acancy occurs in the 34office of the <residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal, then the Central &o'ern(ent shall appoint another person in accordance with the pro'isions of this Act to fill the 'acancy and the proceedings (ay be continued before the Securities Appellate .ribunal fro( the stage at which the 'acancy is filled0 Re!i( %tio % - re.o+%l. 159. ( ) .he $4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal (ay, by notice in writing under his hand addressed to the Central &o'ern(ent, resign his office, 4ro+i-e- that "4the <residing Cfficer or any other ?e(ber: shall, unless he is per(itted by the Central &o'ern(ent to relin*uish his office sooner, continue to hold office, until the expiry of three (onths fro( the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his ter( of office, whiche'er is the earliest0 (%) .he #4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal shall not be re(o'ed fro( his office except by an order by the Central &o'ern(ent on the ground of pro'ed (isbeha'iour or incapacity after an in*uiry (ade by a Mudge of the Supre(e Court, in which the /4<residing Cfficer or any other ?e(ber: concerned has been infor(ed of the charges against hi( and gi'en a reasonable opportunity of being heard in respect of these charges0 (3) .he Central &o'ern(ent (ay, by rules, regulate the procedure for the in'estigation of (isbeha'iour or incapacity of the >4<residing Cfficer or any other ?e(ber:0 Or-er! 'o !tit*ti ( A$$ell%te Tri,* %l to ,e fi %l % - ot to i +%li-%te it! $ro'ee-i (!. 15R. Eo order of the Central &o'ern(ent appointing any person as the !4<residing Cfficer or a ?e(ber: of a Securities Appellate .ribunal shall be called in *uestion in any (anner, and no act or proceeding before a Securities Appellate .ribunal shall be called in *uestion in any (anner on the ground (erely of any defect in the constitution of a Securities Appellate .ribunal0
Substituted for 1<residing Cfficer of a Securities Appellate .ribunal2 by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 / Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 > Substituted for 1aforesaid <residing Cfficer2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 ! Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0
%>
St%ff of the Se'*ritie! A$$ell%te Tri,* %l. 15S. ( ) .he Central &o'ern(ent shall pro'ide the Securities Appellate .ribunal with such officers and e(ployees as that &o'ern(ent (ay thin) fit0 (%) .he officers and e(ployees of the Securities Appellate .ribunal shall discharge their functions under general superintendence of the <residing Cfficer0 (3) .he salaries and allowances and other conditions of ser'ice of the officers and e(ployees of the Securities Appellate .ribunal shall be such as (ay be prescribed0 A$$e%l to the Se'*ritie! A$$ell%te Tri,* %l. 15T. 4( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed,(a) by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws
(Second A(end(ent) Act, !!!, under this Act, or the rules or regulations (ade thereunder3 or (b) by an order (ade by an adDudicating officer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 "5(") ********< (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 348oard or the AdDudicating Cfficer, as the case case (ay be,: is recei'ed by hi( and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 ($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0
Substituted for Sub+sec ( ) R (%) by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, Sub+sections ( ) R (%) were read as under, 1( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by any order (ade by any AdDudicating Cfficer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 (%) Eo appeal shall lie to the Securities Appellate .ribunal fro( an order (ade by an AdDudicating Cfficer with the consent of the parties02 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , o.i!!io , S*,0!e'tio (") re%- %! * -er& J(") No %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-eO (a) ,> the ;o%r- o % - %fter the 'o..e 'e.e t of the Se'*ritie! L%/! (Se'o - A.e -.e t) A't, 1999H (b) ,> % %-G*-i'%ti ( offi'er, /ith the 'o !e t of the $%rtie!.2 3 Substituted for 1a copy of the order (ade by the adDudicating officer2 by S78I (A(end(ent) Act !!!, !!!, w0e0f0 #+ %+ !!!0
%!
(") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 48oard, the: parties to the appeal and to the concerned AdDudicating Cfficer0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of the Se'*ritie! A$$ell%te Tri,* %l. 15U. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act, and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purposes of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3
(e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte 3 (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0), and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 %4Ri(ht to le(%l re$re!e t%tio . 15I. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,Substituted for 1parties2, S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for S0 "B by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, S0 "B read as under,+ 1 "B0 .he appellant (ay either appear in person or authorise one or (ore legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal02
% Substituted
30
(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of subsection ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or any attorney of any Iigh Court, and includes a pleader in practice0: Li.it%tio . 15?. .he pro'isions of the =i(itation Act, !#3 (3# of !#3), shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 54re!i-i ( Offi'er, @e.,er! % - !t%ff of Se'*ritie! A$$ell%te Tri,* %l! to ,e $*,li' !er+% t!. 15A. .he <residing Cfficer, ?e(bers and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0: Ci+il Co*rt ot to h%+e G*ri!-i'tio . 15M. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which an adDudicating officer appointed under this Act or a Securities Appellate .ribunal constituted under this Act is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "5A$$e%l to S*$re.e Co*rt.
Substituted for S0 "A by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, it read as under, + 1 "A0 .he <residing Cfficer and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian penal Code( $" of >#0)20 % Substituted for S0 "S by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution , it
was read as under,+ 1 "S0 Appeal to Iigh Court0+ Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, <ro'ided that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
3
15N. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order , 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the applicant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: CDA4TER III @ISCELLANEOUS 4o/er of Ce tr%l Go+er .e t to i!!*e -ire'tio !. 18. ( ) Kithout preDudice to the foregoing pro'isions of this Act 4or the 9epositories Act, !!#:, the 8oard shall, in exercise of its powers or the perfor(ance of its functions under this Act, be bound by such directions on *uestions of policy as the Central &o'ern(ent (ay gi'e in writing to it fro( ti(e to ti(e , 4ro+i-e- that the 8oard shall, as far as practicable, be gi'en an opportunity to express its 'iews before any direction is gi'en under this sub+section0 (%) .he decision of the Central &o'ern(ent whether a *uestion is one of policy or not shall be final0 4o/er of Ce tr%l Go+er .e t to !*$er!e-e the ;o%r-. 17. ( ) If at any ti(e the Central &o'ern(ent is of opinion(a) that on account of gra'e e(ergency, the 8oard is unable to discharge the functions and duties i(posed on it by or under the pro'isions of this Act3 or (b) that the 8oard has persistently (ade default in co(plying with any direction issued by the Central &o'ern(ent under this Act or in the discharge of the functions and duties i(posed on it by or under the pro'isions of this Act and as a result of such default the financial position of the 8oard or the ad(inistration of the 8oard has deteriorated3 or (c) that circu(stances exist which render it necessary in the public interest so to do, the Central &o'ern(ent (ay, by notification, supersede the 8oard for such period, not exceeding six (onths, as (ay be specified in the notification0 (%) Hpon the publication of a notification under sub+section ( ) superseding the 8oard,(a) all the (e(bers shall, as fro( the date of supersession, 'acate their offices as such3 (b) all the powers, functions and duties which (ay, by or under the pro'isions of this Act, be exercised or discharged by or on behalf of the 8oard, shall until the 8oard is reconstituted under sub+section (3), be exercised and discharged by such person or persons as the Central &o'ern(ent (ay direct3 and (c) all property owned or controlled by the 8oard shall, until the 8oard is reconstituted under sub+section (3), 'est in the Central &o'ern(ent0
Substituted for 1this Act2 by the 9epositories Act !!#, w0r0e0f0 %0+!+ !!"0
3%
(3) Cn the expiration of the period of supersession specified in the notification issued under sub+section ( ), the Central &o'ern(ent (ay reconstitute the 8oard by a fresh appoint(ent
and in such case any person or persons who 'acated their offices under clause ( a) of subsection (%), shall not be dee(ed dis*ualified for appoint(ent , 4ro+i-e- that the Central &o'ern(ent (ay, at any ti(e, before the expiration of the period of supersession, ta)e action under this sub+section0 ($) .he Central &o'ern(ent shall cause a notification issued under sub+section ( ) and a full report of any action ta)en under this section and the circu(stances leading to such action to be laid before each Iouse of <arlia(ent at the earliest0 Ret*r ! % - re$ort!. 1:. ( ) .he 8oard shall furnish to the Central &o'ern(ent at such ti(e and in such for( and (anner as (ay be prescribed or as the Central &o'ern(ent (ay direct, such returns and state(ents and such particulars in regard to any proposed or existing progra((e for the pro(otion and de'elop(ent of the securities (ar)et, as the Central &o'ern(ent (ay, fro( ti(e to ti(e, re*uire0 (%) Kithout preDudice to the pro'isions of sub+section ( ), the 8oard shall, within 4ninety: days after the end of each financial year, sub(it to the Central &o'ern(ent a report in such for(, as (ay be prescribed, gi'ing a true and full account of its acti'ities, policy and progra((es during the pre'ious financial year0 (3) A copy of the report recei'ed under sub+section (%) shall be laid, as soon as (ay be after it is recei'ed, before each Iouse of <arlia(ent0 Dele(%tio . 19. .he 8oard (ay, by general or special order in writing delegate to any (e(ber, officer of the 8oard or any other person subDect to such conditions, if any, as (ay be specified in the order, such of its powers and functions under this Act (except the powers under section %!) as it (ay dee( necessary0 A$$e%l!. "=. ( ) Any person aggrie'ed by an order of the 8oard (ade %4, before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!,: under this Act, or the rules or regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor, 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0
Substituted for 1sixty days2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1an order of the 8oard (ade2 by Securities =aws (Second A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0
% Substituted
33
(3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed, 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 4;%r of G*ri!-i'tio . "=A. Eo order passed by the 8oard %4or the AdDudicating Cfficer: under this Act shall be appealable except as pro'ided in 34section ". or: section %0 and no ci'il court shall ha'e Durisdiction in respect of any (atter which the 8oard $4or the AdDudicating Cfficer: is e(powered by, or under, this Act to pass any order and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any order passed by the 8oard "4or the AdDudicating Cfficer: by, or under, this Act0: S%+i (!.
"1. Eothing in this Act shall exe(pt any person fro( any suit or other proceedings which (ight, apart fro( this Act, be brought against hi(0 @e.,er!, offi'er! % - e.$lo>ee! of the ;o%r- to ,e $*,li' !er+% t!. "". All (e(bers, officers and other e(ployees of the 8oard shall be dee(ed, when acting or purporting to act in pursuance of any of the pro'isions of this Act, to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0 4rote'tio of %'tio t%6e i (oo- f%ith. "). Eo suit, prosecution or other legal proceedings shall lie against the Central &o'ern(ent #4or 8oard: or any officer of the Central &o'ern(ent or any (e(ber, officer or other e(ployee of the 8oard for anything which is in good faith done or intended to be done under this Act or the rules or regulations (ade thereunder0 /4Offe 'e!. "3. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, he shall be punishable with
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 18oard2 by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 3 Substituted for 1Section %02, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 $ Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 " Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Substituted by for S0 %$, Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" && <rior to its substitution S0%$ read as under, 1%$0 <enalty0+ Khoe'er contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both02
% Substituted
3$
i(prison(ent for a ter( which (ay extend to 4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to %4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 34Co.$o!itio of 'ert%i offe 'e!. "3A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "3;. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of the alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation, 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0
(%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0:
Substituted for 1one year, or with fine, or with both2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%, for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both20 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3"
E#e.$tio fro. t%# o /e%lth % - i 'o.e. "5. Eotwithstanding anything contained in the Kealth+tax Act, !"/ (%/ of !"/), the Inco(etax Act, !# ($3 of !# ) or any other enact(ent for the ti(e being in force relating to tax on wealth, inco(e, profits or gains(a) the 8oard3 (b) the existing Securities and 7xchange 8oard fro( the date of its constitution to the date of establish(ent of the 8oard, shall not be liable to pay wealth+tax, inco(e+tax or any other tax in respect of their wealth, inco(e, profits or gains deri'ed0 Co( iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations (ade thereunder, sa'e on a co(plaint (ade by the 8oard 4G G G:0 "5(") *****< )5 E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
.he words 1with the pre'ious sanction of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to the o.i!!io , S*,0!e'tio (") re%- %! * -er& 1(") No 'o*rt i ferior to th%t of "5% Co*rt of Se!!io < !h%ll tr> % > offe 'e $* i!h%,le * -er thi!
A't.2 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3#
A$$e%l % - re+i!io "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e of Cri.i %l 4ro'e-*re, 197) to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< Offe 'e! ,> 'o.$% ie!. "7. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly, 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n , 6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and
3/
(b) 1director2, in relation to a fir(, (eans a partner in the fir(0 4o/er to e#e.$t. ":. 4GGGGGG: "5 Re'o+er> of %.o* t! ":A. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith %
-ire'tio of -i!(or(e.e t or-er i!!*e- * -er !e'tio 11; or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifiefor. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.et%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't.
C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Section %> read as under, 1%>0 8$.er t$ e)e"%t+ If the central go'ern(ent if of the opinion that it is necessary or expedient so to do in public interest, it (ay, by order published in the Cfficial gaFette, exe(pt any person or class of persons buying or selling securities or otherwise dealing with the securities (ar)et fro( the operation of sub+section ! ) of Section %02 % I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3>
"#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio 15T of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 11;, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% !
% > offi'er of the ;o%r- /ho .%> ,e %*thoriLe-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 4o/er to .%6e r*le!. "9. ( ) .he Central &o'ern(ent (ay, by notification, (a)e rules for carrying out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers under sub+section ( ) of section "3 (b) the additional functions that (ay be perfor(ed by the 8oard under section 3 (c) 4G G G: (d) the (anner in which the accounts of the 8oard shall be (aintained under section "3 %4(da) the (anner of in*uiry under sub+section ( ) of section "+I3 (db) the salaries and allowances and other ter(s and conditions of ser'ice of the 34<residing Cfficers, ?e(bers: and other officers and e(ployees of the Securities Appellate .ribunal under section "+C and sub+section (3) of section "S3 (dc) the procedure for the in'estigation of (isbeha'iour or incapacity of the 4<residing Cfficers, or other ?e(bers: of the Securities Appellate .ribunal under sub+section (3) of section "Q3
Clause (c) o(itted by Securities laws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, clause (c) it read as under, 1(c) the conditions subDect to which registration certificate is to be issued under sub+section ( ) of section %20 % Inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 3 Substituted for 1<residing Cfficers2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3!
(dd) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section ". and the fees payable in respect of such appeal3: (e) the for( and the (anner in which returns and report to be (ade to the Central &o'ern(ent under section >3 (f) any other (atter which is to be, or (ay be, prescribed, or in respect of which pro'ision is to be, or (ay be, (ade by rules0 4o/er to .%6e re(*l%tio !. )=. ( ) .he 8oard (ay, %4GGG: by notification, (a)e regulations consistent with this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ti(es and places of (eetings of the 8oard and the procedure to be followed at such (eetings under sub+section ( ) of section / including *uoru( necessary for the transaction of business3 (b) the ter(s and other conditions of ser'ice of officers and e(ployees of the 8oard under sub+section (%) of section !3 34(c) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto and the (anner in which such (atters shall be disclosed by the co(panies under section A3 35('%) the *tiliL%tio of the %.o* t 're-ite- * -er !*,0!e'tio (5) of !e'tio 11H (',) the f*lfill.e t of other 'o -itio ! rel%ti ( to 'olle'ti+e i +e!t.e t !'he.e * -er !*,0!e'tio ("A) of !e'tio 11AAH ('') the $ro'e-*re to ,e follo/e- ,> the %*thoriLe- offi'er for !e%r'h or !eiL*re * -er !*,0!e'tio (9) of !e'tio 11CH < (d) the conditions subDect to which certificate of registration is to be issued, the a(ount of
fee to be paid for certificate of registration and the (anner of suspension or cancellation of certificate of registration under section %0: 55(-%) the ter.! -eter.i e- ,> the ;o%r- for !ettle.e t of $ro'ee-i (! * -er !*,!e'tio (") % - the $ro'e-*re for 'o -*'ti ( of !ettle.e t $ro'ee-i (! * -er !*,!e'tio ()) of !e'tio 15E;H (-,) % > other .%tter /hi'h i! re7*ire- to ,e, or .%> ,e, !$e'ifie- ,> re(*l%tio ! or i re!$e't of /hi'h $ro+i!io i! to ,e .%-e ,> re(*l%tio !.< R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t.
Substituted for 1<residing Cfficers2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 words 1with the pre'ious appro'al of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 3 Substituted for the existing clause (c) by the Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 <rior to substitution this clause read as under, 1(c) the a(ount of fee to be paid for registration certificate and (anner of suspension or cancellation of registration certificate under sub+section (%) and (3) of section %02 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% .he
$0
)1. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. )". .he pro'isions of this Act shall be in addition to, and not in derogation of, the pro'isions of any other law for the ti(e being in force0 A.e -.e t of 'ert%i e %'t.e t!. )). 40e%ealed bF 0e%ealing H A"ending Act' 2001&: 4o/er to re.o+e -iffi'*ltie!. )3. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order, published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as (ay appear to be necessary for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of fi'e years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 Re$e%l % - !%+i (. )5. ( ) .he Securities and 7xchange 8oard of India Crdinance, !!% (Crd0 " of !!%), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 1@( /@(5A9( 4 ee section 33: A@END@ENT O2 CERTAIN ENACT@ENTS 40e%ealed bF 0e%ealing H A"ending Act' 2001:
*SECURITIES CONTRACTS (REGULATION) RULES, 1957
In exercise of the powers conferred by section 30 of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the Central &o'ern(ent hereby (a)es the following rules, the sa(e ha'ing been pre'iously published as re*uired by sub+section (3) of the said section, na(ely ,Short title. 1. .hese rules (ay be called the Securities Contracts (Regulation) Rules, !"/0 Defi itio !. ". In these rules, unless the context otherwise re*uires,(a) 1for(2 (eans a for( appended to these rules3 (b) 1the Act2 (eans the Securities Contracts (Regulation) Act, !"# ($% of !"#)3 (c) 1&o'ern(ent co(pany2 (eans a co(pany in which not less than fifty+one per cent of the share capital is held by the Central &o'ern(ent or by any State &o'ern(ent or &o'ern(ents or partly by the Central &o'ern(ent and partly by one or (ore State &o'ern(ents ; 4(d) 1public2 (eans persons other than 5 (i) the pro(oter and pro(oter group3 (ii) subsidiaries and associates of the co(pany0 E#$l% %tio & 6or the purpose of this clause the words 1pro(oter2 and 1pro(oter group2 shall ha'e the sa(e (eaning as assigned to the( under the Securities and 7xchange 8oard of India (Issue of Capital and 9isclosure Re*uire(ents) Regulations, %00!3: %4(da) ;public sector co(pany; (eans a body corporate constituted by an Act of <arlia(ent or any State =egislature and includes a go'ern(ent co(pany,: 4(e) 1public shareholding2 (eans e*uity shares of the co(pany held by public and shall exclude shares which are held by custodian against depository receipts issued o'erseas0: A$$li'%tio for re'o( itio . ). An application under section 3 of the Act for recognition of a stoc) exchange shall be (ade to the 34Securities and 7xchange 8oard of India: in 6or( A0
* The!e R*le! h%+e ,ee *$-%te- ,%!e- o the R*le! % - A.e -.e t! %+%il%,le o the /e,!ite of the De$%rt.e t of E'o o.i' Aff%ir!0 htt$&11fi .i . i'.i 1l%/1i -e#.%!$ % - %+%il%,le %.e -.e t otifi'%tio !. Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 % Inserted by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3 Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
2ee! for %$$li'%tio . 3. ( ) .here shall be paid in respect of e'ery application under rule 3 a fee of rupees fi'e hundred0 (%) .he a(ount of the fee shall be deposited in the nearest &o'ern(ent treasury or the nearest branch of the State 8an) of India, 4ro+i-e- that at 8o(bay, Calcutta, ?adras, 9elhi and @anpur, the a(ount shall be deposited in the Reser'e 8an) of India0 (3) .he a(ount of the fee so deposited shall be credited to the receipt head 1A=BI?iscellaneous-Cther fees, fines and forfeitures20 Do'*.e t! to ,e file- %lo ( /ith the %$$li'%tio % - $%rti'*l%r! it !ho*l- 'o t%i . 5. 7'ery application shall be acco(panied by four copies of the rules (including the (e(orandu( and articles of association where the applicant stoc) exchange is an
incorporated body) and bye+laws of the stoc) exchange applying for recognition as specified in section 3 of the Act and the receipt granted by the &o'ern(ent treasury, or as the case (ay be, the State 8an) of India or the Reser'e 8an) of India, in respect of the a(ount of the fee deposited and shall contain clear particulars as to the (atters specified in the Annexure to 6or( A0 $54o/er to .%6e i 7*irie! % - '%ll for i for.%tio . 5A. 8efore granting recognition to a stoc) exchange under section $ of the Act, the "4Securities and 7xchange 8oard of India: (ay (a)e such in*uiries and re*uire such further infor(ation to be furnished, as it dee(s necessary, relating to the infor(ation furnished by the stoc) exchange in the Annexure to its application in 6or( A0: 2or. of re'o( itio . 8. .he recognition granted to a stoc) exchange shall be in 6or( 8 and be subDect to the following conditions, na(ely ,(a) that the recognition unless granted on a per(anent basis, shall be for such period not less than one year as (ay be specified in the recognition3 (b) that the stoc) exchange shall co(ply with such conditions as are or (ay be prescribed or i(posed under the pro'isions of the Act and these rules fro( ti(e to ti(e0
$ Inserted
by &SR 0!# dated $00/0 !#/, w0e0f0 %%00/0 !#/ for 1Central &o'ern(ent2 by the Securities Contracts (Regulation)(A(end(ent )Rules, !!#, w0e0f0 %30 %0 !!#0
" Substituted
Re e/%l of re'o( itio . 7. ( ) .hree (onths before the expiry of the period of recognition, a recognised stoc) exchange desirous of renewal of such recognition (ay (a)e an application to the #4Securities and 7xchange 8oard of India: in 6or( A0 (%) .he pro'isions of rule 3, rule $, rule ", rule "A and rule # shall apply in relation to renewal of recognition as they apply in relation to grant of recognition except that the fee payable in respect of an application for renewal of recognition shall be rupees two hundred0 9*%lifi'%tio ! for .e.,er!hi$ of % re'o( i!e- !to'6 e#'h% (e. :. .he rules relating to ad(ission of (e(bers of a stoc) exchange see)ing recognition shall inter alia pro'ide that , (1) Eo person shall be eligible to be elected as a (e(ber if(a) he is less than twenty+one years of age3 (b) he is not a citiFen of India3 pro'ided that the go'erning body (ay in suitable cases relax this condition with the prior appro'al of the !4Securities and 7xchange 8oard of India:3 (c) he has been adDudged ban)rupt or a recei'ing order in ban)ruptcy has been (ade against hi( or he has been pro'ed to be insol'ent e'en though he has obtained his final discharge3 (d) he has co(pounded with his creditors unless he has paid sixteen annas in the rupee3 (e) he has been con'icted of an offence in'ol'ing fraud or dishonesty3 (f) he is engaged as principal or e(ployee in any business other than that of securities /4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability unless he underta)es on ad(ission to se'er his connection with such business ,
>44ro+i-e-
that no (e(ber (ay conduct business in co((odity deri'ati'es, except by setting up a separate co(pany which shall co(ply with the regulatory re*uire(ents, such as, networth, capital ade*uacy, (argins and exposure nor(s as (ay be specified by the 6orward ?ar)et Co((ission, fro( ti(e to ti(e ,
# Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, w0e0f0 %30 %0 !!#0 / Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 > Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 <rior to its substitution, the pro'iso as a(ended by Securities Contracts (Regulation) (A(end(ent) Rules, !!# w0e0f0 %30 %0 !!#, read as under, 1<ro'ided that the Securities and 7xchange 8oard of India (ay, for reasons sufficient in the opinion of the said 8oard, per(it a recogniFed stoc) exchange to suspend the enforce(ent of this clause for a specified period on condition that the applicant is not associated with or is a (e(ber of or subscriber to or shareholder or debenture holder in or connected through a partner or e(ployee with any other organisation, institution, association, co(pany or corporation in India where forward business of any )ind whether in goods or co((odities or otherwise is carried on or is not engaged as a principal or e(ployee ion any such business02
4ro+i-e- f*rther that nothing herein shall be applicable to any corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to ()) of the pro'iso to sub+rule ($)0:3 (g) !4GGG: (h) he has been at any ti(e expelled or declared a defaulter by any other stoc) exchange3 (i) he has been pre'iously refused ad(ission to (e(bership unless a period of one year has elapsed since the date of such reDection0 (2) Eo person eligible for ad(ission as a (e(ber under sub+rule ( ) shall be ad(itted as a (e(ber unless ,(a) he has wor)ed for not less than two years as a partner with, or an authorised assistant or authorised cler) or re(isier or apprentice to, a (e(ber3 or (b) he agrees to wor) for a (ini(u( period of two years as a partner or representati'e (e(ber with another (e(ber and to enter into bargains on the floor of the stoc) exchange and not in his own na(e but in the na(e of such other (e(ber 3 or (c) he succeeds to the established business of a deceased or retiring (e(ber who is his father, uncle, brother or any other person who is, in the opinion of the go'erning body, a close relati'e , 4ro+i-e- that the rules of the stoc) exchange (ay authorise the go'erning body to wai'e co(pliance with any of the foregoing conditions if the person see)ing ad(ission is in respect of (eans, position, integrity, )nowledge and experience of business in securities, considered by the go'erning body to be otherwise *ualified for (e(bership0 (3) Eo person who is a (e(ber at the ti(e of application for recognition or subse*uently ad(itted as a (e(ber shall continue as such if(a) he ceases to be a citiFen of India , 4ro+i-e- that nothing herein shall affect those who are not citiFens of India but who were (e(bers at the ti(e of such application or were ad(itted subse*uently under the pro'isions of clause (b) of sub+rule ( ) of this rule, subDect to their co(plying with all other re*uire(ents of this rule3
(b) he is adDudged ban)rupt or a recei'ing order in ban)ruptcy is (ade against hi( or he is pro'ed to be insol'ent3 (c) he is con'icted of an offence in'ol'ing fraud or dishonesty3 (d) 04G G G: (e) 4G G G: (f) he engages either as principal or e(ployee in any business other than that of securities %4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability, pro'ided that! C(itted 0 Ibid0
by &SR 0/0(7) dated "0
0 !>>
Ibid0
% Inserted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(i) the go'erning body (ay, for reasons, to be recorded in writing, per(it a (e(ber to engage hi(self as principal or e(ployee in any such business, if the (e(ber in *uestion ceases to carry on business on the stoc) exchange either as an indi'idual or as a partner in a fir(, (ii) in the case of those (e(bers who were under the rules in force at the ti(e of such application per(itted to engage in any such business and were actually so engaged on the date of such application, a period of three years fro( the date of the grant of recognition shall be allowed for se'ering their connection with any such business, 34(iii) nothing herein shall affect (e(bers of a recognised stoc) exchange which are corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to (k) of the pro'iso to sub+rule ($)0: (4) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section 3%% of the said Act3 (ii) a (aDority of the directors of such co(pany are shareholders of such co(pany and also (e(bers of that stoc) exchange3 and (iii) the directors of such co(pany, who are (e(bers of that stoc) exchange, ha'e ulti(ate liability in such co(pany , 4ro+i-e- that where the $4Securities and 7xchange 8oard of India: (a)es a reco((endation in this regard, the go'erning body of a stoc) exchange shall, in relaxation of the re*uire(ents of this clause, ad(it as (e(ber the following corporations "4,bodies corporate:, co(panies or institutions, na(ely ,(a) the Industrial 6inance Corporation, established under the Industrial 6inance Corporation Act, !$> ( " of !$>)3 (b) the Industrial 9e'elop(ent 8an) of India, established under the Industrial 9e'elop(ent 8an) Act, !#$ ( > of !#$)3 (c) the =ife Insurance Corporation of India, established under the =ife Insurance Corporation Act, !"# (3 of !"#)3 (d) the &eneral Insurance Corporation of India constituted under the &eneral Insurance Corporation (Eationalisation) Act, !/% ("/ of !/%)3 (e) the Hnit .rust of India, established under the Hnit .rust of India Act, !#3 ("% of !#3)3
3 Substituted, ibid0 <rior to its substitution, sub+clause (iii) read as under, 1(iii) nothing herein shall affect (e(bers of a recogniFed stoc) exchange per(itted under the pro'iso to clause (f) of sub+rule( ) to suspend the enforce(ent of the aforesaid clause, for so long as such suspension is effecti'e, except that no (e(ber of such exchange shall engage in forward business of any )ind whether in goods or co((odities or otherwise and , if actually so engaged on the date of such application , he shall se'er his connection with any such business within a period of three years fro( the date of the grant of recognition02 $ Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# " Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(f) the Industrial Credit and In'est(ent Corporation of India, a co(pany registered under the Co(panies Act, !"# ( of !"#)3 (g) the subsidiaries of any of the corporations or co(panies specified in (a) to (f) and any subsidiary of the State 8an) of India or any nationalised ban) set up for pro'iding (erchant ban)ing ser'ices, buying and selling securities and other si(ilar acti'ities0 #4(h) any ban) included in the Second Schedule to the Reser'e 8an) of India Act, !3$ (% of !3$)3 (i) the 7xport I(port 8an) of India, established under the 7xport I(port 8an) of India Act, !> (%> of !> )3 (j) the Eational 8an) for Agriculture and Rural 9e'elop(ent, established under the Eational 8an) for Agriculture and Rural 9e'elop(ent Act, !> (# of !> )3 and (k) the Eational Iousing 8an), established under the Eational Iousing 8an) Act, !>/ ("3 of !>/)0: (4A) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall also be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section % of the said Act3 (ii) such co(pany underta)es to co(ply with such financial re*uire(ents and nor(s as (ay be specified by the Securities and 7xchange 8oard of India for the registration of such co(pany under sub+section ( ) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (iii) /4G G G: (iv) the directors of the co(pany are not dis*ualified fro( being (e(bers of a stoc) exchange under >4clause ( ) 4except sub+clause (b) and sub+clause (f) thereof: or clause (3) 4except sub+clause (a) and sub+clause (f) thereof:: and the 9irectors of the co(pany had not held the offices of the 9irectors in any co(pany which had been a (e(ber of the stoc) exchange and had been declared defaulter or expelled by the stoc) exchange3 and (v) not less than two directors of the co(pany are persons who possess a (ini(u( two yearsJ experience , (a) in dealing in securities3 or (b) as portfolio (anagers3 or (c) as in'est(ent consultants0 (5) Khere any (e(ber of a stoc) exchange is a fir(, the pro'isions of sub+rules ( ), (3) and ($), shall, so far as they can, apply to the ad(ission or continuation of any partner in such fir(0
# Inserted, / C(itted
ibid0 by &SR /$! (7), dated %0 00 !!$ > Substituted by &SR /!0(7), dated 0/0 0 !!$
Co tr%'t! ,et/ee .e.,er! of re'o( i!e- !to'6 e#'h% (e. 9. All contracts between the (e(bers of a recognised stoc) exchange shall be confir(ed in writing and shall be enforced in accordance with the rules and bye+laws of the stoc) exchange of which they are (e(bers0 !5No.i ee! of the Se'*ritie! % - E#'h% (e ;o%r- of I -i%< o the (o+er i ( ,o-ie! of re'o( i!e- !to'6 e#'h% (e!. 1=. .he %04Securities and 7xchange 8oard of India: (ay no(inate one or (ore persons not exceeding three in nu(ber, as (e(ber or (e(bers of the go'erning body of e'ery recognised stoc) exchange0 Such (e(ber or (e(bers shall enDoy the sa(e status and powers as other (e(bers of the go'erning body0 O,li(%tio of the (o+er i ( ,o-> to t%6e -i!'i$li %r> %'tio %(%i !t % .e.,er if !o -ire'te- ,> the % 5Se'*ritie! % - E#'h% (e ;o%r- of I -i%<. 11. After recei'ing the report of the result of an en*uiry (ade under clause (b) of subsection (3) of section # of the Act, the % 4Securities and 7xchange 8oard of India: (ay ta)e such action as they dee( proper and, in particular, (ay direct the go'erning body of the stoc) exchange to ta)e such disciplinary action against the offending (e(ber, including fine, expulsion, suspension or any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney, as (ay be specified by the % 4Securities and 7xchange 8oard of India:3 notwithstanding anything to the contrary contained in the rules or bye+laws of the stoc) exchange concerned, the go'erning body shall gi'e effect to the directions of the % 4Securities and 7xchange 8oard of India: in this behalf and shall not in any (anner co((ute, re'o)e or (odify the action ta)en in pursuance of such directions, without the prior appro'al of the % 4Securities and 7xchange 8oard of India:0 .he % 4Securities and 7xchange 8oard of India: (ay, howe'er, either of its own (otion or on the representation of the (e(ber concerned, (odify or withdraw its direction to the go'erning body0 A*-it of %''o* t! of .e.,er!. 1". 7'ery (e(ber shall get his accounts audited by a chartered accountant whene'er such audit is re*uired by the % 4Securities and 7xchange 8oard of India:0 ?ith-r%/%l of re'o( itio . 1). .he written notice referred to in section " of the Act shall be in 6or( C0
! Substituted %0 Ibid0 %
by 60 Eo0 L3/LS7L!$, dated %#0 00 !!$0
Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> re'o( i!e- !to'6 e#'h% (e. 13. 7'ery recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years, (1) ?inute boo)s of the (eetings of(a) (e(bers3 (b) go'erning body3 (c) any standing co((ittee or co((ittees of the go'erning body or of the general body of (e(bers0
(2) Register of (e(bers showing their full na(es and addresses0 Khere any (e(ber of the stoc) exchange is a fir(, full na(es and addresses of all partners shall be shown0 (3) Register of authorised cler)s0 (4) Register of re(isiers of authorised assistants0 (5) Record of security deposits0 (6) ?argin deposits boo)0 (7) =edgers0 (8) Mournals0 (9) Cash boo)0 (10) 8an) pass+boo)0 ;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> .e.,er of % re'o( i!e- !to'6 e#'h% (e. 15. ( ) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years , (a) Register of transactions ( a!da boo))0 (b) ClientsJ ledger0 (c) &eneral ledger0 (d) Mournals0 (e) Cash boo)0 (f) 8an) pass+boo)0 (g) 9ocu(ents register showing full particulars of shares and securities recei'ed and deli'ered0 (2) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following docu(ents for a period of two years, (a) ?e(berJs contract boo)s showing details of all contracts entered into by hi( with other (e(bers of the sa(e exchange or counterfoils or duplicates of (e(os of confir(ation issued to such other (e(bers0 (b) Counterfoils or duplicates of contract notes issued to clients0 (c) Kritten consent of clients in respect of contracts entered into as principals0 @% er of i 7*ir> i rel%tio to the %ff%ir! of the (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e or the %ff%ir! of % > .e.,er of the !to'6 e#'h% (e i rel%tio to the !to'6 e#'h% (e. 18. ( )(a) .he person or persons appointed by the %%4Securities and 7xchange 8oard of India: to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act shall hereafter in this rule be referred to as the Nin*uiring authorityJ3 (b) where the in*uiring authority consists of two or (ore persons, one of the( shall be appointed as the chair(an or senior (e(ber thereof3 (c) the in*uiring authority shall hand o'er a state(ent of issues to be in*uired into to the go'erning body or the (e(ber concerned, as the case (ay be, who will be gi'en a reasonable opportunity to state their or his side of the case3 (d) if any witness is called for exa(ination, an opportunity shall be pro'ided to the go'erning body or the (e(ber whose affairs are being in*uired into, as the case (ay be, to cross+exa(ine such witness3 (e) where the in*uiring authority consists of (ore than one person, the 'iews of the (aDority shall be dee(ed to represent the findings of such authority and, in the e'ent of
an e*uality of 'otes, the chair(an or senior (e(ber shall ha'e a casting 'ote3 (f) the in*uiring authority shall sub(it its report in writing to the %%4Securities and 7xchange 8oard of India: within the period specified in the order of appoint(ent3 (g) te(porary absence fro( any hearing or hearings of any (e(ber of the in*uiring authority shall not 'itiate its proceedings0 (%) Khere the %%4Securities and 7xchange 8oard of India: has directed the go'erning body of a stoc) exchange to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act, the go'erning body concerned shall appoint one or (ore (e(bers thereof to (a)e the in*uiry and the pro'isions of sub+rule ( ) shall apply "!tati# "!tandi# to such in*uiry0 S*,.i!!io of % *%l re$ort. 17. ( ) 7'ery recognised stoc) exchange shall before the 3 st day of Manuary in each year or within such extended ti(e as the %34Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, allow, furnish the %34Securities and 7xchange 8oard of India: annually with a report about its acti'ities during the preceding calendar year, which shall inter alia contain detailed infor(ation about the following (atters , (a) changes in rules and bye+laws, if any3 (b) changes in the co(position of the go'erning body3 (c) any new sub+co((ittees set up and changes in the co(position of existing ones3
%% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# %3 Ibid0
(d) ad(issions, re+ad(issions, deaths or resignations of (e(bers3 (e) disciplinary action against (e(bers3 (f) arbitration of disputes (nature and nu(ber) between (e(bers and non+(e(bers3 (g) defaults3 (h) action ta)en to co(bat any e(ergency in trade3 (i) securities listed and de+listed3 and (j) securities brought on or re(o'ed fro( the forward list0 (%) 7'ery recognised stoc) exchange shall within one (onth of the date of the holding of its annual general (eeting, furnish the %$4Securities and 7xchange 8oard of India: with a copy of its audited balance+sheet and profit and loss account for its preceding financial year0 S*,.i!!io of $erio-i'%l ret*r !. 17A. 7'ery recognised stoc) exchange shall furnish the %$4Securities and 7xchange 8oard of India: periodical returns relating to(i) the official rates for the securities enlisted thereon3 (ii) the nu(ber of shares deli'ered through the clearing house3 (iii) the (a)ing+up prices3 (iv) the clearing house progra((es3 (v) the nu(ber of securities listed and de+listed during the pre'ious three (onths3 (vi) the nu(ber of securities brought on or re(o'ed fro( the forward list during the pre'ious three (onths3 and (vii) any other (atter as (ay be specified by the %$4Securities and 7xchange 8oard of India:0 @% er of $*,li'%tio of ,>e0l%/! for 'riti'i!.. 1:. .he bye+laws to be (ade, a(ended or re'ised under the Act shall be published for
criticis( in accordance with the pro'isions of section %3 of the &eneral Clauses Act, >!/ both in the &aFette of India and Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate0 Re7*ire.e t! /ith re!$e't to the li!ti ( of !e'*ritie! o % re'o( i!e- !to'6 e#'h% (e. 19. ( ) A public co(pany as defined under the Co(panies Act, !"#, desirous of getting its securities listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars ,
%$ Ibid0
(a) ?e(orandu( and articles of association and, in the case of a debenture issue, a copy of the trust deed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any securities for subscription or sale during the last fi'e years0 (d) Copies of balance+sheets and audited accounts for the last fi'e years, or in the case of new co(panies, for such shorter period for which accounts ha'e been (ade up0 (e) A state(ent showing(i) di'idends and cash bonuses, if any, paid during the last ten years (or such shorter period as the co(pany has been in existence, whether as a pri'ate or public co(pany), (ii) di'idends or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents with or between ,(i) 'endors andLor pro(oters, (ii) underwriters and sub+underwriters, (iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents with(i) (anaging agents and secretaries and treasurers, (ii) selling agents, (iii) (anaging directors and technical directors, (iv) general (anager, sales (anager, (anager or secretary0 (h) Certified copy of e'ery letter, report, balance+sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering securities for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents0 (j) A brief history of the co(pany since its incorporation gi'ing details of its acti'ities including any reorganisation, reconstruction or a(alga(ation, changes in its capital structure, (authorised, issued and subscribed) and debenture borrowings, if any0
(k) <articulars of shares and debentures issued-(i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s including an option for the issue of any )ind of the securities granted to any person0 (") Certified copies of%"4(i) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3: (ii) agree(ents, if any, with the Industrial 6inance Corporation, Industrial Credit and In'est(ent Corporation and si(ilar bodies0 (n) <articulars of shares forfeited0 ($) A list of highest ten holders of each class or )ind of securities of the co(pany as on the date of application along with particulars as to the nu(ber of shares or debentures held by and the address of each such holder0 (%) <articulars of shares or debentures for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0 (%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant co(pany shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer, (ii) that the fully paid shares will be free fro( all lien, while in the case of partly paid shares, the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such shares, (iii) that any a(ount paid+up in ad'ance of calls on any share (ay carry interest but shall not entitle the holder of the share to participate in respect thereof, in a di'idend subse*uently declared, (iv) there will be no forfeiture of unclai(ed di'idends before the clai( beco(es barred by law, (v) that option or right to call of shares shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the securities of a co(pany which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0
%" Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 <rior to its substitution, sub+clause (i), read as under, 1(i) letters of consent of the Controller of Capital Issues02
%#4(b)
(i) At least twenty fi'e per cent0 of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent3 or (ii) At least ten per cent of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent if the post issue capital of the
co(pany calculated at offer price is (ore than four thousand crore rupees, <ro'ided that the re*uire(ent of post issue capital being (ore than four thousand crore rupees shall not apply to a co(pany whose draft offer docu(ent is pending with the Securities and 7xchange 8oard of India on or before the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, if it satisfies the conditions prescribed in clause (b) of sub+rule % of rule ! of the Securities Contracts (Regulation) Rules, !"# as existed prior to the date of such co((ence(ent, %/4<ro'ided further that the co(pany, referred to in sub clause (ii), shall increase its public shareholding to at least twenty fi'e per cent, within a
%# Substituted
by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, clause (b) as a(ended by the A(end(ent Rules, %00 , w0e0f0 0/00#0%00 , read as under, 1(b) At least 0 per cent of each class or )ind of securities issued by a co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted subDect to the following conditions, (a) (ini(u( %0 la)h securities (excluding reser'ations, fir( allot(ent and pro(otersJ contribution) was offered to the public3 (b) the siFe of the offer to the public, i&e&' the offer price (ultiplied by the nu(ber of securities offered to the public was (ini(u( Rs0 00 crores3 and (c) the issue was (ade only through boo) building (ethod with allocation of #0 per cent of the issue siFe to the *ualified institutional buyers as specified by the Securities and 7xchange 8oard of India, 4ro+i-e- that if a co(pany does not fulfil the conditions, it shall offer at least %" per cent of each class or )ind of securities to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted, 4ro+i-e- f*rther that a recognised stoc) exchange (ay relax any of the conditions with the pre'ious appro'al of the Securities and 7xchange 8oard of India, in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#), and subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*6or the purpose of this clause, it is hereby clarified that where any part of the securities sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental 6ire and &eneral Insurance Co(pany =i(ited and the Hnited 6ire and &eneral Insurance Co(pany =i(ited or Hnit .rust of India, the total subscription to the securities, whether by one or (ore of such bodies, shall not for( part of the 0 per cent or %" per cent of the securities, as the case (ay be, to be offered to the public02 %/ Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 <rior to its substitution, second pro'iso, read as under, 1<ro'ided further that the co(pany, referred in sub+clause (ii), shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of atleast fi'e per
period of three years fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India0: %>4GGG:: %!4(c) Eotwithstanding anything contained in clause (b), a public sector co(pany, shall offer and allot at least ten per cent, of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares to public in ter(s of an offer docu(ent0: (3) A co(pany applying for listing shall, as a condition precedent, underta)e inter alia(a) (i) that letters of allot(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to
that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been posted, (ii) that letters of right will be issued si(ultaneously, (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the securities to which they relate, (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right, (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or di'idend on the securities will be calculated, (b) to issue, when so re*uired, receipts for all securities deposited with it whether for registration, sub+di'ision, exchange or for other purposes 3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of certificates and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (bb) to issue, when so re*uired, consolidation and renewal certificates in deno(inations of the (ar)et unit of trading to split certificates, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3
cent per annu( beginning fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India,2 %> C(itted, ibid <rior to its o(ission, third pro'iso, read as under, 1<ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase beings its public shareholding to the le'el of twenty fi'e per cent in that year02 %! Inserted, ibid0
(c) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders, and (ii) to 'erify when the co(pany is unable to issue certificates or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (d) on production of the necessary docu(ents by shareholders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or certificate of the Controller of 7state 9uty or si(ilar other docu(ent has been duly exhibited to
and registered by the co(pany3 (e) to issue certificates in respect of shares or debentures lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance certificates within the sa(e period where the transfer is acco(panied by a larger certificate3 (f) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a di'idend or the issue of right or bonus share will be considered3 (g) to reco((end or declare all di'idends andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all di'idends andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (h) to notify the stoc) exchange of any (aterial change in the general character or nature of the co(panyJs business3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (anaging agent or secretaries and treasurers, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued, copies of all other notices and circulars sent to the shareholders including proceedings of ordinary and extraordinary general (eetings of the co(pany and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the shareholders of any new issue of securities whether by way of right, pri'ilege bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited securities or the issue of securities held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of di'idend or issue of right or bonus shares or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s (or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its shareholders or debentureholders) and specifying the purpose or purposes for which the transfer boo)s are to be closed (or the record is to be ta)en)3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority subDect to which the issue is proposed to be (ade ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after each annual general (eeting of at least ten principal holders of each class of security of the co(pany along with particulars as to the nu(ber of shares or debentures held by,
and address of, each such holder3 (+) to grant to shareholders the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e not being less than four wee)s within which to record, exercise, or renounce such rights, pri'ileges and benefits and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3 (r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any securities listed on the exchange, (ii) of the intention to (a)e a drawing of such securities, inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing of the balance) for the drawing, (iii) of the a(ount of securities outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the shareholders to apprise the position of the co(pany and to a'oid the establish(ent of a false (ar)et in the shares of the co(pany3 (t) (t)that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 304($) An application for listing shall be necessary in respect of the following, (a) all new issues of any class or )ind of securities of a co(pany to be offered to the public3 (b) all further issues of any class or )ind of securities of a co(pany if such class or )ind of securities of the co(pany are already listed on a recognised stoc) exchange0: (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the securities of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 3 44ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any security, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and its orders shall be carried out by the stoc) exchange0: 3%4(#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore
or re+ad(it to dealings any securities suspended or withdrawn fro( the list0: 334(#A) 7xcept as otherwise pro'ided in these rules or per(itted by the Securities and 7xchange 8oard of India under sub+rule (/), all re*uire(ents with respect to listing
30 Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, sub+rule ($), read as under, 1($) A fresh application for listing will be necessary in respect of all new issues desired to be dealt in, pro'ided that, where such new securities are identical in all respects with those already listed, ad(ission to dealings will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new issues0 7xplanation, Shares are identical in all respects only if(a) they are of the sa(e no(inal 'alue and the sa(e a(ount per share has been called up3 (b) they are entitled to di'idend at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the di'idend payable on each share will a(ount to exactly the sa(e su(, net and gross3 and (c) they carry the sa(e rights in all other respects02 3 Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%0000 7arlier, the second pro'iso was a(ended by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 3% Substituted by the Securities Contracts (Regulation) (A(end(ent), %000, w0e0f0 0>00>0%0000 7arlier, subrule (#) was a(ended by the Securities Contracts (Regulation) (A(end(ent), !!#, w0e0f0 %30 %0 !!#0 33 Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!0>0%0 00 <rior to its substitution, sub+rule (#A) as a(ended by the Securities Contracts
prescribed by these rules shall, so far as they (ay be, also apply to a public sector co(pany0: 3$4GGG: (/) .he 3"4Securities and 7xchange 8oard of India: (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect to listing prescribed by these rules0 3#4Co ti *o*! Li!ti ( Re7*ire.e t. 19A. ( ) 7'ery listed co(pany 3/4other than public sector co(pany: shall (aintain public shareholding of at least twenty fi'e per cent0, 3>4<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent, on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall increase its public shareholding to at least twenty fi'e per cent, within a period of three years fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India0 7xplanation, 6or the purposes of this sub+rule, a co(pany whose securities has been listed pursuant to an offer and allot(ent (ade to public in ter(s of sub+clause (ii) of clause (b) of sub+rule (%) of rule !, shall (aintain (ini(u( twenty fi'e per cent, public shareholding fro( the date on which the public shareholding in the co(pany reaches the le'el of twenty fi'e percent in ter(s of said sub+clause0: (%) Khere the public shareholding in a listed co(pany falls below twenty fi'e per cent0 at any ti(e, such co(pany shall bring the public shareholding to twenty fi'e per cent0
(Regulations)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 and &SR % (7) w0e0f0 0!0030 !!", read as under, 1(#A) All the re*uire(ents with respect to listing and continuous listing prescribed by these rules, shall so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature ,2 3$ C(itted by the Securities Contracts (Regulation)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its o(ission, pro'iso, as substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# and inserted by &SR %! (7) dated %/0030 !!", read as under,
1<ro'ided that a recognised stoc) exchange (ay relax the re*uire(ent of offer to public for subscription of atleast twenty+fi'e percent of the each class or )ind of securities issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e02 3" Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent), Rules, !!#, w0e0f0 %30 %0 !!#0 3# Inserted by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 3/ Inserted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3> Substituted, ibid0 <rior to substitution, pro'isos, read as under, 1<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of at least fi'e per cent per annu( beginning fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India, <ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase brings its public shareholding to the le'el of twenty fi'e per cent in that year02
within a (axi(u( period of twel'e (onths fro( the date of such fall in the (anner specified by the Securities and 7xchange 8oard of India0: 3!4(3) Eotwithstanding anything contained in this rule, e'ery listed public sector co(pany shall (aintain public shareholding of at least ten per cent0, <ro'ided that a listed public sector co(pany+ (a) which has public shareholding below ten per cent, on the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of three years fro( the date of such co((ence(ent3 (b) whose public shareholding reduces below ten per cent, after the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of twel'e (onths fro( the date of such reduction,0: $04Re7*ire.e t! /ith re!$e't to the li!ti ( of * it! or % > other i !tr*.e t of % Colle'ti+e I +e!t.e t S'he.e o % re'o( i!e- !to'6 e#'h% (e. "=. ( ) A Collecti'e In'est(ent ?anage(ent Co(pany (CI?C) which is desirous of getting its any collecti'e in'est(ent sche(e listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars , (a) Certificate of incorporation, (e(orandu( and articles of association of the co(pany and the copy of the trust deed of the sche(e intended to be listed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any unit or other instru(ent for subscription or sale during the last fi'e years, or in the case of a new co(pany, such shorter period during which the co(pany has been in existence0 (d) Copies of balance sheets and audited accounts for the last fi'e years, or in the case of a new co(pany, for such co(pleted financial year for which accounts ha'e been (ade up0 (e) A state(ent showing,(i) returns and cash bonuses, if any, paid during the last ten years (or such
shorter period as the co(pany has been in existence whether as a pri'ate or public co(pany)3 (ii) returns or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents pertaining to each sche(e of the co(pany with or between,(i) 'endors andLor pro(oters3 (ii) underwriters and sub+underwriters3
3! Inserted $0 Inserted
by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 0 by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%000
(iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents pertaining to each sche(e of a co(pany with(i) selling agents and other ser'ice pro'iders3 (ii) (anaging directors and technical directors3 (iii) general (anager, sales (anager, (anager or secretary0 (h) Certified copies of e'ery letter, report, balance sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering units or any other instru(ents of the sche(e for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents pertaining to such sche(e0 (j) A brief history of the Co(pany since its incorporation gi'ing details of its acti'ities including any re+organisation, reconstruction or a(alga(ation, changes in its capital structure (authorised, issued and subscribed) and debenture borrowings, if any, and the perfor(ance of other collecti'e in'est(ent sche(es of the co(pany0 (k) <articulars of units of the sche(e andLor shares, debentures of the co(pany issued (i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s granted to any person pertaining to such sche(e0 (") Certified copies of(i) certificate of registration granted by the Securities and 7xchange 8oard of India3 (ii) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3 (iii) agree(ents, if any, with any public financial institution as specified in section $A of the Co(panies Act, !"# ( of !"#)0 (n) A list of the highest ten holders of units of each sche(e of the co(pany as on the date of application along with particulars as to the nu(ber of units held by and the address of each such holder0 ($) <articulars of units of the sche(e for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0
(%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer of units of a particular sche(e3 (ii) that the fully paid units issued under the sche(e will be free fro( all lien, while in the case of partly paid units the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such units3 (iii) that any a(ount paid+up in ad'ance of calls on any units (ay carry interest but shall not entitle the holder of the unit to participate in respect thereof, in a return subse*uently declared3 (iv) there will be no forfeiture of unclai(ed returns before the clai( beco(es barred by law3 (v) that option or right to call of units shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the units of a sche(e which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0 (b) At least twenty+fi'e per cent of the units or any other instru(ent of a sche(e issued by the co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and not (ore than ninety days, and that applications recei'ed in pursuance of such offer were allotted fairly and unconditionally , 4ro+i-e- that a recognised stoc) exchange (ay relax this re*uire(ent, with the pre'ious appro'al of the Securities and 7xchange 8oard of India in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#) and subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*Khere any part of the units or any other instru(ents sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely, the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental Insurance Co(pany =i(ited and the Hnited Insurance Co(pany =i(ited, or Hnit .rust of India, the total subscription to the units or any other instru(ent, whether by one or (ore of such bodies, shall not for( part of the twenty+fi'e per cent of the units or any other instru(ent to be offered to the public0 (3) A co(pany applying for listing of a sche(e shall, as a condition precedent, underta)e, inter alia,(a) (i) that letters of allot(ent of units or any other instru(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been
posted3 (ii) that letters of right will be issued si(ultaneously3 (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and, exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the units or any other instru(ent to which they relate3 (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right3 (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or return on the units or any other instru(ent will be calculated3 (b) to issue, when so re*uired, receipts for all units and any other instru(ent deposited with it whether for registration, sub+di'ision, exchange or for other purposes3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of units and any other instru(ent and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (c) to issue, when so re*uired, consolidation and renewal units or any other instru(ent in deno(inations of the (ar)et unit of trading, to split units or any other instru(ent, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3 (d) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders3 and (ii) to 'erify when the co(pany is unable to issue units or any other instru(ents or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (e) on production of the necessary docu(ents by unit holders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or si(ilar other docu(ent has been duly exhibited to and registered by the co(pany3 (f) to issue certificates in respect of units or any other instru(ent lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance units or any other instru(ent within the sa(e period where the transfer is acco(panied by a larger unit or any other instru(ent certificate3 (g) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a return or the issue or right or bonus units or
any other instru(ent will be considered3 (h) to reco((end or declare all returns andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all returns andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts of such sche(e as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued copies of all other notices and circulars sent to the unitLother instru(ent holders regarding any i(portant de'elop(ent or resolutions passed by the co(pany affecting the perfor(ance of the sche(e and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the unitLany other instru(ent holders, of any new issue of unitsLother instru(ents whether by way of right, pri'ilege, bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited unitsLother instru(ents or the issue of unitsLother instru(ents held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of unit capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of returns or issue of right or bonus unitsLany other instru(ents in the sche(e or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its unitLother instru(ent holders and specifying the purpose or purposes for which the transfer boo)s are to be closed or the record is to be ta)en3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority, subDect to which the issue is proposed to be (ade, ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after the preparation of annual accounts of at least ten principal holders of each class of unitsLany other instru(ents of the co(pany along with particulars as to the nu(ber of unitsLany other instru(ent held by, and address of, each such holder3 (+) to grant to unitLany other instru(ent holders of the sche(e the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e, not being less than four wee)s, within which to record, exercise, or renounce such rights, pri'ileges and benefits, and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3
(r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any unitLother instru(ent listed on the exchange3 (ii) of the intention to (a)e a drawing of such unitLother instru(ent inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing off the balance) for the drawing3 (iii) of the a(ount of unitsLother instru(ents outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the unitLany other instru(ent holders to appraise the position of the sche(e and to a'oid the establish(ent of a false (ar)et in the unitsLany other instru(ents of the co(pany3 (t) that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 ($) A fresh application for listing will be necessary in respect of all new sche(es desired to be dealt in , 4ro+i-e- that, where such new unitsLother instru(ents are identical in all respects with those already listed, ad(ission to dealing will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new sche(es0 ()%lanati$n0-HnitsLany other instru(ents are identical in all respects only if(a) they are issued under the sa(e sche(e3 (b) they are of the sa(e no(inal 'alue and the sa(e a(ount per unitLother instru(ents has been called up3 (c) they are entitled to returns at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the return payable on each unitLother issue will a(ount to exactly the sa(e su(, net and gross3 and (d) they carry the sa(e rights in all other respects0 (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the unitsLother instru(ents of a sche(e of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 4ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any unitLother instru(ent of a collecti'e in'est(ent sche(e, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an
opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and thereupon the orders of the Securities Appellate .ribunal shall be carried out by the stoc) exchange0 (#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore or read(it to dealings any unitsLother instru(ents suspended or withdrawn fro( the list0 (/) All the re*uire(ents with respect to listing prescribed by these rules, shall, so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature , 4ro+i-e- that a recognised stoc) exchange (ay relax the re*uire(ent of offer to the public for subscription of at least twenty+fi'e per cent of the units or any other instru(ent of a collecti'e in'est(ent sche(e issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 (>) .he Securities and 7xchange 8oard of India (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect of listing prescribed by these rules0: $ 4Deli!ti ( of !e'*ritie!. "1. A recogniFed stoc) exchange (ay, without preDudice to any other action that (ay be ta)en under the Act or under any other law for the ti(e being in force, delist any securities listed thereon on any of the following grounds in accordance with the regulations (ade by the Securities and 7xchange 8oard of India, na(ely,(a) the co(pany has incurred losses during the preceding three consecuti'e years and it has negati'e networth3 (b) trading in the securities of the co(pany has re(ained suspended for a period of (ore than six (onths3 (c) the securities of the co(pany ha'e re(ained infre*uently traded during the preceding three years3 (d) the co(pany or any of its pro(oters or any of its director has been con'icted for failure to co(ply with any of the pro'isions of the Act or the Securities and 7xchange 8oard of India Act, !!% or the 9epositories Act, !!# (%% of !!#) or rules, regulations, agree(ents (ade thereunder, as the case (ay be and awarded a penalty of not less than rupees one crore or i(prison(ent of not less than three years3 (e) the addresses of the co(pany or any of its pro(oter or any of its directors, are not )nown or false addresses ha'e been furnished or the co(pany has changed its registered office in contra'ention of the pro'isions of the Co(panies Act, !"# ( of !"#)3 or
$
Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %00>, w0e0f0 000#0%00!
(f) shareholding of the co(pany held by the public has co(e below the (ini(u( le'el applicable to the co(pany as per the listing agree(ent under the Act and the co(pany has failed to raise public holding to the re*uired le'el within the ti(e specified by the recogniFed stoc) exchange , 4ro+i-e- that no securities shall be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) If the securities is delisted under clause ( ),
(a) the co(pany, pro(oter and director of the co(pany shall be Dointly and se'erally liable to purchase the outstanding securities fro( those holders who wish to sell the( at a fair price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India, under the Act3 and (b) the said securities shall be delisted fro( all recogniFed stoc) exchanges0 (3) A recogniFed stoc) exchange (ay, on the re*uest of the co(pany, delist any securities listed thereon in accordance with the regulations (ade under the Act by Securities and 7xchange 8oard of India, subDect to the following conditions, na(ely ,(a) the securities of the co(pany ha'e been listed for a (ini(u( period of three years on the recogniFed stoc) exchange3 (b) the delisting of such securities has been appro'ed by the two+third of public shareholders3 and (c) the co(pany, pro(oter andLor the director of the co(pany purchase the outstanding securities fro( those holders who wish to sell the( at a price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India under the Act, 4ro+i-e- that the condition at (c) (ay be dispensed with by Securities and 7xchange 8oard of India if the securities re(ain listed at least on the Eational Stoc) 7xchange of India =i(ited or the 8o(bay Stoc) 7xchange =i(ited0: FORM A ( ee Rules 3 and /) A$$li'%tio for re'o( itio 1re e/%l of re'o( itio of % !to'6 e#'h% (e * -er !e'tio ) of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 .o 00000000000000000000000000000000000000 00000000000000000000000000000000000000 !bject,*A%%licati$n f$r rec$gniti$n-rene.al $f rec$gniti$n $f a #t$ck e)change !nder #ecti$n 3 $f the ec!ritie# /$ntract# (0eg!lati$n) Act' 1956& Sir, <ursuant to the $%4Securities and 7xchange 8oard of India: Eotification Eo0 00000000000000000000000000 00000000000000000 dated 000000000000000000000000000000000LCertificate of recognition dated0000000000000000000000000000000KeLI on behalf of 000000000000000000 (na(e and address of stoc) exchange) being a stoc) exchange as defined in section % of the Securities Contracts
$% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
(Regulation) Act, !"# hereby apply for recognitionLrenewal of recognition for the purposes of the said Act in respect of contracts in securities0 ". 6our copies of the rules, (e(orandu( and articles of association relating in general to the constitution and (anage(ent of the stoc) exchange and four copies of the bye+laws for the regulation and control contracts in securities are enclosed0 ). All the necessary infor(ation re*uired in the Annexure to this 6or( is enclosed0 Any additional infor(ation will be furnished as and when called for by the $34Securities and 7xchange 8oard of India:0 3. KeLI on behalf of the said stoc) exchange hereby underta)e to co(ply with the re*uire(ents of section $ of the said Act and such other conditions and ter(s as (ay be contained in the certificate of recognition or be prescribed or i(posed subse*uently0 5. .reasury Receipt Eo0 000000dated000000for Rs000000000000is attached0
Oours faithfully, Signature of applicant ANNEAURE TO 2OR@ BAC Part I - General 0 Ea(e of the applicant stoc) exchange0 %0 Address0 30 9ate of establish(ent0 $0 Is your exchange a Doint stoc) co(pany (state whether public or pri'ate) registered under the Indian Co(panies Act or an association for profit or otherwise P If it is organised on so(e other basis, this (ay be stated0 "0 &i'e details of your capital structure and attach three copies of the audited balance sheets and profit and loss account of the 7xchange for the preceding three years0 Part II - Membership #0 State the nu(ber of (e(bers at the ti(e of application0 Also specify how (any are inacti'e0 /0 State whether there is any pro'ision, resolution or con'ention for li(iting the nu(ber of (e(bers and whether in pursuance thereof you ha'e fixed a ceiling on the nu(ber of (e(bers that you would ta)e0 >0 9o you insist on any (ini(u( *ualifications and experience before enrolling new (e(bers P If so gi'e details0 !0 State the different classes of (e(bers, if any, the nu(ber thereof and the pri'ileges enDoyed by each class0 Khat is the procedure followed by your exchange for the ad(ission of different classes of new (e(bers P 00 Khat are the rates of your annual subscription in respect of the different classes of (e(bers P 0 9o you collect any security deposit fro( your (e(bers P If so, gi'e details and also state the (anner in which such deposits are utilised and the rate of interest allowed, if any0
$3 Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
%0 9o you collect any ad(ission or entrance fees fro( your (e(bers or fro( partners of fir(s who are (e(bers P If so, how (uch P 30 9o you insist on your (e(bers and partners of fir(s who are (e(bers di'esting the(sel'es of other acti'ities either as principal or as e(ployee P $0 9o your rules per(it fir(s to beco(e (e(bers P If so, is it incu(bent on (e(bers to see) the appro'al of the go'erning body before ad(itting new partners P State the conditions, if any, laid down in your rules for the ad(ission of such partners0 "0 If your rules do not per(it of fir(s being enrolled as (e(bers, do you per(it indi'idual (e(bers to for( a partnership P State the procedure followed for the recognition of such partnership0 #0 9o you per(it (e(bers to wor) in partnership with non+(e(bers P If so, how far such non+(e(bers subDect to the control of the stoc) exchange P Part III - Governing Body /0 Khat is the present strength of your go'erning body P &i'e details of the constitution, powers of (anage(ent, election and tenure of office of (e(bers of the go'erning body, and the (anner in which its business is transacted0 >0 Are any trade or co((ercial interest represented on your go'erning body P If so,
gi'e details of interests represented0 !0 9o you associate shareholders of in'estors associations with the (anage(ent of your exchange P If so, state the (anner in which it is done0 %00 Are there any &o'ern(ent representati'es on your go'erning body P If so, furnish their na(es0 % 0 9o your rules pro'ide for the direct election by (e(bers of any other bodies or co((ittees, apart fro( the go'erning body P If so, gi'e details of their constitution, tenure, powers and functions0 %%0 9o you ha'e any pro'ision for the appoint(ent of standing or ad h$c subco((ittees of the go'erning body P If so, furnish details of the (ethod of their appoint(ent, ter(s of office, powers and functions0 %30 &i'e the designations, powers and duties of principal office+bearers of your exchange0 Are any of these office+bearers in the pay of the stoc) exchange P If so, gi'e details as to the (ode of their appoint(ent, tenure of office and re(uneration0 Part IV - Trading %$0 9o you ha'e a trading ring P If not, how do you carry on the business P &i'e details0 %"0 State the different )inds of contracts in use on your exchange e&g&' spot, ready and forward0 State the period of deli'ery and pay(ent in each case0 %#0 &i'e details of business hours for each type of contract0 %/0 &i'e details of the scale of bro)erage and other charges, if any, prescribed by your exchange0 %>0 9o you prescribe standard for(s of contract for the use of your (e(bers P Attach three copies of each such contract for(0 %!0 9o you classify your (e(bers into bro)ers and Dobbers P If so, specify the bye+law under which this is done0 300 9o you ha'e a syste( of registration of re(isiers andLor authorised cler)s P If so, gi'e details as to their *ualifications, obligations and rights, etc0 3 0 9o you ha'e any regulations regarding dealings by (e(bers on their own account whether in the nature of 1aravani (day+to+day) or otherwise P 3%0 9o you ha'e any pro'isions for regulating the 'olu(e of business done by any indi'idual (e(ber other than through a syste( of (argins P If so, gi'e details0 330 Khat pro'isions ha'e you (ade for periodical settle(ent of contracts and differences thereunder, the deli'ery of, and pay(ent for securities and the passing of deli'ery orders P 3$0 9o you ha'e a clearing house for the settle(ent of contracts P If so, gi'e details of its organisation and (anage(ent0 3"0 If you ha'e clearing house, what returns do the (e(bers of your exchange sub(it regarding the transactions cleared through such clearing house P 9oes the exchange as) for any regular returns in respect of transactions settled outside the clearing house P Sub(it three copies of for(s used in this connection0 3#0 Iow do you fix, alter or postpone the dates of settle(ent P 3/0 Iow do you deter(ine and declare (a)ing+up prices P 3>0 9o you ha'e any arrange(ents for (a)ing or recording of bargains P 3!0 Ia'e you any arrange(ents for recording and publishing (ar)et rates including opening, closing, highest and lowest rates P $00 Khat pro'isions ha'e you (ade for regulating-(a) the entering into contracts, their
perfor(ance and rescission, including contracts , (i) between (e(bers, (ii) between a (e(ber and his constituent, and (iii) between a (e(ber and a non+(e(ber3 (b) the conse*uences of breach, default or insol'ency on the part of (e(bers whether acting as buyers, sellers or inter(ediaries 3 and (c) 2havala#3 and other (atters relating to conduct of business of (e(bers in the exchange P $ 0 9o you prescribe (argin re*uire(ents P If yes, gi'e details0 $%0 9o you prescribe (axi(u( and (ini(u( prices for securities P If so, how and under what conditions0 $30 9o you pro'ide any safeguards for the pre'ention of Nbulls*ueeFesJ and 3 NbearraidsJ and for (eeting e(ergencies in trade P &i'e details0 $$0 Khat are the (easures adopted by you to regulate or prohibit ad'ertising or issue of circulars by your (e(bers P $"0 Khat are the disciplinary power with the go'erning body to enforce due co(pliance by (e(bers of the rules and bye+laws of the exchange and generally to ensure proper standard of business conduct P $#0 9o you re*uire (e(bers to supply such infor(ation or explanation and to produce such boo)s relating to their business as your go'erning body (ay re*uire P $/0 9o you publish any statistics in regard to business done on the exchange including the transactions settled through the clearing house, if (aintained P In particular, ha'e you e'ol'ed any (achinery for co(puting the 'olu(e of transactions in the different )inds of contracts per(itted on your exchange P &i'e details0 $>0 9o you ha'e any bye+laws contra'ention of which (a)es a contract 'oid P Part V - Miscellaneo s $!0 9o you ha'e any (achinery for arbitration of disputes between (e(bers andLor between (e(bers and their constituents P &i'e details0 "00 Khat are the conditions subDect to which securities are listed for dealings on your exchange P " 0 Khat are your re*uire(ents for ad(itting securities to forward+trading P "%0 9o you ha'e the right to prohibit, withdraw or suspend dealings in a listed security P If so, under what circu(stances is this right exercised P "30 Khat pro'isions ha'e you (ade for the le'y and reco'ery of fees, fines and penalties P FORM B ( ee rules # and /) $$5The Se'*ritie! % - E#'h% (e ;o%r- of I -i%< 4e. 5elhi' the 20&&&&&&&&&&&&& Eo0 000000000000000000000000000000000000.he $"4Securities and 7xchange 8oard of India:, ha'ing considered the application for recognitionLrenewal of recognition (ade under section 3 of the Securities Contracts (Regulation) Act, !"# by000000000000000000000000000000 (na(e and address of exchange) and being satisfied that it would be in the interest of the trade and also in the public interest so to do, hereby grants, in exercise of the powers conferred by section $ of the Securities Contracts (Regulation) Act, !"# recognition to the said exchange under section $ of the said Act for 0000000000000000000 yearLyears ending 0000000000000000000000%0 0000000on a per(anent basis in respect of contracts in securities subDect to the conditions stated herein below or as (ay be prescribed or i(posed hereafter0 Seal of the $#48oard: Signature of Cfficer
Note&-Application for renewal of recognition shall be (ade so as to reach the Central &o'ern(ent not less than three (onths before the expiry of the period0 (.his certificate, will also ha'e to be published as a Eotification in the &aFette of India and also in the Cfficial &aFette of the State in which principal office of the recognised stoc) exchange is situate)0 $/5FORM ! ( ee rule 3) Noti'e to !ho/ '%*!e %(%i !t the /ith-r%/%l of re'o( itio .I7 S7CHRI.I7S AE9 7ACIAE&7 8CAR9 C6 IE9IA 6!"bai' the&&&&&&&&&&& .o 0000000000000000000000000000000000000000000000000000000000000000000000000000000000
$$ Substituted
for 1&o'ern(ent of India, ?inistry of 6inance2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 $" Substituted for 1Central &o'ern(ent2, ibid0 $# Substituted for 1?inistry2, ibid0 $/ Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#
0000000000000000000000000000000000000000000000000000000000000000000000000000000000 (na(e and address of the exchange) Oou are hereby called upon to show cause on or before 0000000000000000000000000000000000000 at the office of 0000000000000000000000000000000000000000000000000000 ( designation of the officer) why the recognition granted to you under the ?inistry of 6inanceLthe Securities and 7xchange 8oard of India, Eotification Eo0 0000000000000000000000000000 dated 000000000000000000000000000000000000000 and Certificate Eo0 00000000000000000000000000000 dated 000000000000000000000000000000 should not be withdrawn for the reasons gi'en in the annexure to this notice0 8y order and in the na(e of the Securities and 7xchange 8oard of India0 Seal of the Securities and 7xchange 8oard of India0 Notifi'%tio & 4$& 576' dated 217271957&
SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< SECTIONS
80(9:6:4A0; 1. Short title, extent and co((ence(ent ". 9efinitions 0(/<=4: (5 1</> (?/@A4=( ). Application for recognition of stoc) exchanges 3. &rant of recognition to stoc) exchanges0 3A. Corporatisation and de(utualisation of stoc) exchanges 3;. <rocedure for corporatisation and de(utualisation 5. Kithdrawal of recognition 8. <ower of Central &o'ern(ent to call for periodical returns or direct in*uiries to be (ade 7. Annual reports to be furnished to Central &o'ern(ent by stoc) exchanges 7A. <ower of recognised stoc) exchange to (a)e rules restricting 'oting rights, etc :. <ower of Central &o'ern(ent to direct rules to be (ade or to (a)e rules :A. Clearing corporation 9. <ower of recognised stoc) exchanges to (a)e bye+laws 1=. <ower of Securities and 7xchange 8oard of India to (a)e or a(end byelaws of recognised stoc) exchanges 11. <ower of Central &o'ern(ent to supersede go'erning body of a recognised stoc) exchange 1". <ower to suspend business of recognised stoc) exchanges0 1"A. <ower to issue directions 1). Contracts in notified areas illegal in certain circu(stances 1)A. Additional trading floor 13. Contracts in notified areas to be 'oid in certain circu(stances 15. ?e(bers (ay not act as principals in certain circu(stances 18. <ower to prohibit contracts in certain cases 17. =icensing of dealers in securities in certain areas 17A. <ublic issue and listing of securities referred to in sub+clause ( ie) of clause (h) of section % 1:. 7xclusion of spot deli'ery contracts fro( sections 3, $, " and / 1:A. Contracts in deri'ati'e 19. Stoc) exchanges other than recognised stoc) exchanges prohibited "=. <rohibition of options in securities "1. Conditions for listing "1A. 9elisting of securities "". Right of appeal against refusal of stoc) exchanges to list securities of public co(panies ""A. Right of appeal to Securities Appellate .ribunal against refusal of stoc) exchange to list securities of public co(panies "";. <rocedure and powers of Securities Appellate .ribunal ""C. Right to legal representation ""D. =i(itation ""E. Ci'il court not to ha'e Durisdiction
""2. Appeal to Supre(e Court 8(4A91:( A45 80</(5A0( "). <enalties ")A. <enalty for failure to furnish infor(ation, return, etc0 ");. <enalty for failure by any person to enter into an agree(ent with clients ")C. <enalty for failure to redress in'estorsJ grie'ances ")D. <enalty for failure to segregate securities or (oneys of client or clients ")E. <enalty for failure to co(ply with pro'ision of listing conditions or delisting conditions or grounds ")2. <enalty for excess de(aterialisation or deli'ery of unlisted securities ")G. <enalty for failure to furnish periodical returns, etc0 ")D. <enalty for contra'ention where no separate penalty has been pro'ided ")0I. <ower to adDudicate ")E. 6actors to be ta)en into account by adDudicating officer ")EA. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! ")E;. Re'o+er> of %.o* t! ")F. Crediting su(s realised by way of penalties to Consolidated 6und of India ")L. Appeal to Securities Appellate .ribunal ")@. Cffences ")N. Co(position of certain offences ")0O. <ower to grant i((unity "3. Cffences by co(panies "5. Certain offences to be cogniFable "8. CogniFance of offences by courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! 6: /(99A4(<A "7. .itle to di'idends "7A. Right to recei'e inco(e fro( collecti'e in'est(ent sche(e "7;. Right to recei'e inco(e fro( (utual fund ":. Act not to apply in certain cases "9. <rotection of action ta)en in good faith "9A. <ower to delegate )=. <ower to (a)e rules )1. <ower of Securities and 7xchange 8oard of India to (a)e regulations SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< 53th Se$te.,er, 1958< A A't to $re+e t * -e!ir%,le tr% !%'tio ! i !e'*ritie! ,> re(*l%ti ( the ,*!i e!! of -e%li ( therei , 14***: ,> $ro+i-i ( for 'ert%i other .%tter! 'o e'te- there/ith. 87 it enacted by <arlia(ent in the Se'enth Oear of the Republic of India as follows ,
80(9:6:4A0; Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities Contracts (Regulation) Act, !"#0 (%) It extends to the whole of India0
Kords 1by prohibiting options and2 o(itted by the Securities =aws (A(end(ent) Act, !!", Sec0 >, w0e0f0 %"+0 + !!".
(3) It shall co(e into force on such date% as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 Defi itio !. ". In this Act, unless the context otherwise re*uires,(a) 1contract2 (eans a contract for or relating to the purchase or sale of securities3 3 4(aa) 1corporatisation2 (eans the succession of a recognised stoc) exchange, being a body of indi'iduals or a society registered under the Societies Registration Act, >#0 (% of >#0), by another stoc) exchange, being a co(pany incorporated for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities carried on by such indi'iduals or society3 (ab) 1de(utualisation2 (eans the segregation of ownership and (anage(ent fro( the trading rights of the (e(bers of a recognised stoc) exchange in accordance with a sche(e appro'ed by the Securities and 7xchange 8oard of India3: $4"4(ac): 1deri'ati'e2 includes(A) a security deri'ed fro( a debt instru(ent, share, loan, whether secured or unsecured, ris) instru(ent or contract for differences or any other for( of security3 (B) a contract which deri'es its 'alue fro( the prices, or index of prices, of underlying securities3: (b) 1&o'ern(ent security2 (eans a security created and issued, whether before or after the co((ence(ent of this Act, by the Central &o'ern(ent or a State &o'ern(ent for the purpose of raising a public loan and ha'ing one of the for(s specified in clause (2) of section % of the <ublic 9ebt Act, !$$ ( > of !$$)3 (c) 1(e(ber2 (eans a (e(ber of a recognised stoc) exchange3 (d) 1option in securities2 (eans a contract for the purchase or sale of a right to buy or sell, or a right to buy and sell, securities in future, and includes a teji' a "andi' a teji "andi' a galli' a put, a call or a put and call in securities3 (e) 1prescribed2 (eans prescribed by rules (ade under this Act3
% %0+%+
!"/ vide SRC "%>, dated #+0%+ !"/, published in the &aFette of India, 7xtra0, <t0 II, Sec0 3, p0 "$!, dated #+0%+ !"/0 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 $ Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000 " Clause (aa) renu(bered as clause (ac) by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0
(f) 1recognised stoc) exchange2 (eans a stoc) exchange which is for the ti(e
being recognised by the Central &o'ern(ent under section $3 (g) 1rules2, with reference to the rules relating in general to the constitution and (anage(ent of a stoc) exchange, includes, in the case of a stoc) exchange which is an incorporated association, its (e(orandu( and articles of association3 64(ga) 1sche(e2 (eans a sche(e for corporatisation or de(utualisation of a recognised stoc) exchange which (ay pro'ide for(i) the issue of shares for a lawful consideration and pro'ision of trading rights in lieu of (e(bership cards of (e(bers of a recognised stoc) exchange3 (ii) the restrictions on 'oting rights3 (iii) the transfer of property, business, assets, rights, liabilities, recognitions, contracts of the recognised stoc) exchange, legal proceedings by, or against, the recognised stoc) exchange, whether in the na(e of the recognised stoc) exchange or any trustee or otherwise and any per(ission gi'en to, or by, the recognised stoc) exchange3 (iv) the transfer of e(ployees of a recognised stoc) exchange to another recognised stoc) exchange3 (v) any other (atter re*uired for the purpose of, or in connection with, the corporatisation or de(utualisation, as the case (ay be, of the recognised stoc) exchange3: /4>4(gb): 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (h) 1securities2 include(i) shares, scrips, stoc)s, bonds, debentures, debenture stoc) or other (ar)etable securities of a li)e nature in or of any incorporated co(pany or other body corporate3 !4(ia) deri'ati'e3 (ib) units or any other instru(ent issued by any collecti'e in'est(ent sche(e to the in'estors in such sche(es3:
# Inserted / Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (Second A(end(ent) Act, !!!, Sec %, w0e0f0 #+ %+ !!!0 > Clause (ga) renu(bered as clause (gb) by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 ! Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000
04(ic) security receipt as defined in clause ( Cg) of section % of the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%3: 114(id) units or any other such instru(ent issued to the in'estors under any (utual fund sche(e3: %47xplanation0-6or the re(o'al of doubts, it is hereby declared that ;securities; shall not include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(bined benefit ris) on the life of the persons and in'est(ent by such
persons and issued by an insurer referred to in clause (!) of section % of the Insurance Act, !3> ($ of !3>)3: 35(ie) any certificate or instru(ent (by whate'er na(e called), issued to an in'estor by any issuer being a special purpose distinct entity which possesses any debt or recei'able, including (ortgage debt, assigned to such entity, and ac)nowledging beneficial interest of such in'estor in such debt or recei'able, including (ortgage debt, as the case (ay be3 <
0 Inserted by the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%, Sec0 $ and Schedule, w0r0e0f0 % +#+%00%0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0e0f0 %+ 0+%00$0 % Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, Sec $, w0r0e0f0 0!+0$+%0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, read as under , ;CIA<.7R BI ?ISC7==AE7CHS #0 Dalidati$n&-Eotwithstanding anything contained in any Dudg(ent, decree or order of any Court, .ribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly, any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 0e%eal and #aving#&*( ) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0; 3 Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec %, w0e0f0 %>+"+ %00/0
$4(ii) &o'ern(ent securities3 (iia) such other instru(ents as (ay be declared by the Central &o'ern(ent to be securities3 and: (iii) rights or interest in securities3 "4(i) 1spot deli'ery contract2 (eans a contract which pro'ides for,(a) actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e
town or locality3 (b) transfer of the securities by the depository fro( the account of a beneficial owner to the account of another beneficial owner when such securities are dealt with by a depository3: #4(j) 1stoc) exchange2 (eans(a) any body of indi'iduals, whether incorporated or not, constituted before corporatisation and de(utualisation under sections $A and $8, or (b) a body corporate incorporated under the Co(panies Act, !"# ( of !"#) whether under a sche(e of corporatisation and de(utualisation or otherwise, for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0: /4I ter$ret%tio of 'ert%i /or-! % - e#$re!!io !. "A. Kords and expressions used herein and not defined in this Act but defined in the Co(panies Act, !"# ( of !"#) or the Securities and 7xchange 8oard of India
$ Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, for sub+clause (ii), w0r0e0f0 30+0 + !!%0 " Substituted by the 9epositories Act, !!#, Sec 30 and Schedule, <t0 III, w0r0e0f0 %0+0!+ !!" . <rior to its substitution, clause (i) read as under , N(i) 1spot deli'ery contract2 (eans a contract which pro'ides for the actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e town or locality3J # Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (j) read as under ,N(j) 1stoc) exchange2 (eans any body of indi'iduals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0J / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
Act, !!% ( " of !!%) or the 9epositories Act, !!# (%% of !!#) shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts0: 0(/<=4: (5 1</> (?/@A4=( A$$li'%tio for re'o( itio of !to'6 e#'h% (e!. ). ( ) Any stoc) exchange, which is desirous of being recognised for the purposes of this Act, (ay (a)e an application in the prescribed (anner to the Central &o'ern(ent01: (%) 7'ery application under sub+section ( ) shall contain such particulars as (ay be prescribed, and shall be acco(panied by a copy of the bye+laws of the stoc) exchange for the regulation and control of contracts and also a copy of the rules relating in general to the constitution of the stoc) exchange and in particular, to(a) the go'erning body of such stoc) exchange, its constitution and powers of (anage(ent and the (anner in which its business is to be transacted3 (b) the powers and duties of the office bearers of the stoc) exchange3 (c) the ad(ission into the stoc) exchange of 'arious classes of (e(bers, the *ualifications for (e(bership, and the exclusion, suspension, expulsion and
re+ad(ission of (e(bers therefro( or thereinto3 (d) the procedure for the registration of partnerships as (e(bers of the stoc) exchange in cases where the rules pro'ide for such (e(bership3 and the no(ination and appoint(ent of authorised representati'es and cler)s0 Gr% t of re'o( itio to !to'6 e#'h% (e!. 3. ( ) If the Central &o'ern(ent ! is satisfied, after (a)ing such in*uiry as (ay be necessary in this behalf and after obtaining such further infor(ation, if any, as it (ay re*uire,(a) that the rules and bye+laws of a stoc) exchange applying for registration are in confor(ity with such conditions as (ay be prescribed with a 'iew to ensure fair dealing and to protect in'estors3 (b) that the stoc) exchange is willing to co(ply with any other conditions (including conditions as to the nu(ber of (e(bers) which the Central &o'ern(ent, after consultation with the go'erning body of the stoc) exchange and ha'ing regard to the area ser'ed by the stoc) exchange and its standing and the nature of the securities dealt with by it, (ay i(pose for the purpose of carrying out the obDects of this Act3 and
> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 ! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
(c) that it would be in the interest of the trade and also in the public interest to grant recognition to the stoc) exchange3 it (ay grant recognition to the stoc) exchange subDect to the conditions i(posed upon it as aforesaid and in such for( as (ay be prescribed0 (%) .he conditions which the Central &o'ern(ent %0 (ay prescribe under clause (a) of sub+section ( ) for the grant of recognition to the stoc) exchanges (ay include, a(ong other (atters, conditions relating to,(i) the *ualifications for (e(bership of stoc) exchanges3 (ii) the (anner in which contracts shall be entered into and enforced as between (e(bers3 (iii) the representation of the Central &o'ern(ent on each of the stoc) exchange by such nu(ber of persons not exceeding three as the Central &o'ern(ent (ay no(inate in this behalf3 and (iv) the (aintenance of accounts of (e(bers and their audit by chartered accountants whene'er such audit is re*uired by the Central &o'ern(ent0 (3) 7'ery grant of recognition to a stoc) exchange under this section shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office as of the stoc) exchange is situate, and such recognition shall ha'e effect as fro( the date of its publication in the &aFette of India0 % ($) Eo application for the grant of recognition shall be refused except after gi'ing an opportunity to the stoc) exchange concerned to be heard in the (atter3 and the reasons for such refusal shall be co((unicated to the stoc) exchange in writing0 %% (") Eo rules of a recognised stoc) exchange relating to any of the (atters specified in sub+section (%) of section 3 shall be a(ended except with the appro'al of the
Central &o'ern(ent0%3 "35Cor$or%ti!%tio % - -e.*t*%li!%tio of !to'6 e#'h% (e!. 3A. Cn and fro( the appointed date, all recognised stoc) exchanges (if not corporatised and de(utualised before the appointed date) shall be corporatised and de(utualised in accordance with the pro'isions contained in section $8 ,
%0 <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 % <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %% <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %3 <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 %$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
4ro+i-e- that the Securities and 7xchange 8oard of India (ay, if it is satisfied that any recognised stoc) exchange was pre'ented by sufficient cause fro( being corporatised and de(utualised on or after the appointed date, specify another appointed date in respect of that recognised stoc) exchange and such recognised stoc) exchange (ay continue as such before such appointed date0 ()%lanati$n&*6or the purposes of this section, 1appointed date2 (eans the date which the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, appoint and different appointed dates (ay be appointed for different recognised stoc) exchanges0: "554ro'e-*re for 'or$or%ti!%tio % - -e.*t*%li!%tio . 3;. ( ) All recognised stoc) exchanges referred to in section $A shall, within such ti(e as (ay be specified by the Securities and 7xchange 8oard of India, sub(it a sche(e for corporatisation and de(utualisation for its appro'al , 4ro+i-e- that the Securities and 7xchange 8oard of India, (ay, by notification in the Cfficial &aFette, specify na(e of the recognised stoc) exchange, which had already been corporatised and de(utualised, and such stoc) exchange shall not be re*uired to sub(it the sche(e under this section0 (%) Cn receipt of the sche(e referred to in sub+section ( ), the Securities and 7xchange 8oard of India (ay, after (a)ing such en*uiry as (ay be necessary in this behalf and obtaining such further infor(ation, if any, as it (ay re*uire and if it is satisfied that it would be in the interest of the trade and also in the public interest, appro'e the sche(e with or without (odification0 (3) Eo sche(e under sub+section (%) shall be appro'ed by the Securities and 7xchange 8oard of India if the issue of shares for a lawful consideration or pro'ision of trading rights in lieu of (e(bership card of the (e(bers of a recognised stoc) exchange or pay(ent of di'idends to (e(bers ha'e been proposed out of any reser'es or assets of that stoc) exchange0 ($) Khere the sche(e is appro'ed under sub+section (%), the sche(e so appro'ed shall be published i((ediately by(a) the Securities and 7xchange 8oard of India in the Cfficial &aFette3 (b) the recognised stoc) exchange in such two daily newspapers circulating in India, as (ay be specified by the Securities and 7xchange 8oard of India,
and upon such publication, notwithstanding anything to the contrary contained in this Act or any other law for the ti(e being in force or any agree(ent, award, Dudg(ent, decree or other instru(ent for the ti(e being in force, the sche(e shall ha'e effect and be binding on all persons and authorities including all (e(bers, creditors, depositors and e(ployees of the recognised stoc) exchange and on all
%" Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
persons ha'ing any contract, right, power, obligation or liability with, against, o'er, to, or in connection with, the recognised stoc) exchange or its (e(bers0 (") Khere the Securities and 7xchange 8oard of India is satisfied that it would not be in the interest of the trade and also in the public interest to appro'e the sche(e under sub+section (%), it (ay, by an order, reDect the sche(e and such order of reDection shall be published by it in the Cfficial &aFette , 4ro+i-e- that the Securities and 7xchange 8oard of India shall gi'e a reasonable opportunity of being heard to all the persons concerned and the recognised stoc) exchange concerned before passing an order reDecting the sche(e0 (#) .he Securities and 7xchange 8oard of India (ay, while appro'ing the sche(e under sub+section (%), by an order in writing, restrict(a) the 'oting rights of the shareholders who are also stoc) bro)ers of the reognised stoc) exchange3 (b) the right of shareholders or a stoc) bro)er of the recognised stoc) exchange to appoint the representati'es on the go'erning board of the stoc) exchange3 (c) the (axi(u( nu(ber of representati'es of the stoc) bro)ers of the recognised stoc) exchange to be appointed on the go'erning board of the recognised stoc) exchange, which shall not exceed one+fourth of the total strength of the go'erning board0 (/) .he order (ade under sub+section (#) shall be published in the Cfficial &aFette and on the publication thereof, the order shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#), or any other law for the ti(e being in force, ha'e full effect0 (>) 7'ery recognised stoc) exchange, in respect of which the sche(e for corporatisation or de(utualisation has been appro'ed under sub+section (%), shall, either by fresh issue of e*uity shares to the public or in any other (anner as (ay be specified by the regulations (ade by the Securities and 7xchange 8oard of India %#, ensure that at least fifty+one per cent of its e*uity share capital is held, within twel'e (onths fro( the date of publication of the order under sub+section (/), by the public other than shareholders ha'ing trading rights , 4ro+i-e- that the Securities and 7xchange 8oard of India (ay, on sufficient cause being shown to it and in the public interest, extend the said period by another twel'e (onths0:
ee Securities Contracts (Regulation) (Stoc) 7xchanges and Clearing Corporations) Regulations, %0 %, w0e0f0 %0+0#+%0 % notified vide &aFette Eotification Eo0 =A9+ ERCL&EL%0 %+ 3L0/L 3"$#, 7xtra0, <t0 III, Section $, dtd %0+0#+%0 %0
%#
?ith-r%/%l of re'o( itio .
5. %/4( ): If the Central &o'ern(ent%> is of opinion that the recognition granted to a stoc) exchange under the pro'isions of this Act should, in the interest of the trade or in the public interest, be withdrawn, the Central &o'ern(ent (ay ser'e on the go'erning body of the stoc) exchange a written notice that the Central &o'ern(ent is considering the withdrawal of the recognition for the reasons stated in the notice and after gi'ing an opportunity to the go'erning body to be heard in the (atter, the Central &o'ern(ent (ay withdraw, by notification in the Cfficial &aFette, the recognition granted to the stoc) exchange , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Central &o'ern(ent (ay, after consultation with the stoc) exchange, (a)e such pro'ision as it dee(s fit in the notification of withdrawal or in any subse*uent notification si(ilarly published for the due perfor(ance of any contracts outstanding on that date0 %!4(%) Khere the recognised stoc) exchange has not been corporatised or de(utualised or it fails to sub(it the sche(e referred to in sub+section ( ) of section $8 within the specified ti(e therefor or the sche(e has been reDected by the Securities and 7xchange 8oard of India under sub+section (") of section $8, the recognition granted to such stoc) exchange under section $, shall, notwithstanding anything to the contrary contained in this Act, stand withdrawn and the Central &o'ern(ent shall publish, by notification in the Cfficial &aFette, such withdrawal of recognition , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Securities and 7xchange 8oard of India (ay, after consultation with the stoc) exchange, (a)e such pro'isions as it dee(s fit in the order reDecting the sche(e published in the Cfficial &aFette under sub+section (") of section $80: 4o/er of Ce tr%l Go+er .e t to '%ll for $erio-i'%l ret*r ! or -ire't i 7*irie! to ,e .%-e. 8. ( ) 7'ery recognised stoc) exchange shall furnish to the 304Securities and 7xchange 8oard of India: such periodical returns relating to its affairs as (ay be prescribed0
%/ Section
" renu(bered as sub+section ( ) by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 %> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 30 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(%) 7'ery recognised stoc) exchange and e'ery (e(ber thereof shall (aintain and preser'e for such periods not exceeding fi'e years such boo)s of account, and other docu(ents as the Central &o'ern(ent, after consultation with the stoc) exchange concerned, (ay prescribe in the interest of the trade or in the public interest, and such boo)s of account, and other docu(ents shall be subDect to inspection at all reasonable ti(es 3 4by the Securities and 7xchange 8oard of India:0 (3) Kithout preDudice to the pro'isions contained in sub+sections ( ) and (%), the
3%4Securities
and 7xchange 8oard of India:, if it is satisfied that it is in the interest of the trade or in the public interest so to do, (ay, by order in writing,(a) call upon a recognised stoc) exchange or any (e(ber thereof to furnish in writing such infor(ation or explanation relating to the affairs of the stoc) exchange or of the (e(ber in relation to the stoc) exchange as the 334Securities and 7xchange 8oard of India: (ay re*uire3 or (b) appoint one or (ore persons to (a)e an in*uiry in the prescribed (anner in relation to the affairs of the go'erning body of a stoc) exchange or the affairs of any of the (e(bers of the stoc) exchange in relation to the stoc) exchange and sub(it a report of the result of such in*uiry to the 3$4Securities and 7xchange 8oard of India: within such ti(e as (ay be specified in the order or, in the case of an in*uiry in relation to the affairs of any of the (e(bers of a stoc) exchange, direct the go'erning body to (a)e the in*uiry and sub(it its report to the 3"4Securities and 7xchange 8oard of India:0 ($) Khere an in*uiry in relation to the affairs of a recognised stoc) exchange or the affairs of any of its (e(bers in relation to the stoc) exchange has been underta)en under sub+section (3),(a) e'ery director, (anager, secretary or other officer of such stoc) exchange3 (b) e'ery (e(ber of such stoc) exchange3 (c) if the (e(ber of the stoc) exchange is a fir(, e'ery partner, (anager, secretary or other officer of the fir(3 and (d) e'ery other person or body of persons who has had dealings in the course of business with any of the persons (entioned in clauses ( a), (b) and (c), whether directly or indirectly3
Substituted for ;by the Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3% Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 33 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3" Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
3
shall be bound to produce before the authority (a)ing the in*uiry all such boo)s of account, and other docu(ents in his custody or power relating to or ha'ing a bearing on the subDect+(atter of such in*uiry and also to furnish the authorities within such ti(e as (ay be specified with any such state(ent or infor(ation relating thereto as (ay be re*uired of hi(0 )8A *%l re$ort! to ,e f*r i!he- to Ce tr%l Go+er .e t ,> !to'6 e#'h% (e!. 7. 7'ery recognised stoc) exchange shall furnish the Central &o'ern(ent with a copy of the annual report, and such annual report shall contain such particulars as (ay be prescribed0 )754o/er of re'o( i!e- !to'6 e#'h% (e to .%6e r*le! re!tri'ti ( +oti ( ri(ht!, et'. 7A. ( ) A recognised stoc) exchange (ay (a)e rules or a(end any rules (ade by it
to pro'ide for all or any of the following (atters, na(ely ,(a) the restriction of 'oting rights to (e(bers only in respect of any (atter placed before the stoc) exchange at any (eeting3 (b) the regulation of 'oting rights in respect of any (atter placed before the stoc) exchange at any (eeting so that each (e(ber (ay be entitled to ha'e one 'ote only, irrespecti'e of his share of the paid+up e*uity capital of the stoc) exchange3 (c) the restriction on the right of a (e(ber to appoint another person as his proxy to attend and 'ote at a (eeting of the stoc) exchange3 (d) such incidental, conse*uential and supple(entary (atters as (ay be necessary to gi'e effect to any of the (atters specified in clauses ( a), (b) and (c)0 (%) Eo rules of a recognised stoc) exchange (ade or a(ended in relation to any (atter referred to in clauses (a) to (d) of sub+section ( ) shall ha'e effect until they ha'e been appro'ed by the Central &o'ern(ent 3> and published by that &o'ern(ent in the Cfficial &aFette and, in appro'ing the rules so (ade or a(ended, the Central &o'ern(ent (ay (a)e such (odifications therein as it thin)s fit, and on such publication, the rules as appro'ed by the Central &o'ern(ent shall be dee(ed to ha'e been 'alidly (ade, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#)0:
3# <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 3/ Inserted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec %, w0e0f0 0>+ %+ !"!0 3> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
4o/er of Ce tr%l Go+er .e t )9 to -ire't r*le! to ,e .%-e or to .%6e r*le!. :. ( ) Khere, after consultation with the go'erning bodies of stoc) exchanges generally or with the go'erning body of any stoc) exchange in particular, the Central &o'ern(ent is of opinion that it is necessary or expedient so to do, it (ay, by order in writing together with a state(ent of the reasons therefor, direct recognised stoc) exchanges generally or any recognised stoc) exchange in particular, as the case (ay be, to (a)e any rules or to a(end any rules already (ade in respect of all or any of the (atters specified in sub+section (%) of section 3 within a period of $04two (onths: fro( the date of the order0 (%) If any recognised stoc) exchange fails or neglects to co(ply with any order (ade under sub+section ( ) within the period specified therein, the Central &o'ern(ent (ay (a)e the rules for, or a(end the rules (ade by, the recognised stoc) exchange, either in the for( proposed in the order or with such (odifications thereof as (ay be agreed to between the stoc) exchange and the Central &o'ern(ent0 (3) Khere in pursuance of this section any rules ha'e been (ade or a(ended, the rules so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette or &aFettes of the State or States in which the principal office or offices of the recognised stoc) exchange or exchanges is or are situate, and, on the publication thereof in the &aFette of India, the rules so (ade or a(ended shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# (
of !"#), or in any other law for the ti(e being in force, ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange or stoc) exchanges, as the case (ay be0 315Cle%ri ( 'or$or%tio . :A. ( ) A recognised stoc) exchange (ay, with the prior appro'al of the Securities and 7xchange 8oard of India, transfer the duties and functions of a clearing house to a clearing corporation, being a co(pany incorporated under the Co(panies Act, !"# ( of !"#), for the purpose of(a) the periodical settle(ent of contracts and differences thereunder3 (b) the deli'ery of, and pay(ent for, securities3 (c) any other (atter incidental to, or connected with, such transfer0 (%) 7'ery clearing corporation shall, for the purpose of transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( ),
3! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 $0 Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec !, w0e0f0 %"+ 0 + !!"0 $ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0
(a)e bye+laws and sub(it the sa(e to the Securities and 7xchange 8oard of India for its appro'al0 (3) .he Securities and 7xchange 8oard of India (ay, on being satisfied that it is in the interest of the trade and also in the public interest to transfer the duties and functions of a clearing house to a clearing corporation, grant appro'al to the byelaws sub(itted to it under sub+section (%) and appro'e the transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( )0 ($) .he pro'isions of sections $, ", #, /, >, !, 0, and % shall, as far as (ay be, apply to a clearing corporation referred to in sub+section ( ) as they apply in relation to a recognised stoc) exchange0: 4o/er of re'o( i!e- !to'6 e#'h% (e! to .%6e ,>e0l%/!. 9. ( ) Any recognised stoc) exchange (ay, subDect to the pre'ious appro'al of the $%4Securities and 7xchange 8oard of India:, (a)e bye+laws for the regulation and control of contracts0 (%) In particular, and without preDudice to the generality of the foregoing power, such bye+laws (ay pro'ide for , (a) the opening and closing of (ar)ets and the regulation of the hours of trade3 (b) a clearing house for the periodical settle(ent of contracts and differences thereunder, the deli'ery of and pay(ent for securities, the passing on of deli'ery orders and the regulation and (aintenance of such clearing house3 (c) the sub(ission to the $34Securities and 7xchange 8oard of India: by the clearing house as soon as (ay be after each periodical settle(ent of all or any of the following particulars as the $$4Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, re*uire, na(ely ,(i) the total nu(ber of each category of security carried o'er fro( one settle(ent period to another3 (ii) the total nu(ber of each category of security, contracts in respect of
which ha'e been s*uared up during the course of each settle(ent period3 (iii) the total nu(ber of each category of security actually deli'ered at each clearing3
$% Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(d) the publication by the clearing house of all or any of the particulars sub(itted to the $"4Securities and 7xchange 8oard of India: under clause ( c) subDect to the directions, if any, issued by the $#4Securities and 7xchange 8oard of India: in this behalf3 (e) the regulation or prohibition of blan) transfers3 (f) the nu(ber and classes of contracts in respect of which settle(ents shall be (ade or differences paid through the clearing house3 (g) the regulation, or prohibition of b!dla# or carry+o'er facilities3 (h) the fixing, altering or postponing of days for settle(ents3 (i) the deter(ination and declaration of (ar)et rates, including the opening, closing highest and lowest rates for securities3 (j) the ter(s, conditions and incidents of contracts, including the prescription of (argin re*uire(ents, if any, and conditions relating thereto, and the for(s of contracts in writing3 (k) the regulation of the entering into, (a)ing, perfor(ance, recession and ter(ination, of contracts, including contracts between (e(bers or between a (e(ber and his constituent or between a (e(ber and a person who is not a (e(ber, and the conse*uences of default or insol'ency on the part of a seller or buyer or inter(ediary, the conse*uences of a breach or o(ission by a seller or buyer, and the responsibility of (e(bers who are not parties to such contracts3 (l) the regulation of taravani business including the placing of li(itations thereon3 (") the listing of securities on the stoc) exchange, the inclusion of any security for the purpose of dealings and the suspension or withdrawal of any such securities, and the suspension or prohibition of trading in any specified securities3 (n) the (ethod and procedure for the settle(ent of clai(s or disputes, including settle(ent by arbitration3 ($) the le'y and reco'ery of fees, fines and penalties3 (%) the regulation of the course of business between parties to contracts in any capacity3 (+) the fixing of a scale of bro)erage and other charges3 (r) the (a)ing, co(paring, settling and closing of bargains3 (#) the e(ergencies in trade which (ay arise, whether as a result of pool or syndicated operations or cornering or otherwise, and the exercise of powers in
$" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%,
Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $# Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
such e(ergencies, including the power to fix (axi(u( and (ini(u( prices for securities3 (t) the regulation of dealings by (e(bers for their own account3 (!) the separation of the functions of Dobbers and bro)ers3 (v) the li(itations on the 'olu(e of trade done by any indi'idual (e(ber in exceptional circu(stances3 (.) the obligation of (e(bers to supply such infor(ation or explanation and to produce such docu(ents relating to the business as the go'erning body (ay re*uire0 (3) .he bye+laws (ade under this section (ay(a) specify the bye+laws the contra'ention of which shall (a)e a contract entered into otherwise than in accordance with the bye+laws 'oid under sub+section ( ) of section $3 (b) pro'ide that the contra'ention of any of the bye+laws shall render the (e(ber concerned liable to one or (ore of the following punish(ents, na(ely ,(i) fine, (ii) expulsion fro( (e(bership, (iii) suspension fro( (e(bership for a specified period, (iv) any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney0 ($) Any bye+laws (ade under this section shall be subDect to such conditions in regard to pre'ious publication as (ay be prescribed, and, when appro'ed by the $/4Securities and 7xchange 8oard of India:, shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and shall ha'e effect as fro( the date of its publication in the &aFette of India , 4ro+i-e- that if the $>4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+law should be (ade i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0
$/ Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $> Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4o/er of 395Se'*ritie! % - E#'h% (e ;o%r- of I -i%< to .%6e or %.e - ,>e0l%/! of re'o( i!e- !to'6 e#'h% (e!. 1=. ( ) .he "04Securities and 7xchange 8oard of India: (ay, either on a re*uest in writing recei'ed by it in this behalf fro( the go'erning body of a recognised stoc) exchange or on its own (otion, if it is satisfied after consultation with the go'erning body of the stoc) exchange that it is necessary or expedient so to do and after recording its reasons for so doing, (a)e bye+laws for all or any of the (atters specified in section ! or a(end any bye+laws (ade by such stoc) exchange under that section0
(%) Khere in pursuance of this section any bye+laws ha'e been (ade or a(ended the bye+laws so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and on the publication thereof in the &aFette of India, the bye+laws so (ade or a(ended shall ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange concerned0 (3) Eotwithstanding anything contained in this section, where the go'erning body of a recognised stoc) exchange obDects to any bye+laws (ade or a(ended under this section by the " 4Securities and 7xchange 8oard of India: on its own (otion, it (ay, within "%4two (onths: of the publication thereof in the &aFette of India under subsection (%), apply to the "34Securities and 7xchange 8oard of India: for re'ision thereof, and the "$4Securities and 7xchange 8oard of India: (ay, after gi'ing an opportunity to the go'erning body of the stoc) exchange to be heard in the (atter, re'ise the bye+laws so (ade or a(ended, anywhere any bye+laws so (ade or a(ended are re'ised as a result of any action ta)en under this sub+section, the byelaws so re'ised shall be published and shall beco(e effecti'e as pro'ided in subsection (%)0 ($) .he (a)ing or the a(end(ent or re'ision of any bye+laws under this section shall in all cases be subDect to the condition of pre'ious publication ,
$! Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "0 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 " Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "% Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec %0, w0e0f0 %"+ 0 + !!"0 "3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4ro+i-e- that if the ""4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+laws should be (ade, a(ended or re'ised i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0 4o/er of Ce tr%l Go+er .e t 58 to !*$er!e-e (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e. 11. ( ) Kithout preDudice to any other powers 'ested in the Central &o'ern(ent under this Act, where the Central &o'ern(ent is of opinion that the go'erning body of any recognised stoc) exchange should be superseded, then, notwithstanding anything contained in any other law for the ti(e being in force, in the Central &o'ern(ent (ay ser'e on the go'erning body a written notice that the Central &o'ern(ent is considering the supersession of the go'erning body for the reasons specified in the notice and after gi'ing an opportunity to the go'erning body to be
heard in the (atter, it (ay, by notification in the Cfficial &aFette, declare the go'erning body of such stoc) exchange to be superseded, and (ay appoint any person or persons to exercise and perfor( all the powers and duties of the go'erning body, and, where (ore persons than one are appointed, (ay appoint one of such persons to be the chair(an and another to be the 'ice+chair(an thereof0 (%) Cn the publication of a notification in the Cfficial &aFette under sub+section ( ), the following conse*uences shall ensue, na(ely,(a) the (e(bers of the go'erning body which has been superseded shall, as fro( the date of the notification of supersession, cease to hold office as such (e(bers3 (b) the person or persons appointed under sub+section ( ) (ay exercise and perfor( all the powers and duties of the go'erning body which has been superseded3 (c) all such property of the recognised stoc) exchange as the person or persons appointed under sub+section ( ) (ay, by order in writing, specify in this behalf as being necessary for the purpose of enabling hi( or the( to carry on the business of the stoc) exchange, shall 'est in such person or persons0 (3) Eotwithstanding anything to the contrary contained in any law or the rules or bye+laws of the recognised stoc) exchange the go'erning body of which is superseded under sub+section ( ), the person or persons appointed under that subsection shall hold office for such period as (ay be specified in the notification published under that sub+section and the Central &o'ern(ent (ay fro( ti(e to ti(e, by li)e notification, 'ary such period0
"" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "# <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0
($) .he Central &o'ern(ent (ay at any ti(e before the deter(ination of the period of office of any person or persons appointed under this section call upon the recognised stoc) exchange to re+constitute the go'erning body in accordance with its rules and on such re+constitution all the property of the recognised stoc) exchange which has 'ested in, or was in the possession of, the person or persons appointed under sub+section ( ), shall re+'est or 'est, as the case (ay be, in the go'erning body so re+constituted , 4ro+i-e- that until a go'erning body is so re+constituted, the person or persons appointed under sub+section ( ) shall continue to exercise and perfor( their powers and duties0 4o/er57 to !*!$e - ,*!i e!! of re'o( i!e- !to'6 e#'h% (e!. 1". If in the opinion of the Central &o'ern(ent an e(ergency has arisen and for the purpose of (eeting the e(ergency the Central &o'ern(ent considers it expedient so to do, it (ay, by notification in the Cfficial &aFette, for reasons to be set out therein, direct a recognised stoc) exchange to suspend such of its business for such period not exceeding se'en days and subDect to such conditions as (ay be specified in the notification, and, if, in the opinion of the Central &o'ern(ent, the interest of
the trade or the public interest re*uires that the period should be extended, (ay, by li)e notification extend the said period fro( ti(e to ti(e , 4ro+i-e- that where the period of suspension is to be extended beyond the first period, no notification extending the period of suspension shall be issued unless the go'erning body of the ">4recognised stoc) exchange: has been gi'en an opportunity of being heard in the (atter0 "!54o/er to i!!*e -ire'tio !. 1"A. If, after (a)ing or causing to be (ade an in*uiry, the Securities and 7xchange 8oard of India is satisfied that it is necessary(a) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (b) to pre'ent the affairs of any recognised stoc) exchange or clearing corporation, or such other agency or person, pro'iding trading or clearing or settle(ent facility in respect of securities, being conducted in a (anner detri(ental to the interests of in'estors or securities (ar)et3 or (c) to secure the proper (anage(ent of any such stoc) exchange or clearing corporation or agency or person, referred to in clause ( b),
"/ <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 "> Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 "! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0
it (ay issue such directions,(i) to any stoc) exchange or clearing corporation or agency or person referred to in clause (b) or any person or class of persons associated with the securities (ar)et3 or (ii) to any co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 8=5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< /<410A/1 A45 <81:<4 :4 (/A0:1:( Co tr%'t! i otifie- %re%! ille(%l i 'ert%i 'ir'*.!t% 'e!. 1). If the Central &o'ern(ent# is satisfied, ha'ing regard to the nature or the 'olu(e of transactions in securities in any #%4State or States or area: that it is necessary so to do, it (ay, by notification in the Cfficial &aFette, declared this section to apply to such #34State or States or area:, and thereupon e'ery contract in such #$4State or States or area: which is entered into after the date of the notification otherwise than #"4between (e(bers of a recognised stoc) exchange or recognised stoc) exchanges: in such ##4State or States or area: or through or with such (e(ber shall be illegal ,
#0 I #
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 #% Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #3 Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #$ Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$ for ;between (e(bers of a recognised stoc) exchange; & ## Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0
#/54ro+i-e-
that any contract entered into between (e(bers of two or (ore recognised stoc) exchanges in such State or States or area, shall(i) be subDect to such ter(s and conditions as (ay be stipulated by the respecti'e stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India3 (ii) re*uire prior per(ission fro( the respecti'e stoc) exchanges if so stipulated by the stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India0: #>4A--itio %l tr%-i ( floor. 1)A. A stoc) exchange (ay establish additional trading floor with the prior appro'al of the Securities and 7xchange 8oard of India in accordance with the ter(s and conditions stipulated by the said 8oard0 ()%lanati$n , 6or the purposes of this section, 1additional trading floor2 (eans a trading ring or trading facility offered by a recognised stoc) exchange outside its area of operation to enable the in'estors to buy and sell securities through such trading floor under the regulatory fra(ewor) of that stoc) exchange0: Co tr%'t! i otifie- %re%! to ,e +oi- i 'ert%i 'ir'*.!t% 'e!. 13. ( ) Any contract entered into in any State or area specified in the notification under section 3 which is in contra'ention of any of the bye+laws specified in that behalf under clause (a) of sub+section (3) of section ! shall be 'oid , (i) as respects the rights of any (e(ber of the recognised stoc) exchange who has entered into such contract in contra'ention of any such bye+law, and also (ii) as respects the rights of any other person who has )nowingly participated in the transaction entailing such contra'ention0 (%) Eothing in sub+section ( ) shall be construed to affect the right of any person other than a (e(ber of the recognised stoc) exchange to enforce any such contract or to reco'er any su( under or in respect of such contract if such person had no )nowledge that the transaction was in contra'ention of any of the bye+laws specified in clause (a) of sub+section (3) of section !0 @e.,er! .%> ot %'t %! $ri 'i$%l! i 'ert%i 'ir'*.!t% 'e!. 15. Eo (e(ber of a recognised stoc) exchange shall in respect of any securities enter into any contract as a principal with any person other than a (e(ber of a recognised stoc) exchange, unless he has secured the consent or authority of such
#/ Inserted #> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (A(end(ent) Act, !!", Sec % , w0e0f0 %"+0 + !!"0
person and discloses in the note, (e(orandu( or agree(ent of sale or purchase that he is acting as a principal , 4ro+i-e- that where the (e(ber has secured the consent or authority of such person otherwise than in writing he shall secure written confir(ation by such person or such consent or authority within three days fro( the date of the contract , 4ro+i-e- f*rther that no such written consent or authority of such person shall be necessary for closing out any outstanding contract entered into by such person in accordance with the bye+laws, if the (e(ber discloses in the note, (e(orandu( or agree(ent of sale or purchase in respect of such closing out that he is acting as a principal0 4o/er89 to $rohi,it 'o tr%'t! i 'ert%i '%!e!. 18. ( ) If the Central &o'ern(ent is of opinion that it is necessary to pre'ent undesirable speculation in specified securities in any State or area, it (ay, by notification in the Cfficial &aFette, declare that no person in the State or area specified in the notification shall, sa'e with the per(ission of the Central &o'ern(ent, enter into any contract for the sale or purchase of any security specified in the notification except to the extent and in the (anner, if any, specified therein0 (%) All contracts in contra'ention of the pro'isions of sub+section ( ) entered into after the date of notification issued thereunder shall be illegal0 Li'e !i ( of -e%ler! i !e'*ritie! i 'ert%i %re%!. 17. ( ) SubDect to the pro'isions of sub+section (3) and to the other pro'isions contained in this Act, no person shall carry on or purport to carry on, whether on his own behalf or on behalf of any other person, the business of dealing in securities in any State or area to which section 3 has not been declared to apply and to which the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, declare this section to apply, except under the authority of a /04licence granted by the Securities and 7xchange 8oard of India: in this behalf0 (%) Eo notification under sub+section ( ) shall be issued with respect to any State or area unless the Central &o'ern(ent is satisfied, ha'ing regard to the (anner in which securities are being dealt with in such State or area, that it is desirable or
#! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 <owers are exercisable by R8I also 'ide &o'ern(ent of India Eotification Eo0 >3 (7), 9ated 0 +03+%000 in relation to any contracts in go'ern(ent securities, (oney (ar)et securities etc0 /0 Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% for ;licence granted by the Central &o'ern(ent;0
expedient in the interest of the trade or in the public interest that such dealings should be regulated by a syste( of licensing0 (3) .he restrictions i(posed by sub+section ( ) in relation to dealings in securities shall not apply to the doing of anything by or on behalf of a (e(ber of any recognised stoc) exchange0
7154*,li'
i!!*e % - li!ti ( of !e'*ritie! referre- to i !*,0'l%*!e ( ie) of 'l%*!e (h)
of !e'tio ". 17A. ( ) Kithout preDudice to the pro'isions contained in this Act or any other law for the ti(e being in force, no securities of the nature referred to in sub+clause (ie) of clause (h) of section % shall be offered to the public or listed on any recognised stoc) exchange unless the issuer fulfils such eligibility criteria and co(plies with such other re*uire(ents as (ay be specified by regulations (ade by the Securities and 7xchange 8oard of India0 (%) 7'ery issuer referred to in sub+clause (ie) of clause (h) of section % intending to offer the certificates or instru(ents referred therein to the public shall (a)e an application, before issuing the offer docu(ent to the public, to one or (ore recognised stoc) exchanges for per(ission for such certificates or instru(ents to be listed on the stoc) exchange or each such stoc) exchange0 (3) Khere the per(ission applied for under sub+section (%) for listing has not been granted or refused by the recognised stoc) exchanges or any of the(, the issuer shall forthwith repay all (oneys, if any, recei'ed fro( applicants in pursuance of the offer docu(ent, and if any such (oney is not repaid within eight days after the issuer beco(es liable to repay it, the issuer and e'ery director or trustee thereof, as the case (ay be, who is in default shall, on and fro( the expiry of the eighth day, be Dointly and se'erally liable to repay that (oney with interest at the rate of fifteen per cent per annu(0 7xplanation0-In rec)oning the eighth day after another day, any inter'ening day which is a public holiday under the Eegotiable Instru(ents Act, >> (%# of >> ), shall be disregarded, and if the eighth day (as so rec)oned) is itself such a public holiday, there shall for the said purposes be substituted the first day thereafter which is not a holiday0 ($) All the pro'isions of this Act relating to listing of securities of a public co(pany on a recognised stoc) exchange shall, (utatis (utandis, apply to the listing of the securities of the nature referred to in sub+clause (ie) of clause (h) of section % by the issuer, being a special purpose distinct entity0 <
Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec 3, w0e0f0 %>+0"+ %00/0
/
E#'l*!io of !$ot -eli+er> 'o tr%'t! fro. !e'tio ! 1), 13, 15 % - 17. 1:. ( ) Eothing contained in sections 3, $, " and / shall apply to spot deli'ery contracts0 (%) Eotwithstanding anything contained in sub+section ( ), if the Central &o'ern(ent/% is of opinion that in the interest of the trade or in the public interest it is expedient to regulate and control the business of dealing in spot deli'ery contracts also in any State or area (whether section 3 has been declared to apply to that State or area or not), it (ay, by notification in the Cfficial &aFette, declare that the pro'isions of section / shall also apply to such State or area in respect of spot deli'ery contracts generally or in respect of spot deli'ery contracts for the sale or purchase of such securities as (ay be specified in the notification, and (ay also specify the (anner in which, and the extent to which, the pro'isions of that section
shall so apply0 /34Co tr%'t! i -eri+%ti+e. 1:A. Eotwithstanding anything contained in any other law for the ti(e being in force, contracts in deri'ati'e shall be legal and 'alid if such contracts are(a) traded on a recognised stoc) exchange3 (b) settled on the clearing house of the recognised stoc) exchange, in accordance with the rules and bye+laws of such stoc) exchange0: Sto'6 e#'h% (e! other th% re'o( i!e- !to'6 e#'h% (e! $rohi,ite-. 19. ( ) Eo person shall, except with the per(ission of the Central &o'ern(ent, organise or assist in organising or be a (e(ber of any stoc) exchange (other than a recognised stoc) exchange) for the purpose of assisting in, entering into or perfor(ing any contracts in securities0 (%) .his section shall co(e into force in any State or area on such date as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 4rohi,itio of o$tio ! i !e'*ritie!. "=. 734GGGGG:
/% <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 /3 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec 3, w0e0f0 %%+%+%0000 /$ C(itted by the Securities =aws (A(end(ent) Act, !!", Sec %%, w0e0f0 %"+0 + !!"0 <rior to o(ission, section %0 read as under , 1%00 8r$hibiti$n $f $%ti$n# in #ec!ritie#&-( ) Eotwithstanding anything contained in this Act or in any other law for the ti(e being in force, all options in securities entered into after the co((ence(ent of this Act shall be illegal0
9: 1:4= <E (/A0:1:( 754GGG: /#4Co -itio ! for li!ti (. "1. Khere securities are listed on the application of any person in any recognised stoc) exchange, such person shall co(ply with the conditions of the listing agree(ent with that stoc) exchange&: 775Deli!ti ( of !e'*ritie!. "1A. ( ) A recognised stoc) exchange (ay delist the securities, after recording the reasons therefor, fro( any recognised stoc) exchange on any of the ground or grounds as (ay be prescribed under this Act , 4ro+i-e- that the securities of a co(pany shall not be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) A listed co(pany or an aggrie'ed in'estor (ay file an appeal before the Securities Appellate .ribunal against the decision of the recognised stoc) exchange delisting the securities within fifteen days fro( the date of the decision of the recognised stoc) exchange delisting the securities and the pro'isions of sections %%8 to %%7 of this Act, shall apply, as far as (ay be, to such appeals , 4ro+i-e- that the Securities Appellate .ribunal (ay, if it is satisfied that the co(pany was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding one (onth0:
(%) Any option in securities which has been entered into before such co((ence(ent and which re(ains to be perfor(ed, whether wholly or in part, after such co((ence(ent shall, to that
extent, beco(e 'oid02 /" Kords 18O <H8=IC CC?<AEI7S2 o(itted by the Securities =aws (A(end(ent) Act, !!!, Sec $, w0e0f0 %%+0%+%0000 /# Substituted by the Securities =aws (A(end(ent) Act, !!", Sec 33, w0e0f0 %"+0 + !!" . <rior to substitution, section % read as under , 1% 0 8$.er t$ c$"%el li#ting $f #ec!ritie# bF %!blic c$"%anie#& -Eotwithstanding anything contained in any other law for the ti(e being in force, if the Securities and 7xchange 8oard of India is of opinion, ha'ing regard to the nature of the securities issued by any public co(pany as defined in the Co(panies Act, !"# ( of !"#), or to the dealings in the(, that it is necessary or expedient in the interest of the trade or in the public interest so to do, it (ay re*uire the co(pany, after gi'ing it an opportunity of being heard in the (atter, to co(ply with such re*uire(ents as (ay be prescribed with respect to the listing of its securities on any recognised stoc) exchange02 // Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec >, w0r0e0f0 %+ 0+%00$0
7:5Ri(ht
of %$$e%l %(%i !t ref*!%l of !to'6 e#'h% (e! to li!t !e'*ritie! of $*,li' 'o.$% ie!. 79"". Khere a recognised stoc) exchange acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any public co(pany >04or collecti'e in'est(ent sche(e:, the co(pany > 4or sche(e: shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( ) of section /3 of the Co(panies Act, !"# ( of !"#) (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Central &o'ern(ent (ay, on sufficient cause being shown, allow, appeal to the Central &o'ern(ent against such refusal, o(ission or failure, as the case (ay be, and thereupon the Central &o'ern(ent (ay, after gi'ing the stoc) exchange an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange, or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Central &o'ern(ent sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Central &o'ern(ent: , >%44ro+i-e- that no appeal shall be preferred against refusal, o(ission or failure, as the case (ay be, under this section on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!0: :)5Ri(ht of %$$e%l to Se'*ritie! A$$ell%te Tri,* %l %(%i !t ref*!%l of !to'6 e#'h% (e to li!t !e'*ritie! of $*,li' 'o.$% ie!.
/> Substituted
by .he Co(panies (A(end(ent) Act, !/$ (Act Eo0 $ of !/$), Sec $%, w0e0f0 0 + 0%+ !/"0 /! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the
&aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 >0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%00003 Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 > Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%0000 >% Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec $, w0e0f0 #+ %+ !!!0 >3 Sections %%A, %%8, %%C, %%9, %%7 and %%6 inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!!& 7arlier section %%A was inserted by .he
""A. ( ) Khere a recognised stoc) exchange, acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any co(pany, the co(pany shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( A) of section /3 of the Co(panies Act, !"# ( of !"#), (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Securities Appellate .ribunal (ay, on sufficient cause being shown, allow, appeal to the Securities Appellate .ribunal ha'ing Durisdiction in the (atter against such refusal, o(ission or failure, as the case (ay be, and thereupon the Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange, an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange3 or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Securities Appellate .ribunal sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Securities Appellate .ribunal0 (%) 7'ery appeal under sub+section ( ) shall be in such for( and be acco(panied by such fee as (ay be prescribed0 (3) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 ($) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: :354ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. "";. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of
Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec %, w0e0f0 /+ 0 + !>#, and o(itted by the 9epositories Act, !!#, Sec 30 and Sch0, <t0III, w0r0e0f0 %0+0!+ !!"0 >$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath 3 (b) re*uiring the disco'ery and production of docu(ents 3 (c) recei'ing e'idence on affida'its 3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents 3 (e) re'iewing its decisions 3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte ; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0: :55Ri(ht to le(%l re$re!e t%tio . ""C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of sub+section ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of subsection ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of
>" Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
!"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, vakil or an attorney of any Iigh Court, and includes a pleader in practice0: :85Li.it%tio . ""D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0: :75Ci+il 'o*rt ot to h%+e G*ri!-i'tio .
""E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0: ::5A$$e%l to S*$re.e Co*rt. ""2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order, 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: 8(4A91:( A45 80</(5A0( 4e %ltie!. "). ( ) Any person who+
># Inserted >/ Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & >> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec !, w0r0e0f0 %+ 0+%00$0 7arlier section %%6 as inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", read as under,+ 1""2. A$$e%l to Di(h Co*rt.+Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order , 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
(a) without reasonable excuse (the burden of pro'ing which shall be on hi() fails to co(ply with any re*uisition (ade under sub+section ($) of section #3 or (b) enters into any contract in contra'ention of any of the pro'isions contained in section 3 or section #3 or (c) contra'enes the pro'isions contained in >!5section / or section /A<, or section !3 or 90 4(d) enters into any contract in deri'ati'e in contra'ention of section >A or the rules (ade under section 303: (e) owns or )eeps a place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act and )nowingly per(its such place to be used for such purposes3 or (f) (anages, controls, or assists in )eeping any place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act or at which contracts are recorded or adDusted or rights or liabilities arising out of contracts are adDusted, regulated or enforced in any (anner whatsoe'er3 or (g) not being a (e(ber of a recognised stoc) exchange or his agent authorised as
such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section / wilfully represents to or induces any person to belie'e that contracts can be entered into or perfor(ed under this Act through hi(3 or (h) not being a (e(ber of a recognised stoc) exchange or his agent authorised as such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section /, can'asses, ad'ertises or touts in any (anner either for hi(self or on behalf of any other persons for any business connected with contracts in contra'ention of any of the pro'isions of this Act3 or (i) Doins, gathers or assists in gathering at any place other than the place of business specified in the bye+laws of a recognised stoc) exchange any person or persons for (a)ing bids or offers or for entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act3 ! 4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which
>! Inserted
by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec $, w0e0f0 %>+0"+ %00/ for ;section /;0 !0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec #, w0e0f0 %%+0%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 ! Substituted for 1shall, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0
(ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: (%) Any person who enters into any contract in contra'ention of the pro'isions contained in section " !%4or who fails to co(ply with the pro'isions of !34section % or section % A: or with the orders of: or section %% !$4or with the orders of the Securities Appellate .ribunal: !"4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 9854e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. ")A. Any person, who is re*uired under this Act or any rules (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to a recognised stoc) exchange, fails to furnish the sa(e within the ti(e specified therefor in the listing agree(ent or conditions or bye+laws of the recognised stoc) exchange, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to (aintain boo)s of account or records, as per the listing agree(ent or conditions, or bye+laws of a recognised stoc) exchange, fails to (aintain the sa(e, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0:
9754e
%lt> for f%il*re ,> % > $er!o to e ter i to % %(ree.e t /ith 'lie t!. ");. If any person, who is re*uired under this Act or any bye+laws of a recognised stoc) exchange (ade thereunder, to enter into an agree(ent with his client, fails to enter into such an agree(ent, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0:
!% Substituted
for 1or who fails to co(ply with the orders of the Securities and 7xchange 8oard of India under section % 2 by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 <rior to !!", ;Securities and 7xchange 8oard of India under section % or Central &o'ern(ent under section %%; were substituted for ;Central &o'ern(ent under section % or section %%; vide .he Schedule, <art II of Securities and 7xchange 8oard of India Act, !!%, w0e0f0 30+0 + !!%0 !3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec #, w0e0f0 #+ %+ !!!0 !" Substituted for 1shall, on con'iction, be punishable with fine which (ay extend to one thousand rupees2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !# Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$ & !/ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$0
9:54e
%lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. ")C. If any stoc) bro)er or sub+bro)er or a co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, after ha'ing been called upon by the Securities and 7xchange 8oard of India or a recognised stoc) exchange in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e stipulated by the Securities and 7xchange 8oard of India or a recognised stoc) exchange, he or it shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 9954e %lt> for f%il*re to !e(re(%te !e'*ritie! or .o e>! of 'lie t or 'lie t!. ")D. If any person, who is registered under section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%) as a stoc) bro)er or sub+bro)er, fails to segregate securities or (oneys of the client or clients or uses the securities or (oneys of a client or clients for self or for any other client, he shall be liable to a penalty not exceeding one crore rupees0: 1==54e %lt> for f%il*re to 'o.$l> /ith $ro+i!io of li!ti ( 'o -itio ! or -eli!ti ( 'o -itio ! or (ro* -!. ")E. If a co(pany or any person (anaging collecti'e in'est(ent sche(e or (utual fund, fails to co(ply with the listing conditions or delisting conditions or grounds or co((its a breach thereof, it or he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0: 1=154e %lt> for e#'e!! -e.%teri%li!%tio or -eli+er> of * li!te- !e'*ritie!. ")2. If any issuer de(aterialises securities (ore than the issued securities of a co(pany or deli'ers in the stoc) exchanges the securities which are not listed in the recognised stoc) exchange or deli'ers securities where no trading per(ission has been gi'en by the recognised stoc) exchange, he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0:
!> Inserted !! Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 00 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0
%+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0
1="54e
%lt> for f%il*re to f*r i!h $erio-i'%l ret*r !, et'. ")G. If a recognised stoc) exchange fails or neglects to furnish periodical returns to the Securities and 7xchange 8oard of India or fails or neglects to (a)e or a(end its rules or bye+laws as directed by the Securities and 7xchange 8oard of India or fails to co(ply with directions issued by the Securities and 7xchange 8oard of India, such recognised stoc) exchange shall be liable to a penalty which (ay extend to twenty+fi'e crore rupees0: 1=)54e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. ")D. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or articles or bye+ laws or the regulations of the recognised stoc) exchange or directions issued by the Securities and 7xchange 8oard of India for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 1=354o/er to %-G*-i'%te. ")0I. ( ) 6or the purpose of adDudging under sections %3A, %38, %3C, %39, %37, %36, %3& and %3I, the Securities and 7xchange 8oard of India shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0: 1=552%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. ")E. Khile adDudging the *uantu( of penalty under section %3+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3
0% Inserted 03 Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec 0$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0" Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 , w0r0e0f0 , w0r0e0f0 , w0r0e0f0
%+ %+ %+ %+
0+%00$0 0+%00$0 0+%00$0 0+%00$0
(b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0: 1=85 Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!.
")EA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 1"A or !e'tio ")0I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%tefor the %lle(e- -ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re %! !$e'ifie,> the ;o%r- * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")L %(%i !t % > or-er $%!!e- ,> the ;o%ror %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 1=75Re'o+er> of %.o* t!. ")E;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 1"A or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H
0# I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30"==7) 0/ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %!
.%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - ThirS'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")L of thi! A't. (") The re'o+er> offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ())Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 0'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 1"A, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1),(") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 1=:5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. ")F. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: 1=95A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")L. ( ) Any person aggrie'ed, by the order or decision of the recogniFed stoc) exchange or the adDudicating officer or any order (ade by the Securities and 7xchange 8oard of India under section $8, (ay prefer an appeal before the Securities Appellate .ribunal and the pro'isions of sections %%8, %%C, %%9 and %%7 of this Act, shall apply, as far as (ay be, to such appeals0 (%) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order or decision is recei'ed by the
appellant and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 (3) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 ($) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the parties to the appeal and to the concerned adDudicating officer0 (") .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: 11=5Offe 'e!. ")@. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws
0> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 0! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
(ade thereunder, for which no punish(ent is pro'ided elsewhere in this Act, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 1115Co.$o!itio of 'ert%i offe 'e!. ")N. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0: 11"54o/er to (r% t i..* it>. ")0O. ( ) .he Central &o'ern(ent (ay, on reco((endation by the Securities and 7xchange 8oard of India, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation,
4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that the reco((endation of the Securities and 7xchange 8oard of India under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under
% Inserted
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
this Act to which such person would ha'e been liable, had not such i((unity been granted0: Offe 'e! ,> 'o.$% ie!. "3. ( ) Khere an offence has been co((itted by a co(pany, e'ery person who, at the ti(e when the offence was co((itted, was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence, and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any gross negligence on the part of any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer of the co(pany, shall also be dee(ed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n0-6or the purpose of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals, and 34(b) 1director2, in relation to(i) a fir(, (eans a partner in the fir(3 (ii) any association of persons or a body of indi'iduals, (eans any (e(ber controlling the affairs thereof0: $4(3) .he pro'isions of this section shall be in addition to, and not in derogation of, the pro'isions of section %%A0: Cert%i offe 'e! to ,e 'o( iL%,le. "5. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, >!> (" of >!>) ", any offence punishable under #4GGG: section %3 shall be dee(ed to be a
cogniFable offence within the (eaning of that Code0
3 Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec /, w0e0f0 %%+%+%0000 <rior to its substitution, sub+clause (b) read as under, N(b) 1director2, in relation to a fir(, (eans a partner in the fir(0J $ Inserted by .he Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec 3, w0e0f0 /+0 + !>#0
iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central &o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or a recognised stoc) exchange or by any person0 >5(")********< 1195E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
ee now the Code of Cri(inal <rocedure, !/3 (% of !/$) 1sub+section ( ) of2 o(itted by the Securities =aws (A(end(ent) Act, %00$, w0e0f0 %+ 0+%00$0 / Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$ & <rior to its substitution section %# read as under ,1%#0 G!ri#dicti$n t$ trF $ffence# !nder thi# Act&-Eo court inferior to that of a presidency (agistrate or a (agistrate of the first class shall ta)e cogniFance of or try any offence punishable under this Act02 > O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JEo court inferior to that of a Court of Session shall try any offence punishable under this Act .K ! I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
" # Kords
/4Co(
A$$e%l % - Re+i!io . "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt. "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel% $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io !. "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< 6: /(99A4(<A Title to -i+i-e -!. "7. ( ) It shall be lawful for the holder of any security whose na(e appears on the boo)s of the co(pany issuing the said security to recei'e and retain any di'idend declared by the co(pany in respect thereof for any year, notwithstanding that the said security has already been transferred by hi( for consideration, unless the transferee who clai(s the di'idend fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the co(pany with the co(pany for being registered in his na(e within fifteen days of the date on which the di'idend beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the di'idend3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security and other docu(ents relating to
the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a co(pany to pay any di'idend which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the co(pany as the holder of the security in respect of which the di'idend has beco(e due3 or (b) the right of the transferee of any security to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security in the na(e of the transferee0 %04Ri(ht to re'ei+e i 'o.e fro. 'olle'ti+e i +e!t.e t !'he.e. "7A. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, whose na(e appears on the boo)s of the collecti'e in'est(ent sche(e issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e declared by the collecti'e in'est(ent sche(e in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e fro( the transfer or has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the collecti'e in'est(ent sche(e with the collecti'e in'est(ent sche(e for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec >, w0e0f0 %%+%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the collecti'e in'est(ent sche(e3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a collecti'e in'est(ent sche(e to pay any inco(e fro( units or other instru(ents issued by the collecti'e in'est(ent sche(e which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the collecti'e in'est(ent sche(e as the holder of the security being
units or other instru(ents issued by the collecti'e in'est(ent sche(e in respect of which the inco(e in respect of units or other instru(ents issued by the collecti'e sche(e has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security being units or other instru(ents issued by the collecti'e in'est(ent sche(e in the na(e of the transferee0: % 4Ri(ht to re'ei+e i 'o.e fro. .*t*%l f* -. "7;. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by any (utual fund, whose na(e appears on the boo)s of the (utual fund issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the (utual fund declared by the (utual fund in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the (utual fund, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the (utual fund fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the (utual fund with the (utual fund for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the (utual fund beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the (utual fund3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the (utual fund, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a (utual fund to pay any inco(e fro( units or other instru(ents issued by the (utual fund which has beco(e due to any person, whose na(e is for the ti(e being registered in the boo)s of the (utual fund as the holder of the security being units or other instru(ents issued by the (utual fund in respect of which the inco(e in respect of units or other instru(ents issued by the (utual fund has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the (utual fund, to enforce against the transferor or any other person, his rights, if any, in relation to the transfer in any case where the (utual fund has refused to register the transfer of the security being units or other instru(ents issued by the (utual fund in the na(e of the transferee0:
1""5A't
ot to %$$l> i 'ert%i '%!e!. ":. ( ) .he pro'isions of this Act shall not apply to(a) the &o'ern(ent, the Reser'e 8an) of India, any local authority or any corporation set up by a special law or any person who has effected any transaction with or through the agency of any such authority as is referred to in this clause3 (b) any con'ertible bond or share warrant or any option or right in relation thereto, in so far as it entitles the person in whose fa'our any of the foregoing has been issued to obtain at his option fro( the co(pany or other body corporate, issuing the sa(e or fro( any of its shareholders or duly appointed agentsJ shares of the co(pany or other body corporate, whether by con'ersion of the bond or warrant or otherwise, on the basis of the price agreed upon when the sa(e was issued0 (%) Kithout preDudice to the pro'isions contained in sub+section ( ), if the Central &o'ern(ent %3 is satisfied that in the interests of trade and co((erce or the
%% Substituted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec 3, w0e0f0 0>+ %+ !"!0
econo(ic de'elop(ent of the country it is necessary or expedient so to do, it (ay, by notification in the Cfficial &aFette, specify any class of contracts as contracts to which this Act or any pro'ision contained therein shall not apply, and also the conditions, li(itations or restrictions, if any, subDect to which it shall not so apply0: 4rote'tio of %'tio t%6e i (oo- f%ith. "9. Eo suit, prosecution or other legal proceeding whatsoe'er shall lie in any court against the go'erning body or any (e(ber, office bearer or ser'ant of any recognised stoc) exchange or against any person or persons appointed under subsection ( ) of section for anything which is in good faith done or intended to be done in pursuance of this Act or of any rules or bye+laws (ade thereunder0 %$44o/er to -ele(%te. "9A. .he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers (except the power under section 30) exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India or the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)0: 4o/er to .%6e r*le!. )=. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for the purpose of carrying into effect the obDects of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for,(a) the (anner in which applications (ay be (ade, the particulars which they should contain and the le'y of a fee in respect of such applications 3 (b) the (anner in which any in*uiry for the purpose of recognising any stoc) exchange (ay be (ade, the conditions which (ay be i(posed for the grant of such recognition, including conditions as to the ad(ission of (e(bers if the
%3 <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %$ Inserted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% and Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec !, w0e0f0 %%+0%+%0000 <rior to its substitution, section %!A read as under , 1%!A0 8$.er t$ delegate&*.he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India02
stoc) exchange concerned is to be the only recognised stoc) exchange in the area3 and the for( in which such recognition shall be granted3 (c) the particulars which should be contained in the periodical returns and annual reports to be furnished to the Central &o'ern(ent3 (d) the docu(ents which should be (aintained and preser'ed under section # and the periods for which they should be preser'ed3 (e) the (anner in which any in*uiry by the go'erning body of a stoc) exchange shall be (ade under section #3 (f) the (anner in which the bye+laws to be (ade or a(ended under this Act shall before being so (ade or a(ended be published for criticis(3 (g) the (anner in which applications (ay be (ade by dealers in securities for licences under section /, the fee payable in respect thereof and the period of such licences, the conditions subDect to which licences (ay be granted, including conditions relating to the for(s which (ay be used in (a)ing contracts, the docu(ents to be (aintained by licensed dealers and the furnishing of periodical infor(ation to such authority as (ay be specified and the re'ocation of licences for breach of conditions3 %"4(h) the re*uire(ents which shall be co(plied with(A) by public co(panies for the purpose of getting their securities listed on any stoc) exchange3 (B) by collecti'e in'est(ent sche(e for the purpose of getting their units listed on any stoc) exchange3: %#4GGG: %/4(ha) the grounds on which the securities of a co(pany (ay be delisted fro( any recognised stoc) exchange under sub+section ( ) of section % A3 (hb) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under sub+section (%) of section % A and the fees payable in respect of such appeal3 (hc) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3
%" Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec 0, w0e0f0 %%+0%+%0000 <rior to its substitution, clause (h) read as under , 1(h) the re*uire(ents which shall be co(plied with by public co(panies for the purpose of getting their securities listed on any stoc) exchange32 %# .he word ;and; o(itted by .he Securities Contracts (Regulation) A(end(ent Act, !>", Sec $, w0e0f0 /+0 + !>#0 %/ Substituted for clause (ha) by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 7arlier clause (ha), as a(ended by the Securities =aws (A(end(ent) Act, !!!, read as
under ,1(ha) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3 and2
(hd) the (anner of in*uiry under sub+section ( ) of section %3+I3 (he) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3= and the fees payable in respect of such appeal3: (i) any other (atter which is to be or (ay be prescribed0 %>4(3) 7'ery rule (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule0: 1"954o/er of Se'*ritie! % - E#'h% (e ;o%r- of I -i% to .%6e re(*l%tio !. )1. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 305(%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,%> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 <rior to its substitution, sub+section (3), as a(ended by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!", read as under , 1(3) 7'ery rule (ade under this section shall, as soon as (ay be, after its publication in the Cfficial &aFette, be laid before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e session aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule02 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0 7arlier it was repealed by the Repealing and A(ending Act, !#0, Sec % and 6irst Sch0 w0e0f0 %>+ %+ !#00 30 Substituted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec ", w0e0f0 %>+ 0"+%00/0 <rior to substitution it read as under , 1(%) In particular and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for the (anner in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section02
(a) the (anner, in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of
publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section3 (b) the eligibility criteria and other re*uire(ents under section /A0 < (3) 7'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the regulation or both Iouses agree that the regulation should not be (ade, the regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that regulation0:
DE4OSITORIES ACT, 1998 SECTIONS /@A81(0 : 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS ). Certificate of co((ence(ent of business by depositories /@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS 3. Agree(ent between depository and participant 5. Ser'ices of depository 8. Surrender of certificate of security 7. Registration of transfer of securities with depositories :. Cptions to recei'e security certificate or hold securities with depository 9. Securities in depositories to be in fungible for( 1=. Rights of depositories and beneficial owner 11. Register of beneficial owner 1". <ledge or hypothecation of securities held in a depository 1). 6urnishing of infor(ation and records by depository and issuer 13. Cption to opt out in respect of any security 15. Act > of >! to apply to depositories 18. 9epositories to inde(nify loss in certain cases 17. Rights and obligations of depositories, etc0 /@A81(0 :: EN9UIRM AND INS4ECTION 1:. <ower of 8oard to call for infor(ation and en*uiry 19. <ower of 8oard to gi'e directions in certain cases 19A. <enalty for failure to furnish infor(ation, return, etc0 19;. <enalty for failure to enter into an agree(ent 19C. <enalty for failure to redress in'estorsJ grie'ances
19D. <enalty for delay in de(aterialisation or issue of certificate of securities 19E. <enalty for failure to reconcile records 192. <enalty for failure to co(ply with directions issued by 8oard under section ! of the Act 19G. <enalty for contra'ention where no separate penalty has been pro'ided 19D. <ower to adDudicate 190I. 6actors to be ta)en into account by adDudicating officer 190IA. Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (! 190I;. Re'o+er> of %.o* t! 190E. Crediting su(s realised by way of penalties to Consolidated 6und of India /@A81(0 D 4ENALTM "=. Cffences "1. Cffences by co(panies /@A81(0 D: @ISCELLANEOUS "". CogniFance of offences by courts ""A. Co(position of certain offences "";. <ower to grant i((unity ""C. E!t%,li!h.e t of S$e'i%l Co*rt! ""D. Offe 'e! tri%,le ,> S$e'i%l Co*rt! ""E. A$$e%l % - re+i!io ""2. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""G. Tr% !itio %l 4ro+i!io ! "). Appeals ")A. Appeal to Securities Appellate .ribunal ")A. Appeal to Securities Appellate .ribunal ");. <rocedure and powers of Securities Appellate .ribunal ")C. Right to =egal Representation ")D. =i(itation ")E. Ci'il court not to ha'e Durisdiction ")2. Appeal to Supre(e Court "3. <ower of Central &o'ern(ent to (a)e rules "5. <ower of 8oard to (a)e regulations "8. <ower of depositories to (a)e bye+laws "7. Rules and regulations to be laid before <arlia(ent ":. Application of other laws not barred "9. Re(o'al of difficulties )=. A(end(ents to certain enact(ents )1. Repeal and sa'ing /@(5A9( A?7E9?7E. .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0: DE4OSITORIES ACT, 1998 5"" O2 1998< 51=th A*(*!t, 1998< An Act to provide $or reg lation o$ depositories in sec rities and $or matters connected there%ith or incidental thereto& B( it enacted bF 8arlia"ent in the E$rtF7#eventh ;ear $f the 0e%!blic $f :ndia a# f$ll$.# ,*
/@A81(0 : 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the 9epositories Act, !!#0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the %0th day of Septe(ber, !!"0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 1beneficial owner2 (eans a person whose na(e is recorded as such with a depository3 (b) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 3 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (c) 1bye+laws2 (eans bye+laws (ade by a depository under section %#3 (d) 1Co(pany =aw 8oard2 (eans the 8oard of Co(pany =aw Ad(inistration constituted under section 07 of the Co(panies Act, !"# ( of !"#)3 (e) 1depository2 (eans a co(pany for(ed and registered under the Co(panies Act, !"# ( of !"#), and which has been granted a certificate of registration under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (f) 1issuer2 (eans any person (a)ing an issue of securities3 (g) 1participant2 (eans a person registered as such under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (h) 1prescribed2 (eans prescribed by rules (ade under this Act3 (i) 1record2 includes the records (aintained in the for( of boo)s or stored in a co(puter or in such other for( as (ay be deter(ined by regulations3 (j) 1registered owner2 (eans a depository whose na(e is entered as such in the register of the issuer3 (k) 1regulations2 (eans the regulations (ade by the 8oard3 4(ka) 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (l) 1security2 (eans such security as (ay be specified by the 8oard3 (") 1ser'ice2 (eans any ser'ice connected with recording of allot(ent of securities or transfer of ownership of securities in the record of a depository0 (%) Kords and expressions used herein and not defined but defined in the Co(panies Act, !"# ( of !"#), or the Securities Contracts (Regulation) Act, !"# ($% of !"#), or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), shall ha'e the (eanings respecti'ely assigned to the( in those Acts0 /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS Certifi'%te of 'o..e 'e.e t of ,*!i e!! ,> -e$o!itorie!. ). ( ) Eo depository shall act as a depository unless it obtains a certificate of co((ence(ent of business fro( the 8oard0 (%) A certificate granted under sub+section ( ) shall be in such for( as (ay be specified by the regulations0 (3) .he 8oard shall not grant a certificate under sub+section ( ) unless it is satisfied that the depository has ade*uate syste(s and safeguards to pre'ent (anipulation of records and transactions , 4ro+i-e- that no certificate shall be refused under this section unless the depository concerned has been gi'en a reasonable opportunity of being heard0
Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
/@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS A(ree.e t ,et/ee -e$o!itor> % - $%rti'i$% t. 3. ( ) A depository shall enter into an agree(ent with one or (ore participants as its agent0 (%) 7'ery agree(ent under sub+section ( ) shall be in such for( as (ay be specified by the bye+laws0 Ser+i'e! of -e$o!itor>. 5. Any person, through a participant, (ay enter into an agree(ent, in such for( as (ay be specified by the bye+laws, with any depository for a'ailing its ser'ices0 S*rre -er of 'ertifi'%te of !e'*rit>. 8. ( ) Any person who has entered into an agree(ent under section " shall surrender the certificate of security, for which he see)s to a'ail the ser'ices of a depository, to the issuer in such (anner as (ay be specified by the regulations0 (%) .he issuer, on receipt of certificate of security under sub+section ( ), shall cancel the certificate of security and substitute in its records the na(e of the depository as a registered owner in respect of that security and infor( the depository accordingly0 (3) A depository shall, on receipt of infor(ation under sub+section (%), enter the na(e of the person referred to in sub+section ( ) in its records, as the beneficial owner0 Re(i!tr%tio of tr% !fer of !e'*ritie! /ith -e$o!itor>. 7. ( ) 7'ery depository shall, on receipt of inti(ation fro( a participant, register the transfer of security in the na(e of the transferee0 (%) If a beneficial owner or a transferee of any security see)s to ha'e custody of such security the depository shall infor( the issuer accordingly0 O$tio ! to re'ei+e !e'*rit> 'ertifi'%te or hol- !e'*ritie! /ith -e$o!itor>. :. ( ) 7'ery person subscribing to securities offered by an issuer shall ha'e the option either to recei'e the security certificates or hold securities with a depository0 (%) Khere a person opts to hold a security with a depository, the issuer shall inti(ate such depository the details of allot(ent of the security, and on receipt of such infor(ation the depository shall enter in its records the na(e of the allottee as the beneficial owner of that security0 Se'*ritie! i -e$o!itorie! to ,e i f* (i,le for.. 9. ( ) All securities held by a depository shall be de(aterialised and shall be in a fungible for(0 %4(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#), shall apply to a depository in respect of securities held by it on behalf of the beneficial owners&: Ri(ht! of -e$o!itorie! % - ,e efi'i%l o/ er. 1=. ( ) Eotwithstanding anything contained in any other law for the ti(e being in force, a depository shall be dee(ed to be the registered owner for the purposes of effecting transfer of ownership of security on behalf of a beneficial owner0 (%) Sa'e as otherwise pro'ided in sub+section ( ), the depository as a registered owner shall not ha'e any 'oting rights or any other rights in respect of securities held by it0 (3) .he beneficial owner shall be entitled to all the rights and benefits and be subDected to all the liabilities in respect of his securities held by a depository0 Re(i!ter of ,e efi'i%l o/ er. 11. 7'ery depository shall (aintain a register and an index of beneficial owners in the
(anner pro'ided in sections "0, " and "% of the Co(panies Act, !"# ( of !"#)0 4le-(e or h>$othe'%tio of !e'*ritie! hel- i % -e$o!itor>. 1". ( ) SubDect to such regulations and bye+laws, as (ay be (ade in this behalf, a beneficial owner (ay with the pre'ious appro'al of the depository create a pledge or hypothecation in respect of a security owned by hi( through a depository0 (%) 7'ery beneficial owner shall gi'e inti(ation of such pledge or hypothecation to the depository and such depository shall thereupon (a)e entries in its records accordingly0 (3) Any entry in the records of a depository under sub+section (%) shall be e'idence of a pledge or hypothecation0 2*r i!hi ( of i for.%tio % - re'or-! ,> -e$o!itor> % - i!!*er. 1). ( ) 7'ery depository shall furnish to the issuer infor(ation about the transfer of securities in the na(e of beneficial owners at such inter'als and in such (anner as (ay be specified by the bye+laws0 (%) 7'ery issuer shall (a)e a'ailable to the depository copies of the rele'ant records in respect of securities held by such depository0 O$tio to o$t o*t i re!$e't of % > !e'*rit>.
% Substituted
by the 9epositories Related =aws (A(end(ent) Act, !!/, Sec %%, w0e0f0 "+0 + !!/0 <rior to its substitution sub+section (%) read as under , 1(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#) shall apply to the securities held by a depository on behalf of the beneficial owners02
13. ( ) If a beneficial owner see)s to opt out of a depository in respect of any security he shall infor( the depository accordingly0 (%) .he depository shall on receipt of inti(ation under sub+section ( ) (a)e appropriate entries in its records and shall infor( the issuer0 (3) 7'ery issuer shall, within thirty days of the receipt of inti(ation fro( the depository and on fulfil(ent of such conditions and on pay(ent of such fees as (ay be specified by the regulations, issue the certificate of securities to the beneficial owner or the transferee, as the case (ay be0 A't 1: of 1:91 to %$$l> to -e$o!itorie!. 15. .he 8an)ersJ 8oo)s 7'idence Act, >! shall apply in relation to a depository as if it were a ban) as defined in section % of that Act0 De$o!itorie! to i -e. if> lo!! i 'ert%i '%!e!. 18. ( ) Kithout preDudice to the pro'isions of any other law for the ti(e being in force, any loss caused to the beneficial owner due to the negligence of the depository or the participant, the depository shall inde(nify such beneficial owner0 (%) Khere the loss due to the negligence of the participant under sub+section ( ) is inde(nified by the depository, the depository shall ha'e the right to reco'er the sa(e fro( such participant0 Ri(ht! % - o,li(%tio ! of -e$o!itorie!, et'. 17. ( ) SubDect to the pro'isions of this Act, the rights and obligations of the depositories, participants and the issuers whose securities are dealt with by a depository shall be specified by the regulations0 (%) .he eligibility criteria for ad(ission of securities into the depository shall be specified by the regulations0 /@A81(0 :D EN9UIRM AND INS4ECTION 4o/er of ;o%r- to '%ll for i for.%tio % - e 7*ir>. 1:. ( ) .he 8oard, on being satisfied that it is necessary in the public interest or in the interest of in'estors so to do, (ay, by order in writing,-
(a) call upon any issuer, depository, participant or beneficial owner to furnish in writing such infor(ation relating to the securities held in a depository as it (ay re*uire3 or (b) authorise any person to (a)e an en*uiry or inspection in relation to the affairs of the issuer, beneficial owner, depository or participant, who shall sub(it a report of such en*uiry or inspection to it within such period as (ay be specified in the order0 (%) 7'ery director, (anager, partner, secretary, officer or e(ployee of the depository or issuer or the participant or beneficial owner shall on de(and produce before the person (a)ing the en*uiry or inspection all infor(ation or such records and other docu(ents in his custody ha'ing a bearing on the subDect+(atter of such en*uiry or inspection0 4o/er of ;o%r- to (i+e -ire'tio ! i 'ert%i '%!e!. 19. Sa'e as pro'ided in this Act, if after (a)ing or causing to be (ade an en*uiry or inspection, the 8oard is satisfied that it is necessary(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any depository or participant being conducted in the (anner detri(ental to the interests of in'estors or securities (ar)et, it (ay issue such directions,(a) to any depository or participant or any person associated with the securities (ar)et3 or (b) to any issuer, as (ay be appropriate in the interest of in'estors or the securities (ar)et0 )5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< $44e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 19A. Any person, who is re*uired under this Act or any rules or regulations or bye+laws (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to the 8oard, fails to furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations or bye+laws, fails to file return or furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0
3I $ Inserted
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the Securities =aws (A(end(ent) Act, %00$, Sec0 /, w0r0e0f0 %+ 0+%00$0
4e %lt> for f%il*re to e ter i to % %(ree.e t. 19;. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and is re*uired under this Act or any rules or regulations (ade thereunder, to enter into an agree(ent, fails to enter into such agree(ent, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0
4e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 19C. If any depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such depository or participant or issuer or its agents or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for -el%> i -e.%teri%li!%tio or i!!*e of 'ertifi'%te of !e'*ritie!. 19D. If any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to de(aterialise or issue the certificate of securities on opting out of a depository by the in'estors, within the ti(e specified under this Act or regulations or bye+laws (ade thereunder or abets in delaying the process of de(aterialisation or issue the certificate of securities on opting out of a depository of securities, such issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to re'o 'ile re'or-!. 19E. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to reconcile the records of de(aterialised securities with all the securities issued by the issuer as specified in the regulations, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to 'o.$l> /ith -ire'tio ! i!!*e- ,> ;o%r- * -er !e'tio 19 of the A't. 192. If any person fails to co(ply with the directions issued by the 8oard under section !, within the ti(e specified by it, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 19G. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations or bye+laws (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0 4o/er to %-G*-i'%te. 19D. ( ) 6or the purpose of adDudging under sections !A, !8, !C, !9, !7, !6 and !&, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the
sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. 190I. Khile adDudging the *uantu( of penalty under section !I, the adDudicating officer shall ha'e due regard to the following factors, na(ely,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 55 Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (!. 190IA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 19, !e'tio 19D, %! the '%!e .%> ,e, .%> file % %$$li'%tio i /riti ( to the ;o%r$ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e-ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h
"I
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re !$e'ifie- ,> the ;o%r* -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")A %(%i !t % > or-er $%!!e- ,> the ;o%r- or the %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 85 Re'o+er> of %.o* t!. 190I;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 19 or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6
%''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hilor !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C!
#I
!erte- ,> The Se'*ritie! L%/! (A.e- .e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
.o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")A of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 19, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 19E. All su(s realiFed by way of penalties under this Act shall be credited to the Consolidated 6und of India0: /@A81(0 D 4ENALTM /4Offe 'e!. "=. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws (ade thereunder, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0
/ Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 >, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %0 read as under,1%00 <ffence#0- Khoe'er contran'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or any regulations or bye+laws (ade thereunder shall be punishable with i(prison(ent for a ter( which (ay extend to fi'e years, or with fine or with both02
(%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with
fine, which (ay extend to twenty+fi'e crore rupees, or with both0: Offe 'e! ,> 'o.$% ie!. "1. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n&-6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and (b) 1director2, in relation to a fir(, (eans a partner in the fir(0 /@A81(0 D: @ISCELLANEOUS >4Co( iL% 'e of offe 'e! ,> 'o*rt!. "". ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central
> Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 !, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %% read as under,1%%0 /$gniCance $f $ffence# bF c$!rt#&*( ) Eo Court shall ta)e cogniFance of any offence punishable under this Act or any regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the 8oard0 (%) Eo court inferior to that of a ?etropolitan ?agistrate or a Dudicial ?agistrate of the first class shall try any offence punishable under this Act02
&o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or by any person0 !5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < Co.$o!itio of 'ert%i offe 'e!. ""A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "";. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any
penalty under this Act with respect to the alleged 'iolation , 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity , 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0: 1=5 E!t%,li!h.e t of S$e'i%l Co*rt!. ""C. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>.
! <rior
to o(ission, Sub+section(%) read 1Eo court inferior to that of a Court of Session shall try any offence punishable under this Act02 0 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. ""D. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-. A$$e%l % - Re+i!io ""E. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""2. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197).
(") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erioof ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! ""G. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< A$$e%l!. "). ( ) Any person aggrie'ed by an order of the 8oard (ade 4before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!: under this Act, or the regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor , 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0 (3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed , 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 %4A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")A. ( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!, under this Act, or the regulations (ade thereunder, 34or by an order (ade by an adDudicating officer under this Act: (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 $5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 8oard is recei'ed by the person referred to in sub+section ( ) and it shall be in such for( and be acco(panied by such fee as (ay be prescribed ,
Substituted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 $, w0e0f0 #+ %+ !!! for ;an order of the 8oard (ade;0 % Sections %3A to %36 inserted by the Securities =aws (Second A(end(ent) Act, !!! , Sec0 ", w0e0f0 #+ %+ !!!& 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %0, w0r0e0f0 %+ 0+%00$0 $ 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JNo %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-e ,> the ;o%r- /ith the 'o !e t of the $%rtie!.K
4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0
($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 (") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. ");. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3 (e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte; (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 Ri(ht to le(%l re$re!e t%tio . ")C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or an attorney of any Iigh Court, and
includes a pleader in practice0 Li.it%tio . ")D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 Ci+il 'o*rt ot to h%+e G*ri!-i'tio . ")E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "4A$$e%l to S*$re.e Co*rt. ")2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order ,
" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 % , w0r0e0f0 %+ 0+%00$0 <rior to its substitution, Section %36, as inserted by Securities =aws (Second A(end(ent) Act, !!!, w0e0f0 #+ %+ !!!, read as under,1%360 A%%eal t$ @igh /$!rt&-Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0:: 4o/er of Ce tr%l Go+er .e t to .%6e r*le!. "3. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for carrying out the pro'isions of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,164(a) the (anner of in*uiry under sub+section ( ) of section !I3 (aa) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %33: (b) the for( in which an appeal (ay be preferred under sub+section (3) of section %3 and the fees payable in respect of such appeal 3 (c) the procedure for disposing of an appeal under sub+section ($) of section %33 /4(d) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3A and the fees payable in respect of such appeal0: 4o/er of ;o%r- to .%6e re(*l%tio !. "5. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the 8oard (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for(a) the for( in which record is to be (aintained under clause ( i) of sub+section ( ) of section %3 (b) the for( in which the certificate of co((ence(ent of business shall be issued under
sub+section (%) of section 33 (c) the (anner in which the certificate of security shall be surrendered under sub+section ( ) of section #3 (d) the (anner of creating a pledge or hypothecation in respect of security owned by a beneficial owner under sub+section ( ) of section %3 (e) the conditions and the fees payable with respect to the issue of certificate of securities under sub+section (3) of section $3
# Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %%, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (a) read as under,1(a) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %332 / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 #, w0e0f0 #+ %+ !!!0
(f) the rights and obligations of the depositories, participants and the issuers under subsection ( ) of section /3 (g) the eligibility criteria for ad(ission of securities into the depository under sub+section (%) of section /0 4o/er of -e$o!itorie! to .%6e ,>e0l%/!. "8. ( ) A depository shall, with the pre'ious appro'al of the 8oard, (a)e bye+laws consistent with the pro'isions of this Act and the regulations0 (%) In particular, and without preDudice to the generality of the foregoing power, such byelaws shall pro'ide for(a) the eligibility criteria for ad(ission and re(o'al of securities in the depository3 (b) the conditions subDect to which the securities shall be dealt with3 (c) the eligibility criteria for ad(ission of any person as a participant3 (d) the (anner and procedure for de(aterialisation of securities3 (e) the procedure for transactions within the depository3 (f) the (anner in which securities shall be dealt with or withdrawn fro( a depository3 (g) the procedure for ensuring safeguards to protect the interests of participants and beneficial owners3 (h) the conditions of ad(ission into and withdrawal fro( a participant by a beneficial owner3 (i) the procedure for con'eying infor(ation to the participants and beneficial owners on di'idend declaration, shareholder (eetings and other (atters of interest to the beneficial owners3 (j) the (anner of distribution of di'idends, interest and (onetary benefits recei'ed fro( the co(pany a(ong beneficial owners3 (k) the (anner of creating pledge or hypothecation in respect of securities held with a depository3 (l) inter #e rights and obligations a(ong the depository, issuer, participants, and beneficial owners3 (") the (anner and the periodicity of furnishing infor(ation to the 8oard, issuer and other persons3 (n) the procedure for resol'ing disputes in'ol'ing depository, issuer, co(pany or a beneficial owner3 ($) the procedure for proceeding against the participant co((itting breach of the regulations and pro'isions for suspension and expulsion of participants fro( the depository and cancellation of agree(ents entered with the depository3 (%) the internal control standards including procedure for auditing, re'iewing and (onitoring0
(3) Khere the 8oard considers it expedient so to do, it (ay, by order in writing, direct a depository to (a)e any bye+laws or to a(end or re'o)e any bye+laws already (ade within such period as it (ay specify in this behalf0 ($) If the depository fails or neglects to co(ply with such order within the specified period, the 8oard (ay (a)e the bye+laws or a(end or re'o)e the bye+laws (ade either in the for( specified in the order or with such (odifications thereof as the 8oard thin)s fit0 R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t. "7. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. ":. .he pro'isions of this Act shall be in addition to, and not in derogation of, any other law for the ti(e being in force relating to the holding and transfer of securities0 Re.o+%l of -iffi'*ltie!. "9. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as appear to it to be necessary or expedient for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of a period of two years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 A.e -.e t! to 'ert%i e %'t.e t!. )=. 40e%ealed bF 0e%ealing H A"ending Act' 20010: Re$e%l % - !%+i (. )1. ( ) .he 9epositories (.hird) Crdinance, !!# (Crd0 %> of !!#), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 /@(5A9( 4 ee section 30: A?7E9?7E.S .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0:
SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 SECTIONS !'APT"R I 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions !'APT"R II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA
). 7stablish(ent and incorporation of 8oard 3. ?anage(ent of the 8oard 5. .er( of office and conditions of ser'ice of Chair(an and (e(bers of the 8oard 8. Re(o'al of (e(ber fro( office 7. ?eetings 7A. ?e(ber not to participate in (eetings in certain cases :. Bacancies, etc0, not to in'alidate proceedings of 8oard 9. Cfficers and e(ployees of the 8oard !'APT"R III TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD 1=. .ransfer of assets, liabilities, etc0, of existing Securities and 7xchange 8oard to the 8oard !'APT"R IV 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 11. 6unctions of 8oard 11A. 8oard to regulate or prohibit issue of prospectus, offer docu(ent or ad'ertise(ent soliciting (oney for issue of securities 11AA. Collecti'e in'est(ent sche(e 11;. <ower to issue directions 11C. In'estigation 11D. Cease and desist proceedings !'APT"R V REGISTRATION CERTI2ICATE 1". Registration of stoc) bro)ers, sub+bro)ers, share transfer agents, etc0
%
!'APT"R VA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 1"A. <rohibition of (anipulati'e and decepti'e de'ices, insider trading and substantial ac*uisition of securities or control !'APT"R VI 2INANCE, ACCOUNTS AND AUDIT 1). &rants by the Central &o'ern(ent 13. 6und 15. Accounts and audit !'APT"R VIA 4ENALTIES AND ADEUDICATION 15A. <enalty for failure to furnish infor(ation, return, etc & 15;. <enalty for failure by any person to enter into agree(ent with clients 15C. <enalty for failure to redress in'estorsJ grie'ances 15D. <enalty for certain defaults in case of (utual funds 15E. <enalty for failure to obser'e rules and regulations by an asset (anage(ent co(pany 152. <enalty for default in case of stoc) bro)ers 15G. <enalty for insider trading 15D. <enalty for non+disclosure of ac*uisition of shares and ta)eo'ers 15DA. <enalty for fraudulent and unfair trade practices 15D;. <enalty for contra'ention where no separate penalty has been pro'ided
150I. <ower to adDudicate 15E. 6actors to be ta)en into account by the AdDudicating Cfficer 15EA. Crediting su(s realised by way of penalties to Consolidated 6und of India 15E;. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! !'APT"R VIB ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL 15F. 7stablish(ent of Securities Appellate .ribunals 15L. Co(position of Securities Appellate .ribunal 15@. Qualification for appoint(ent as <residing Cfficer or ?e(ber of Securities Appellate .ribunal
3
15N. .enure of office of <residing Cfficer and other (e(bers of Securities Appellate .ribunal 150O. Salary and allowances and other ter(s and conditions of ser'ice of <residing Cfficers 154. 6illing up of 'acancies 159. Resignation and re(o'al 15R. Crders constituting Appellate .ribunal to be final and not to in'alidate its proceedings 15S. Staff of the Securities Appellate .ribunal 15T. Appeal to the Securities Appellate .ribunal 15U. <rocedure and powers of the Securities Appellate .ribunal 15I. Right to legal representation 15?. =i(itation 15A. <residing Cfficer, (e(bers and staff of Securities Appellate .ribunals to be public ser'ants 15M. Ci'il Court not to ha'e Durisdiction 15N. Appeal to Supre(e Court !'APT"R VII @ISCELLANEOUS 18. <ower of Central &o'ern(ent to issue directions 17. <ower of Central &o'ern(ent to supersede the 8oard 1:. Returns and reports 19. 9elegation "=. Appeals "=A. 8ar of Durisdiction "1. Sa'ings "". ?e(bers, officers and e(ployees of the 8oard to be public ser'ants "). <rotection of action ta)en in good faith "3. Cffences "3A. Co(position of certain offences "3;. <ower to grant i((unity "5. 7xe(ption fro( tax on wealth and inco(e "8. CogniFance of offences by Courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! "7. Cffences by co(panies
":. 4C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!":
$
":A. Re'o+er> of %.o* t! "9. <ower to (a)e rules )=. <ower to (a)e regulations )1. Rules and regulations to be laid before <arlia(ent )". Application of other laws not barred )). 4Repealed by Repealing R A(ending Act, %00 : )3. <ower to re(o'e difficulties )5. Repeal and sa'ing .I7 SCI79H=7 4Repealed by Repealing R A(ending Act, %00 : SECURITIES AND EACDANGE ;OARD O2 INDIA ACT, 199" 515 O2 199"< 53th A$ril, 199"< A A't to $ro+i-e for the e!t%,li!h.e t of % ;o%r- to $rote't the i tere!t! of i +e!tor! i !e'*ritie! % - to $ro.ote the -e+elo$.e t of, % - to re(*l%te, the !e'*ritie! .%r6et % - for .%tter! 'o e'te- there/ith or i 'i-e t%l thereto B( it enacted bF 8arlia"ent in the E$rtF7third ;ear $f the 0e%!blic $f :ndia a# f$ll$.# , CDA4TER I 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities and 7xchange 8oard of India Act, !!%0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the 30th day of Manuary, !!%0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 33 (b) 1Chair(an2 (eans the Chair(an of the 8oard3 4(ba) 1collecti'e in'est(ent sche(e2 (eans any sche(e or arrange(ent which satisfies the conditions specified in section AA3: (c) 1existing Securities and 7xchange 8oard2 (eans the Securities and 7xchange 8oard of India constituted under the Resolution of the &o'ern(ent of India in the 9epart(ent of 7cono(ic Affairs Eo0 ($$) S7L>#, dated the %th day of April, !>>3 (d) 16und2 (eans the 6und constituted under section $3 (e) 1(e(ber2 (eans a (e(ber of the 8oard and includes the Chair(an3 (f) 1notification2 (eans a notification published in the Cfficial &aFette3 (g) 1prescribed2 (eans prescribed by rules (ade under this Act3
Inserted by the Securities =aws (A(end(ent) Act, !!!, w0e0f0 %%+%+%0000
"
(h) 1regulations2 (eans the regulations (ade by the 8oard under this Act3 4(ha) 1Reser'e 8an)2 (eans the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)3: (i) 1securities2 has the (eaning assigned to it in section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#)0 %4(%) Kords and expressions used and not defined in this Act but defined in the Securities Contracts (Regulation) Act, !"# ($% of !"#) 34or the 9epositories Act, !!#:, shall ha'e the (eanings respecti'ely assigned to the( in that Act:0 CDA4TER II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA E!t%,li!h.e t % - i 'or$or%tio of ;o%r-.
). ( ) Kith effect fro( such date as the Central &o'ern(ent (ay, by notification, appoint, there shall be established, for the purposes of this Act, a 8oard by the na(e of the Securities and 7xchange 8oard of India0 (%) .he 8oard shall be a body corporate by the na(e aforesaid, ha'ing perpetual succession and a co((on seal, with power subDect to the pro'isions of this Act, to ac*uire, hold and dispose of property, both (o'able and i((o'able, and to contract, and shall, by the said na(e, sue or be sued0 (3) .he head office of the 8oard shall be at 8o(bay0 ($) .he 8oard (ay establish offices at other places in India0 @% %(e.e t of the ;o%r-. 3. ( ) .he 8oard shall consist of the following (e(bers, na(ely,(a) a Chair(an3 (b) two (e(bers fro( a(ongst the officials of the $4?inistry: of the Central &o'ern(ent dealing with 6inance "4and ad(inistration of the Co(panies Act, !"# ( of !"#):3 (c) one (e(ber fro( a(ongst the officials of #4the Reser'e 8an):3 /4(d) fi'e other (e(bers of who( at least three shall be the whole+ti(e (e(bers,: to be appointed by the Central &o'ern(ent0
Inserted by the Securities =aws (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0 <rior to its substitution, sub+section (%) reads as under, 1(%) Kords and expressions used and not defined in this Act but defined in the Capital Issues (Control) Act, !$/ or the Securities Contracts Regulation Act, !"# shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts02 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 $ Substituted for 1?inistries2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1and law2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act !3$ (% of !3$)2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 / Substituted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, clause (d) read as, 1(d) two other (e(bers20
% Substituted
#
(%) .he general superintendence, direction and (anage(ent of the affairs of the 8oard shall 'est in a 8oard of (e(bers, which (ay exercise all powers and do all acts and things which (ay be exercised or done by the 8oard0 (3) Sa'e as otherwise deter(ined by regulations, the Chair(an shall also ha'e powers of general superintendence and direction of the affairs of the 8oard and (ay also exercise all powers and do all acts and things which (ay be exercised or done by that 8oard0 ($) .he Chair(an and (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be appointed by the Central &o'ern(ent and the (e(bers referred to in clauses ( b) and (c) of that sub+section shall be no(inated by the Central &o'ern(ent and the 4Reser'e 8an): respecti'ely0 (") .he Chair(an and the other (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be persons of ability, integrity and standing who ha'e shown capacity in dealing with proble(s relating to securities (ar)et or ha'e special )nowledge or experience of law, finance, econo(ics, accountancy, ad(inistration or in any other discipline which, in the opinion of the Central &o'ern(ent, shall be useful to the 8oard0 Ter. of offi'e % - 'o -itio ! of !er+i'e of Ch%ir.% % - .e.,er! of the ;o%r-. 5. ( ) .he ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers referred to in clause (d) of sub+section ( ) of section $ shall be such as (ay be prescribed0 (%) Eotwithstanding anything contained in sub+section ( ), the Central &o'ern(ent shall ha'e the right to ter(inate the ser'ices of the Chair(an or a (e(ber appointed under clause ( d) of
sub+section ( ) of section $, at any ti(e before the expiry of the period prescribed under subsection ( ), by gi'ing hi( notice of not less than three (onths in writing or three (onthsJ salary and allowances in lieu thereof, and the Chair(an or a (e(ber, as the case (ay be, shall also ha'e the right to relin*uish his office, at any ti(e before the expiry of the period prescribed under sub+section ( ), by gi'ing to the Central &o'ern(ent notice of not less than three (onths in writing0 Re.o+%l of .e.,er fro. offi'e. 8. %4G G G: .he Central &o'ern(ent shall re(o'e a (e(ber fro( office if he(a) is, or at any ti(e has been, adDudicated as insol'ent3 (b) is of unsound (ind and stands so declared by a co(petent court3 (c) has been con'icted of an offence which, in the opinion of the Central &o'ern(ent, in'ol'es a (oral turpitude3 (d) 34G G G: (e) has, in the opinion of the Central &o'ern(ent, so abused his position as to render his continuation in office detri(ental to the public interest , 4ro+i-e- that no (e(ber shall be re(o'ed under this clause unless he has been gi'en a reasonable opportunity of being heard in the (atter0
Substituted for 1Reser'e 8an) of India2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 )2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 C(itted, by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to o(ission clause (d) read read as, 1(d) is appointed as a director of a co(pany20
% 1(
/
@eeti (!. 7. ( ) .he 8oard shall (eet at such ti(es and places, and shall obser'e such rules of procedure in regard to the transaction of business at its (eetings (including *uoru( at such (eetings) as (ay be pro'ided by regulations0 (%) .he Chair(an or, if for any reason, he is unable to attend a (eeting of the 8oard, any other (e(ber chosen by the (e(bers present fro( a(ongst the(sel'es at the (eeting shall preside at the (eeting0 (3) All *uestions which co(e up before any (eeting of the 8oard shall be decided by a (aDority 'otes of the (e(bers present and 'oting, and, in the e'ent of an e*uality of 'otes, the Chair(an, or in his absence, the person presiding, shall ha'e a second or casting 'ote0 4@e.,er ot to $%rti'i$%te i .eeti (! i 'ert%i '%!e!. 7A. Any (e(ber, who is a director of a co(pany and who as such director has any direct or indirect pecuniary interest in any (atter co(ing up for consideration at a (eeting of the 8oard, shall, as soon as possible after rele'ant circu(stances ha'e co(e to his )nowledge, disclose the nature of his interest at such (eeting and such disclosure shall be recorded in the proceedings of the 8oard, and the (e(ber shall not ta)e any part in any deliberation or decision of the 8oard with respect to that (atter0: I%'% 'ie!, et'., ot to i +%li-%te $ro'ee-i (! of ;o%r-. :. Eo act or proceeding of the 8oard shall be in'alid (erely by reason of(a) any 'acancy in, or any defect in the constitution of, the 8oard3 or (b) any defect in the appoint(ent of a person acting as a (e(ber of the 8oard3 or (c) any irregularity in the procedure of the 8oard not affecting the (erits of the case0 Offi'er! % - e.$lo>ee! of the ;o%r-. 9. ( ) .he 8oard (ay appoint such other officers and e(ployees as it considers necessary for the efficient discharge of its functions under this Act0 (%) .he ter( and other conditions of ser'ice of officers and e(ployees of the 8oard appointed under sub+section ( ) shall be such as (ay be deter(ined by regulations0 CDA4TER III
TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD Tr% !fer of %!!et!, li%,ilitie!, et'., of e#i!ti ( Se'*ritie! % - E#'h% (e ;o%r- to the ;o%r-. 1=. ( ) Cn and fro( the date of establish(ent of the 8oard,(a) any reference to the existing Securities and 7xchange 8oard in any law other than this Act or in any contract or other instru(ent shall be dee(ed as a reference to the 8oard3 (b) all properties and assets, (o'able and i((o'able, of, or belonging to, the existing Securities and 7xchange 8oard, shall 'est in the 8oard3
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
>
(c) all rights and liabilities of the existing Securities and 7xchange 8oard shall be transferred to, and be the rights and liabilities of, the 8oard3 (d) without preDudice to the pro'isions of clause (c), all debts, obligations and liabilities incurred, all contracts entered into and all (atters and things engaged to be done by, with or for the existing Securities and 7xchange 8oard i((ediately before that date, for or in connection with the purpose of the said existing 8oard shall be dee(ed to ha'e been incurred, entered into, or engaged to be done by, with or for, the 8oard3 (e) all su(s of (oney due to the existing Securities and 7xchange 8oard i((ediately before that date shall be dee(ed to be due to the 8oard3 (f) all suits and other legal proceedings instituted or which could ha'e been instituted by or against the existing Securities and 7xchange 8oard i((ediately before that date (ay be continued or (ay be instituted by or against the 8oard3 and (g) e'ery e(ployee holding any office under the existing Securities and 7xchange 8oard i((ediately before that date shall hold his office in the 8oard by the sa(e tenure and upon the sa(e ter(s and conditions of ser'ice as respects re(uneration, lea'e, pro'ident fund, retire(ent and other ter(inal benefits as he would ha'e held such office if the 8oard had not been established and shall continue to do so as an e(ployee of the 8oard or until the expiry of the period of six (onths fro( that date if such e(ployee opts not to be the e(ployee of the 8oard within such period0 (%) Eotwithstanding anything contained in the Industrial 9isputes Act, !$/ ( $ of !$/), or in any other law for the ti(e being in force, absorption of any e(ployee by the 8oard in its regular ser'ice under this section shall not entitle such e(ployee to any co(pensation under that Act or other law and no such clai( shall be entertained by any court, tribunal or other authority0 CDA4TER II 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 2* 'tio ! of ;o%r-. 11. ( ) SubDect to the pro'isions of this Act, it shall be the duty of the 8oard to protect the interests of in'estors in securities and to pro(ote the de'elop(ent of, and to regulate the securities (ar)et, by such (easures as it thin)s fit0 (%) Kithout preDudice to the generality of the foregoing pro'isions, the (easures referred to therein (ay pro'ide for(a) regulating the business in stoc) exchanges and any other securities (ar)ets3 (b) registering and regulating the wor)ing of stoc) bro)ers, sub+bro)ers, share transfer agents, ban)ers to an issue, trustees of trust deeds, registrars to an issue, (erchant ban)ers, underwriters, portfolio (anagers, in'est(ent ad'isers and such other inter(ediaries who (ay be associated with securities (ar)ets in any (anner3 4(ba) registering and regulating the wor)ing of the depositories, %4participants:, custodians of securities, foreign institutional in'estors, credit rating agencies and such other inter(ediaries as the 8oard (ay, by notification, specify in this behalf3: (c) registering and regulating the wor)ing of 4'enture capital funds and collecti'e
in'est(ent sche(es:, including (utual funds3
% Inserted
Inserted by Securities =aws (A(end(ent) Act !!", w0r0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+!+ !!"0
!
(d) pro(oting and regulating self+regulatory organisations3 (e) prohibiting fraudulent and unfair trade practices relating to securities (ar)ets3 (f) pro(oting in'estorsJ education and training of inter(ediaries of securities (ar)ets3 (g) prohibiting insider trading in securities3 (h) regulating substantial ac*uisition of shares and ta)e o'er of co(panies3 (i) calling for infor(ation fro(, underta)ing inspection, conducting in*uiries and audits of the %4stoc) exchanges, (utual funds, other persons associated with the securities (ar)et:, inter(ediaries and self+regulatory organisations in the securities (ar)et3 34(ia) '%lli ( for i for.%tio % - re'or-! fro. % > $er!o i 'l*-i ( % > ,% 6 or % > other %*thorit> or ,o%r- or 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l or St%te A't /hi'h, i the o$i io of the ;o%r-, !h%ll ,e rele+% t to % > i +e!ti(%tio or i 7*ir> ,> the ;o%r- i re!$e't of % > tr% !%'tio i !e'*ritie! 3: $5(i,) '%lli ( for i for.%tio fro., or f*r i!hi ( i for.%tio to, other %*thoritie!, /hether i I -i% or o*t!i-e I -i%, h%+i ( f* 'tio ! !i.il%r to tho!e of the ;o%r-, i the .%tter! rel%ti ( to the $re+e tio or -ete'tio of +iol%tio ! i re!$e't of !e'*ritie! l%/!, !*,Ge't to the $ro+i!io ! of other l%/! for the ti.e ,ei ( i for'e i thi! re(%r-& 4ro+i-e- th%t the ;o%r-, for the $*r$o!e of f*r i!hi ( % > i for.%tio to % > %*thorit> o*t!i-e I -i%, .%> e ter i to % %rr% (e.e t or %(ree.e t or * -er!t% -i ( /ith !*'h %*thorit> /ith the $rior %$$ro+%l of the Ce tr%l Go+er .e tH< (j) perfor(ing such functions and exercising such powers under the pro'isions of "4G G G: the Securities Contracts (Regulation) Act, !"# ($% of !"#), as (ay be delegated to it by the Central &o'ern(ent3 (k) le'ying fees or other charges for carrying out the purposes of this section3 (l) conducting research for the abo'e purposes3 #4(la) calling fro( or furnishing to any such agencies, as (ay be specified by the 8oard, such infor(ation as (ay be considered necessary by it for the efficient discharge of its functions3: (") perfor(ing such other functions as (ay be prescribed0 /4(%A) Kithout preDudice to the pro'isions contained in sub+section (%), the 8oard (ay ta)e (easures to underta)e inspection of any boo), or register, or other docu(ent or record of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard
Substituted for 1collecti'e in'est(ent sche(es2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % Substituted for 1stoc) exchanges and2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 S*,!tit*te- for J'%lli ( for i for.%tio % - re'or- fro. % > ,% 6 or % > other %*thorit> or ,o%ror 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l, St%te or 4ro+i 'i%l A't i re!$e't of % > tr% !%'tio i !e'*ritie! /hi'h i! * -er i +e!ti(%tio or i 7*ir> ,> the ;o%r-K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). E%rlier Se'tio 11(")(i%) /%! i !erte- ,> the SE;I (A.e -.e t) A't, "==" /.e.f. "901=0"=="0 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. =80=)0 199:) " .he words 1the Capital Issues (Control) Act, !$/ (%! of !$/) and2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
0
has reasonable grounds to belie'e that such co(pany has been indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et0: 4(3) Eotwithstanding anything contained in any other law for the ti(e being in force while exercising the powers under %4clause (i) or clause (ia) of sub+section (%) or sub+ section (2A):, the 8oard shall ha'e the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(i) the disco'ery and production of boo)s of account and other docu(ents, at such place and such ti(e as (ay be specified by the 8oard3 (ii) su((oning and enforcing the attendance of persons and exa(ining the( on oath3 (iii) inspection of any boo)s, registers and other docu(ents of any person referred to in section %, at any place3: 34(iv) inspection of any boo), or register, or other docu(ent or record of the co(pany referred to in sub+section (%A)3 (v) issuing co((issions for the exa(ination of witnesses or docu(ents0: $4($) Kithout preDudice to the pro'isions contained in sub+sections ( ), (%), (%A) and (3) and section 8, the 8oard (ay, by an order, for reasons to be recorded in writing, in the interests of in'estors or securities (ar)et, ta)e any of the following (easures, either pending in'estigation or in*uiry or on co(pletion of such in'estigation or in*uiry, na(ely,(a) suspend the trading of any security in a recognised stoc) exchange3 (b) restrain persons fro( accessing the securities (ar)et and prohibit any person associated with securities (ar)et to buy, sell or deal in securities3 (c) suspend any office+bearer of any stoc) exchange or self+regulatory organisation fro( holding such position3 (d) i(pound and retain the proceeds or securities in respect of any transaction which is under in'estigation3 (e) attach, after passing of an order on an application (ade for appro'al by the Mudicial ?agistrate of the first class ha'ing Durisdiction, for a period not exceeding one (onth, one or (ore ban) account or accounts of any inter(ediary or any person associated with the securities (ar)et in any (anner in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder , 4ro+i-e- that only the ban) account or accounts or any transaction entered therein, so far as it relates to the proceeds actually in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder shall be allowed to be attached3 (f) direct any inter(ediary or any person associated with the securities (ar)et in any (anner not to dispose of or alienate an asset for(ing part of any transaction which is under in'estigation , 4ro+i-e- that the 8oard (ay, without preDudice to the pro'isions contained in sub+section (%) or sub+section (%A), ta)e any of the (easures specified in clause ( d) or clause (e) or clause (f), in respect of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard has reasonable grounds to belie'e that such co(pany has been
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1clause (i) of sub+section (%)2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 3 Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 $ Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
% Substituted
indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et , 4ro+i-e- f*rther that the 8oard shall, either before or after passing such orders, gi'e an
opportunity of hearing to such inter(ediaries or persons concerned0: 15(5) The %.o* t -i!(or(e-, $*r!*% t to % -ire'tio i!!*e- * -er !e'tio 11; or !e'tio 1"A of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 or !e'tio 19 of the De$o!itorie! A't, 1998, %! the '%!e .%> ,e, !h%ll ,e 're-ite- to the I +e!tor 4rote'tio % - E-*'%tio 2* e!t%,li!he- ,> the ;o%r- % - !*'h %.o* t !h%ll ,e *tiliLe- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< %4;o%r- to re(*l%te or $rohi,it i!!*e of $ro!$e't*!, offer -o'*.e t or %-+erti!e.e t !oli'iti ( .o e> for i!!*e of !e'*ritie!. 11A. ( ) Kithout preDudice to the pro'isions of the Co(panies Act, !"# ( of !"#), the 8oard (ay, for the protection of in'estors,(a) specify, by regulations(i) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (ii) the (anner in which such (atters shall be disclosed by the co(panies3 (b) by general or special orders(i) prohibit any co(pany fro( issuing prospectus, any offer docu(ent, or ad'ertise(ent soliciting (oney fro( the public for the issue of securities3 (ii) specify the conditions subDect to which the prospectus, such offer docu(ent or ad'ertise(ent, if not prohibited, (ay be issued0 (%) Kithout preDudice to the pro'isions of section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the 8oard (ay specify the re*uire(ents for listing and transfer of securities and other (atters incidental thereto0: 34Colle'ti+e i +e!t.e t !'he.e. 11AA. ( ) Any sche(e or arrange(ent which satisfies the conditions referred to in subsection (%) $5or !*,0!e'tio ("A)< shall be a collecti'e in'est(ent sche(e0 "44ro+i-e- th%t % > $ooli ( of f* -! * -er % > !'he.e or %rr% (e.e t, /hi'h i! ot re(i!tere- /ith the ;o%r- or i! ot 'o+ere- * -er !*,0!e'tio ()), i +ol+i ( %
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 7arlier S0 A was inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" for S0 A0 <rior to its substitution, S0 A read as under,+ 1 A0 ?atters to be disclosed by the co(panies0+ Kithout <reDudice to the <ro'isions of the Co(panies Act , !"# ( of !"#), the board (ay , for the protection of in'estors, specify, by regulations,+ (a) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (b) the (anner in which such (atters, shall be disclosed by the co(panies02 3 Inserted by S78I (A(end(ent) Act !!!, w0e0f0 %%+%+%0000 $I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% Substituted
%
'or$*! %.o* t of o e h* -re- 'rore r*$ee! or .ore !h%ll ,e -ee.e- to ,e % 'olle'ti+e i +e!t.e t !'he.e.< (%) Any sche(e or arrange(ent (ade or offered by any 5$er!o < under which,(i) the contributions, or pay(ents (ade by the in'estors, by whate'er na(e called, are pooled and utiliFed for the purposes of the sche(e or arrange(ent3 (ii) the contributions or pay(ents are (ade to such sche(e or arrange(ent by the in'estors with a 'iew to recei'e profits, inco(e, produce or property, whether (o'able or i((o'able, fro( such sche(e or arrange(ent3 (iii) the property, contribution or in'est(ent for(ing part of sche(e or arrange(ent, whether identifiable or not, is (anaged on behalf of the in'estors3
(iv) the in'estors do not ha'e day+to+day control o'er the (anage(ent and operation of the sche(e or arrange(ent0 "5("A)< A > !'he.e or %rr% (e.e t .%-e or offere- ,> % > $er!o !%ti!f>i ( the 'o -itio ! %! .%> ,e !$e'ifie- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< (3) Eotwithstanding anything contained in sub+section (%) 35or !*,0!e'tio ("A)<, any sche(e or arrange(ent(i) (ade or offered by a co+operati'e society registered under the Co+operati'e Societies Act, ! % (% of ! %) or a society being a society registered or dee(ed to be registered under any law relating to co+operati'e societies for the ti(e being in force in any State3 (ii) under which deposits are accepted by non+ban)ing financial co(panies as defined in clause (f) of section $"+I of the Reser'e 8an) of India Act, !3$ (% of !3$)3 (iii) being a contract of insurance to which the Insurance Act, !3> ($ of !3>), applies3 (iv) pro'iding for any Sche(e, <ension Sche(e or the Insurance Sche(e fra(ed under the 7(ployees <ro'ident 6und and ?iscellaneous <ro'isions Act, !"% ( ! of !"%)3 (v) under which deposits are accepted under section ">A of the Co(panies Act, !"# ( of !"#)3 (vi) under which deposits are accepted by a co(pany declared as a Eidhi or a (utual benefit society under section #%0A of the Co(panies Act, !"# ( of !"#)3 (vii) falling within the (eaning of Chit business as defined in clause ( d) of section % of the Chit 6und Act, !>% ($0 of !>%)3 (viii) under which contributions (ade are in the nature of subscription to a (utual fund3 35(i#) !*'h other !'he.e or %rr% (e.e t /hi'h the Ce tr%l Go+er .e t .%>, i 'o !*lt%tio /ith the ;o%r-, otif>H< shall not be a collecti'e in'est(ent sche(e0: "54o/er to i!!*e -ire'tio !. 11;. Sa'e as otherwise pro'ided in section , if after (a)ing or causing to be (ade an en*uiry, the 8oard is satisfied that it is necessary,S*,!tit*te- for J'o.$% >K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) 3I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
%I
3
(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any inter(ediary or other persons referred to in section % being conducted in a (anner detri(ental to the interest of in'estors or securities (ar)et3 or (iii) to secure the proper (anage(ent of any such inter(ediary or person, it (ay issue such directions,(a) to any person or class of persons referred to in section %, or associated with the securities (ar)et3 or (b) to any co(pany in respect of (atters specified in section A, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 15E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< %4I +e!ti(%tio . 11C. ( ) Khere the 8oard has reasonable ground to belie'e that-
(a) the transactions in securities are being dealt with in a (anner detri(ental to the in'estors or the securities (ar)et3 or (b) any inter(ediary or any person associated with the securities (ar)et has 'iolated any of the pro'isions of this Act or the rules or the regulations (ade or directions issued by the 8oard thereunder, it (ay, at any ti(e by order in writing, direct any person (hereafter in this section referred to as the In'estigating Authority) specified in the order to in'estigate the affairs of such inter(ediary or persons associated with the securities (ar)et and to report thereon to the 8oard0 (%) Kithout preDudice to the pro'isions of sections %3" to %$ of the Co(panies Act, !"# ( of !"#), it shall be the duty of e'ery (anager, (anaging director, officer and other e(ployee of the co(pany and e'ery inter(ediary referred to in section % or e'ery person associated with the securities (ar)et to preser'e and to produce to the In'estigating Authority or any person authorised by it in this behalf, all the boo)s, registers, other docu(ents and record of, or relating to, the co(pany or, as the case (ay be, of or relating to, the inter(ediary or such person, which are in their custody or power0 (3) .he In'estigating Authority (ay re*uire any inter(ediary or any person associated with securities (ar)et in any (anner to furnish such infor(ation to, or produce such boo)s, or registers, or other docu(ents, or record before hi( or any person authorised by it in this behalf as it (ay consider necessary if the furnishing of such infor(ation or the production of such boo)s, or registers, or other docu(ents, or record is rele'ant or necessary for the purposes of its in'estigation0 ($) .he In'estigating Authority (ay )eep in its custody any boo)s, registers, other docu(ents and record produced under sub+section (%) or sub+section (3) for six (onths and thereafter
% Inserted
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
$
shall return the sa(e to any inter(ediary or any person associated with securities (ar)et by who( or on whose behalf the boo)s, registers, other docu(ents and record are produced , 4ro+i-e- that the In'estigating Authority (ay call for any boo), register, other docu(ent and record if they are needed again , 4ro+i-e- f*rther that if the person on whose behalf the boo)s, registers, other docu(ents and record are produced re*uires certified copies of the boo)s, registers, other docu(ents and record produced before the In'estigating Authority, it shall gi'e certified copies of such boo)s, registers, other docu(ents and record to such person or on whose behalf the boo)s, registers, other docu(ents and record were produced0 (") Any person, directed to (a)e an in'estigation under sub+section ( ), (ay exa(ine on oath, any (anager, (anaging director, officer and other e(ployee of any inter(ediary or any person associated with securities (ar)et in any (anner, in relation to the affairs of his business and (ay ad(inister an oath accordingly and for that purpose (ay re*uire any of those persons to appear before it personally0 (#) If any person fails without reasonable cause or refuses(a) to produce to the In'estigating Authority or any person authorised by it in this behalf any boo), register, other docu(ent and record which is his duty under sub+section (%) or sub+section (3) to produce3 or (b) to furnish any infor(ation which is his duty under sub+section (3) to furnish3 or (c) to appear before the In'estigating Authority personally when re*uired to do so under sub+section (") or to answer any *uestion which is put to hi( by the In'estigating Authority in pursuance of that sub+section3 or (d) to sign the notes of any exa(ination referred to in sub+section (/), he shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with
fine, which (ay extend to one crore rupees, or with both, and also with a further fine which (ay extend to fi'e la)h rupees for e'ery day after the first during which the failure or refusal continues0 (/) Eotes of any exa(ination under sub+section (") shall be ta)en down in writing and shall be read o'er to, or by, and signed by, the person exa(ined, and (ay thereafter be used in e'idence against hi(0 4(:) ?here i the 'o*r!e of % i +e!ti(%tio , the I +e!ti(%ti ( A*thorit> h%! re%!o to ,elie+e th%t % > $er!o or e ter$ri!e, %! the '%!e .%> ,e, to /ho. % oti'e * -er !*,!e'tio ()) h%! ,ee i!!*e- or .i(ht ,e i!!*e-, 0 (%) h%! o.itte- or f%ile- to $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! %! re7*irei the oti'eH or (,) /o*l- ot $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! /hi'h !h%ll ,e *!ef*l for, or rele+% t to, the i +e!ti(%tio H or (') /o*l- -e!tro>, .*til%te, %lter, f%l!if> or !e'rete the i for.%tio or -o'*.e t! *!ef*l for, or rele+% t to, the i +e!ti(%tio ,
S*,!tit*te- for JKhere in the course of in'estigation, the In'estigating Authority has reasonable ground to belie'e that the boo)s, registers, other docu(ents and record of, or relating to, any inter(ediary or any person associated with securities (ar)et in any (anner, (ay be destroyed, (utilated, altered, falsified or secreted, the In'estigating Authority (ay (a)e an application to the Mudicial ?agistrate of the first class ha'ing Durisdiction for an order for the seiFure of such boo)s, registers, other docu(ents and record K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
"
the , the Ch%ir.% .%>, %fter ,ei ( !%ti!fie- th%t it i! e'e!!%r> to -o !o, %*thoriLe the I +e!ti(%ti ( A*thorit> or % > other offi'er of the ;o%r- (the offi'er !o %*thoriLe- i %ll '%!e! ,ei ( herei %fter referre- to %! the %*thori!e- offi'er), to0 (i) e ter % - !e%r'h, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft /here !*'h i for.%tio or -o'*.e t! %re e#$e'te- or ,elie+e- to ,e 6e$tH (ii) ,re%6 o$e the lo'6 of % > -oor, ,o#, lo'6er, !%fe, %l.ir%h or other re'e$t%'le for e#er'i!i ( the $o/er! 'o ferre- ,> !*,0'l%*!e (i), /here the 6e>! thereof %re ot %+%il%,leH (iii) !e%r'h % > $er!o /ho h%! (ot o*t of, or i! %,o*t to (et i to, or i! i , the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft, if the %*thoriLe- offi'er h%! re%!o to !*!$e't th%t !*'h $er!o h%! !e'rete- %,o*t hi! $er!o % > !*'h ,oo6! of %''o* t or other -o'*.e t!H (i+) re7*ire % > $er!o /ho i! fo* - to ,e i $o!!e!!io or 'o trol of % > ,oo6! of %''o* t or other -o'*.e t!, .%i t%i e- i the for. of ele'tro i' re'or-, to $ro+i-e the %*thori!e- offi'er the e'e!!%r> f%'ilit> to i !$e't !*'h ,oo6! of %''o* t or other -o'*.e t!. "#planation0 2or the $*r$o!e of thi! !*,0'l%*!e, the e#$re!!io Jele'tro i' re'or-K !h%ll h%+e the .e% i ( %!!i( e- to it i 'l%*!e (t) of !*,0!e'tio (1) of !e'tio " of the I for.%tio Te'h olo(> A't, "===. (+) !eiLe % > !*'h ,oo6! of %''o* t or other -o'*.e t! fo* - %! % re!*lt of !*'h !e%r'hH (+i) $l%'e .%r6! of i-e tifi'%tio o % > ,oo6! of %''o* t or other -o'*.e t! or .%6e or '%*!e to ,e .%-e e#tr%'t! or 'o$ie! therefro.H (+ii) re'or- o o%th the !t%te.e t of % > $er!o /ho i! fo* - to ,e i $o!!e!!io or i 'o trol of the i for.%tio or -o'*.e t! referre- to i !*,0'l%*!e! (i), (iii) % - (i+).< 4(9) The ;o%r- .%> .%6e re(*l%tio ! i rel%tio to % > !e%r'h or !eiL*re * -er thi! !e'tio H % - i $%rti'*l%r, /itho*t $reG*-i'e to the (e er%lit> of the fore(oi ( $o/er, !*'h re(*l%tio ! .%> $ro+i-e for the $ro'e-*re to ,e follo/e- ,> the %*thori!e- offi'er0
(%) for o,t%i i ( i (re!! i to % > ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft to ,e !e%r'he- /here free i (re!! thereto i! ot %+%il%,leH
1 S*,!tit*te-
,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) for the follo/i (& JAfter 'o !i-eri ( the %$$li'%tio % - he%ri ( the I +e!ti(%ti ( A*thorit>, if e'e!!%r>, the @%(i!tr%te .%>, ,> or-er, %*thori!e the I +e!ti(%ti ( A*thorit>O (a) to e ter, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the $l%'e or $l%'e! /here !*'h ,oo6!, re(i!ter!, other -o'*.e t! % - re'or- %re 6e$tH (b) to !e%r'h th%t $l%'e or tho!e $l%'e! i the .% er !$e'ifie- i the or-erH % (c) to !eiLe ,oo6!, re(i!ter!, other -o'*.e t! % - re'or-, it 'o !i-er! e'e!!%r> for the $*r$o!e! of the i +e!ti(%tio & 4ro+i-e- th%t the @%(i!tr%te !h%ll ot %*thori!e !eiL*re of ,oo6!, re(i!ter!, other -o'*.e t! % re'or-, of % > li!te- $*,li' 'o.$% > or % $*,li' 'o.$% > ( ot ,ei ( the i ter.e-i%rie! !$e'ifie* -er !e'tio 1") /hi'h i te -! to (et it! !e'*ritie! li!te- o % > re'o( i!e- !to'6 e#'h% (e * le!! !*'h 'o.$% > i -*l(e! i i !i-er tr%-i ( or .%r6et .% i$*l%tio .K
#
(,) for e !*ri ( !%fe '*!to-> of % > ,oo6! of %''o* t or other -o'*.e t! or %!!et! !eiLe-.< ( 0) .he In'estigating Authority shall )eep in its custody the boo)s, registers, other docu(ents and record seiFed under this section for such period not later than the conclusion of the in'estigation as it considers necessary and thereafter shall return the sa(e to the co(pany or the other body corporate, or, as the case (ay be, to the (anaging director or the (anager or any other person, fro( whose custody or power they were seiFed 5***<, 4ro+i-e- that the In'estigating Authority (ay, before returning such boo)s, registers, other docu(ents and record as aforesaid, place identification (ar)s on the( or any part thereof0 ( ) Sa'e as otherwise pro'ided in this section, e'ery search or seiFure (ade under this section shall be carried out in accordance with the pro'isions of the Code of Cri(inal <rocedure, !/3 (% of !/$) relating to searches or seiFures (ade under that Code0 Ce%!e % - -e!i!t $ro'ee-i (!. 11D. If the 8oard finds, after causing an in*uiry to be (ade, that any person has 'iolated, or is li)ely to 'iolate, any pro'isions of this Act, or any rules or regulations (ade thereunder, it (ay pass an order re*uiring such person to cease and desist fro( co((itting or causing such 'iolation, 4ro+i-e- that the 8oard shall not pass such order in respect of any listed public co(pany or a public co(pany (other than the inter(ediaries specified under section %) which intends to get its securities listed on any recognised stoc) exchange unless the 8oard has reasonable grounds to belie'e that such co(pany has indulged in insider trading or (ar)et (anipulation0: CDA4TER I REGISTRATION CERTI2ICATE Re(i!tr%tio of !to'6 ,ro6er!, !*,0,ro6er!, !h%re tr% !fer %(e t!, et'. 1". ( ) Eo stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et shall buy, sell or deal in securities except under, and in accordance with, the conditions of a certificate of registration obtained fro( the 8oard in accordance with the %4regulations: (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et i((ediately before the establish(ent of the 8oard for which no registration certificate was
necessary prior to such establish(ent, (ay continue to do so for a period of three (onths fro( such establish(ent or, if he has (ade an application for such registration within the said period of three (onths, till the disposal of such application,
The /or-! P% - i for. the @%(i!tr%te of !*'h ret*r P, o.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) % Substituted for 1rules2 by Securities =aw (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0
/
44ro+i-e- f*rther that any certificate of registration, obtained i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", shall be dee(ed to ha'e been obtained fro( the 8oard in accordance with the regulations pro'iding for such registration0 ( A) Eo depository, %4participant,: custodian of securities, foreign institutional in'estor, credit rating agency, or any other inter(ediary associated with the securities (ar)et as the 8oard (ay by notification in this behalf specify, shall buy or sell or deal in securities except under and in accordance with the conditions of a certificate of registration obtained fro( the 8oard in accordance with the regulations (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a depository, 34participant,: custodian of securities, foreign institutional in'estor or credit rating agency i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to buy or sell securities or otherwise deal with the securities (ar)et until such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300 ( 8) Eo person shall sponsor or cause to be sponsored or carry on or caused to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es including (utual funds, unless he obtains a certificate of registration fro( the 8oard in accordance with the regulations, 4ro+i-e- that any person sponsoring or causing to be sponsored, carrying or causing to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es operating in the securities (ar)et i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to operate till such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300:
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0
% Inserted
>
4()%lanati$n7 6or the re(o'al of doubts, it is hereby declared that, for purposes of this section, a collecti'e in'est(ent sche(e or (utual fund shall not be include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(ponent of in'est(ent besides the co(ponent of insurance issued by the insurer0: (%) 7'ery application for registration shall be in such (anner and on pay(ent of such fees as (ay be deter(ined by regulations0 (3) .he 8oard (ay, by order, suspend or cancel a certificate of registration in such (anner as (ay be deter(ined by regulations, 4ro+i-e- that no order under this sub+section shall be (ade unless the person concerned has been gi'en a reasonable opportunity of being heard0 %4CIA<.7R BA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 4rohi,itio of .% i$*l%ti+e % - -e'e$ti+e -e+i'e!, i !i-er tr%-i ( % - !*,!t% ti%l %'7*i!itio of !e'*ritie! or 'o trol.
1"A. Eo person shall directly or indirectly(a) use or e(ploy, in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recogniFed stoc) exchange, any (anipulati'e or decepti'e de'ice or contri'ance in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3
Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, w0r0e0f !+$+ %0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, reads as under, /@A81(0 D: ?ISC7==AE7CHS #0 Balidation+ Eotwithstanding anything contained in any Dudg(ent, decree or order of any court, tribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 Repeal and sa'ings + (1) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (2) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0 % Chapter BA inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
!
(b) e(ploy any de'ice, sche(e or artifice to defraud in connection with issue or dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange3 (c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange, in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (d) engage in insider trading3 (e) deal in securities while in possession of (aterial or non+public infor(ation or co((unicate such (aterial or non+public infor(ation to any other person, in a (anner which is in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (f) ac*uire control of any co(pany or securities (ore than the percentage of e*uity share capital of a co(pany whose securities are listed or proposed to be listed on a recognised stoc) exchange in contra'ention of the regulations (ade under this Act0: CDA4TER II 2INANCE, ACCOUNTS AND AUDIT Gr% t! ,> the Ce tr%l Go+er .e t. 1). .he Central &o'ern(ent (ay, after due appropriation (ade by <arlia(ent by law in this behalf, (a)e to the 8oard grants of such su(s of (oney as that &o'ern(ent (ay thin) fit for being utiliFed for the purposes of this Act0 2* -. 13. ( ) .here shall be constituted a 6und to be called the Securities and 7xchange 8oard of
India &eneral 6und and there shall be credited thereto(a) all grants, fees and charges recei'ed by the 8oard under this Act3 4G G G: (aa) %4G G G: (b) all su(s recei'ed by the 8oard fro( such other sources as (ay be decided upon by the Central &o'ern(ent0 (%) .he 6und shall be applied for (eeting(a) the salaries, allowances and other re(uneration of the (e(bers, officers and other e(ployees of the 8oard3 (b) the expenses of the 8oard in the discharge of its functions under section 3 (c) the expenses on obDects and for purposes authorised by this Act0
.he word 1and2 o(itted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 (aa) o(itted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 It was inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Clause (aa) reads as under,+ 1(aa) all su(s realiFed by way of <enalties under this Act3 and20
% Clause
%0
A''o* t! % - %*-it. 15. ( ) .he 8oard shall (aintain proper accounts and other rele'ant records and prepare an annual state(ent of accounts in such for( as (ay be prescribed by the Central &o'ern(ent in consultation with the Co(ptroller and Auditor+&eneral of India0 (%) .he accounts of the 8oard shall be audited by the Co(ptroller and Auditor+&eneral of India at such inter'als as (ay be specified by hi( and any expenditure incurred in connection with such audit shall be payable by the 8oard to the Co(ptroller and Auditor+&eneral of India0 (3) .he Co(ptroller and Auditor+&eneral of India and any other person appointed by hi( in connection with the audit of the accounts of the 8oard shall ha'e the sa(e rights and pri'ileges and authority in connection with such audit as the Co(ptroller and Auditor+ &eneral generally has in connection with the audit of the &o'ern(ent accounts and, in particular, shall ha'e the right to de(and the production of boo)s, accounts, connected 'ouchers and other docu(ents and papers and to inspect any of the offices of the 8oard0 ($) .he accounts of the 8oard as certified by the Co(ptroller and Auditor+&eneral of India or any other person appointed by hi( in this behalf together with the audit report thereon shall be forwarded annually to the Central &o'ern(ent and that &o'ern(ent shall cause the sa(e to be laid before each Iouse of <arlia(ent0 5CDA4TER IIA 4ENALTIES AND ADEUDICATION 4e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 15A. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder,(a) to furnish any docu(ent, return or report to the 8oard, fails to furnish the sa(e, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations, fails to file return or furnish the sa(e within the ti(e specified therefor in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0
Chapters BI A and BI 8 containing Ss0 "A to "M and "@ to "S respecti'ely, inserted by Securities =aws (A(end(ent) Act, !!" w0e0f0 %"+ + !!"0 % Substituted for 1a penalty not exceeding one la)h and fifty thousand rupees for each such failure2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding fi'e thousand rupees for e'ery day during which such failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for e'ery day during which the failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%
4e %lt> for f%il*re ,> % > $er!o to e ter i to %(ree.e t /ith 'lie t!. 15;. If any person, who is registered as an inter(ediary and is re*uired under this Act or any rules or regulations (ade thereunder to enter into an agree(ent with his client, fails to enter into such agree(ent, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 %54e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 15C. If any listed co(pany or any person who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such co(pany or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 4e %lt> for 'ert%i -ef%*lt! i '%!e of .*t*%l f* -!. 15D. If any person, who is(a) re*uired under this Act or any rules or regulations (ade thereunder to obtain a certificate of registration fro( the 8oard for sponsoring or carrying on any collecti'e in'est(ent sche(e, including (utual funds, sponsors or carries on any collecti'e in'est(ent sche(e, including (utual funds, without obtaining such certificate of registration, he shall be liable to 34a penalty of one la)h rupees for each day during which he sponsors or carries on any such collecti'e in'est(ent sche(e including (utual funds, or one crore rupees, whiche'er is less:3 (b) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, for sponsoring or carrying on any in'est(ent sche(e, fails to co(ply with the ter(s and conditions of certificate of registration, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, fails to (a)e an application for listing of its sche(es as pro'ided for in the regulations
Substituted for 1a penalty not exceeding fi'e la)h rupees for e'ery such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1If any person, who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing to redress the grie'ances of in'estors, fails to redress such grie'ances, he shall be liable to a penalty not exceeding ten thousand rupees for each such failure2, by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding ten thousand rupees for each day during which he carries on any such collecti'e in'est(ent sche(e including (utual funds, or ten la)h rupees whiche'er is higher02 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for each day during which such failure continues or ten la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0
%%
go'erning such listing, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (d) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to despatch
unit certificates of any sche(e in the (anner pro'ided in the regulation go'erning such despatch, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (e) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to refund the application (onies paid by the in'estors within the period specified in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (f) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to in'est (oney collected by such collecti'e in'est(ent sche(es in the (anner or within the period specified in the regulations, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for f%il*re to o,!er+e r*le! % - re(*l%tio ! ,> % %!!et .% %(e.e t 'o.$% >. 15E. Khere any asset (anage(ent co(pany of a (utual fund registered under this Act, fails to co(ply with any of the regulations pro'iding for restrictions on the acti'ities of the asset (anage(ent co(panies, such asset (anage(ent co(pany shall be liable to "4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for -ef%*lt i '%!e of !to'6 ,ro6er!. 152. If any person, who is registered as a stoc) bro)er under this Act,(a) fails to issue contract notes in the for( and (anner specified by the stoc) exchange of which such bro)er is a (e(ber, he shall be liable to a penalty not exceeding fi'e ti(es the a(ount for which the contract note was re*uired to be issued by that bro)er3 (b) fails to deli'er any security or fails to (a)e pay(ent of the a(ount due to the in'estor in the (anner within the period specified in the regulations, he shall be liable to #4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3
Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues or fi'e la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding one thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%3
(c) charges an a(ount of bro)erage which is in excess of the bro)erage specified in the regulations, he shall be liable to 4a penalty of one la)h rupees: or fi'e ti(es the a(ount of bro)erage charged in excess of the specified bro)erage, whiche'er is higher0 4e %lt> for i !i-er tr%-i (. 15G. If any insider who,(i) either on his own behalf or on behalf of any other person, deals in securities of a body corporate listed on any stoc) exchange on the basis of any unpublished price+sensiti'e infor(ation3 or (ii) co((unicates any unpublished price+sensiti'e infor(ation to any person, with or without his re*uest for such infor(ation except as re*uired in the ordinary course of business or under any law3 or
(iii) counsels, or procures for any other person to deal in any securities of any body corporate on the basis of unpublished price+sensiti'e infor(ation, shall be liable to a penalty %4of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of insider trading, whiche'er is higher:0 4e %lt> for o 0-i!'lo!*re of %'7*i!itio of !h%re! % - t%6eo+er!. 15D. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder, fails to,(i) disclose the aggregate of his shareholding in the body corporate before he ac*uires any shares of that body corporate3 or (ii) (a)e a public announce(ent to ac*uire shares at a (ini(u( price3 or 34(iii) (a)e a public offer by sending letter of offer to the shareholders of the concerned co(pany3 or (iv) (a)e pay(ent of consideration to the shareholders who sold their shares pursuant to letter of offer,: he shall be liable to a penalty $4of twenty+fi'e crore rupees or three ti(es the a(ount of profits profits (ade out of such failure, whiche'er is higher:0 554e %lt> for fr%*-*le t % - * f%ir tr%-e $r%'ti'e!. 15DA. If any person indulges in fraudulent and unfair trade practices relating to securities, he shall be liable to a penalty of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of such practices, whiche'er is higher0
Substituted for 1a penalty not exceeding fi'e thousand rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00% 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00% %00% " Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00%0
%$
4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 15D;. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 4o/er to %-G*-i'%te. 150I. ( ) 6or the purpose of adDudging under sections "A, "8, "C, "9, "7, "6, "& 4, "I, "IA and "I8:, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in subsection ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> the %-G*-i'%ti ( offi'er. 15E. Khile adDudging *uantu( of penalty under section "+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade
as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 "5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 15EA. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: )5Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!. 15E;. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 11, !e'tio 11;, !e'tio 11D, !*,0!e'tio ()) of !e'tio 1" or !e'tio 150I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e- -ef%*lt!.
Substituted for 1and "I2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the S78I (A(end(ent) Act, %00%, S0 ! w0e0f0 %!+ 0+%00%0 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
% Inserted
%"
(") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't. ()) The !ettle.e t $ro'ee-i (! * -er thi! !e'tio !h%ll ,e 'o -*'te- i %''or-% 'e /ith the $ro'e-*re !$e'ifie- i the re(*l%tio ! .%-e * -er thi! A't. (3) No %$$e%l !h%ll lie * -er !e'tio 15T %(%i !t % > or-er $%!!e- ,> the ;o%r- or %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio . < CDA4TER II; ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL E!t%,li!h.e t of Se'*ritie! A$$ell%te Tri,* %l!. 15F. ( ) .he Central &o'ern(ent shall by notification, establish one or (ore Appellate .ribunals to be )nown as the Securities Appellate .ribunal to exercise the Durisdiction, powers and authority conferred on such .ribunal by or under this Act 4or any other law for the ti(e being in force:0 (%) .he Central &o'ern(ent shall also specify in the notification referred to in sub+section ( ) the (atters and places in relation to which the Securities Appellate .ribunal (ay exercise Durisdiction0 "5Co.$o!itio of Se'*ritie! A$$ell%te Tri,* %l. 15L. A Securities Appellate .ribunal shall consist of a <residing Cfficer and two other (e(bers, to be appointed, by notification, by the Central &o'ern(ent, 4ro+i-e- that the Securities Appellate .ribunal, consisting of one person only, established before the co((ence(ent of the Securities and 7xchange 8oard of India (A(end(ent) Act, %00%, shall continue to exercise the Durisdiction, powers and authority conferred on it by or under this Act or any other law for the ti(e being in force till two other ?e(bers are appointed under this section0 9*%lifi'%tio for %$$oi t.e t %! 4re!i-i ( Offi'er or @e.,er of Se'*ritie! A$$ell%te Tri,* %l.
Inserted by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for Sections "= and "? by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "= and "? read as under,+ 1 "+=0 Co(position of securities Appellate .ribunal0 5 A Securities Appellate .ribunal shall consist of
% Substituted
one person only (hereinafter referred to as the <residing Cfficer of the Securities Appellate .ribunal) to be appointed, by notification, by the central &o'ern(ent0 "?0 Qualifications for appoint(ent as <residing Cfficer of the Securities Appellate .ribunal0 5 A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he + (a) is, or has been, or is *ualified to be, a Mudge of a Iigh Court3 or (b) has been a (e(ber of the Indian =egal Ser'ice and has held a post in &rade I of that ser'ice for at least three years3 or (c) has held office as the <residing Cfficer of a tribunal for at least three years02
%#
15@. 15( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of the Securities Appellate .ribunal unless he + (a) is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court3 or (b) is a sitting or retired Mudge of a Iigh Court who has co(pleted not less than se'en years of ser'ice as a Mudge in a Iigh Court0 ( A) .he <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0: (%) A person shall not be *ualified for appoint(ent as (e(ber of a Securities Appellate .ribunal unless he is a person of ability, integrity and standing who has shown capacity in dealing with proble(s relating to securities (ar)et and has *ualification and experience of corporate law, securities laws, finance, econo(ics or accountancy, 4ro+i-e- that a (e(ber of the 8oard or any person holding a post at senior (anage(ent le'el e*ui'alent to 7xecuti'e 9irector in the 8oard shall not be appointed as <residing Cfficer or ?e(ber of a Securities Appellate .ribunal during his ser'ice or tenure as such with the 8oard or within two years fro( the date on which he ceases to hold office as such in the 8oard0: %4Te *re of offi'e of 4re!i-i ( Offi'er % - other @e.,er! of Se'*ritie! A$$ell%te Tri,* %l. 15N. .he <residing Cfficer and e'ery other ?e(ber of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office and shall be eligible for re+appoint(ent, 4ro+i-e- that no person shall hold office as the <residing Cfficer of the Securities Appellate .ribunal after he has attained the age of sixty+eight years, 4ro+i-e- f*rther that no person shall hold office as a ?e(ber of the Securities Appellate .ribunal after he has attained the age of sixty+two years0: S%l%r> % - %llo/% 'e! % - other ter.! % - 'o -itio ! of !er+i'e of 4re!i-i ( Offi'er!. 150O. .he salary and allowances payable to and the other ter(s and conditions of ser'ice including pension, gratuity and other retire(ent benefits of the 4<residing Cfficer and other ?e(bers: of a Securities Appellate .ribunal shall be such as (ay be prescribed,
Substituted for sub+section ( ) of Section "? by the S78I (A(end(ent) Crdinance, %0 3 w0e0f0 % 00 0%0 30 <rior to substitution, it read as under,+ ;( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court , 4ro+i-e- that the <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0; % Substituted for Section "E, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "E read as under,+ 1 "E0 .er( of office0+ .he <residing officer of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office or until he attains the age of sixtyfi'e years, whiche'er is earlier02
%/
4ro+i-e- that neither the salary and allowances nor the other ter(s and conditions of ser'ice of the %4<residing Cfficer and other ?e(bers of a Securities Appellate .ribunal: shall be 'aried to their disad'antage after appoint(ent0 2illi ( *$ of +%'% 'ie!. 154. If, for reason other than te(porary absence, any 'acancy occurs in the 34office of the <residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal, then the Central &o'ern(ent shall appoint another person in accordance with the pro'isions of this Act to fill the 'acancy and the proceedings (ay be continued before the Securities Appellate .ribunal fro( the stage at which the 'acancy is filled0 Re!i( %tio % - re.o+%l. 159. ( ) .he $4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal (ay, by notice in writing under his hand addressed to the Central &o'ern(ent, resign his office, 4ro+i-e- that "4the <residing Cfficer or any other ?e(ber: shall, unless he is per(itted by the Central &o'ern(ent to relin*uish his office sooner, continue to hold office, until the expiry of three (onths fro( the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his ter( of office, whiche'er is the earliest0 (%) .he #4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal shall not be re(o'ed fro( his office except by an order by the Central &o'ern(ent on the ground of pro'ed (isbeha'iour or incapacity after an in*uiry (ade by a Mudge of the Supre(e Court, in which the /4<residing Cfficer or any other ?e(ber: concerned has been infor(ed of the charges against hi( and gi'en a reasonable opportunity of being heard in respect of these charges0 (3) .he Central &o'ern(ent (ay, by rules, regulate the procedure for the in'estigation of (isbeha'iour or incapacity of the >4<residing Cfficer or any other ?e(ber:0 Or-er! 'o !tit*ti ( A$$ell%te Tri,* %l to ,e fi %l % - ot to i +%li-%te it! $ro'ee-i (!. 15R. Eo order of the Central &o'ern(ent appointing any person as the !4<residing Cfficer or a ?e(ber: of a Securities Appellate .ribunal shall be called in *uestion in any (anner, and no act or proceeding before a Securities Appellate .ribunal shall be called in *uestion in any (anner on the ground (erely of any defect in the constitution of a Securities Appellate .ribunal0
Substituted for 1<residing Cfficer of a Securities Appellate .ribunal2 by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 / Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 > Substituted for 1aforesaid <residing Cfficer2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 ! Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0
%>
St%ff of the Se'*ritie! A$$ell%te Tri,* %l. 15S. ( ) .he Central &o'ern(ent shall pro'ide the Securities Appellate .ribunal with such officers and e(ployees as that &o'ern(ent (ay thin) fit0 (%) .he officers and e(ployees of the Securities Appellate .ribunal shall discharge their functions under general superintendence of the <residing Cfficer0 (3) .he salaries and allowances and other conditions of ser'ice of the officers and e(ployees of the Securities Appellate .ribunal shall be such as (ay be prescribed0 A$$e%l to the Se'*ritie! A$$ell%te Tri,* %l. 15T. 4( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed,(a) by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws
(Second A(end(ent) Act, !!!, under this Act, or the rules or regulations (ade thereunder3 or (b) by an order (ade by an adDudicating officer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 "5(") ********< (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 348oard or the AdDudicating Cfficer, as the case case (ay be,: is recei'ed by hi( and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 ($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0
Substituted for Sub+sec ( ) R (%) by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, Sub+sections ( ) R (%) were read as under, 1( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by any order (ade by any AdDudicating Cfficer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 (%) Eo appeal shall lie to the Securities Appellate .ribunal fro( an order (ade by an AdDudicating Cfficer with the consent of the parties02 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , o.i!!io , S*,0!e'tio (") re%- %! * -er& J(") No %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-eO (a) ,> the ;o%r- o % - %fter the 'o..e 'e.e t of the Se'*ritie! L%/! (Se'o - A.e -.e t) A't, 1999H (b) ,> % %-G*-i'%ti ( offi'er, /ith the 'o !e t of the $%rtie!.2 3 Substituted for 1a copy of the order (ade by the adDudicating officer2 by S78I (A(end(ent) Act !!!, !!!, w0e0f0 #+ %+ !!!0
%!
(") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 48oard, the: parties to the appeal and to the concerned AdDudicating Cfficer0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of the Se'*ritie! A$$ell%te Tri,* %l. 15U. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act, and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purposes of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3
(e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte 3 (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0), and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 %4Ri(ht to le(%l re$re!e t%tio . 15I. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,Substituted for 1parties2, S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for S0 "B by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, S0 "B read as under,+ 1 "B0 .he appellant (ay either appear in person or authorise one or (ore legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal02
% Substituted
30
(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of subsection ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or any attorney of any Iigh Court, and includes a pleader in practice0: Li.it%tio . 15?. .he pro'isions of the =i(itation Act, !#3 (3# of !#3), shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 54re!i-i ( Offi'er, @e.,er! % - !t%ff of Se'*ritie! A$$ell%te Tri,* %l! to ,e $*,li' !er+% t!. 15A. .he <residing Cfficer, ?e(bers and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0: Ci+il Co*rt ot to h%+e G*ri!-i'tio . 15M. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which an adDudicating officer appointed under this Act or a Securities Appellate .ribunal constituted under this Act is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "5A$$e%l to S*$re.e Co*rt.
Substituted for S0 "A by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, it read as under, + 1 "A0 .he <residing Cfficer and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian penal Code( $" of >#0)20 % Substituted for S0 "S by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution , it
was read as under,+ 1 "S0 Appeal to Iigh Court0+ Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, <ro'ided that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
3
15N. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order , 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the applicant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: CDA4TER III @ISCELLANEOUS 4o/er of Ce tr%l Go+er .e t to i!!*e -ire'tio !. 18. ( ) Kithout preDudice to the foregoing pro'isions of this Act 4or the 9epositories Act, !!#:, the 8oard shall, in exercise of its powers or the perfor(ance of its functions under this Act, be bound by such directions on *uestions of policy as the Central &o'ern(ent (ay gi'e in writing to it fro( ti(e to ti(e , 4ro+i-e- that the 8oard shall, as far as practicable, be gi'en an opportunity to express its 'iews before any direction is gi'en under this sub+section0 (%) .he decision of the Central &o'ern(ent whether a *uestion is one of policy or not shall be final0 4o/er of Ce tr%l Go+er .e t to !*$er!e-e the ;o%r-. 17. ( ) If at any ti(e the Central &o'ern(ent is of opinion(a) that on account of gra'e e(ergency, the 8oard is unable to discharge the functions and duties i(posed on it by or under the pro'isions of this Act3 or (b) that the 8oard has persistently (ade default in co(plying with any direction issued by the Central &o'ern(ent under this Act or in the discharge of the functions and duties i(posed on it by or under the pro'isions of this Act and as a result of such default the financial position of the 8oard or the ad(inistration of the 8oard has deteriorated3 or (c) that circu(stances exist which render it necessary in the public interest so to do, the Central &o'ern(ent (ay, by notification, supersede the 8oard for such period, not exceeding six (onths, as (ay be specified in the notification0 (%) Hpon the publication of a notification under sub+section ( ) superseding the 8oard,(a) all the (e(bers shall, as fro( the date of supersession, 'acate their offices as such3 (b) all the powers, functions and duties which (ay, by or under the pro'isions of this Act, be exercised or discharged by or on behalf of the 8oard, shall until the 8oard is reconstituted under sub+section (3), be exercised and discharged by such person or persons as the Central &o'ern(ent (ay direct3 and (c) all property owned or controlled by the 8oard shall, until the 8oard is reconstituted under sub+section (3), 'est in the Central &o'ern(ent0
Substituted for 1this Act2 by the 9epositories Act !!#, w0r0e0f0 %0+!+ !!"0
3%
(3) Cn the expiration of the period of supersession specified in the notification issued under sub+section ( ), the Central &o'ern(ent (ay reconstitute the 8oard by a fresh appoint(ent
and in such case any person or persons who 'acated their offices under clause ( a) of subsection (%), shall not be dee(ed dis*ualified for appoint(ent , 4ro+i-e- that the Central &o'ern(ent (ay, at any ti(e, before the expiration of the period of supersession, ta)e action under this sub+section0 ($) .he Central &o'ern(ent shall cause a notification issued under sub+section ( ) and a full report of any action ta)en under this section and the circu(stances leading to such action to be laid before each Iouse of <arlia(ent at the earliest0 Ret*r ! % - re$ort!. 1:. ( ) .he 8oard shall furnish to the Central &o'ern(ent at such ti(e and in such for( and (anner as (ay be prescribed or as the Central &o'ern(ent (ay direct, such returns and state(ents and such particulars in regard to any proposed or existing progra((e for the pro(otion and de'elop(ent of the securities (ar)et, as the Central &o'ern(ent (ay, fro( ti(e to ti(e, re*uire0 (%) Kithout preDudice to the pro'isions of sub+section ( ), the 8oard shall, within 4ninety: days after the end of each financial year, sub(it to the Central &o'ern(ent a report in such for(, as (ay be prescribed, gi'ing a true and full account of its acti'ities, policy and progra((es during the pre'ious financial year0 (3) A copy of the report recei'ed under sub+section (%) shall be laid, as soon as (ay be after it is recei'ed, before each Iouse of <arlia(ent0 Dele(%tio . 19. .he 8oard (ay, by general or special order in writing delegate to any (e(ber, officer of the 8oard or any other person subDect to such conditions, if any, as (ay be specified in the order, such of its powers and functions under this Act (except the powers under section %!) as it (ay dee( necessary0 A$$e%l!. "=. ( ) Any person aggrie'ed by an order of the 8oard (ade %4, before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!,: under this Act, or the rules or regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor, 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0
Substituted for 1sixty days2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1an order of the 8oard (ade2 by Securities =aws (Second A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0
% Substituted
33
(3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed, 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 4;%r of G*ri!-i'tio . "=A. Eo order passed by the 8oard %4or the AdDudicating Cfficer: under this Act shall be appealable except as pro'ided in 34section ". or: section %0 and no ci'il court shall ha'e Durisdiction in respect of any (atter which the 8oard $4or the AdDudicating Cfficer: is e(powered by, or under, this Act to pass any order and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any order passed by the 8oard "4or the AdDudicating Cfficer: by, or under, this Act0: S%+i (!.
"1. Eothing in this Act shall exe(pt any person fro( any suit or other proceedings which (ight, apart fro( this Act, be brought against hi(0 @e.,er!, offi'er! % - e.$lo>ee! of the ;o%r- to ,e $*,li' !er+% t!. "". All (e(bers, officers and other e(ployees of the 8oard shall be dee(ed, when acting or purporting to act in pursuance of any of the pro'isions of this Act, to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0 4rote'tio of %'tio t%6e i (oo- f%ith. "). Eo suit, prosecution or other legal proceedings shall lie against the Central &o'ern(ent #4or 8oard: or any officer of the Central &o'ern(ent or any (e(ber, officer or other e(ployee of the 8oard for anything which is in good faith done or intended to be done under this Act or the rules or regulations (ade thereunder0 /4Offe 'e!. "3. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, he shall be punishable with
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 18oard2 by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 3 Substituted for 1Section %02, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 $ Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 " Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Substituted by for S0 %$, Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" && <rior to its substitution S0%$ read as under, 1%$0 <enalty0+ Khoe'er contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both02
% Substituted
3$
i(prison(ent for a ter( which (ay extend to 4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to %4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 34Co.$o!itio of 'ert%i offe 'e!. "3A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "3;. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of the alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation, 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0
(%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0:
Substituted for 1one year, or with fine, or with both2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%, for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both20 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3"
E#e.$tio fro. t%# o /e%lth % - i 'o.e. "5. Eotwithstanding anything contained in the Kealth+tax Act, !"/ (%/ of !"/), the Inco(etax Act, !# ($3 of !# ) or any other enact(ent for the ti(e being in force relating to tax on wealth, inco(e, profits or gains(a) the 8oard3 (b) the existing Securities and 7xchange 8oard fro( the date of its constitution to the date of establish(ent of the 8oard, shall not be liable to pay wealth+tax, inco(e+tax or any other tax in respect of their wealth, inco(e, profits or gains deri'ed0 Co( iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations (ade thereunder, sa'e on a co(plaint (ade by the 8oard 4G G G:0 "5(") *****< )5 E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
.he words 1with the pre'ious sanction of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to the o.i!!io , S*,0!e'tio (") re%- %! * -er& 1(") No 'o*rt i ferior to th%t of "5% Co*rt of Se!!io < !h%ll tr> % > offe 'e $* i!h%,le * -er thi!
A't.2 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3#
A$$e%l % - re+i!io "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e of Cri.i %l 4ro'e-*re, 197) to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< Offe 'e! ,> 'o.$% ie!. "7. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly, 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n , 6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and
3/
(b) 1director2, in relation to a fir(, (eans a partner in the fir(0 4o/er to e#e.$t. ":. 4GGGGGG: "5 Re'o+er> of %.o* t! ":A. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith %
-ire'tio of -i!(or(e.e t or-er i!!*e- * -er !e'tio 11; or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifiefor. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.et%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't.
C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Section %> read as under, 1%>0 8$.er t$ e)e"%t+ If the central go'ern(ent if of the opinion that it is necessary or expedient so to do in public interest, it (ay, by order published in the Cfficial gaFette, exe(pt any person or class of persons buying or selling securities or otherwise dealing with the securities (ar)et fro( the operation of sub+section ! ) of Section %02 % I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3>
"#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio 15T of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 11;, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% !
% > offi'er of the ;o%r- /ho .%> ,e %*thoriLe-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 4o/er to .%6e r*le!. "9. ( ) .he Central &o'ern(ent (ay, by notification, (a)e rules for carrying out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers under sub+section ( ) of section "3 (b) the additional functions that (ay be perfor(ed by the 8oard under section 3 (c) 4G G G: (d) the (anner in which the accounts of the 8oard shall be (aintained under section "3 %4(da) the (anner of in*uiry under sub+section ( ) of section "+I3 (db) the salaries and allowances and other ter(s and conditions of ser'ice of the 34<residing Cfficers, ?e(bers: and other officers and e(ployees of the Securities Appellate .ribunal under section "+C and sub+section (3) of section "S3 (dc) the procedure for the in'estigation of (isbeha'iour or incapacity of the 4<residing Cfficers, or other ?e(bers: of the Securities Appellate .ribunal under sub+section (3) of section "Q3
Clause (c) o(itted by Securities laws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, clause (c) it read as under, 1(c) the conditions subDect to which registration certificate is to be issued under sub+section ( ) of section %20 % Inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 3 Substituted for 1<residing Cfficers2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3!
(dd) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section ". and the fees payable in respect of such appeal3: (e) the for( and the (anner in which returns and report to be (ade to the Central &o'ern(ent under section >3 (f) any other (atter which is to be, or (ay be, prescribed, or in respect of which pro'ision is to be, or (ay be, (ade by rules0 4o/er to .%6e re(*l%tio !. )=. ( ) .he 8oard (ay, %4GGG: by notification, (a)e regulations consistent with this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ti(es and places of (eetings of the 8oard and the procedure to be followed at such (eetings under sub+section ( ) of section / including *uoru( necessary for the transaction of business3 (b) the ter(s and other conditions of ser'ice of officers and e(ployees of the 8oard under sub+section (%) of section !3 34(c) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto and the (anner in which such (atters shall be disclosed by the co(panies under section A3 35('%) the *tiliL%tio of the %.o* t 're-ite- * -er !*,0!e'tio (5) of !e'tio 11H (',) the f*lfill.e t of other 'o -itio ! rel%ti ( to 'olle'ti+e i +e!t.e t !'he.e * -er !*,0!e'tio ("A) of !e'tio 11AAH ('') the $ro'e-*re to ,e follo/e- ,> the %*thoriLe- offi'er for !e%r'h or !eiL*re * -er !*,0!e'tio (9) of !e'tio 11CH < (d) the conditions subDect to which certificate of registration is to be issued, the a(ount of
fee to be paid for certificate of registration and the (anner of suspension or cancellation of certificate of registration under section %0: 55(-%) the ter.! -eter.i e- ,> the ;o%r- for !ettle.e t of $ro'ee-i (! * -er !*,!e'tio (") % - the $ro'e-*re for 'o -*'ti ( of !ettle.e t $ro'ee-i (! * -er !*,!e'tio ()) of !e'tio 15E;H (-,) % > other .%tter /hi'h i! re7*ire- to ,e, or .%> ,e, !$e'ifie- ,> re(*l%tio ! or i re!$e't of /hi'h $ro+i!io i! to ,e .%-e ,> re(*l%tio !.< R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t.
Substituted for 1<residing Cfficers2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 words 1with the pre'ious appro'al of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 3 Substituted for the existing clause (c) by the Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 <rior to substitution this clause read as under, 1(c) the a(ount of fee to be paid for registration certificate and (anner of suspension or cancellation of registration certificate under sub+section (%) and (3) of section %02 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% .he
$0
)1. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. )". .he pro'isions of this Act shall be in addition to, and not in derogation of, the pro'isions of any other law for the ti(e being in force0 A.e -.e t of 'ert%i e %'t.e t!. )). 40e%ealed bF 0e%ealing H A"ending Act' 2001&: 4o/er to re.o+e -iffi'*ltie!. )3. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order, published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as (ay appear to be necessary for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of fi'e years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 Re$e%l % - !%+i (. )5. ( ) .he Securities and 7xchange 8oard of India Crdinance, !!% (Crd0 " of !!%), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 1@( /@(5A9( 4 ee section 33: A@END@ENT O2 CERTAIN ENACT@ENTS 40e%ealed bF 0e%ealing H A"ending Act' 2001:
*SECURITIES CONTRACTS (REGULATION) RULES, 1957
In exercise of the powers conferred by section 30 of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the Central &o'ern(ent hereby (a)es the following rules, the sa(e ha'ing been pre'iously published as re*uired by sub+section (3) of the said section, na(ely ,Short title. 1. .hese rules (ay be called the Securities Contracts (Regulation) Rules, !"/0 Defi itio !. ". In these rules, unless the context otherwise re*uires,(a) 1for(2 (eans a for( appended to these rules3 (b) 1the Act2 (eans the Securities Contracts (Regulation) Act, !"# ($% of !"#)3 (c) 1&o'ern(ent co(pany2 (eans a co(pany in which not less than fifty+one per cent of the share capital is held by the Central &o'ern(ent or by any State &o'ern(ent or &o'ern(ents or partly by the Central &o'ern(ent and partly by one or (ore State &o'ern(ents ; 4(d) 1public2 (eans persons other than 5 (i) the pro(oter and pro(oter group3 (ii) subsidiaries and associates of the co(pany0 E#$l% %tio & 6or the purpose of this clause the words 1pro(oter2 and 1pro(oter group2 shall ha'e the sa(e (eaning as assigned to the( under the Securities and 7xchange 8oard of India (Issue of Capital and 9isclosure Re*uire(ents) Regulations, %00!3: %4(da) ;public sector co(pany; (eans a body corporate constituted by an Act of <arlia(ent or any State =egislature and includes a go'ern(ent co(pany,: 4(e) 1public shareholding2 (eans e*uity shares of the co(pany held by public and shall exclude shares which are held by custodian against depository receipts issued o'erseas0: A$$li'%tio for re'o( itio . ). An application under section 3 of the Act for recognition of a stoc) exchange shall be (ade to the 34Securities and 7xchange 8oard of India: in 6or( A0
* The!e R*le! h%+e ,ee *$-%te- ,%!e- o the R*le! % - A.e -.e t! %+%il%,le o the /e,!ite of the De$%rt.e t of E'o o.i' Aff%ir!0 htt$&11fi .i . i'.i 1l%/1i -e#.%!$ % - %+%il%,le %.e -.e t otifi'%tio !. Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 % Inserted by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3 Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
2ee! for %$$li'%tio . 3. ( ) .here shall be paid in respect of e'ery application under rule 3 a fee of rupees fi'e hundred0 (%) .he a(ount of the fee shall be deposited in the nearest &o'ern(ent treasury or the nearest branch of the State 8an) of India, 4ro+i-e- that at 8o(bay, Calcutta, ?adras, 9elhi and @anpur, the a(ount shall be deposited in the Reser'e 8an) of India0 (3) .he a(ount of the fee so deposited shall be credited to the receipt head 1A=BI?iscellaneous-Cther fees, fines and forfeitures20 Do'*.e t! to ,e file- %lo ( /ith the %$$li'%tio % - $%rti'*l%r! it !ho*l- 'o t%i . 5. 7'ery application shall be acco(panied by four copies of the rules (including the (e(orandu( and articles of association where the applicant stoc) exchange is an
incorporated body) and bye+laws of the stoc) exchange applying for recognition as specified in section 3 of the Act and the receipt granted by the &o'ern(ent treasury, or as the case (ay be, the State 8an) of India or the Reser'e 8an) of India, in respect of the a(ount of the fee deposited and shall contain clear particulars as to the (atters specified in the Annexure to 6or( A0 $54o/er to .%6e i 7*irie! % - '%ll for i for.%tio . 5A. 8efore granting recognition to a stoc) exchange under section $ of the Act, the "4Securities and 7xchange 8oard of India: (ay (a)e such in*uiries and re*uire such further infor(ation to be furnished, as it dee(s necessary, relating to the infor(ation furnished by the stoc) exchange in the Annexure to its application in 6or( A0: 2or. of re'o( itio . 8. .he recognition granted to a stoc) exchange shall be in 6or( 8 and be subDect to the following conditions, na(ely ,(a) that the recognition unless granted on a per(anent basis, shall be for such period not less than one year as (ay be specified in the recognition3 (b) that the stoc) exchange shall co(ply with such conditions as are or (ay be prescribed or i(posed under the pro'isions of the Act and these rules fro( ti(e to ti(e0
$ Inserted
by &SR 0!# dated $00/0 !#/, w0e0f0 %%00/0 !#/ for 1Central &o'ern(ent2 by the Securities Contracts (Regulation)(A(end(ent )Rules, !!#, w0e0f0 %30 %0 !!#0
" Substituted
Re e/%l of re'o( itio . 7. ( ) .hree (onths before the expiry of the period of recognition, a recognised stoc) exchange desirous of renewal of such recognition (ay (a)e an application to the #4Securities and 7xchange 8oard of India: in 6or( A0 (%) .he pro'isions of rule 3, rule $, rule ", rule "A and rule # shall apply in relation to renewal of recognition as they apply in relation to grant of recognition except that the fee payable in respect of an application for renewal of recognition shall be rupees two hundred0 9*%lifi'%tio ! for .e.,er!hi$ of % re'o( i!e- !to'6 e#'h% (e. :. .he rules relating to ad(ission of (e(bers of a stoc) exchange see)ing recognition shall inter alia pro'ide that , (1) Eo person shall be eligible to be elected as a (e(ber if(a) he is less than twenty+one years of age3 (b) he is not a citiFen of India3 pro'ided that the go'erning body (ay in suitable cases relax this condition with the prior appro'al of the !4Securities and 7xchange 8oard of India:3 (c) he has been adDudged ban)rupt or a recei'ing order in ban)ruptcy has been (ade against hi( or he has been pro'ed to be insol'ent e'en though he has obtained his final discharge3 (d) he has co(pounded with his creditors unless he has paid sixteen annas in the rupee3 (e) he has been con'icted of an offence in'ol'ing fraud or dishonesty3 (f) he is engaged as principal or e(ployee in any business other than that of securities /4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability unless he underta)es on ad(ission to se'er his connection with such business ,
>44ro+i-e-
that no (e(ber (ay conduct business in co((odity deri'ati'es, except by setting up a separate co(pany which shall co(ply with the regulatory re*uire(ents, such as, networth, capital ade*uacy, (argins and exposure nor(s as (ay be specified by the 6orward ?ar)et Co((ission, fro( ti(e to ti(e ,
# Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, w0e0f0 %30 %0 !!#0 / Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 > Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 <rior to its substitution, the pro'iso as a(ended by Securities Contracts (Regulation) (A(end(ent) Rules, !!# w0e0f0 %30 %0 !!#, read as under, 1<ro'ided that the Securities and 7xchange 8oard of India (ay, for reasons sufficient in the opinion of the said 8oard, per(it a recogniFed stoc) exchange to suspend the enforce(ent of this clause for a specified period on condition that the applicant is not associated with or is a (e(ber of or subscriber to or shareholder or debenture holder in or connected through a partner or e(ployee with any other organisation, institution, association, co(pany or corporation in India where forward business of any )ind whether in goods or co((odities or otherwise is carried on or is not engaged as a principal or e(ployee ion any such business02
4ro+i-e- f*rther that nothing herein shall be applicable to any corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to ()) of the pro'iso to sub+rule ($)0:3 (g) !4GGG: (h) he has been at any ti(e expelled or declared a defaulter by any other stoc) exchange3 (i) he has been pre'iously refused ad(ission to (e(bership unless a period of one year has elapsed since the date of such reDection0 (2) Eo person eligible for ad(ission as a (e(ber under sub+rule ( ) shall be ad(itted as a (e(ber unless ,(a) he has wor)ed for not less than two years as a partner with, or an authorised assistant or authorised cler) or re(isier or apprentice to, a (e(ber3 or (b) he agrees to wor) for a (ini(u( period of two years as a partner or representati'e (e(ber with another (e(ber and to enter into bargains on the floor of the stoc) exchange and not in his own na(e but in the na(e of such other (e(ber 3 or (c) he succeeds to the established business of a deceased or retiring (e(ber who is his father, uncle, brother or any other person who is, in the opinion of the go'erning body, a close relati'e , 4ro+i-e- that the rules of the stoc) exchange (ay authorise the go'erning body to wai'e co(pliance with any of the foregoing conditions if the person see)ing ad(ission is in respect of (eans, position, integrity, )nowledge and experience of business in securities, considered by the go'erning body to be otherwise *ualified for (e(bership0 (3) Eo person who is a (e(ber at the ti(e of application for recognition or subse*uently ad(itted as a (e(ber shall continue as such if(a) he ceases to be a citiFen of India , 4ro+i-e- that nothing herein shall affect those who are not citiFens of India but who were (e(bers at the ti(e of such application or were ad(itted subse*uently under the pro'isions of clause (b) of sub+rule ( ) of this rule, subDect to their co(plying with all other re*uire(ents of this rule3
(b) he is adDudged ban)rupt or a recei'ing order in ban)ruptcy is (ade against hi( or he is pro'ed to be insol'ent3 (c) he is con'icted of an offence in'ol'ing fraud or dishonesty3 (d) 04G G G: (e) 4G G G: (f) he engages either as principal or e(ployee in any business other than that of securities %4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability, pro'ided that! C(itted 0 Ibid0
by &SR 0/0(7) dated "0
0 !>>
Ibid0
% Inserted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(i) the go'erning body (ay, for reasons, to be recorded in writing, per(it a (e(ber to engage hi(self as principal or e(ployee in any such business, if the (e(ber in *uestion ceases to carry on business on the stoc) exchange either as an indi'idual or as a partner in a fir(, (ii) in the case of those (e(bers who were under the rules in force at the ti(e of such application per(itted to engage in any such business and were actually so engaged on the date of such application, a period of three years fro( the date of the grant of recognition shall be allowed for se'ering their connection with any such business, 34(iii) nothing herein shall affect (e(bers of a recognised stoc) exchange which are corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to (k) of the pro'iso to sub+rule ($)0: (4) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section 3%% of the said Act3 (ii) a (aDority of the directors of such co(pany are shareholders of such co(pany and also (e(bers of that stoc) exchange3 and (iii) the directors of such co(pany, who are (e(bers of that stoc) exchange, ha'e ulti(ate liability in such co(pany , 4ro+i-e- that where the $4Securities and 7xchange 8oard of India: (a)es a reco((endation in this regard, the go'erning body of a stoc) exchange shall, in relaxation of the re*uire(ents of this clause, ad(it as (e(ber the following corporations "4,bodies corporate:, co(panies or institutions, na(ely ,(a) the Industrial 6inance Corporation, established under the Industrial 6inance Corporation Act, !$> ( " of !$>)3 (b) the Industrial 9e'elop(ent 8an) of India, established under the Industrial 9e'elop(ent 8an) Act, !#$ ( > of !#$)3 (c) the =ife Insurance Corporation of India, established under the =ife Insurance Corporation Act, !"# (3 of !"#)3 (d) the &eneral Insurance Corporation of India constituted under the &eneral Insurance Corporation (Eationalisation) Act, !/% ("/ of !/%)3 (e) the Hnit .rust of India, established under the Hnit .rust of India Act, !#3 ("% of !#3)3
3 Substituted, ibid0 <rior to its substitution, sub+clause (iii) read as under, 1(iii) nothing herein shall affect (e(bers of a recogniFed stoc) exchange per(itted under the pro'iso to clause (f) of sub+rule( ) to suspend the enforce(ent of the aforesaid clause, for so long as such suspension is effecti'e, except that no (e(ber of such exchange shall engage in forward business of any )ind whether in goods or co((odities or otherwise and , if actually so engaged on the date of such application , he shall se'er his connection with any such business within a period of three years fro( the date of the grant of recognition02 $ Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# " Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(f) the Industrial Credit and In'est(ent Corporation of India, a co(pany registered under the Co(panies Act, !"# ( of !"#)3 (g) the subsidiaries of any of the corporations or co(panies specified in (a) to (f) and any subsidiary of the State 8an) of India or any nationalised ban) set up for pro'iding (erchant ban)ing ser'ices, buying and selling securities and other si(ilar acti'ities0 #4(h) any ban) included in the Second Schedule to the Reser'e 8an) of India Act, !3$ (% of !3$)3 (i) the 7xport I(port 8an) of India, established under the 7xport I(port 8an) of India Act, !> (%> of !> )3 (j) the Eational 8an) for Agriculture and Rural 9e'elop(ent, established under the Eational 8an) for Agriculture and Rural 9e'elop(ent Act, !> (# of !> )3 and (k) the Eational Iousing 8an), established under the Eational Iousing 8an) Act, !>/ ("3 of !>/)0: (4A) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall also be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section % of the said Act3 (ii) such co(pany underta)es to co(ply with such financial re*uire(ents and nor(s as (ay be specified by the Securities and 7xchange 8oard of India for the registration of such co(pany under sub+section ( ) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (iii) /4G G G: (iv) the directors of the co(pany are not dis*ualified fro( being (e(bers of a stoc) exchange under >4clause ( ) 4except sub+clause (b) and sub+clause (f) thereof: or clause (3) 4except sub+clause (a) and sub+clause (f) thereof:: and the 9irectors of the co(pany had not held the offices of the 9irectors in any co(pany which had been a (e(ber of the stoc) exchange and had been declared defaulter or expelled by the stoc) exchange3 and (v) not less than two directors of the co(pany are persons who possess a (ini(u( two yearsJ experience , (a) in dealing in securities3 or (b) as portfolio (anagers3 or (c) as in'est(ent consultants0 (5) Khere any (e(ber of a stoc) exchange is a fir(, the pro'isions of sub+rules ( ), (3) and ($), shall, so far as they can, apply to the ad(ission or continuation of any partner in such fir(0
# Inserted, / C(itted
ibid0 by &SR /$! (7), dated %0 00 !!$ > Substituted by &SR /!0(7), dated 0/0 0 !!$
Co tr%'t! ,et/ee .e.,er! of re'o( i!e- !to'6 e#'h% (e. 9. All contracts between the (e(bers of a recognised stoc) exchange shall be confir(ed in writing and shall be enforced in accordance with the rules and bye+laws of the stoc) exchange of which they are (e(bers0 !5No.i ee! of the Se'*ritie! % - E#'h% (e ;o%r- of I -i%< o the (o+er i ( ,o-ie! of re'o( i!e- !to'6 e#'h% (e!. 1=. .he %04Securities and 7xchange 8oard of India: (ay no(inate one or (ore persons not exceeding three in nu(ber, as (e(ber or (e(bers of the go'erning body of e'ery recognised stoc) exchange0 Such (e(ber or (e(bers shall enDoy the sa(e status and powers as other (e(bers of the go'erning body0 O,li(%tio of the (o+er i ( ,o-> to t%6e -i!'i$li %r> %'tio %(%i !t % .e.,er if !o -ire'te- ,> the % 5Se'*ritie! % - E#'h% (e ;o%r- of I -i%<. 11. After recei'ing the report of the result of an en*uiry (ade under clause (b) of subsection (3) of section # of the Act, the % 4Securities and 7xchange 8oard of India: (ay ta)e such action as they dee( proper and, in particular, (ay direct the go'erning body of the stoc) exchange to ta)e such disciplinary action against the offending (e(ber, including fine, expulsion, suspension or any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney, as (ay be specified by the % 4Securities and 7xchange 8oard of India:3 notwithstanding anything to the contrary contained in the rules or bye+laws of the stoc) exchange concerned, the go'erning body shall gi'e effect to the directions of the % 4Securities and 7xchange 8oard of India: in this behalf and shall not in any (anner co((ute, re'o)e or (odify the action ta)en in pursuance of such directions, without the prior appro'al of the % 4Securities and 7xchange 8oard of India:0 .he % 4Securities and 7xchange 8oard of India: (ay, howe'er, either of its own (otion or on the representation of the (e(ber concerned, (odify or withdraw its direction to the go'erning body0 A*-it of %''o* t! of .e.,er!. 1". 7'ery (e(ber shall get his accounts audited by a chartered accountant whene'er such audit is re*uired by the % 4Securities and 7xchange 8oard of India:0 ?ith-r%/%l of re'o( itio . 1). .he written notice referred to in section " of the Act shall be in 6or( C0
! Substituted %0 Ibid0 %
by 60 Eo0 L3/LS7L!$, dated %#0 00 !!$0
Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> re'o( i!e- !to'6 e#'h% (e. 13. 7'ery recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years, (1) ?inute boo)s of the (eetings of(a) (e(bers3 (b) go'erning body3 (c) any standing co((ittee or co((ittees of the go'erning body or of the general body of (e(bers0
(2) Register of (e(bers showing their full na(es and addresses0 Khere any (e(ber of the stoc) exchange is a fir(, full na(es and addresses of all partners shall be shown0 (3) Register of authorised cler)s0 (4) Register of re(isiers of authorised assistants0 (5) Record of security deposits0 (6) ?argin deposits boo)0 (7) =edgers0 (8) Mournals0 (9) Cash boo)0 (10) 8an) pass+boo)0 ;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> .e.,er of % re'o( i!e- !to'6 e#'h% (e. 15. ( ) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years , (a) Register of transactions ( a!da boo))0 (b) ClientsJ ledger0 (c) &eneral ledger0 (d) Mournals0 (e) Cash boo)0 (f) 8an) pass+boo)0 (g) 9ocu(ents register showing full particulars of shares and securities recei'ed and deli'ered0 (2) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following docu(ents for a period of two years, (a) ?e(berJs contract boo)s showing details of all contracts entered into by hi( with other (e(bers of the sa(e exchange or counterfoils or duplicates of (e(os of confir(ation issued to such other (e(bers0 (b) Counterfoils or duplicates of contract notes issued to clients0 (c) Kritten consent of clients in respect of contracts entered into as principals0 @% er of i 7*ir> i rel%tio to the %ff%ir! of the (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e or the %ff%ir! of % > .e.,er of the !to'6 e#'h% (e i rel%tio to the !to'6 e#'h% (e. 18. ( )(a) .he person or persons appointed by the %%4Securities and 7xchange 8oard of India: to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act shall hereafter in this rule be referred to as the Nin*uiring authorityJ3 (b) where the in*uiring authority consists of two or (ore persons, one of the( shall be appointed as the chair(an or senior (e(ber thereof3 (c) the in*uiring authority shall hand o'er a state(ent of issues to be in*uired into to the go'erning body or the (e(ber concerned, as the case (ay be, who will be gi'en a reasonable opportunity to state their or his side of the case3 (d) if any witness is called for exa(ination, an opportunity shall be pro'ided to the go'erning body or the (e(ber whose affairs are being in*uired into, as the case (ay be, to cross+exa(ine such witness3 (e) where the in*uiring authority consists of (ore than one person, the 'iews of the (aDority shall be dee(ed to represent the findings of such authority and, in the e'ent of
an e*uality of 'otes, the chair(an or senior (e(ber shall ha'e a casting 'ote3 (f) the in*uiring authority shall sub(it its report in writing to the %%4Securities and 7xchange 8oard of India: within the period specified in the order of appoint(ent3 (g) te(porary absence fro( any hearing or hearings of any (e(ber of the in*uiring authority shall not 'itiate its proceedings0 (%) Khere the %%4Securities and 7xchange 8oard of India: has directed the go'erning body of a stoc) exchange to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act, the go'erning body concerned shall appoint one or (ore (e(bers thereof to (a)e the in*uiry and the pro'isions of sub+rule ( ) shall apply "!tati# "!tandi# to such in*uiry0 S*,.i!!io of % *%l re$ort. 17. ( ) 7'ery recognised stoc) exchange shall before the 3 st day of Manuary in each year or within such extended ti(e as the %34Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, allow, furnish the %34Securities and 7xchange 8oard of India: annually with a report about its acti'ities during the preceding calendar year, which shall inter alia contain detailed infor(ation about the following (atters , (a) changes in rules and bye+laws, if any3 (b) changes in the co(position of the go'erning body3 (c) any new sub+co((ittees set up and changes in the co(position of existing ones3
%% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# %3 Ibid0
(d) ad(issions, re+ad(issions, deaths or resignations of (e(bers3 (e) disciplinary action against (e(bers3 (f) arbitration of disputes (nature and nu(ber) between (e(bers and non+(e(bers3 (g) defaults3 (h) action ta)en to co(bat any e(ergency in trade3 (i) securities listed and de+listed3 and (j) securities brought on or re(o'ed fro( the forward list0 (%) 7'ery recognised stoc) exchange shall within one (onth of the date of the holding of its annual general (eeting, furnish the %$4Securities and 7xchange 8oard of India: with a copy of its audited balance+sheet and profit and loss account for its preceding financial year0 S*,.i!!io of $erio-i'%l ret*r !. 17A. 7'ery recognised stoc) exchange shall furnish the %$4Securities and 7xchange 8oard of India: periodical returns relating to(i) the official rates for the securities enlisted thereon3 (ii) the nu(ber of shares deli'ered through the clearing house3 (iii) the (a)ing+up prices3 (iv) the clearing house progra((es3 (v) the nu(ber of securities listed and de+listed during the pre'ious three (onths3 (vi) the nu(ber of securities brought on or re(o'ed fro( the forward list during the pre'ious three (onths3 and (vii) any other (atter as (ay be specified by the %$4Securities and 7xchange 8oard of India:0 @% er of $*,li'%tio of ,>e0l%/! for 'riti'i!.. 1:. .he bye+laws to be (ade, a(ended or re'ised under the Act shall be published for
criticis( in accordance with the pro'isions of section %3 of the &eneral Clauses Act, >!/ both in the &aFette of India and Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate0 Re7*ire.e t! /ith re!$e't to the li!ti ( of !e'*ritie! o % re'o( i!e- !to'6 e#'h% (e. 19. ( ) A public co(pany as defined under the Co(panies Act, !"#, desirous of getting its securities listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars ,
%$ Ibid0
(a) ?e(orandu( and articles of association and, in the case of a debenture issue, a copy of the trust deed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any securities for subscription or sale during the last fi'e years0 (d) Copies of balance+sheets and audited accounts for the last fi'e years, or in the case of new co(panies, for such shorter period for which accounts ha'e been (ade up0 (e) A state(ent showing(i) di'idends and cash bonuses, if any, paid during the last ten years (or such shorter period as the co(pany has been in existence, whether as a pri'ate or public co(pany), (ii) di'idends or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents with or between ,(i) 'endors andLor pro(oters, (ii) underwriters and sub+underwriters, (iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents with(i) (anaging agents and secretaries and treasurers, (ii) selling agents, (iii) (anaging directors and technical directors, (iv) general (anager, sales (anager, (anager or secretary0 (h) Certified copy of e'ery letter, report, balance+sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering securities for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents0 (j) A brief history of the co(pany since its incorporation gi'ing details of its acti'ities including any reorganisation, reconstruction or a(alga(ation, changes in its capital structure, (authorised, issued and subscribed) and debenture borrowings, if any0
(k) <articulars of shares and debentures issued-(i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s including an option for the issue of any )ind of the securities granted to any person0 (") Certified copies of%"4(i) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3: (ii) agree(ents, if any, with the Industrial 6inance Corporation, Industrial Credit and In'est(ent Corporation and si(ilar bodies0 (n) <articulars of shares forfeited0 ($) A list of highest ten holders of each class or )ind of securities of the co(pany as on the date of application along with particulars as to the nu(ber of shares or debentures held by and the address of each such holder0 (%) <articulars of shares or debentures for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0 (%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant co(pany shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer, (ii) that the fully paid shares will be free fro( all lien, while in the case of partly paid shares, the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such shares, (iii) that any a(ount paid+up in ad'ance of calls on any share (ay carry interest but shall not entitle the holder of the share to participate in respect thereof, in a di'idend subse*uently declared, (iv) there will be no forfeiture of unclai(ed di'idends before the clai( beco(es barred by law, (v) that option or right to call of shares shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the securities of a co(pany which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0
%" Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 <rior to its substitution, sub+clause (i), read as under, 1(i) letters of consent of the Controller of Capital Issues02
%#4(b)
(i) At least twenty fi'e per cent0 of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent3 or (ii) At least ten per cent of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent if the post issue capital of the
co(pany calculated at offer price is (ore than four thousand crore rupees, <ro'ided that the re*uire(ent of post issue capital being (ore than four thousand crore rupees shall not apply to a co(pany whose draft offer docu(ent is pending with the Securities and 7xchange 8oard of India on or before the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, if it satisfies the conditions prescribed in clause (b) of sub+rule % of rule ! of the Securities Contracts (Regulation) Rules, !"# as existed prior to the date of such co((ence(ent, %/4<ro'ided further that the co(pany, referred to in sub clause (ii), shall increase its public shareholding to at least twenty fi'e per cent, within a
%# Substituted
by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, clause (b) as a(ended by the A(end(ent Rules, %00 , w0e0f0 0/00#0%00 , read as under, 1(b) At least 0 per cent of each class or )ind of securities issued by a co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted subDect to the following conditions, (a) (ini(u( %0 la)h securities (excluding reser'ations, fir( allot(ent and pro(otersJ contribution) was offered to the public3 (b) the siFe of the offer to the public, i&e&' the offer price (ultiplied by the nu(ber of securities offered to the public was (ini(u( Rs0 00 crores3 and (c) the issue was (ade only through boo) building (ethod with allocation of #0 per cent of the issue siFe to the *ualified institutional buyers as specified by the Securities and 7xchange 8oard of India, 4ro+i-e- that if a co(pany does not fulfil the conditions, it shall offer at least %" per cent of each class or )ind of securities to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted, 4ro+i-e- f*rther that a recognised stoc) exchange (ay relax any of the conditions with the pre'ious appro'al of the Securities and 7xchange 8oard of India, in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#), and subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*6or the purpose of this clause, it is hereby clarified that where any part of the securities sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental 6ire and &eneral Insurance Co(pany =i(ited and the Hnited 6ire and &eneral Insurance Co(pany =i(ited or Hnit .rust of India, the total subscription to the securities, whether by one or (ore of such bodies, shall not for( part of the 0 per cent or %" per cent of the securities, as the case (ay be, to be offered to the public02 %/ Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 <rior to its substitution, second pro'iso, read as under, 1<ro'ided further that the co(pany, referred in sub+clause (ii), shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of atleast fi'e per
period of three years fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India0: %>4GGG:: %!4(c) Eotwithstanding anything contained in clause (b), a public sector co(pany, shall offer and allot at least ten per cent, of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares to public in ter(s of an offer docu(ent0: (3) A co(pany applying for listing shall, as a condition precedent, underta)e inter alia(a) (i) that letters of allot(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to
that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been posted, (ii) that letters of right will be issued si(ultaneously, (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the securities to which they relate, (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right, (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or di'idend on the securities will be calculated, (b) to issue, when so re*uired, receipts for all securities deposited with it whether for registration, sub+di'ision, exchange or for other purposes 3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of certificates and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (bb) to issue, when so re*uired, consolidation and renewal certificates in deno(inations of the (ar)et unit of trading to split certificates, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3
cent per annu( beginning fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India,2 %> C(itted, ibid <rior to its o(ission, third pro'iso, read as under, 1<ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase beings its public shareholding to the le'el of twenty fi'e per cent in that year02 %! Inserted, ibid0
(c) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders, and (ii) to 'erify when the co(pany is unable to issue certificates or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (d) on production of the necessary docu(ents by shareholders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or certificate of the Controller of 7state 9uty or si(ilar other docu(ent has been duly exhibited to
and registered by the co(pany3 (e) to issue certificates in respect of shares or debentures lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance certificates within the sa(e period where the transfer is acco(panied by a larger certificate3 (f) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a di'idend or the issue of right or bonus share will be considered3 (g) to reco((end or declare all di'idends andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all di'idends andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (h) to notify the stoc) exchange of any (aterial change in the general character or nature of the co(panyJs business3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (anaging agent or secretaries and treasurers, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued, copies of all other notices and circulars sent to the shareholders including proceedings of ordinary and extraordinary general (eetings of the co(pany and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the shareholders of any new issue of securities whether by way of right, pri'ilege bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited securities or the issue of securities held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of di'idend or issue of right or bonus shares or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s (or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its shareholders or debentureholders) and specifying the purpose or purposes for which the transfer boo)s are to be closed (or the record is to be ta)en)3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority subDect to which the issue is proposed to be (ade ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after each annual general (eeting of at least ten principal holders of each class of security of the co(pany along with particulars as to the nu(ber of shares or debentures held by,
and address of, each such holder3 (+) to grant to shareholders the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e not being less than four wee)s within which to record, exercise, or renounce such rights, pri'ileges and benefits and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3 (r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any securities listed on the exchange, (ii) of the intention to (a)e a drawing of such securities, inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing of the balance) for the drawing, (iii) of the a(ount of securities outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the shareholders to apprise the position of the co(pany and to a'oid the establish(ent of a false (ar)et in the shares of the co(pany3 (t) (t)that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 304($) An application for listing shall be necessary in respect of the following, (a) all new issues of any class or )ind of securities of a co(pany to be offered to the public3 (b) all further issues of any class or )ind of securities of a co(pany if such class or )ind of securities of the co(pany are already listed on a recognised stoc) exchange0: (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the securities of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 3 44ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any security, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and its orders shall be carried out by the stoc) exchange0: 3%4(#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore
or re+ad(it to dealings any securities suspended or withdrawn fro( the list0: 334(#A) 7xcept as otherwise pro'ided in these rules or per(itted by the Securities and 7xchange 8oard of India under sub+rule (/), all re*uire(ents with respect to listing
30 Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, sub+rule ($), read as under, 1($) A fresh application for listing will be necessary in respect of all new issues desired to be dealt in, pro'ided that, where such new securities are identical in all respects with those already listed, ad(ission to dealings will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new issues0 7xplanation, Shares are identical in all respects only if(a) they are of the sa(e no(inal 'alue and the sa(e a(ount per share has been called up3 (b) they are entitled to di'idend at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the di'idend payable on each share will a(ount to exactly the sa(e su(, net and gross3 and (c) they carry the sa(e rights in all other respects02 3 Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%0000 7arlier, the second pro'iso was a(ended by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 3% Substituted by the Securities Contracts (Regulation) (A(end(ent), %000, w0e0f0 0>00>0%0000 7arlier, subrule (#) was a(ended by the Securities Contracts (Regulation) (A(end(ent), !!#, w0e0f0 %30 %0 !!#0 33 Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!0>0%0 00 <rior to its substitution, sub+rule (#A) as a(ended by the Securities Contracts
prescribed by these rules shall, so far as they (ay be, also apply to a public sector co(pany0: 3$4GGG: (/) .he 3"4Securities and 7xchange 8oard of India: (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect to listing prescribed by these rules0 3#4Co ti *o*! Li!ti ( Re7*ire.e t. 19A. ( ) 7'ery listed co(pany 3/4other than public sector co(pany: shall (aintain public shareholding of at least twenty fi'e per cent0, 3>4<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent, on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall increase its public shareholding to at least twenty fi'e per cent, within a period of three years fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India0 7xplanation, 6or the purposes of this sub+rule, a co(pany whose securities has been listed pursuant to an offer and allot(ent (ade to public in ter(s of sub+clause (ii) of clause (b) of sub+rule (%) of rule !, shall (aintain (ini(u( twenty fi'e per cent, public shareholding fro( the date on which the public shareholding in the co(pany reaches the le'el of twenty fi'e percent in ter(s of said sub+clause0: (%) Khere the public shareholding in a listed co(pany falls below twenty fi'e per cent0 at any ti(e, such co(pany shall bring the public shareholding to twenty fi'e per cent0
(Regulations)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 and &SR % (7) w0e0f0 0!0030 !!", read as under, 1(#A) All the re*uire(ents with respect to listing and continuous listing prescribed by these rules, shall so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature ,2 3$ C(itted by the Securities Contracts (Regulation)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its o(ission, pro'iso, as substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# and inserted by &SR %! (7) dated %/0030 !!", read as under,
1<ro'ided that a recognised stoc) exchange (ay relax the re*uire(ent of offer to public for subscription of atleast twenty+fi'e percent of the each class or )ind of securities issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e02 3" Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent), Rules, !!#, w0e0f0 %30 %0 !!#0 3# Inserted by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 3/ Inserted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3> Substituted, ibid0 <rior to substitution, pro'isos, read as under, 1<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of at least fi'e per cent per annu( beginning fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India, <ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase brings its public shareholding to the le'el of twenty fi'e per cent in that year02
within a (axi(u( period of twel'e (onths fro( the date of such fall in the (anner specified by the Securities and 7xchange 8oard of India0: 3!4(3) Eotwithstanding anything contained in this rule, e'ery listed public sector co(pany shall (aintain public shareholding of at least ten per cent0, <ro'ided that a listed public sector co(pany+ (a) which has public shareholding below ten per cent, on the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of three years fro( the date of such co((ence(ent3 (b) whose public shareholding reduces below ten per cent, after the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of twel'e (onths fro( the date of such reduction,0: $04Re7*ire.e t! /ith re!$e't to the li!ti ( of * it! or % > other i !tr*.e t of % Colle'ti+e I +e!t.e t S'he.e o % re'o( i!e- !to'6 e#'h% (e. "=. ( ) A Collecti'e In'est(ent ?anage(ent Co(pany (CI?C) which is desirous of getting its any collecti'e in'est(ent sche(e listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars , (a) Certificate of incorporation, (e(orandu( and articles of association of the co(pany and the copy of the trust deed of the sche(e intended to be listed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any unit or other instru(ent for subscription or sale during the last fi'e years, or in the case of a new co(pany, such shorter period during which the co(pany has been in existence0 (d) Copies of balance sheets and audited accounts for the last fi'e years, or in the case of a new co(pany, for such co(pleted financial year for which accounts ha'e been (ade up0 (e) A state(ent showing,(i) returns and cash bonuses, if any, paid during the last ten years (or such
shorter period as the co(pany has been in existence whether as a pri'ate or public co(pany)3 (ii) returns or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents pertaining to each sche(e of the co(pany with or between,(i) 'endors andLor pro(oters3 (ii) underwriters and sub+underwriters3
3! Inserted $0 Inserted
by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 0 by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%000
(iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents pertaining to each sche(e of a co(pany with(i) selling agents and other ser'ice pro'iders3 (ii) (anaging directors and technical directors3 (iii) general (anager, sales (anager, (anager or secretary0 (h) Certified copies of e'ery letter, report, balance sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering units or any other instru(ents of the sche(e for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents pertaining to such sche(e0 (j) A brief history of the Co(pany since its incorporation gi'ing details of its acti'ities including any re+organisation, reconstruction or a(alga(ation, changes in its capital structure (authorised, issued and subscribed) and debenture borrowings, if any, and the perfor(ance of other collecti'e in'est(ent sche(es of the co(pany0 (k) <articulars of units of the sche(e andLor shares, debentures of the co(pany issued (i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s granted to any person pertaining to such sche(e0 (") Certified copies of(i) certificate of registration granted by the Securities and 7xchange 8oard of India3 (ii) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3 (iii) agree(ents, if any, with any public financial institution as specified in section $A of the Co(panies Act, !"# ( of !"#)0 (n) A list of the highest ten holders of units of each sche(e of the co(pany as on the date of application along with particulars as to the nu(ber of units held by and the address of each such holder0 ($) <articulars of units of the sche(e for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0
(%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer of units of a particular sche(e3 (ii) that the fully paid units issued under the sche(e will be free fro( all lien, while in the case of partly paid units the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such units3 (iii) that any a(ount paid+up in ad'ance of calls on any units (ay carry interest but shall not entitle the holder of the unit to participate in respect thereof, in a return subse*uently declared3 (iv) there will be no forfeiture of unclai(ed returns before the clai( beco(es barred by law3 (v) that option or right to call of units shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the units of a sche(e which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0 (b) At least twenty+fi'e per cent of the units or any other instru(ent of a sche(e issued by the co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and not (ore than ninety days, and that applications recei'ed in pursuance of such offer were allotted fairly and unconditionally , 4ro+i-e- that a recognised stoc) exchange (ay relax this re*uire(ent, with the pre'ious appro'al of the Securities and 7xchange 8oard of India in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#) and subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*Khere any part of the units or any other instru(ents sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely, the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental Insurance Co(pany =i(ited and the Hnited Insurance Co(pany =i(ited, or Hnit .rust of India, the total subscription to the units or any other instru(ent, whether by one or (ore of such bodies, shall not for( part of the twenty+fi'e per cent of the units or any other instru(ent to be offered to the public0 (3) A co(pany applying for listing of a sche(e shall, as a condition precedent, underta)e, inter alia,(a) (i) that letters of allot(ent of units or any other instru(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been
posted3 (ii) that letters of right will be issued si(ultaneously3 (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and, exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the units or any other instru(ent to which they relate3 (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right3 (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or return on the units or any other instru(ent will be calculated3 (b) to issue, when so re*uired, receipts for all units and any other instru(ent deposited with it whether for registration, sub+di'ision, exchange or for other purposes3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of units and any other instru(ent and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (c) to issue, when so re*uired, consolidation and renewal units or any other instru(ent in deno(inations of the (ar)et unit of trading, to split units or any other instru(ent, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3 (d) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders3 and (ii) to 'erify when the co(pany is unable to issue units or any other instru(ents or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (e) on production of the necessary docu(ents by unit holders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or si(ilar other docu(ent has been duly exhibited to and registered by the co(pany3 (f) to issue certificates in respect of units or any other instru(ent lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance units or any other instru(ent within the sa(e period where the transfer is acco(panied by a larger unit or any other instru(ent certificate3 (g) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a return or the issue or right or bonus units or
any other instru(ent will be considered3 (h) to reco((end or declare all returns andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all returns andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts of such sche(e as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued copies of all other notices and circulars sent to the unitLother instru(ent holders regarding any i(portant de'elop(ent or resolutions passed by the co(pany affecting the perfor(ance of the sche(e and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the unitLany other instru(ent holders, of any new issue of unitsLother instru(ents whether by way of right, pri'ilege, bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited unitsLother instru(ents or the issue of unitsLother instru(ents held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of unit capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of returns or issue of right or bonus unitsLany other instru(ents in the sche(e or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its unitLother instru(ent holders and specifying the purpose or purposes for which the transfer boo)s are to be closed or the record is to be ta)en3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority, subDect to which the issue is proposed to be (ade, ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after the preparation of annual accounts of at least ten principal holders of each class of unitsLany other instru(ents of the co(pany along with particulars as to the nu(ber of unitsLany other instru(ent held by, and address of, each such holder3 (+) to grant to unitLany other instru(ent holders of the sche(e the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e, not being less than four wee)s, within which to record, exercise, or renounce such rights, pri'ileges and benefits, and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3
(r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any unitLother instru(ent listed on the exchange3 (ii) of the intention to (a)e a drawing of such unitLother instru(ent inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing off the balance) for the drawing3 (iii) of the a(ount of unitsLother instru(ents outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the unitLany other instru(ent holders to appraise the position of the sche(e and to a'oid the establish(ent of a false (ar)et in the unitsLany other instru(ents of the co(pany3 (t) that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 ($) A fresh application for listing will be necessary in respect of all new sche(es desired to be dealt in , 4ro+i-e- that, where such new unitsLother instru(ents are identical in all respects with those already listed, ad(ission to dealing will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new sche(es0 ()%lanati$n0-HnitsLany other instru(ents are identical in all respects only if(a) they are issued under the sa(e sche(e3 (b) they are of the sa(e no(inal 'alue and the sa(e a(ount per unitLother instru(ents has been called up3 (c) they are entitled to returns at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the return payable on each unitLother issue will a(ount to exactly the sa(e su(, net and gross3 and (d) they carry the sa(e rights in all other respects0 (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the unitsLother instru(ents of a sche(e of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 4ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any unitLother instru(ent of a collecti'e in'est(ent sche(e, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an
opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and thereupon the orders of the Securities Appellate .ribunal shall be carried out by the stoc) exchange0 (#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore or read(it to dealings any unitsLother instru(ents suspended or withdrawn fro( the list0 (/) All the re*uire(ents with respect to listing prescribed by these rules, shall, so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature , 4ro+i-e- that a recognised stoc) exchange (ay relax the re*uire(ent of offer to the public for subscription of at least twenty+fi'e per cent of the units or any other instru(ent of a collecti'e in'est(ent sche(e issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 (>) .he Securities and 7xchange 8oard of India (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect of listing prescribed by these rules0: $ 4Deli!ti ( of !e'*ritie!. "1. A recogniFed stoc) exchange (ay, without preDudice to any other action that (ay be ta)en under the Act or under any other law for the ti(e being in force, delist any securities listed thereon on any of the following grounds in accordance with the regulations (ade by the Securities and 7xchange 8oard of India, na(ely,(a) the co(pany has incurred losses during the preceding three consecuti'e years and it has negati'e networth3 (b) trading in the securities of the co(pany has re(ained suspended for a period of (ore than six (onths3 (c) the securities of the co(pany ha'e re(ained infre*uently traded during the preceding three years3 (d) the co(pany or any of its pro(oters or any of its director has been con'icted for failure to co(ply with any of the pro'isions of the Act or the Securities and 7xchange 8oard of India Act, !!% or the 9epositories Act, !!# (%% of !!#) or rules, regulations, agree(ents (ade thereunder, as the case (ay be and awarded a penalty of not less than rupees one crore or i(prison(ent of not less than three years3 (e) the addresses of the co(pany or any of its pro(oter or any of its directors, are not )nown or false addresses ha'e been furnished or the co(pany has changed its registered office in contra'ention of the pro'isions of the Co(panies Act, !"# ( of !"#)3 or
$
Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %00>, w0e0f0 000#0%00!
(f) shareholding of the co(pany held by the public has co(e below the (ini(u( le'el applicable to the co(pany as per the listing agree(ent under the Act and the co(pany has failed to raise public holding to the re*uired le'el within the ti(e specified by the recogniFed stoc) exchange , 4ro+i-e- that no securities shall be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) If the securities is delisted under clause ( ),
(a) the co(pany, pro(oter and director of the co(pany shall be Dointly and se'erally liable to purchase the outstanding securities fro( those holders who wish to sell the( at a fair price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India, under the Act3 and (b) the said securities shall be delisted fro( all recogniFed stoc) exchanges0 (3) A recogniFed stoc) exchange (ay, on the re*uest of the co(pany, delist any securities listed thereon in accordance with the regulations (ade under the Act by Securities and 7xchange 8oard of India, subDect to the following conditions, na(ely ,(a) the securities of the co(pany ha'e been listed for a (ini(u( period of three years on the recogniFed stoc) exchange3 (b) the delisting of such securities has been appro'ed by the two+third of public shareholders3 and (c) the co(pany, pro(oter andLor the director of the co(pany purchase the outstanding securities fro( those holders who wish to sell the( at a price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India under the Act, 4ro+i-e- that the condition at (c) (ay be dispensed with by Securities and 7xchange 8oard of India if the securities re(ain listed at least on the Eational Stoc) 7xchange of India =i(ited or the 8o(bay Stoc) 7xchange =i(ited0: FORM A ( ee Rules 3 and /) A$$li'%tio for re'o( itio 1re e/%l of re'o( itio of % !to'6 e#'h% (e * -er !e'tio ) of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 .o 00000000000000000000000000000000000000 00000000000000000000000000000000000000 !bject,*A%%licati$n f$r rec$gniti$n-rene.al $f rec$gniti$n $f a #t$ck e)change !nder #ecti$n 3 $f the ec!ritie# /$ntract# (0eg!lati$n) Act' 1956& Sir, <ursuant to the $%4Securities and 7xchange 8oard of India: Eotification Eo0 00000000000000000000000000 00000000000000000 dated 000000000000000000000000000000000LCertificate of recognition dated0000000000000000000000000000000KeLI on behalf of 000000000000000000 (na(e and address of stoc) exchange) being a stoc) exchange as defined in section % of the Securities Contracts
$% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
(Regulation) Act, !"# hereby apply for recognitionLrenewal of recognition for the purposes of the said Act in respect of contracts in securities0 ". 6our copies of the rules, (e(orandu( and articles of association relating in general to the constitution and (anage(ent of the stoc) exchange and four copies of the bye+laws for the regulation and control contracts in securities are enclosed0 ). All the necessary infor(ation re*uired in the Annexure to this 6or( is enclosed0 Any additional infor(ation will be furnished as and when called for by the $34Securities and 7xchange 8oard of India:0 3. KeLI on behalf of the said stoc) exchange hereby underta)e to co(ply with the re*uire(ents of section $ of the said Act and such other conditions and ter(s as (ay be contained in the certificate of recognition or be prescribed or i(posed subse*uently0 5. .reasury Receipt Eo0 000000dated000000for Rs000000000000is attached0
Oours faithfully, Signature of applicant ANNEAURE TO 2OR@ BAC Part I - General 0 Ea(e of the applicant stoc) exchange0 %0 Address0 30 9ate of establish(ent0 $0 Is your exchange a Doint stoc) co(pany (state whether public or pri'ate) registered under the Indian Co(panies Act or an association for profit or otherwise P If it is organised on so(e other basis, this (ay be stated0 "0 &i'e details of your capital structure and attach three copies of the audited balance sheets and profit and loss account of the 7xchange for the preceding three years0 Part II - Membership #0 State the nu(ber of (e(bers at the ti(e of application0 Also specify how (any are inacti'e0 /0 State whether there is any pro'ision, resolution or con'ention for li(iting the nu(ber of (e(bers and whether in pursuance thereof you ha'e fixed a ceiling on the nu(ber of (e(bers that you would ta)e0 >0 9o you insist on any (ini(u( *ualifications and experience before enrolling new (e(bers P If so gi'e details0 !0 State the different classes of (e(bers, if any, the nu(ber thereof and the pri'ileges enDoyed by each class0 Khat is the procedure followed by your exchange for the ad(ission of different classes of new (e(bers P 00 Khat are the rates of your annual subscription in respect of the different classes of (e(bers P 0 9o you collect any security deposit fro( your (e(bers P If so, gi'e details and also state the (anner in which such deposits are utilised and the rate of interest allowed, if any0
$3 Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
%0 9o you collect any ad(ission or entrance fees fro( your (e(bers or fro( partners of fir(s who are (e(bers P If so, how (uch P 30 9o you insist on your (e(bers and partners of fir(s who are (e(bers di'esting the(sel'es of other acti'ities either as principal or as e(ployee P $0 9o your rules per(it fir(s to beco(e (e(bers P If so, is it incu(bent on (e(bers to see) the appro'al of the go'erning body before ad(itting new partners P State the conditions, if any, laid down in your rules for the ad(ission of such partners0 "0 If your rules do not per(it of fir(s being enrolled as (e(bers, do you per(it indi'idual (e(bers to for( a partnership P State the procedure followed for the recognition of such partnership0 #0 9o you per(it (e(bers to wor) in partnership with non+(e(bers P If so, how far such non+(e(bers subDect to the control of the stoc) exchange P Part III - Governing Body /0 Khat is the present strength of your go'erning body P &i'e details of the constitution, powers of (anage(ent, election and tenure of office of (e(bers of the go'erning body, and the (anner in which its business is transacted0 >0 Are any trade or co((ercial interest represented on your go'erning body P If so,
gi'e details of interests represented0 !0 9o you associate shareholders of in'estors associations with the (anage(ent of your exchange P If so, state the (anner in which it is done0 %00 Are there any &o'ern(ent representati'es on your go'erning body P If so, furnish their na(es0 % 0 9o your rules pro'ide for the direct election by (e(bers of any other bodies or co((ittees, apart fro( the go'erning body P If so, gi'e details of their constitution, tenure, powers and functions0 %%0 9o you ha'e any pro'ision for the appoint(ent of standing or ad h$c subco((ittees of the go'erning body P If so, furnish details of the (ethod of their appoint(ent, ter(s of office, powers and functions0 %30 &i'e the designations, powers and duties of principal office+bearers of your exchange0 Are any of these office+bearers in the pay of the stoc) exchange P If so, gi'e details as to the (ode of their appoint(ent, tenure of office and re(uneration0 Part IV - Trading %$0 9o you ha'e a trading ring P If not, how do you carry on the business P &i'e details0 %"0 State the different )inds of contracts in use on your exchange e&g&' spot, ready and forward0 State the period of deli'ery and pay(ent in each case0 %#0 &i'e details of business hours for each type of contract0 %/0 &i'e details of the scale of bro)erage and other charges, if any, prescribed by your exchange0 %>0 9o you prescribe standard for(s of contract for the use of your (e(bers P Attach three copies of each such contract for(0 %!0 9o you classify your (e(bers into bro)ers and Dobbers P If so, specify the bye+law under which this is done0 300 9o you ha'e a syste( of registration of re(isiers andLor authorised cler)s P If so, gi'e details as to their *ualifications, obligations and rights, etc0 3 0 9o you ha'e any regulations regarding dealings by (e(bers on their own account whether in the nature of 1aravani (day+to+day) or otherwise P 3%0 9o you ha'e any pro'isions for regulating the 'olu(e of business done by any indi'idual (e(ber other than through a syste( of (argins P If so, gi'e details0 330 Khat pro'isions ha'e you (ade for periodical settle(ent of contracts and differences thereunder, the deli'ery of, and pay(ent for securities and the passing of deli'ery orders P 3$0 9o you ha'e a clearing house for the settle(ent of contracts P If so, gi'e details of its organisation and (anage(ent0 3"0 If you ha'e clearing house, what returns do the (e(bers of your exchange sub(it regarding the transactions cleared through such clearing house P 9oes the exchange as) for any regular returns in respect of transactions settled outside the clearing house P Sub(it three copies of for(s used in this connection0 3#0 Iow do you fix, alter or postpone the dates of settle(ent P 3/0 Iow do you deter(ine and declare (a)ing+up prices P 3>0 9o you ha'e any arrange(ents for (a)ing or recording of bargains P 3!0 Ia'e you any arrange(ents for recording and publishing (ar)et rates including opening, closing, highest and lowest rates P $00 Khat pro'isions ha'e you (ade for regulating-(a) the entering into contracts, their
perfor(ance and rescission, including contracts , (i) between (e(bers, (ii) between a (e(ber and his constituent, and (iii) between a (e(ber and a non+(e(ber3 (b) the conse*uences of breach, default or insol'ency on the part of (e(bers whether acting as buyers, sellers or inter(ediaries 3 and (c) 2havala#3 and other (atters relating to conduct of business of (e(bers in the exchange P $ 0 9o you prescribe (argin re*uire(ents P If yes, gi'e details0 $%0 9o you prescribe (axi(u( and (ini(u( prices for securities P If so, how and under what conditions0 $30 9o you pro'ide any safeguards for the pre'ention of Nbulls*ueeFesJ and 3 NbearraidsJ and for (eeting e(ergencies in trade P &i'e details0 $$0 Khat are the (easures adopted by you to regulate or prohibit ad'ertising or issue of circulars by your (e(bers P $"0 Khat are the disciplinary power with the go'erning body to enforce due co(pliance by (e(bers of the rules and bye+laws of the exchange and generally to ensure proper standard of business conduct P $#0 9o you re*uire (e(bers to supply such infor(ation or explanation and to produce such boo)s relating to their business as your go'erning body (ay re*uire P $/0 9o you publish any statistics in regard to business done on the exchange including the transactions settled through the clearing house, if (aintained P In particular, ha'e you e'ol'ed any (achinery for co(puting the 'olu(e of transactions in the different )inds of contracts per(itted on your exchange P &i'e details0 $>0 9o you ha'e any bye+laws contra'ention of which (a)es a contract 'oid P Part V - Miscellaneo s $!0 9o you ha'e any (achinery for arbitration of disputes between (e(bers andLor between (e(bers and their constituents P &i'e details0 "00 Khat are the conditions subDect to which securities are listed for dealings on your exchange P " 0 Khat are your re*uire(ents for ad(itting securities to forward+trading P "%0 9o you ha'e the right to prohibit, withdraw or suspend dealings in a listed security P If so, under what circu(stances is this right exercised P "30 Khat pro'isions ha'e you (ade for the le'y and reco'ery of fees, fines and penalties P FORM B ( ee rules # and /) $$5The Se'*ritie! % - E#'h% (e ;o%r- of I -i%< 4e. 5elhi' the 20&&&&&&&&&&&&& Eo0 000000000000000000000000000000000000.he $"4Securities and 7xchange 8oard of India:, ha'ing considered the application for recognitionLrenewal of recognition (ade under section 3 of the Securities Contracts (Regulation) Act, !"# by000000000000000000000000000000 (na(e and address of exchange) and being satisfied that it would be in the interest of the trade and also in the public interest so to do, hereby grants, in exercise of the powers conferred by section $ of the Securities Contracts (Regulation) Act, !"# recognition to the said exchange under section $ of the said Act for 0000000000000000000 yearLyears ending 0000000000000000000000%0 0000000on a per(anent basis in respect of contracts in securities subDect to the conditions stated herein below or as (ay be prescribed or i(posed hereafter0 Seal of the $#48oard: Signature of Cfficer
Note&-Application for renewal of recognition shall be (ade so as to reach the Central &o'ern(ent not less than three (onths before the expiry of the period0 (.his certificate, will also ha'e to be published as a Eotification in the &aFette of India and also in the Cfficial &aFette of the State in which principal office of the recognised stoc) exchange is situate)0 $/5FORM ! ( ee rule 3) Noti'e to !ho/ '%*!e %(%i !t the /ith-r%/%l of re'o( itio .I7 S7CHRI.I7S AE9 7ACIAE&7 8CAR9 C6 IE9IA 6!"bai' the&&&&&&&&&&& .o 0000000000000000000000000000000000000000000000000000000000000000000000000000000000
$$ Substituted
for 1&o'ern(ent of India, ?inistry of 6inance2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 $" Substituted for 1Central &o'ern(ent2, ibid0 $# Substituted for 1?inistry2, ibid0 $/ Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#
0000000000000000000000000000000000000000000000000000000000000000000000000000000000 (na(e and address of the exchange) Oou are hereby called upon to show cause on or before 0000000000000000000000000000000000000 at the office of 0000000000000000000000000000000000000000000000000000 ( designation of the officer) why the recognition granted to you under the ?inistry of 6inanceLthe Securities and 7xchange 8oard of India, Eotification Eo0 0000000000000000000000000000 dated 000000000000000000000000000000000000000 and Certificate Eo0 00000000000000000000000000000 dated 000000000000000000000000000000 should not be withdrawn for the reasons gi'en in the annexure to this notice0 8y order and in the na(e of the Securities and 7xchange 8oard of India0 Seal of the Securities and 7xchange 8oard of India0 Notifi'%tio & 4$& 576' dated 217271957&
SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< SECTIONS
80(9:6:4A0; 1. Short title, extent and co((ence(ent ". 9efinitions 0(/<=4: (5 1</> (?/@A4=( ). Application for recognition of stoc) exchanges 3. &rant of recognition to stoc) exchanges0 3A. Corporatisation and de(utualisation of stoc) exchanges 3;. <rocedure for corporatisation and de(utualisation 5. Kithdrawal of recognition 8. <ower of Central &o'ern(ent to call for periodical returns or direct in*uiries to be (ade 7. Annual reports to be furnished to Central &o'ern(ent by stoc) exchanges 7A. <ower of recognised stoc) exchange to (a)e rules restricting 'oting rights, etc :. <ower of Central &o'ern(ent to direct rules to be (ade or to (a)e rules :A. Clearing corporation 9. <ower of recognised stoc) exchanges to (a)e bye+laws 1=. <ower of Securities and 7xchange 8oard of India to (a)e or a(end byelaws of recognised stoc) exchanges 11. <ower of Central &o'ern(ent to supersede go'erning body of a recognised stoc) exchange 1". <ower to suspend business of recognised stoc) exchanges0 1"A. <ower to issue directions 1). Contracts in notified areas illegal in certain circu(stances 1)A. Additional trading floor 13. Contracts in notified areas to be 'oid in certain circu(stances 15. ?e(bers (ay not act as principals in certain circu(stances 18. <ower to prohibit contracts in certain cases 17. =icensing of dealers in securities in certain areas 17A. <ublic issue and listing of securities referred to in sub+clause ( ie) of clause (h) of section % 1:. 7xclusion of spot deli'ery contracts fro( sections 3, $, " and / 1:A. Contracts in deri'ati'e 19. Stoc) exchanges other than recognised stoc) exchanges prohibited "=. <rohibition of options in securities "1. Conditions for listing "1A. 9elisting of securities "". Right of appeal against refusal of stoc) exchanges to list securities of public co(panies ""A. Right of appeal to Securities Appellate .ribunal against refusal of stoc) exchange to list securities of public co(panies "";. <rocedure and powers of Securities Appellate .ribunal ""C. Right to legal representation ""D. =i(itation ""E. Ci'il court not to ha'e Durisdiction
""2. Appeal to Supre(e Court 8(4A91:( A45 80</(5A0( "). <enalties ")A. <enalty for failure to furnish infor(ation, return, etc0 ");. <enalty for failure by any person to enter into an agree(ent with clients ")C. <enalty for failure to redress in'estorsJ grie'ances ")D. <enalty for failure to segregate securities or (oneys of client or clients ")E. <enalty for failure to co(ply with pro'ision of listing conditions or delisting conditions or grounds ")2. <enalty for excess de(aterialisation or deli'ery of unlisted securities ")G. <enalty for failure to furnish periodical returns, etc0 ")D. <enalty for contra'ention where no separate penalty has been pro'ided ")0I. <ower to adDudicate ")E. 6actors to be ta)en into account by adDudicating officer ")EA. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! ")E;. Re'o+er> of %.o* t! ")F. Crediting su(s realised by way of penalties to Consolidated 6und of India ")L. Appeal to Securities Appellate .ribunal ")@. Cffences ")N. Co(position of certain offences ")0O. <ower to grant i((unity "3. Cffences by co(panies "5. Certain offences to be cogniFable "8. CogniFance of offences by courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! 6: /(99A4(<A "7. .itle to di'idends "7A. Right to recei'e inco(e fro( collecti'e in'est(ent sche(e "7;. Right to recei'e inco(e fro( (utual fund ":. Act not to apply in certain cases "9. <rotection of action ta)en in good faith "9A. <ower to delegate )=. <ower to (a)e rules )1. <ower of Securities and 7xchange 8oard of India to (a)e regulations SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< 53th Se$te.,er, 1958< A A't to $re+e t * -e!ir%,le tr% !%'tio ! i !e'*ritie! ,> re(*l%ti ( the ,*!i e!! of -e%li ( therei , 14***: ,> $ro+i-i ( for 'ert%i other .%tter! 'o e'te- there/ith. 87 it enacted by <arlia(ent in the Se'enth Oear of the Republic of India as follows ,
80(9:6:4A0; Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities Contracts (Regulation) Act, !"#0 (%) It extends to the whole of India0
Kords 1by prohibiting options and2 o(itted by the Securities =aws (A(end(ent) Act, !!", Sec0 >, w0e0f0 %"+0 + !!".
(3) It shall co(e into force on such date% as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 Defi itio !. ". In this Act, unless the context otherwise re*uires,(a) 1contract2 (eans a contract for or relating to the purchase or sale of securities3 3 4(aa) 1corporatisation2 (eans the succession of a recognised stoc) exchange, being a body of indi'iduals or a society registered under the Societies Registration Act, >#0 (% of >#0), by another stoc) exchange, being a co(pany incorporated for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities carried on by such indi'iduals or society3 (ab) 1de(utualisation2 (eans the segregation of ownership and (anage(ent fro( the trading rights of the (e(bers of a recognised stoc) exchange in accordance with a sche(e appro'ed by the Securities and 7xchange 8oard of India3: $4"4(ac): 1deri'ati'e2 includes(A) a security deri'ed fro( a debt instru(ent, share, loan, whether secured or unsecured, ris) instru(ent or contract for differences or any other for( of security3 (B) a contract which deri'es its 'alue fro( the prices, or index of prices, of underlying securities3: (b) 1&o'ern(ent security2 (eans a security created and issued, whether before or after the co((ence(ent of this Act, by the Central &o'ern(ent or a State &o'ern(ent for the purpose of raising a public loan and ha'ing one of the for(s specified in clause (2) of section % of the <ublic 9ebt Act, !$$ ( > of !$$)3 (c) 1(e(ber2 (eans a (e(ber of a recognised stoc) exchange3 (d) 1option in securities2 (eans a contract for the purchase or sale of a right to buy or sell, or a right to buy and sell, securities in future, and includes a teji' a "andi' a teji "andi' a galli' a put, a call or a put and call in securities3 (e) 1prescribed2 (eans prescribed by rules (ade under this Act3
% %0+%+
!"/ vide SRC "%>, dated #+0%+ !"/, published in the &aFette of India, 7xtra0, <t0 II, Sec0 3, p0 "$!, dated #+0%+ !"/0 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 $ Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000 " Clause (aa) renu(bered as clause (ac) by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0
(f) 1recognised stoc) exchange2 (eans a stoc) exchange which is for the ti(e
being recognised by the Central &o'ern(ent under section $3 (g) 1rules2, with reference to the rules relating in general to the constitution and (anage(ent of a stoc) exchange, includes, in the case of a stoc) exchange which is an incorporated association, its (e(orandu( and articles of association3 64(ga) 1sche(e2 (eans a sche(e for corporatisation or de(utualisation of a recognised stoc) exchange which (ay pro'ide for(i) the issue of shares for a lawful consideration and pro'ision of trading rights in lieu of (e(bership cards of (e(bers of a recognised stoc) exchange3 (ii) the restrictions on 'oting rights3 (iii) the transfer of property, business, assets, rights, liabilities, recognitions, contracts of the recognised stoc) exchange, legal proceedings by, or against, the recognised stoc) exchange, whether in the na(e of the recognised stoc) exchange or any trustee or otherwise and any per(ission gi'en to, or by, the recognised stoc) exchange3 (iv) the transfer of e(ployees of a recognised stoc) exchange to another recognised stoc) exchange3 (v) any other (atter re*uired for the purpose of, or in connection with, the corporatisation or de(utualisation, as the case (ay be, of the recognised stoc) exchange3: /4>4(gb): 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (h) 1securities2 include(i) shares, scrips, stoc)s, bonds, debentures, debenture stoc) or other (ar)etable securities of a li)e nature in or of any incorporated co(pany or other body corporate3 !4(ia) deri'ati'e3 (ib) units or any other instru(ent issued by any collecti'e in'est(ent sche(e to the in'estors in such sche(es3:
# Inserted / Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (Second A(end(ent) Act, !!!, Sec %, w0e0f0 #+ %+ !!!0 > Clause (ga) renu(bered as clause (gb) by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 ! Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000
04(ic) security receipt as defined in clause ( Cg) of section % of the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%3: 114(id) units or any other such instru(ent issued to the in'estors under any (utual fund sche(e3: %47xplanation0-6or the re(o'al of doubts, it is hereby declared that ;securities; shall not include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(bined benefit ris) on the life of the persons and in'est(ent by such
persons and issued by an insurer referred to in clause (!) of section % of the Insurance Act, !3> ($ of !3>)3: 35(ie) any certificate or instru(ent (by whate'er na(e called), issued to an in'estor by any issuer being a special purpose distinct entity which possesses any debt or recei'able, including (ortgage debt, assigned to such entity, and ac)nowledging beneficial interest of such in'estor in such debt or recei'able, including (ortgage debt, as the case (ay be3 <
0 Inserted by the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%, Sec0 $ and Schedule, w0r0e0f0 % +#+%00%0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0e0f0 %+ 0+%00$0 % Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, Sec $, w0r0e0f0 0!+0$+%0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, read as under , ;CIA<.7R BI ?ISC7==AE7CHS #0 Dalidati$n&-Eotwithstanding anything contained in any Dudg(ent, decree or order of any Court, .ribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly, any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 0e%eal and #aving#&*( ) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0; 3 Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec %, w0e0f0 %>+"+ %00/0
$4(ii) &o'ern(ent securities3 (iia) such other instru(ents as (ay be declared by the Central &o'ern(ent to be securities3 and: (iii) rights or interest in securities3 "4(i) 1spot deli'ery contract2 (eans a contract which pro'ides for,(a) actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e
town or locality3 (b) transfer of the securities by the depository fro( the account of a beneficial owner to the account of another beneficial owner when such securities are dealt with by a depository3: #4(j) 1stoc) exchange2 (eans(a) any body of indi'iduals, whether incorporated or not, constituted before corporatisation and de(utualisation under sections $A and $8, or (b) a body corporate incorporated under the Co(panies Act, !"# ( of !"#) whether under a sche(e of corporatisation and de(utualisation or otherwise, for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0: /4I ter$ret%tio of 'ert%i /or-! % - e#$re!!io !. "A. Kords and expressions used herein and not defined in this Act but defined in the Co(panies Act, !"# ( of !"#) or the Securities and 7xchange 8oard of India
$ Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, for sub+clause (ii), w0r0e0f0 30+0 + !!%0 " Substituted by the 9epositories Act, !!#, Sec 30 and Schedule, <t0 III, w0r0e0f0 %0+0!+ !!" . <rior to its substitution, clause (i) read as under , N(i) 1spot deli'ery contract2 (eans a contract which pro'ides for the actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e town or locality3J # Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (j) read as under ,N(j) 1stoc) exchange2 (eans any body of indi'iduals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0J / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
Act, !!% ( " of !!%) or the 9epositories Act, !!# (%% of !!#) shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts0: 0(/<=4: (5 1</> (?/@A4=( A$$li'%tio for re'o( itio of !to'6 e#'h% (e!. ). ( ) Any stoc) exchange, which is desirous of being recognised for the purposes of this Act, (ay (a)e an application in the prescribed (anner to the Central &o'ern(ent01: (%) 7'ery application under sub+section ( ) shall contain such particulars as (ay be prescribed, and shall be acco(panied by a copy of the bye+laws of the stoc) exchange for the regulation and control of contracts and also a copy of the rules relating in general to the constitution of the stoc) exchange and in particular, to(a) the go'erning body of such stoc) exchange, its constitution and powers of (anage(ent and the (anner in which its business is to be transacted3 (b) the powers and duties of the office bearers of the stoc) exchange3 (c) the ad(ission into the stoc) exchange of 'arious classes of (e(bers, the *ualifications for (e(bership, and the exclusion, suspension, expulsion and
re+ad(ission of (e(bers therefro( or thereinto3 (d) the procedure for the registration of partnerships as (e(bers of the stoc) exchange in cases where the rules pro'ide for such (e(bership3 and the no(ination and appoint(ent of authorised representati'es and cler)s0 Gr% t of re'o( itio to !to'6 e#'h% (e!. 3. ( ) If the Central &o'ern(ent ! is satisfied, after (a)ing such in*uiry as (ay be necessary in this behalf and after obtaining such further infor(ation, if any, as it (ay re*uire,(a) that the rules and bye+laws of a stoc) exchange applying for registration are in confor(ity with such conditions as (ay be prescribed with a 'iew to ensure fair dealing and to protect in'estors3 (b) that the stoc) exchange is willing to co(ply with any other conditions (including conditions as to the nu(ber of (e(bers) which the Central &o'ern(ent, after consultation with the go'erning body of the stoc) exchange and ha'ing regard to the area ser'ed by the stoc) exchange and its standing and the nature of the securities dealt with by it, (ay i(pose for the purpose of carrying out the obDects of this Act3 and
> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 ! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
(c) that it would be in the interest of the trade and also in the public interest to grant recognition to the stoc) exchange3 it (ay grant recognition to the stoc) exchange subDect to the conditions i(posed upon it as aforesaid and in such for( as (ay be prescribed0 (%) .he conditions which the Central &o'ern(ent %0 (ay prescribe under clause (a) of sub+section ( ) for the grant of recognition to the stoc) exchanges (ay include, a(ong other (atters, conditions relating to,(i) the *ualifications for (e(bership of stoc) exchanges3 (ii) the (anner in which contracts shall be entered into and enforced as between (e(bers3 (iii) the representation of the Central &o'ern(ent on each of the stoc) exchange by such nu(ber of persons not exceeding three as the Central &o'ern(ent (ay no(inate in this behalf3 and (iv) the (aintenance of accounts of (e(bers and their audit by chartered accountants whene'er such audit is re*uired by the Central &o'ern(ent0 (3) 7'ery grant of recognition to a stoc) exchange under this section shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office as of the stoc) exchange is situate, and such recognition shall ha'e effect as fro( the date of its publication in the &aFette of India0 % ($) Eo application for the grant of recognition shall be refused except after gi'ing an opportunity to the stoc) exchange concerned to be heard in the (atter3 and the reasons for such refusal shall be co((unicated to the stoc) exchange in writing0 %% (") Eo rules of a recognised stoc) exchange relating to any of the (atters specified in sub+section (%) of section 3 shall be a(ended except with the appro'al of the
Central &o'ern(ent0%3 "35Cor$or%ti!%tio % - -e.*t*%li!%tio of !to'6 e#'h% (e!. 3A. Cn and fro( the appointed date, all recognised stoc) exchanges (if not corporatised and de(utualised before the appointed date) shall be corporatised and de(utualised in accordance with the pro'isions contained in section $8 ,
%0 <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 % <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %% <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %3 <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 %$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
4ro+i-e- that the Securities and 7xchange 8oard of India (ay, if it is satisfied that any recognised stoc) exchange was pre'ented by sufficient cause fro( being corporatised and de(utualised on or after the appointed date, specify another appointed date in respect of that recognised stoc) exchange and such recognised stoc) exchange (ay continue as such before such appointed date0 ()%lanati$n&*6or the purposes of this section, 1appointed date2 (eans the date which the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, appoint and different appointed dates (ay be appointed for different recognised stoc) exchanges0: "554ro'e-*re for 'or$or%ti!%tio % - -e.*t*%li!%tio . 3;. ( ) All recognised stoc) exchanges referred to in section $A shall, within such ti(e as (ay be specified by the Securities and 7xchange 8oard of India, sub(it a sche(e for corporatisation and de(utualisation for its appro'al , 4ro+i-e- that the Securities and 7xchange 8oard of India, (ay, by notification in the Cfficial &aFette, specify na(e of the recognised stoc) exchange, which had already been corporatised and de(utualised, and such stoc) exchange shall not be re*uired to sub(it the sche(e under this section0 (%) Cn receipt of the sche(e referred to in sub+section ( ), the Securities and 7xchange 8oard of India (ay, after (a)ing such en*uiry as (ay be necessary in this behalf and obtaining such further infor(ation, if any, as it (ay re*uire and if it is satisfied that it would be in the interest of the trade and also in the public interest, appro'e the sche(e with or without (odification0 (3) Eo sche(e under sub+section (%) shall be appro'ed by the Securities and 7xchange 8oard of India if the issue of shares for a lawful consideration or pro'ision of trading rights in lieu of (e(bership card of the (e(bers of a recognised stoc) exchange or pay(ent of di'idends to (e(bers ha'e been proposed out of any reser'es or assets of that stoc) exchange0 ($) Khere the sche(e is appro'ed under sub+section (%), the sche(e so appro'ed shall be published i((ediately by(a) the Securities and 7xchange 8oard of India in the Cfficial &aFette3 (b) the recognised stoc) exchange in such two daily newspapers circulating in India, as (ay be specified by the Securities and 7xchange 8oard of India,
and upon such publication, notwithstanding anything to the contrary contained in this Act or any other law for the ti(e being in force or any agree(ent, award, Dudg(ent, decree or other instru(ent for the ti(e being in force, the sche(e shall ha'e effect and be binding on all persons and authorities including all (e(bers, creditors, depositors and e(ployees of the recognised stoc) exchange and on all
%" Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
persons ha'ing any contract, right, power, obligation or liability with, against, o'er, to, or in connection with, the recognised stoc) exchange or its (e(bers0 (") Khere the Securities and 7xchange 8oard of India is satisfied that it would not be in the interest of the trade and also in the public interest to appro'e the sche(e under sub+section (%), it (ay, by an order, reDect the sche(e and such order of reDection shall be published by it in the Cfficial &aFette , 4ro+i-e- that the Securities and 7xchange 8oard of India shall gi'e a reasonable opportunity of being heard to all the persons concerned and the recognised stoc) exchange concerned before passing an order reDecting the sche(e0 (#) .he Securities and 7xchange 8oard of India (ay, while appro'ing the sche(e under sub+section (%), by an order in writing, restrict(a) the 'oting rights of the shareholders who are also stoc) bro)ers of the reognised stoc) exchange3 (b) the right of shareholders or a stoc) bro)er of the recognised stoc) exchange to appoint the representati'es on the go'erning board of the stoc) exchange3 (c) the (axi(u( nu(ber of representati'es of the stoc) bro)ers of the recognised stoc) exchange to be appointed on the go'erning board of the recognised stoc) exchange, which shall not exceed one+fourth of the total strength of the go'erning board0 (/) .he order (ade under sub+section (#) shall be published in the Cfficial &aFette and on the publication thereof, the order shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#), or any other law for the ti(e being in force, ha'e full effect0 (>) 7'ery recognised stoc) exchange, in respect of which the sche(e for corporatisation or de(utualisation has been appro'ed under sub+section (%), shall, either by fresh issue of e*uity shares to the public or in any other (anner as (ay be specified by the regulations (ade by the Securities and 7xchange 8oard of India %#, ensure that at least fifty+one per cent of its e*uity share capital is held, within twel'e (onths fro( the date of publication of the order under sub+section (/), by the public other than shareholders ha'ing trading rights , 4ro+i-e- that the Securities and 7xchange 8oard of India (ay, on sufficient cause being shown to it and in the public interest, extend the said period by another twel'e (onths0:
ee Securities Contracts (Regulation) (Stoc) 7xchanges and Clearing Corporations) Regulations, %0 %, w0e0f0 %0+0#+%0 % notified vide &aFette Eotification Eo0 =A9+ ERCL&EL%0 %+ 3L0/L 3"$#, 7xtra0, <t0 III, Section $, dtd %0+0#+%0 %0
%#
?ith-r%/%l of re'o( itio .
5. %/4( ): If the Central &o'ern(ent%> is of opinion that the recognition granted to a stoc) exchange under the pro'isions of this Act should, in the interest of the trade or in the public interest, be withdrawn, the Central &o'ern(ent (ay ser'e on the go'erning body of the stoc) exchange a written notice that the Central &o'ern(ent is considering the withdrawal of the recognition for the reasons stated in the notice and after gi'ing an opportunity to the go'erning body to be heard in the (atter, the Central &o'ern(ent (ay withdraw, by notification in the Cfficial &aFette, the recognition granted to the stoc) exchange , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Central &o'ern(ent (ay, after consultation with the stoc) exchange, (a)e such pro'ision as it dee(s fit in the notification of withdrawal or in any subse*uent notification si(ilarly published for the due perfor(ance of any contracts outstanding on that date0 %!4(%) Khere the recognised stoc) exchange has not been corporatised or de(utualised or it fails to sub(it the sche(e referred to in sub+section ( ) of section $8 within the specified ti(e therefor or the sche(e has been reDected by the Securities and 7xchange 8oard of India under sub+section (") of section $8, the recognition granted to such stoc) exchange under section $, shall, notwithstanding anything to the contrary contained in this Act, stand withdrawn and the Central &o'ern(ent shall publish, by notification in the Cfficial &aFette, such withdrawal of recognition , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Securities and 7xchange 8oard of India (ay, after consultation with the stoc) exchange, (a)e such pro'isions as it dee(s fit in the order reDecting the sche(e published in the Cfficial &aFette under sub+section (") of section $80: 4o/er of Ce tr%l Go+er .e t to '%ll for $erio-i'%l ret*r ! or -ire't i 7*irie! to ,e .%-e. 8. ( ) 7'ery recognised stoc) exchange shall furnish to the 304Securities and 7xchange 8oard of India: such periodical returns relating to its affairs as (ay be prescribed0
%/ Section
" renu(bered as sub+section ( ) by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 %> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 30 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(%) 7'ery recognised stoc) exchange and e'ery (e(ber thereof shall (aintain and preser'e for such periods not exceeding fi'e years such boo)s of account, and other docu(ents as the Central &o'ern(ent, after consultation with the stoc) exchange concerned, (ay prescribe in the interest of the trade or in the public interest, and such boo)s of account, and other docu(ents shall be subDect to inspection at all reasonable ti(es 3 4by the Securities and 7xchange 8oard of India:0 (3) Kithout preDudice to the pro'isions contained in sub+sections ( ) and (%), the
3%4Securities
and 7xchange 8oard of India:, if it is satisfied that it is in the interest of the trade or in the public interest so to do, (ay, by order in writing,(a) call upon a recognised stoc) exchange or any (e(ber thereof to furnish in writing such infor(ation or explanation relating to the affairs of the stoc) exchange or of the (e(ber in relation to the stoc) exchange as the 334Securities and 7xchange 8oard of India: (ay re*uire3 or (b) appoint one or (ore persons to (a)e an in*uiry in the prescribed (anner in relation to the affairs of the go'erning body of a stoc) exchange or the affairs of any of the (e(bers of the stoc) exchange in relation to the stoc) exchange and sub(it a report of the result of such in*uiry to the 3$4Securities and 7xchange 8oard of India: within such ti(e as (ay be specified in the order or, in the case of an in*uiry in relation to the affairs of any of the (e(bers of a stoc) exchange, direct the go'erning body to (a)e the in*uiry and sub(it its report to the 3"4Securities and 7xchange 8oard of India:0 ($) Khere an in*uiry in relation to the affairs of a recognised stoc) exchange or the affairs of any of its (e(bers in relation to the stoc) exchange has been underta)en under sub+section (3),(a) e'ery director, (anager, secretary or other officer of such stoc) exchange3 (b) e'ery (e(ber of such stoc) exchange3 (c) if the (e(ber of the stoc) exchange is a fir(, e'ery partner, (anager, secretary or other officer of the fir(3 and (d) e'ery other person or body of persons who has had dealings in the course of business with any of the persons (entioned in clauses ( a), (b) and (c), whether directly or indirectly3
Substituted for ;by the Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3% Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 33 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3" Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
3
shall be bound to produce before the authority (a)ing the in*uiry all such boo)s of account, and other docu(ents in his custody or power relating to or ha'ing a bearing on the subDect+(atter of such in*uiry and also to furnish the authorities within such ti(e as (ay be specified with any such state(ent or infor(ation relating thereto as (ay be re*uired of hi(0 )8A *%l re$ort! to ,e f*r i!he- to Ce tr%l Go+er .e t ,> !to'6 e#'h% (e!. 7. 7'ery recognised stoc) exchange shall furnish the Central &o'ern(ent with a copy of the annual report, and such annual report shall contain such particulars as (ay be prescribed0 )754o/er of re'o( i!e- !to'6 e#'h% (e to .%6e r*le! re!tri'ti ( +oti ( ri(ht!, et'. 7A. ( ) A recognised stoc) exchange (ay (a)e rules or a(end any rules (ade by it
to pro'ide for all or any of the following (atters, na(ely ,(a) the restriction of 'oting rights to (e(bers only in respect of any (atter placed before the stoc) exchange at any (eeting3 (b) the regulation of 'oting rights in respect of any (atter placed before the stoc) exchange at any (eeting so that each (e(ber (ay be entitled to ha'e one 'ote only, irrespecti'e of his share of the paid+up e*uity capital of the stoc) exchange3 (c) the restriction on the right of a (e(ber to appoint another person as his proxy to attend and 'ote at a (eeting of the stoc) exchange3 (d) such incidental, conse*uential and supple(entary (atters as (ay be necessary to gi'e effect to any of the (atters specified in clauses ( a), (b) and (c)0 (%) Eo rules of a recognised stoc) exchange (ade or a(ended in relation to any (atter referred to in clauses (a) to (d) of sub+section ( ) shall ha'e effect until they ha'e been appro'ed by the Central &o'ern(ent 3> and published by that &o'ern(ent in the Cfficial &aFette and, in appro'ing the rules so (ade or a(ended, the Central &o'ern(ent (ay (a)e such (odifications therein as it thin)s fit, and on such publication, the rules as appro'ed by the Central &o'ern(ent shall be dee(ed to ha'e been 'alidly (ade, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#)0:
3# <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 3/ Inserted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec %, w0e0f0 0>+ %+ !"!0 3> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
4o/er of Ce tr%l Go+er .e t )9 to -ire't r*le! to ,e .%-e or to .%6e r*le!. :. ( ) Khere, after consultation with the go'erning bodies of stoc) exchanges generally or with the go'erning body of any stoc) exchange in particular, the Central &o'ern(ent is of opinion that it is necessary or expedient so to do, it (ay, by order in writing together with a state(ent of the reasons therefor, direct recognised stoc) exchanges generally or any recognised stoc) exchange in particular, as the case (ay be, to (a)e any rules or to a(end any rules already (ade in respect of all or any of the (atters specified in sub+section (%) of section 3 within a period of $04two (onths: fro( the date of the order0 (%) If any recognised stoc) exchange fails or neglects to co(ply with any order (ade under sub+section ( ) within the period specified therein, the Central &o'ern(ent (ay (a)e the rules for, or a(end the rules (ade by, the recognised stoc) exchange, either in the for( proposed in the order or with such (odifications thereof as (ay be agreed to between the stoc) exchange and the Central &o'ern(ent0 (3) Khere in pursuance of this section any rules ha'e been (ade or a(ended, the rules so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette or &aFettes of the State or States in which the principal office or offices of the recognised stoc) exchange or exchanges is or are situate, and, on the publication thereof in the &aFette of India, the rules so (ade or a(ended shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# (
of !"#), or in any other law for the ti(e being in force, ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange or stoc) exchanges, as the case (ay be0 315Cle%ri ( 'or$or%tio . :A. ( ) A recognised stoc) exchange (ay, with the prior appro'al of the Securities and 7xchange 8oard of India, transfer the duties and functions of a clearing house to a clearing corporation, being a co(pany incorporated under the Co(panies Act, !"# ( of !"#), for the purpose of(a) the periodical settle(ent of contracts and differences thereunder3 (b) the deli'ery of, and pay(ent for, securities3 (c) any other (atter incidental to, or connected with, such transfer0 (%) 7'ery clearing corporation shall, for the purpose of transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( ),
3! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 $0 Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec !, w0e0f0 %"+ 0 + !!"0 $ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0
(a)e bye+laws and sub(it the sa(e to the Securities and 7xchange 8oard of India for its appro'al0 (3) .he Securities and 7xchange 8oard of India (ay, on being satisfied that it is in the interest of the trade and also in the public interest to transfer the duties and functions of a clearing house to a clearing corporation, grant appro'al to the byelaws sub(itted to it under sub+section (%) and appro'e the transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( )0 ($) .he pro'isions of sections $, ", #, /, >, !, 0, and % shall, as far as (ay be, apply to a clearing corporation referred to in sub+section ( ) as they apply in relation to a recognised stoc) exchange0: 4o/er of re'o( i!e- !to'6 e#'h% (e! to .%6e ,>e0l%/!. 9. ( ) Any recognised stoc) exchange (ay, subDect to the pre'ious appro'al of the $%4Securities and 7xchange 8oard of India:, (a)e bye+laws for the regulation and control of contracts0 (%) In particular, and without preDudice to the generality of the foregoing power, such bye+laws (ay pro'ide for , (a) the opening and closing of (ar)ets and the regulation of the hours of trade3 (b) a clearing house for the periodical settle(ent of contracts and differences thereunder, the deli'ery of and pay(ent for securities, the passing on of deli'ery orders and the regulation and (aintenance of such clearing house3 (c) the sub(ission to the $34Securities and 7xchange 8oard of India: by the clearing house as soon as (ay be after each periodical settle(ent of all or any of the following particulars as the $$4Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, re*uire, na(ely ,(i) the total nu(ber of each category of security carried o'er fro( one settle(ent period to another3 (ii) the total nu(ber of each category of security, contracts in respect of
which ha'e been s*uared up during the course of each settle(ent period3 (iii) the total nu(ber of each category of security actually deli'ered at each clearing3
$% Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(d) the publication by the clearing house of all or any of the particulars sub(itted to the $"4Securities and 7xchange 8oard of India: under clause ( c) subDect to the directions, if any, issued by the $#4Securities and 7xchange 8oard of India: in this behalf3 (e) the regulation or prohibition of blan) transfers3 (f) the nu(ber and classes of contracts in respect of which settle(ents shall be (ade or differences paid through the clearing house3 (g) the regulation, or prohibition of b!dla# or carry+o'er facilities3 (h) the fixing, altering or postponing of days for settle(ents3 (i) the deter(ination and declaration of (ar)et rates, including the opening, closing highest and lowest rates for securities3 (j) the ter(s, conditions and incidents of contracts, including the prescription of (argin re*uire(ents, if any, and conditions relating thereto, and the for(s of contracts in writing3 (k) the regulation of the entering into, (a)ing, perfor(ance, recession and ter(ination, of contracts, including contracts between (e(bers or between a (e(ber and his constituent or between a (e(ber and a person who is not a (e(ber, and the conse*uences of default or insol'ency on the part of a seller or buyer or inter(ediary, the conse*uences of a breach or o(ission by a seller or buyer, and the responsibility of (e(bers who are not parties to such contracts3 (l) the regulation of taravani business including the placing of li(itations thereon3 (") the listing of securities on the stoc) exchange, the inclusion of any security for the purpose of dealings and the suspension or withdrawal of any such securities, and the suspension or prohibition of trading in any specified securities3 (n) the (ethod and procedure for the settle(ent of clai(s or disputes, including settle(ent by arbitration3 ($) the le'y and reco'ery of fees, fines and penalties3 (%) the regulation of the course of business between parties to contracts in any capacity3 (+) the fixing of a scale of bro)erage and other charges3 (r) the (a)ing, co(paring, settling and closing of bargains3 (#) the e(ergencies in trade which (ay arise, whether as a result of pool or syndicated operations or cornering or otherwise, and the exercise of powers in
$" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%,
Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $# Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
such e(ergencies, including the power to fix (axi(u( and (ini(u( prices for securities3 (t) the regulation of dealings by (e(bers for their own account3 (!) the separation of the functions of Dobbers and bro)ers3 (v) the li(itations on the 'olu(e of trade done by any indi'idual (e(ber in exceptional circu(stances3 (.) the obligation of (e(bers to supply such infor(ation or explanation and to produce such docu(ents relating to the business as the go'erning body (ay re*uire0 (3) .he bye+laws (ade under this section (ay(a) specify the bye+laws the contra'ention of which shall (a)e a contract entered into otherwise than in accordance with the bye+laws 'oid under sub+section ( ) of section $3 (b) pro'ide that the contra'ention of any of the bye+laws shall render the (e(ber concerned liable to one or (ore of the following punish(ents, na(ely ,(i) fine, (ii) expulsion fro( (e(bership, (iii) suspension fro( (e(bership for a specified period, (iv) any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney0 ($) Any bye+laws (ade under this section shall be subDect to such conditions in regard to pre'ious publication as (ay be prescribed, and, when appro'ed by the $/4Securities and 7xchange 8oard of India:, shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and shall ha'e effect as fro( the date of its publication in the &aFette of India , 4ro+i-e- that if the $>4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+law should be (ade i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0
$/ Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $> Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4o/er of 395Se'*ritie! % - E#'h% (e ;o%r- of I -i%< to .%6e or %.e - ,>e0l%/! of re'o( i!e- !to'6 e#'h% (e!. 1=. ( ) .he "04Securities and 7xchange 8oard of India: (ay, either on a re*uest in writing recei'ed by it in this behalf fro( the go'erning body of a recognised stoc) exchange or on its own (otion, if it is satisfied after consultation with the go'erning body of the stoc) exchange that it is necessary or expedient so to do and after recording its reasons for so doing, (a)e bye+laws for all or any of the (atters specified in section ! or a(end any bye+laws (ade by such stoc) exchange under that section0
(%) Khere in pursuance of this section any bye+laws ha'e been (ade or a(ended the bye+laws so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and on the publication thereof in the &aFette of India, the bye+laws so (ade or a(ended shall ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange concerned0 (3) Eotwithstanding anything contained in this section, where the go'erning body of a recognised stoc) exchange obDects to any bye+laws (ade or a(ended under this section by the " 4Securities and 7xchange 8oard of India: on its own (otion, it (ay, within "%4two (onths: of the publication thereof in the &aFette of India under subsection (%), apply to the "34Securities and 7xchange 8oard of India: for re'ision thereof, and the "$4Securities and 7xchange 8oard of India: (ay, after gi'ing an opportunity to the go'erning body of the stoc) exchange to be heard in the (atter, re'ise the bye+laws so (ade or a(ended, anywhere any bye+laws so (ade or a(ended are re'ised as a result of any action ta)en under this sub+section, the byelaws so re'ised shall be published and shall beco(e effecti'e as pro'ided in subsection (%)0 ($) .he (a)ing or the a(end(ent or re'ision of any bye+laws under this section shall in all cases be subDect to the condition of pre'ious publication ,
$! Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "0 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 " Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "% Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec %0, w0e0f0 %"+ 0 + !!"0 "3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4ro+i-e- that if the ""4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+laws should be (ade, a(ended or re'ised i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0 4o/er of Ce tr%l Go+er .e t 58 to !*$er!e-e (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e. 11. ( ) Kithout preDudice to any other powers 'ested in the Central &o'ern(ent under this Act, where the Central &o'ern(ent is of opinion that the go'erning body of any recognised stoc) exchange should be superseded, then, notwithstanding anything contained in any other law for the ti(e being in force, in the Central &o'ern(ent (ay ser'e on the go'erning body a written notice that the Central &o'ern(ent is considering the supersession of the go'erning body for the reasons specified in the notice and after gi'ing an opportunity to the go'erning body to be
heard in the (atter, it (ay, by notification in the Cfficial &aFette, declare the go'erning body of such stoc) exchange to be superseded, and (ay appoint any person or persons to exercise and perfor( all the powers and duties of the go'erning body, and, where (ore persons than one are appointed, (ay appoint one of such persons to be the chair(an and another to be the 'ice+chair(an thereof0 (%) Cn the publication of a notification in the Cfficial &aFette under sub+section ( ), the following conse*uences shall ensue, na(ely,(a) the (e(bers of the go'erning body which has been superseded shall, as fro( the date of the notification of supersession, cease to hold office as such (e(bers3 (b) the person or persons appointed under sub+section ( ) (ay exercise and perfor( all the powers and duties of the go'erning body which has been superseded3 (c) all such property of the recognised stoc) exchange as the person or persons appointed under sub+section ( ) (ay, by order in writing, specify in this behalf as being necessary for the purpose of enabling hi( or the( to carry on the business of the stoc) exchange, shall 'est in such person or persons0 (3) Eotwithstanding anything to the contrary contained in any law or the rules or bye+laws of the recognised stoc) exchange the go'erning body of which is superseded under sub+section ( ), the person or persons appointed under that subsection shall hold office for such period as (ay be specified in the notification published under that sub+section and the Central &o'ern(ent (ay fro( ti(e to ti(e, by li)e notification, 'ary such period0
"" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "# <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0
($) .he Central &o'ern(ent (ay at any ti(e before the deter(ination of the period of office of any person or persons appointed under this section call upon the recognised stoc) exchange to re+constitute the go'erning body in accordance with its rules and on such re+constitution all the property of the recognised stoc) exchange which has 'ested in, or was in the possession of, the person or persons appointed under sub+section ( ), shall re+'est or 'est, as the case (ay be, in the go'erning body so re+constituted , 4ro+i-e- that until a go'erning body is so re+constituted, the person or persons appointed under sub+section ( ) shall continue to exercise and perfor( their powers and duties0 4o/er57 to !*!$e - ,*!i e!! of re'o( i!e- !to'6 e#'h% (e!. 1". If in the opinion of the Central &o'ern(ent an e(ergency has arisen and for the purpose of (eeting the e(ergency the Central &o'ern(ent considers it expedient so to do, it (ay, by notification in the Cfficial &aFette, for reasons to be set out therein, direct a recognised stoc) exchange to suspend such of its business for such period not exceeding se'en days and subDect to such conditions as (ay be specified in the notification, and, if, in the opinion of the Central &o'ern(ent, the interest of
the trade or the public interest re*uires that the period should be extended, (ay, by li)e notification extend the said period fro( ti(e to ti(e , 4ro+i-e- that where the period of suspension is to be extended beyond the first period, no notification extending the period of suspension shall be issued unless the go'erning body of the ">4recognised stoc) exchange: has been gi'en an opportunity of being heard in the (atter0 "!54o/er to i!!*e -ire'tio !. 1"A. If, after (a)ing or causing to be (ade an in*uiry, the Securities and 7xchange 8oard of India is satisfied that it is necessary(a) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (b) to pre'ent the affairs of any recognised stoc) exchange or clearing corporation, or such other agency or person, pro'iding trading or clearing or settle(ent facility in respect of securities, being conducted in a (anner detri(ental to the interests of in'estors or securities (ar)et3 or (c) to secure the proper (anage(ent of any such stoc) exchange or clearing corporation or agency or person, referred to in clause ( b),
"/ <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 "> Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 "! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0
it (ay issue such directions,(i) to any stoc) exchange or clearing corporation or agency or person referred to in clause (b) or any person or class of persons associated with the securities (ar)et3 or (ii) to any co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 8=5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< /<410A/1 A45 <81:<4 :4 (/A0:1:( Co tr%'t! i otifie- %re%! ille(%l i 'ert%i 'ir'*.!t% 'e!. 1). If the Central &o'ern(ent# is satisfied, ha'ing regard to the nature or the 'olu(e of transactions in securities in any #%4State or States or area: that it is necessary so to do, it (ay, by notification in the Cfficial &aFette, declared this section to apply to such #34State or States or area:, and thereupon e'ery contract in such #$4State or States or area: which is entered into after the date of the notification otherwise than #"4between (e(bers of a recognised stoc) exchange or recognised stoc) exchanges: in such ##4State or States or area: or through or with such (e(ber shall be illegal ,
#0 I #
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 #% Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #3 Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #$ Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$ for ;between (e(bers of a recognised stoc) exchange; & ## Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0
#/54ro+i-e-
that any contract entered into between (e(bers of two or (ore recognised stoc) exchanges in such State or States or area, shall(i) be subDect to such ter(s and conditions as (ay be stipulated by the respecti'e stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India3 (ii) re*uire prior per(ission fro( the respecti'e stoc) exchanges if so stipulated by the stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India0: #>4A--itio %l tr%-i ( floor. 1)A. A stoc) exchange (ay establish additional trading floor with the prior appro'al of the Securities and 7xchange 8oard of India in accordance with the ter(s and conditions stipulated by the said 8oard0 ()%lanati$n , 6or the purposes of this section, 1additional trading floor2 (eans a trading ring or trading facility offered by a recognised stoc) exchange outside its area of operation to enable the in'estors to buy and sell securities through such trading floor under the regulatory fra(ewor) of that stoc) exchange0: Co tr%'t! i otifie- %re%! to ,e +oi- i 'ert%i 'ir'*.!t% 'e!. 13. ( ) Any contract entered into in any State or area specified in the notification under section 3 which is in contra'ention of any of the bye+laws specified in that behalf under clause (a) of sub+section (3) of section ! shall be 'oid , (i) as respects the rights of any (e(ber of the recognised stoc) exchange who has entered into such contract in contra'ention of any such bye+law, and also (ii) as respects the rights of any other person who has )nowingly participated in the transaction entailing such contra'ention0 (%) Eothing in sub+section ( ) shall be construed to affect the right of any person other than a (e(ber of the recognised stoc) exchange to enforce any such contract or to reco'er any su( under or in respect of such contract if such person had no )nowledge that the transaction was in contra'ention of any of the bye+laws specified in clause (a) of sub+section (3) of section !0 @e.,er! .%> ot %'t %! $ri 'i$%l! i 'ert%i 'ir'*.!t% 'e!. 15. Eo (e(ber of a recognised stoc) exchange shall in respect of any securities enter into any contract as a principal with any person other than a (e(ber of a recognised stoc) exchange, unless he has secured the consent or authority of such
#/ Inserted #> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (A(end(ent) Act, !!", Sec % , w0e0f0 %"+0 + !!"0
person and discloses in the note, (e(orandu( or agree(ent of sale or purchase that he is acting as a principal , 4ro+i-e- that where the (e(ber has secured the consent or authority of such person otherwise than in writing he shall secure written confir(ation by such person or such consent or authority within three days fro( the date of the contract , 4ro+i-e- f*rther that no such written consent or authority of such person shall be necessary for closing out any outstanding contract entered into by such person in accordance with the bye+laws, if the (e(ber discloses in the note, (e(orandu( or agree(ent of sale or purchase in respect of such closing out that he is acting as a principal0 4o/er89 to $rohi,it 'o tr%'t! i 'ert%i '%!e!. 18. ( ) If the Central &o'ern(ent is of opinion that it is necessary to pre'ent undesirable speculation in specified securities in any State or area, it (ay, by notification in the Cfficial &aFette, declare that no person in the State or area specified in the notification shall, sa'e with the per(ission of the Central &o'ern(ent, enter into any contract for the sale or purchase of any security specified in the notification except to the extent and in the (anner, if any, specified therein0 (%) All contracts in contra'ention of the pro'isions of sub+section ( ) entered into after the date of notification issued thereunder shall be illegal0 Li'e !i ( of -e%ler! i !e'*ritie! i 'ert%i %re%!. 17. ( ) SubDect to the pro'isions of sub+section (3) and to the other pro'isions contained in this Act, no person shall carry on or purport to carry on, whether on his own behalf or on behalf of any other person, the business of dealing in securities in any State or area to which section 3 has not been declared to apply and to which the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, declare this section to apply, except under the authority of a /04licence granted by the Securities and 7xchange 8oard of India: in this behalf0 (%) Eo notification under sub+section ( ) shall be issued with respect to any State or area unless the Central &o'ern(ent is satisfied, ha'ing regard to the (anner in which securities are being dealt with in such State or area, that it is desirable or
#! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 <owers are exercisable by R8I also 'ide &o'ern(ent of India Eotification Eo0 >3 (7), 9ated 0 +03+%000 in relation to any contracts in go'ern(ent securities, (oney (ar)et securities etc0 /0 Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% for ;licence granted by the Central &o'ern(ent;0
expedient in the interest of the trade or in the public interest that such dealings should be regulated by a syste( of licensing0 (3) .he restrictions i(posed by sub+section ( ) in relation to dealings in securities shall not apply to the doing of anything by or on behalf of a (e(ber of any recognised stoc) exchange0
7154*,li'
i!!*e % - li!ti ( of !e'*ritie! referre- to i !*,0'l%*!e ( ie) of 'l%*!e (h)
of !e'tio ". 17A. ( ) Kithout preDudice to the pro'isions contained in this Act or any other law for the ti(e being in force, no securities of the nature referred to in sub+clause (ie) of clause (h) of section % shall be offered to the public or listed on any recognised stoc) exchange unless the issuer fulfils such eligibility criteria and co(plies with such other re*uire(ents as (ay be specified by regulations (ade by the Securities and 7xchange 8oard of India0 (%) 7'ery issuer referred to in sub+clause (ie) of clause (h) of section % intending to offer the certificates or instru(ents referred therein to the public shall (a)e an application, before issuing the offer docu(ent to the public, to one or (ore recognised stoc) exchanges for per(ission for such certificates or instru(ents to be listed on the stoc) exchange or each such stoc) exchange0 (3) Khere the per(ission applied for under sub+section (%) for listing has not been granted or refused by the recognised stoc) exchanges or any of the(, the issuer shall forthwith repay all (oneys, if any, recei'ed fro( applicants in pursuance of the offer docu(ent, and if any such (oney is not repaid within eight days after the issuer beco(es liable to repay it, the issuer and e'ery director or trustee thereof, as the case (ay be, who is in default shall, on and fro( the expiry of the eighth day, be Dointly and se'erally liable to repay that (oney with interest at the rate of fifteen per cent per annu(0 7xplanation0-In rec)oning the eighth day after another day, any inter'ening day which is a public holiday under the Eegotiable Instru(ents Act, >> (%# of >> ), shall be disregarded, and if the eighth day (as so rec)oned) is itself such a public holiday, there shall for the said purposes be substituted the first day thereafter which is not a holiday0 ($) All the pro'isions of this Act relating to listing of securities of a public co(pany on a recognised stoc) exchange shall, (utatis (utandis, apply to the listing of the securities of the nature referred to in sub+clause (ie) of clause (h) of section % by the issuer, being a special purpose distinct entity0 <
Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec 3, w0e0f0 %>+0"+ %00/0
/
E#'l*!io of !$ot -eli+er> 'o tr%'t! fro. !e'tio ! 1), 13, 15 % - 17. 1:. ( ) Eothing contained in sections 3, $, " and / shall apply to spot deli'ery contracts0 (%) Eotwithstanding anything contained in sub+section ( ), if the Central &o'ern(ent/% is of opinion that in the interest of the trade or in the public interest it is expedient to regulate and control the business of dealing in spot deli'ery contracts also in any State or area (whether section 3 has been declared to apply to that State or area or not), it (ay, by notification in the Cfficial &aFette, declare that the pro'isions of section / shall also apply to such State or area in respect of spot deli'ery contracts generally or in respect of spot deli'ery contracts for the sale or purchase of such securities as (ay be specified in the notification, and (ay also specify the (anner in which, and the extent to which, the pro'isions of that section
shall so apply0 /34Co tr%'t! i -eri+%ti+e. 1:A. Eotwithstanding anything contained in any other law for the ti(e being in force, contracts in deri'ati'e shall be legal and 'alid if such contracts are(a) traded on a recognised stoc) exchange3 (b) settled on the clearing house of the recognised stoc) exchange, in accordance with the rules and bye+laws of such stoc) exchange0: Sto'6 e#'h% (e! other th% re'o( i!e- !to'6 e#'h% (e! $rohi,ite-. 19. ( ) Eo person shall, except with the per(ission of the Central &o'ern(ent, organise or assist in organising or be a (e(ber of any stoc) exchange (other than a recognised stoc) exchange) for the purpose of assisting in, entering into or perfor(ing any contracts in securities0 (%) .his section shall co(e into force in any State or area on such date as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 4rohi,itio of o$tio ! i !e'*ritie!. "=. 734GGGGG:
/% <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 /3 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec 3, w0e0f0 %%+%+%0000 /$ C(itted by the Securities =aws (A(end(ent) Act, !!", Sec %%, w0e0f0 %"+0 + !!"0 <rior to o(ission, section %0 read as under , 1%00 8r$hibiti$n $f $%ti$n# in #ec!ritie#&-( ) Eotwithstanding anything contained in this Act or in any other law for the ti(e being in force, all options in securities entered into after the co((ence(ent of this Act shall be illegal0
9: 1:4= <E (/A0:1:( 754GGG: /#4Co -itio ! for li!ti (. "1. Khere securities are listed on the application of any person in any recognised stoc) exchange, such person shall co(ply with the conditions of the listing agree(ent with that stoc) exchange&: 775Deli!ti ( of !e'*ritie!. "1A. ( ) A recognised stoc) exchange (ay delist the securities, after recording the reasons therefor, fro( any recognised stoc) exchange on any of the ground or grounds as (ay be prescribed under this Act , 4ro+i-e- that the securities of a co(pany shall not be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) A listed co(pany or an aggrie'ed in'estor (ay file an appeal before the Securities Appellate .ribunal against the decision of the recognised stoc) exchange delisting the securities within fifteen days fro( the date of the decision of the recognised stoc) exchange delisting the securities and the pro'isions of sections %%8 to %%7 of this Act, shall apply, as far as (ay be, to such appeals , 4ro+i-e- that the Securities Appellate .ribunal (ay, if it is satisfied that the co(pany was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding one (onth0:
(%) Any option in securities which has been entered into before such co((ence(ent and which re(ains to be perfor(ed, whether wholly or in part, after such co((ence(ent shall, to that
extent, beco(e 'oid02 /" Kords 18O <H8=IC CC?<AEI7S2 o(itted by the Securities =aws (A(end(ent) Act, !!!, Sec $, w0e0f0 %%+0%+%0000 /# Substituted by the Securities =aws (A(end(ent) Act, !!", Sec 33, w0e0f0 %"+0 + !!" . <rior to substitution, section % read as under , 1% 0 8$.er t$ c$"%el li#ting $f #ec!ritie# bF %!blic c$"%anie#& -Eotwithstanding anything contained in any other law for the ti(e being in force, if the Securities and 7xchange 8oard of India is of opinion, ha'ing regard to the nature of the securities issued by any public co(pany as defined in the Co(panies Act, !"# ( of !"#), or to the dealings in the(, that it is necessary or expedient in the interest of the trade or in the public interest so to do, it (ay re*uire the co(pany, after gi'ing it an opportunity of being heard in the (atter, to co(ply with such re*uire(ents as (ay be prescribed with respect to the listing of its securities on any recognised stoc) exchange02 // Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec >, w0r0e0f0 %+ 0+%00$0
7:5Ri(ht
of %$$e%l %(%i !t ref*!%l of !to'6 e#'h% (e! to li!t !e'*ritie! of $*,li' 'o.$% ie!. 79"". Khere a recognised stoc) exchange acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any public co(pany >04or collecti'e in'est(ent sche(e:, the co(pany > 4or sche(e: shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( ) of section /3 of the Co(panies Act, !"# ( of !"#) (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Central &o'ern(ent (ay, on sufficient cause being shown, allow, appeal to the Central &o'ern(ent against such refusal, o(ission or failure, as the case (ay be, and thereupon the Central &o'ern(ent (ay, after gi'ing the stoc) exchange an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange, or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Central &o'ern(ent sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Central &o'ern(ent: , >%44ro+i-e- that no appeal shall be preferred against refusal, o(ission or failure, as the case (ay be, under this section on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!0: :)5Ri(ht of %$$e%l to Se'*ritie! A$$ell%te Tri,* %l %(%i !t ref*!%l of !to'6 e#'h% (e to li!t !e'*ritie! of $*,li' 'o.$% ie!.
/> Substituted
by .he Co(panies (A(end(ent) Act, !/$ (Act Eo0 $ of !/$), Sec $%, w0e0f0 0 + 0%+ !/"0 /! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the
&aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 >0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%00003 Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 > Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%0000 >% Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec $, w0e0f0 #+ %+ !!!0 >3 Sections %%A, %%8, %%C, %%9, %%7 and %%6 inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!!& 7arlier section %%A was inserted by .he
""A. ( ) Khere a recognised stoc) exchange, acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any co(pany, the co(pany shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( A) of section /3 of the Co(panies Act, !"# ( of !"#), (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Securities Appellate .ribunal (ay, on sufficient cause being shown, allow, appeal to the Securities Appellate .ribunal ha'ing Durisdiction in the (atter against such refusal, o(ission or failure, as the case (ay be, and thereupon the Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange, an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange3 or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Securities Appellate .ribunal sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Securities Appellate .ribunal0 (%) 7'ery appeal under sub+section ( ) shall be in such for( and be acco(panied by such fee as (ay be prescribed0 (3) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 ($) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: :354ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. "";. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of
Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec %, w0e0f0 /+ 0 + !>#, and o(itted by the 9epositories Act, !!#, Sec 30 and Sch0, <t0III, w0r0e0f0 %0+0!+ !!"0 >$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath 3 (b) re*uiring the disco'ery and production of docu(ents 3 (c) recei'ing e'idence on affida'its 3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents 3 (e) re'iewing its decisions 3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte ; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0: :55Ri(ht to le(%l re$re!e t%tio . ""C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of sub+section ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of subsection ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of
>" Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
!"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, vakil or an attorney of any Iigh Court, and includes a pleader in practice0: :85Li.it%tio . ""D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0: :75Ci+il 'o*rt ot to h%+e G*ri!-i'tio .
""E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0: ::5A$$e%l to S*$re.e Co*rt. ""2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order, 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: 8(4A91:( A45 80</(5A0( 4e %ltie!. "). ( ) Any person who+
># Inserted >/ Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & >> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec !, w0r0e0f0 %+ 0+%00$0 7arlier section %%6 as inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", read as under,+ 1""2. A$$e%l to Di(h Co*rt.+Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order , 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
(a) without reasonable excuse (the burden of pro'ing which shall be on hi() fails to co(ply with any re*uisition (ade under sub+section ($) of section #3 or (b) enters into any contract in contra'ention of any of the pro'isions contained in section 3 or section #3 or (c) contra'enes the pro'isions contained in >!5section / or section /A<, or section !3 or 90 4(d) enters into any contract in deri'ati'e in contra'ention of section >A or the rules (ade under section 303: (e) owns or )eeps a place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act and )nowingly per(its such place to be used for such purposes3 or (f) (anages, controls, or assists in )eeping any place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act or at which contracts are recorded or adDusted or rights or liabilities arising out of contracts are adDusted, regulated or enforced in any (anner whatsoe'er3 or (g) not being a (e(ber of a recognised stoc) exchange or his agent authorised as
such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section / wilfully represents to or induces any person to belie'e that contracts can be entered into or perfor(ed under this Act through hi(3 or (h) not being a (e(ber of a recognised stoc) exchange or his agent authorised as such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section /, can'asses, ad'ertises or touts in any (anner either for hi(self or on behalf of any other persons for any business connected with contracts in contra'ention of any of the pro'isions of this Act3 or (i) Doins, gathers or assists in gathering at any place other than the place of business specified in the bye+laws of a recognised stoc) exchange any person or persons for (a)ing bids or offers or for entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act3 ! 4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which
>! Inserted
by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec $, w0e0f0 %>+0"+ %00/ for ;section /;0 !0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec #, w0e0f0 %%+0%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 ! Substituted for 1shall, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0
(ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: (%) Any person who enters into any contract in contra'ention of the pro'isions contained in section " !%4or who fails to co(ply with the pro'isions of !34section % or section % A: or with the orders of: or section %% !$4or with the orders of the Securities Appellate .ribunal: !"4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 9854e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. ")A. Any person, who is re*uired under this Act or any rules (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to a recognised stoc) exchange, fails to furnish the sa(e within the ti(e specified therefor in the listing agree(ent or conditions or bye+laws of the recognised stoc) exchange, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to (aintain boo)s of account or records, as per the listing agree(ent or conditions, or bye+laws of a recognised stoc) exchange, fails to (aintain the sa(e, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0:
9754e
%lt> for f%il*re ,> % > $er!o to e ter i to % %(ree.e t /ith 'lie t!. ");. If any person, who is re*uired under this Act or any bye+laws of a recognised stoc) exchange (ade thereunder, to enter into an agree(ent with his client, fails to enter into such an agree(ent, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0:
!% Substituted
for 1or who fails to co(ply with the orders of the Securities and 7xchange 8oard of India under section % 2 by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 <rior to !!", ;Securities and 7xchange 8oard of India under section % or Central &o'ern(ent under section %%; were substituted for ;Central &o'ern(ent under section % or section %%; vide .he Schedule, <art II of Securities and 7xchange 8oard of India Act, !!%, w0e0f0 30+0 + !!%0 !3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec #, w0e0f0 #+ %+ !!!0 !" Substituted for 1shall, on con'iction, be punishable with fine which (ay extend to one thousand rupees2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !# Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$ & !/ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$0
9:54e
%lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. ")C. If any stoc) bro)er or sub+bro)er or a co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, after ha'ing been called upon by the Securities and 7xchange 8oard of India or a recognised stoc) exchange in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e stipulated by the Securities and 7xchange 8oard of India or a recognised stoc) exchange, he or it shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 9954e %lt> for f%il*re to !e(re(%te !e'*ritie! or .o e>! of 'lie t or 'lie t!. ")D. If any person, who is registered under section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%) as a stoc) bro)er or sub+bro)er, fails to segregate securities or (oneys of the client or clients or uses the securities or (oneys of a client or clients for self or for any other client, he shall be liable to a penalty not exceeding one crore rupees0: 1==54e %lt> for f%il*re to 'o.$l> /ith $ro+i!io of li!ti ( 'o -itio ! or -eli!ti ( 'o -itio ! or (ro* -!. ")E. If a co(pany or any person (anaging collecti'e in'est(ent sche(e or (utual fund, fails to co(ply with the listing conditions or delisting conditions or grounds or co((its a breach thereof, it or he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0: 1=154e %lt> for e#'e!! -e.%teri%li!%tio or -eli+er> of * li!te- !e'*ritie!. ")2. If any issuer de(aterialises securities (ore than the issued securities of a co(pany or deli'ers in the stoc) exchanges the securities which are not listed in the recognised stoc) exchange or deli'ers securities where no trading per(ission has been gi'en by the recognised stoc) exchange, he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0:
!> Inserted !! Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 00 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0
%+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0
1="54e
%lt> for f%il*re to f*r i!h $erio-i'%l ret*r !, et'. ")G. If a recognised stoc) exchange fails or neglects to furnish periodical returns to the Securities and 7xchange 8oard of India or fails or neglects to (a)e or a(end its rules or bye+laws as directed by the Securities and 7xchange 8oard of India or fails to co(ply with directions issued by the Securities and 7xchange 8oard of India, such recognised stoc) exchange shall be liable to a penalty which (ay extend to twenty+fi'e crore rupees0: 1=)54e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. ")D. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or articles or bye+ laws or the regulations of the recognised stoc) exchange or directions issued by the Securities and 7xchange 8oard of India for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 1=354o/er to %-G*-i'%te. ")0I. ( ) 6or the purpose of adDudging under sections %3A, %38, %3C, %39, %37, %36, %3& and %3I, the Securities and 7xchange 8oard of India shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0: 1=552%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. ")E. Khile adDudging the *uantu( of penalty under section %3+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3
0% Inserted 03 Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec 0$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0" Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 , w0r0e0f0 , w0r0e0f0 , w0r0e0f0
%+ %+ %+ %+
0+%00$0 0+%00$0 0+%00$0 0+%00$0
(b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0: 1=85 Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!.
")EA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 1"A or !e'tio ")0I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%tefor the %lle(e- -ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re %! !$e'ifie,> the ;o%r- * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")L %(%i !t % > or-er $%!!e- ,> the ;o%ror %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 1=75Re'o+er> of %.o* t!. ")E;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 1"A or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H
0# I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30"==7) 0/ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %!
.%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - ThirS'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")L of thi! A't. (") The re'o+er> offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ())Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 0'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 1"A, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1),(") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 1=:5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. ")F. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: 1=95A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")L. ( ) Any person aggrie'ed, by the order or decision of the recogniFed stoc) exchange or the adDudicating officer or any order (ade by the Securities and 7xchange 8oard of India under section $8, (ay prefer an appeal before the Securities Appellate .ribunal and the pro'isions of sections %%8, %%C, %%9 and %%7 of this Act, shall apply, as far as (ay be, to such appeals0 (%) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order or decision is recei'ed by the
appellant and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 (3) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 ($) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the parties to the appeal and to the concerned adDudicating officer0 (") .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: 11=5Offe 'e!. ")@. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws
0> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 0! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
(ade thereunder, for which no punish(ent is pro'ided elsewhere in this Act, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 1115Co.$o!itio of 'ert%i offe 'e!. ")N. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0: 11"54o/er to (r% t i..* it>. ")0O. ( ) .he Central &o'ern(ent (ay, on reco((endation by the Securities and 7xchange 8oard of India, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation,
4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that the reco((endation of the Securities and 7xchange 8oard of India under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under
% Inserted
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
this Act to which such person would ha'e been liable, had not such i((unity been granted0: Offe 'e! ,> 'o.$% ie!. "3. ( ) Khere an offence has been co((itted by a co(pany, e'ery person who, at the ti(e when the offence was co((itted, was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence, and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any gross negligence on the part of any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer of the co(pany, shall also be dee(ed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n0-6or the purpose of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals, and 34(b) 1director2, in relation to(i) a fir(, (eans a partner in the fir(3 (ii) any association of persons or a body of indi'iduals, (eans any (e(ber controlling the affairs thereof0: $4(3) .he pro'isions of this section shall be in addition to, and not in derogation of, the pro'isions of section %%A0: Cert%i offe 'e! to ,e 'o( iL%,le. "5. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, >!> (" of >!>) ", any offence punishable under #4GGG: section %3 shall be dee(ed to be a
cogniFable offence within the (eaning of that Code0
3 Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec /, w0e0f0 %%+%+%0000 <rior to its substitution, sub+clause (b) read as under, N(b) 1director2, in relation to a fir(, (eans a partner in the fir(0J $ Inserted by .he Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec 3, w0e0f0 /+0 + !>#0
iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central &o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or a recognised stoc) exchange or by any person0 >5(")********< 1195E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
ee now the Code of Cri(inal <rocedure, !/3 (% of !/$) 1sub+section ( ) of2 o(itted by the Securities =aws (A(end(ent) Act, %00$, w0e0f0 %+ 0+%00$0 / Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$ & <rior to its substitution section %# read as under ,1%#0 G!ri#dicti$n t$ trF $ffence# !nder thi# Act&-Eo court inferior to that of a presidency (agistrate or a (agistrate of the first class shall ta)e cogniFance of or try any offence punishable under this Act02 > O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JEo court inferior to that of a Court of Session shall try any offence punishable under this Act .K ! I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
" # Kords
/4Co(
A$$e%l % - Re+i!io . "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt. "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel% $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io !. "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< 6: /(99A4(<A Title to -i+i-e -!. "7. ( ) It shall be lawful for the holder of any security whose na(e appears on the boo)s of the co(pany issuing the said security to recei'e and retain any di'idend declared by the co(pany in respect thereof for any year, notwithstanding that the said security has already been transferred by hi( for consideration, unless the transferee who clai(s the di'idend fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the co(pany with the co(pany for being registered in his na(e within fifteen days of the date on which the di'idend beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the di'idend3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security and other docu(ents relating to
the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a co(pany to pay any di'idend which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the co(pany as the holder of the security in respect of which the di'idend has beco(e due3 or (b) the right of the transferee of any security to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security in the na(e of the transferee0 %04Ri(ht to re'ei+e i 'o.e fro. 'olle'ti+e i +e!t.e t !'he.e. "7A. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, whose na(e appears on the boo)s of the collecti'e in'est(ent sche(e issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e declared by the collecti'e in'est(ent sche(e in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e fro( the transfer or has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the collecti'e in'est(ent sche(e with the collecti'e in'est(ent sche(e for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec >, w0e0f0 %%+%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the collecti'e in'est(ent sche(e3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a collecti'e in'est(ent sche(e to pay any inco(e fro( units or other instru(ents issued by the collecti'e in'est(ent sche(e which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the collecti'e in'est(ent sche(e as the holder of the security being
units or other instru(ents issued by the collecti'e in'est(ent sche(e in respect of which the inco(e in respect of units or other instru(ents issued by the collecti'e sche(e has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security being units or other instru(ents issued by the collecti'e in'est(ent sche(e in the na(e of the transferee0: % 4Ri(ht to re'ei+e i 'o.e fro. .*t*%l f* -. "7;. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by any (utual fund, whose na(e appears on the boo)s of the (utual fund issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the (utual fund declared by the (utual fund in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the (utual fund, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the (utual fund fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the (utual fund with the (utual fund for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the (utual fund beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the (utual fund3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the (utual fund, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a (utual fund to pay any inco(e fro( units or other instru(ents issued by the (utual fund which has beco(e due to any person, whose na(e is for the ti(e being registered in the boo)s of the (utual fund as the holder of the security being units or other instru(ents issued by the (utual fund in respect of which the inco(e in respect of units or other instru(ents issued by the (utual fund has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the (utual fund, to enforce against the transferor or any other person, his rights, if any, in relation to the transfer in any case where the (utual fund has refused to register the transfer of the security being units or other instru(ents issued by the (utual fund in the na(e of the transferee0:
1""5A't
ot to %$$l> i 'ert%i '%!e!. ":. ( ) .he pro'isions of this Act shall not apply to(a) the &o'ern(ent, the Reser'e 8an) of India, any local authority or any corporation set up by a special law or any person who has effected any transaction with or through the agency of any such authority as is referred to in this clause3 (b) any con'ertible bond or share warrant or any option or right in relation thereto, in so far as it entitles the person in whose fa'our any of the foregoing has been issued to obtain at his option fro( the co(pany or other body corporate, issuing the sa(e or fro( any of its shareholders or duly appointed agentsJ shares of the co(pany or other body corporate, whether by con'ersion of the bond or warrant or otherwise, on the basis of the price agreed upon when the sa(e was issued0 (%) Kithout preDudice to the pro'isions contained in sub+section ( ), if the Central &o'ern(ent %3 is satisfied that in the interests of trade and co((erce or the
%% Substituted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec 3, w0e0f0 0>+ %+ !"!0
econo(ic de'elop(ent of the country it is necessary or expedient so to do, it (ay, by notification in the Cfficial &aFette, specify any class of contracts as contracts to which this Act or any pro'ision contained therein shall not apply, and also the conditions, li(itations or restrictions, if any, subDect to which it shall not so apply0: 4rote'tio of %'tio t%6e i (oo- f%ith. "9. Eo suit, prosecution or other legal proceeding whatsoe'er shall lie in any court against the go'erning body or any (e(ber, office bearer or ser'ant of any recognised stoc) exchange or against any person or persons appointed under subsection ( ) of section for anything which is in good faith done or intended to be done in pursuance of this Act or of any rules or bye+laws (ade thereunder0 %$44o/er to -ele(%te. "9A. .he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers (except the power under section 30) exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India or the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)0: 4o/er to .%6e r*le!. )=. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for the purpose of carrying into effect the obDects of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for,(a) the (anner in which applications (ay be (ade, the particulars which they should contain and the le'y of a fee in respect of such applications 3 (b) the (anner in which any in*uiry for the purpose of recognising any stoc) exchange (ay be (ade, the conditions which (ay be i(posed for the grant of such recognition, including conditions as to the ad(ission of (e(bers if the
%3 <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %$ Inserted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% and Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec !, w0e0f0 %%+0%+%0000 <rior to its substitution, section %!A read as under , 1%!A0 8$.er t$ delegate&*.he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India02
stoc) exchange concerned is to be the only recognised stoc) exchange in the area3 and the for( in which such recognition shall be granted3 (c) the particulars which should be contained in the periodical returns and annual reports to be furnished to the Central &o'ern(ent3 (d) the docu(ents which should be (aintained and preser'ed under section # and the periods for which they should be preser'ed3 (e) the (anner in which any in*uiry by the go'erning body of a stoc) exchange shall be (ade under section #3 (f) the (anner in which the bye+laws to be (ade or a(ended under this Act shall before being so (ade or a(ended be published for criticis(3 (g) the (anner in which applications (ay be (ade by dealers in securities for licences under section /, the fee payable in respect thereof and the period of such licences, the conditions subDect to which licences (ay be granted, including conditions relating to the for(s which (ay be used in (a)ing contracts, the docu(ents to be (aintained by licensed dealers and the furnishing of periodical infor(ation to such authority as (ay be specified and the re'ocation of licences for breach of conditions3 %"4(h) the re*uire(ents which shall be co(plied with(A) by public co(panies for the purpose of getting their securities listed on any stoc) exchange3 (B) by collecti'e in'est(ent sche(e for the purpose of getting their units listed on any stoc) exchange3: %#4GGG: %/4(ha) the grounds on which the securities of a co(pany (ay be delisted fro( any recognised stoc) exchange under sub+section ( ) of section % A3 (hb) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under sub+section (%) of section % A and the fees payable in respect of such appeal3 (hc) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3
%" Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec 0, w0e0f0 %%+0%+%0000 <rior to its substitution, clause (h) read as under , 1(h) the re*uire(ents which shall be co(plied with by public co(panies for the purpose of getting their securities listed on any stoc) exchange32 %# .he word ;and; o(itted by .he Securities Contracts (Regulation) A(end(ent Act, !>", Sec $, w0e0f0 /+0 + !>#0 %/ Substituted for clause (ha) by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 7arlier clause (ha), as a(ended by the Securities =aws (A(end(ent) Act, !!!, read as
under ,1(ha) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3 and2
(hd) the (anner of in*uiry under sub+section ( ) of section %3+I3 (he) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3= and the fees payable in respect of such appeal3: (i) any other (atter which is to be or (ay be prescribed0 %>4(3) 7'ery rule (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule0: 1"954o/er of Se'*ritie! % - E#'h% (e ;o%r- of I -i% to .%6e re(*l%tio !. )1. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 305(%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,%> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 <rior to its substitution, sub+section (3), as a(ended by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!", read as under , 1(3) 7'ery rule (ade under this section shall, as soon as (ay be, after its publication in the Cfficial &aFette, be laid before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e session aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule02 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0 7arlier it was repealed by the Repealing and A(ending Act, !#0, Sec % and 6irst Sch0 w0e0f0 %>+ %+ !#00 30 Substituted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec ", w0e0f0 %>+ 0"+%00/0 <rior to substitution it read as under , 1(%) In particular and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for the (anner in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section02
(a) the (anner, in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of
publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section3 (b) the eligibility criteria and other re*uire(ents under section /A0 < (3) 7'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the regulation or both Iouses agree that the regulation should not be (ade, the regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that regulation0:
DE4OSITORIES ACT, 1998 SECTIONS /@A81(0 : 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS ). Certificate of co((ence(ent of business by depositories /@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS 3. Agree(ent between depository and participant 5. Ser'ices of depository 8. Surrender of certificate of security 7. Registration of transfer of securities with depositories :. Cptions to recei'e security certificate or hold securities with depository 9. Securities in depositories to be in fungible for( 1=. Rights of depositories and beneficial owner 11. Register of beneficial owner 1". <ledge or hypothecation of securities held in a depository 1). 6urnishing of infor(ation and records by depository and issuer 13. Cption to opt out in respect of any security 15. Act > of >! to apply to depositories 18. 9epositories to inde(nify loss in certain cases 17. Rights and obligations of depositories, etc0 /@A81(0 :: EN9UIRM AND INS4ECTION 1:. <ower of 8oard to call for infor(ation and en*uiry 19. <ower of 8oard to gi'e directions in certain cases 19A. <enalty for failure to furnish infor(ation, return, etc0 19;. <enalty for failure to enter into an agree(ent 19C. <enalty for failure to redress in'estorsJ grie'ances
19D. <enalty for delay in de(aterialisation or issue of certificate of securities 19E. <enalty for failure to reconcile records 192. <enalty for failure to co(ply with directions issued by 8oard under section ! of the Act 19G. <enalty for contra'ention where no separate penalty has been pro'ided 19D. <ower to adDudicate 190I. 6actors to be ta)en into account by adDudicating officer 190IA. Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (! 190I;. Re'o+er> of %.o* t! 190E. Crediting su(s realised by way of penalties to Consolidated 6und of India /@A81(0 D 4ENALTM "=. Cffences "1. Cffences by co(panies /@A81(0 D: @ISCELLANEOUS "". CogniFance of offences by courts ""A. Co(position of certain offences "";. <ower to grant i((unity ""C. E!t%,li!h.e t of S$e'i%l Co*rt! ""D. Offe 'e! tri%,le ,> S$e'i%l Co*rt! ""E. A$$e%l % - re+i!io ""2. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""G. Tr% !itio %l 4ro+i!io ! "). Appeals ")A. Appeal to Securities Appellate .ribunal ")A. Appeal to Securities Appellate .ribunal ");. <rocedure and powers of Securities Appellate .ribunal ")C. Right to =egal Representation ")D. =i(itation ")E. Ci'il court not to ha'e Durisdiction ")2. Appeal to Supre(e Court "3. <ower of Central &o'ern(ent to (a)e rules "5. <ower of 8oard to (a)e regulations "8. <ower of depositories to (a)e bye+laws "7. Rules and regulations to be laid before <arlia(ent ":. Application of other laws not barred "9. Re(o'al of difficulties )=. A(end(ents to certain enact(ents )1. Repeal and sa'ing /@(5A9( A?7E9?7E. .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0: DE4OSITORIES ACT, 1998 5"" O2 1998< 51=th A*(*!t, 1998< An Act to provide $or reg lation o$ depositories in sec rities and $or matters connected there%ith or incidental thereto& B( it enacted bF 8arlia"ent in the E$rtF7#eventh ;ear $f the 0e%!blic $f :ndia a# f$ll$.# ,*
/@A81(0 : 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the 9epositories Act, !!#0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the %0th day of Septe(ber, !!"0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 1beneficial owner2 (eans a person whose na(e is recorded as such with a depository3 (b) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 3 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (c) 1bye+laws2 (eans bye+laws (ade by a depository under section %#3 (d) 1Co(pany =aw 8oard2 (eans the 8oard of Co(pany =aw Ad(inistration constituted under section 07 of the Co(panies Act, !"# ( of !"#)3 (e) 1depository2 (eans a co(pany for(ed and registered under the Co(panies Act, !"# ( of !"#), and which has been granted a certificate of registration under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (f) 1issuer2 (eans any person (a)ing an issue of securities3 (g) 1participant2 (eans a person registered as such under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (h) 1prescribed2 (eans prescribed by rules (ade under this Act3 (i) 1record2 includes the records (aintained in the for( of boo)s or stored in a co(puter or in such other for( as (ay be deter(ined by regulations3 (j) 1registered owner2 (eans a depository whose na(e is entered as such in the register of the issuer3 (k) 1regulations2 (eans the regulations (ade by the 8oard3 4(ka) 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (l) 1security2 (eans such security as (ay be specified by the 8oard3 (") 1ser'ice2 (eans any ser'ice connected with recording of allot(ent of securities or transfer of ownership of securities in the record of a depository0 (%) Kords and expressions used herein and not defined but defined in the Co(panies Act, !"# ( of !"#), or the Securities Contracts (Regulation) Act, !"# ($% of !"#), or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), shall ha'e the (eanings respecti'ely assigned to the( in those Acts0 /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS Certifi'%te of 'o..e 'e.e t of ,*!i e!! ,> -e$o!itorie!. ). ( ) Eo depository shall act as a depository unless it obtains a certificate of co((ence(ent of business fro( the 8oard0 (%) A certificate granted under sub+section ( ) shall be in such for( as (ay be specified by the regulations0 (3) .he 8oard shall not grant a certificate under sub+section ( ) unless it is satisfied that the depository has ade*uate syste(s and safeguards to pre'ent (anipulation of records and transactions , 4ro+i-e- that no certificate shall be refused under this section unless the depository concerned has been gi'en a reasonable opportunity of being heard0
Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
/@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS A(ree.e t ,et/ee -e$o!itor> % - $%rti'i$% t. 3. ( ) A depository shall enter into an agree(ent with one or (ore participants as its agent0 (%) 7'ery agree(ent under sub+section ( ) shall be in such for( as (ay be specified by the bye+laws0 Ser+i'e! of -e$o!itor>. 5. Any person, through a participant, (ay enter into an agree(ent, in such for( as (ay be specified by the bye+laws, with any depository for a'ailing its ser'ices0 S*rre -er of 'ertifi'%te of !e'*rit>. 8. ( ) Any person who has entered into an agree(ent under section " shall surrender the certificate of security, for which he see)s to a'ail the ser'ices of a depository, to the issuer in such (anner as (ay be specified by the regulations0 (%) .he issuer, on receipt of certificate of security under sub+section ( ), shall cancel the certificate of security and substitute in its records the na(e of the depository as a registered owner in respect of that security and infor( the depository accordingly0 (3) A depository shall, on receipt of infor(ation under sub+section (%), enter the na(e of the person referred to in sub+section ( ) in its records, as the beneficial owner0 Re(i!tr%tio of tr% !fer of !e'*ritie! /ith -e$o!itor>. 7. ( ) 7'ery depository shall, on receipt of inti(ation fro( a participant, register the transfer of security in the na(e of the transferee0 (%) If a beneficial owner or a transferee of any security see)s to ha'e custody of such security the depository shall infor( the issuer accordingly0 O$tio ! to re'ei+e !e'*rit> 'ertifi'%te or hol- !e'*ritie! /ith -e$o!itor>. :. ( ) 7'ery person subscribing to securities offered by an issuer shall ha'e the option either to recei'e the security certificates or hold securities with a depository0 (%) Khere a person opts to hold a security with a depository, the issuer shall inti(ate such depository the details of allot(ent of the security, and on receipt of such infor(ation the depository shall enter in its records the na(e of the allottee as the beneficial owner of that security0 Se'*ritie! i -e$o!itorie! to ,e i f* (i,le for.. 9. ( ) All securities held by a depository shall be de(aterialised and shall be in a fungible for(0 %4(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#), shall apply to a depository in respect of securities held by it on behalf of the beneficial owners&: Ri(ht! of -e$o!itorie! % - ,e efi'i%l o/ er. 1=. ( ) Eotwithstanding anything contained in any other law for the ti(e being in force, a depository shall be dee(ed to be the registered owner for the purposes of effecting transfer of ownership of security on behalf of a beneficial owner0 (%) Sa'e as otherwise pro'ided in sub+section ( ), the depository as a registered owner shall not ha'e any 'oting rights or any other rights in respect of securities held by it0 (3) .he beneficial owner shall be entitled to all the rights and benefits and be subDected to all the liabilities in respect of his securities held by a depository0 Re(i!ter of ,e efi'i%l o/ er. 11. 7'ery depository shall (aintain a register and an index of beneficial owners in the
(anner pro'ided in sections "0, " and "% of the Co(panies Act, !"# ( of !"#)0 4le-(e or h>$othe'%tio of !e'*ritie! hel- i % -e$o!itor>. 1". ( ) SubDect to such regulations and bye+laws, as (ay be (ade in this behalf, a beneficial owner (ay with the pre'ious appro'al of the depository create a pledge or hypothecation in respect of a security owned by hi( through a depository0 (%) 7'ery beneficial owner shall gi'e inti(ation of such pledge or hypothecation to the depository and such depository shall thereupon (a)e entries in its records accordingly0 (3) Any entry in the records of a depository under sub+section (%) shall be e'idence of a pledge or hypothecation0 2*r i!hi ( of i for.%tio % - re'or-! ,> -e$o!itor> % - i!!*er. 1). ( ) 7'ery depository shall furnish to the issuer infor(ation about the transfer of securities in the na(e of beneficial owners at such inter'als and in such (anner as (ay be specified by the bye+laws0 (%) 7'ery issuer shall (a)e a'ailable to the depository copies of the rele'ant records in respect of securities held by such depository0 O$tio to o$t o*t i re!$e't of % > !e'*rit>.
% Substituted
by the 9epositories Related =aws (A(end(ent) Act, !!/, Sec %%, w0e0f0 "+0 + !!/0 <rior to its substitution sub+section (%) read as under , 1(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#) shall apply to the securities held by a depository on behalf of the beneficial owners02
13. ( ) If a beneficial owner see)s to opt out of a depository in respect of any security he shall infor( the depository accordingly0 (%) .he depository shall on receipt of inti(ation under sub+section ( ) (a)e appropriate entries in its records and shall infor( the issuer0 (3) 7'ery issuer shall, within thirty days of the receipt of inti(ation fro( the depository and on fulfil(ent of such conditions and on pay(ent of such fees as (ay be specified by the regulations, issue the certificate of securities to the beneficial owner or the transferee, as the case (ay be0 A't 1: of 1:91 to %$$l> to -e$o!itorie!. 15. .he 8an)ersJ 8oo)s 7'idence Act, >! shall apply in relation to a depository as if it were a ban) as defined in section % of that Act0 De$o!itorie! to i -e. if> lo!! i 'ert%i '%!e!. 18. ( ) Kithout preDudice to the pro'isions of any other law for the ti(e being in force, any loss caused to the beneficial owner due to the negligence of the depository or the participant, the depository shall inde(nify such beneficial owner0 (%) Khere the loss due to the negligence of the participant under sub+section ( ) is inde(nified by the depository, the depository shall ha'e the right to reco'er the sa(e fro( such participant0 Ri(ht! % - o,li(%tio ! of -e$o!itorie!, et'. 17. ( ) SubDect to the pro'isions of this Act, the rights and obligations of the depositories, participants and the issuers whose securities are dealt with by a depository shall be specified by the regulations0 (%) .he eligibility criteria for ad(ission of securities into the depository shall be specified by the regulations0 /@A81(0 :D EN9UIRM AND INS4ECTION 4o/er of ;o%r- to '%ll for i for.%tio % - e 7*ir>. 1:. ( ) .he 8oard, on being satisfied that it is necessary in the public interest or in the interest of in'estors so to do, (ay, by order in writing,-
(a) call upon any issuer, depository, participant or beneficial owner to furnish in writing such infor(ation relating to the securities held in a depository as it (ay re*uire3 or (b) authorise any person to (a)e an en*uiry or inspection in relation to the affairs of the issuer, beneficial owner, depository or participant, who shall sub(it a report of such en*uiry or inspection to it within such period as (ay be specified in the order0 (%) 7'ery director, (anager, partner, secretary, officer or e(ployee of the depository or issuer or the participant or beneficial owner shall on de(and produce before the person (a)ing the en*uiry or inspection all infor(ation or such records and other docu(ents in his custody ha'ing a bearing on the subDect+(atter of such en*uiry or inspection0 4o/er of ;o%r- to (i+e -ire'tio ! i 'ert%i '%!e!. 19. Sa'e as pro'ided in this Act, if after (a)ing or causing to be (ade an en*uiry or inspection, the 8oard is satisfied that it is necessary(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any depository or participant being conducted in the (anner detri(ental to the interests of in'estors or securities (ar)et, it (ay issue such directions,(a) to any depository or participant or any person associated with the securities (ar)et3 or (b) to any issuer, as (ay be appropriate in the interest of in'estors or the securities (ar)et0 )5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< $44e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 19A. Any person, who is re*uired under this Act or any rules or regulations or bye+laws (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to the 8oard, fails to furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations or bye+laws, fails to file return or furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0
3I $ Inserted
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the Securities =aws (A(end(ent) Act, %00$, Sec0 /, w0r0e0f0 %+ 0+%00$0
4e %lt> for f%il*re to e ter i to % %(ree.e t. 19;. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and is re*uired under this Act or any rules or regulations (ade thereunder, to enter into an agree(ent, fails to enter into such agree(ent, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0
4e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 19C. If any depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such depository or participant or issuer or its agents or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for -el%> i -e.%teri%li!%tio or i!!*e of 'ertifi'%te of !e'*ritie!. 19D. If any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to de(aterialise or issue the certificate of securities on opting out of a depository by the in'estors, within the ti(e specified under this Act or regulations or bye+laws (ade thereunder or abets in delaying the process of de(aterialisation or issue the certificate of securities on opting out of a depository of securities, such issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to re'o 'ile re'or-!. 19E. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to reconcile the records of de(aterialised securities with all the securities issued by the issuer as specified in the regulations, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to 'o.$l> /ith -ire'tio ! i!!*e- ,> ;o%r- * -er !e'tio 19 of the A't. 192. If any person fails to co(ply with the directions issued by the 8oard under section !, within the ti(e specified by it, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 19G. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations or bye+laws (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0 4o/er to %-G*-i'%te. 19D. ( ) 6or the purpose of adDudging under sections !A, !8, !C, !9, !7, !6 and !&, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the
sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. 190I. Khile adDudging the *uantu( of penalty under section !I, the adDudicating officer shall ha'e due regard to the following factors, na(ely,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 55 Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (!. 190IA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 19, !e'tio 19D, %! the '%!e .%> ,e, .%> file % %$$li'%tio i /riti ( to the ;o%r$ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e-ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h
"I
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re !$e'ifie- ,> the ;o%r* -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")A %(%i !t % > or-er $%!!e- ,> the ;o%r- or the %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 85 Re'o+er> of %.o* t!. 190I;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 19 or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6
%''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hilor !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C!
#I
!erte- ,> The Se'*ritie! L%/! (A.e- .e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
.o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")A of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 19, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 19E. All su(s realiFed by way of penalties under this Act shall be credited to the Consolidated 6und of India0: /@A81(0 D 4ENALTM /4Offe 'e!. "=. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws (ade thereunder, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0
/ Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 >, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %0 read as under,1%00 <ffence#0- Khoe'er contran'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or any regulations or bye+laws (ade thereunder shall be punishable with i(prison(ent for a ter( which (ay extend to fi'e years, or with fine or with both02
(%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with
fine, which (ay extend to twenty+fi'e crore rupees, or with both0: Offe 'e! ,> 'o.$% ie!. "1. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n&-6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and (b) 1director2, in relation to a fir(, (eans a partner in the fir(0 /@A81(0 D: @ISCELLANEOUS >4Co( iL% 'e of offe 'e! ,> 'o*rt!. "". ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central
> Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 !, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %% read as under,1%%0 /$gniCance $f $ffence# bF c$!rt#&*( ) Eo Court shall ta)e cogniFance of any offence punishable under this Act or any regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the 8oard0 (%) Eo court inferior to that of a ?etropolitan ?agistrate or a Dudicial ?agistrate of the first class shall try any offence punishable under this Act02
&o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or by any person0 !5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < Co.$o!itio of 'ert%i offe 'e!. ""A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "";. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any
penalty under this Act with respect to the alleged 'iolation , 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity , 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0: 1=5 E!t%,li!h.e t of S$e'i%l Co*rt!. ""C. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>.
! <rior
to o(ission, Sub+section(%) read 1Eo court inferior to that of a Court of Session shall try any offence punishable under this Act02 0 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. ""D. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-. A$$e%l % - Re+i!io ""E. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""2. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197).
(") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erioof ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! ""G. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< A$$e%l!. "). ( ) Any person aggrie'ed by an order of the 8oard (ade 4before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!: under this Act, or the regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor , 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0 (3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed , 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 %4A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")A. ( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!, under this Act, or the regulations (ade thereunder, 34or by an order (ade by an adDudicating officer under this Act: (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 $5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 8oard is recei'ed by the person referred to in sub+section ( ) and it shall be in such for( and be acco(panied by such fee as (ay be prescribed ,
Substituted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 $, w0e0f0 #+ %+ !!! for ;an order of the 8oard (ade;0 % Sections %3A to %36 inserted by the Securities =aws (Second A(end(ent) Act, !!! , Sec0 ", w0e0f0 #+ %+ !!!& 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %0, w0r0e0f0 %+ 0+%00$0 $ 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JNo %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-e ,> the ;o%r- /ith the 'o !e t of the $%rtie!.K
4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0
($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 (") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. ");. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3 (e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte; (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 Ri(ht to le(%l re$re!e t%tio . ")C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or an attorney of any Iigh Court, and
includes a pleader in practice0 Li.it%tio . ")D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 Ci+il 'o*rt ot to h%+e G*ri!-i'tio . ")E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "4A$$e%l to S*$re.e Co*rt. ")2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order ,
" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 % , w0r0e0f0 %+ 0+%00$0 <rior to its substitution, Section %36, as inserted by Securities =aws (Second A(end(ent) Act, !!!, w0e0f0 #+ %+ !!!, read as under,1%360 A%%eal t$ @igh /$!rt&-Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0:: 4o/er of Ce tr%l Go+er .e t to .%6e r*le!. "3. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for carrying out the pro'isions of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,164(a) the (anner of in*uiry under sub+section ( ) of section !I3 (aa) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %33: (b) the for( in which an appeal (ay be preferred under sub+section (3) of section %3 and the fees payable in respect of such appeal 3 (c) the procedure for disposing of an appeal under sub+section ($) of section %33 /4(d) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3A and the fees payable in respect of such appeal0: 4o/er of ;o%r- to .%6e re(*l%tio !. "5. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the 8oard (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for(a) the for( in which record is to be (aintained under clause ( i) of sub+section ( ) of section %3 (b) the for( in which the certificate of co((ence(ent of business shall be issued under
sub+section (%) of section 33 (c) the (anner in which the certificate of security shall be surrendered under sub+section ( ) of section #3 (d) the (anner of creating a pledge or hypothecation in respect of security owned by a beneficial owner under sub+section ( ) of section %3 (e) the conditions and the fees payable with respect to the issue of certificate of securities under sub+section (3) of section $3
# Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %%, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (a) read as under,1(a) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %332 / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 #, w0e0f0 #+ %+ !!!0
(f) the rights and obligations of the depositories, participants and the issuers under subsection ( ) of section /3 (g) the eligibility criteria for ad(ission of securities into the depository under sub+section (%) of section /0 4o/er of -e$o!itorie! to .%6e ,>e0l%/!. "8. ( ) A depository shall, with the pre'ious appro'al of the 8oard, (a)e bye+laws consistent with the pro'isions of this Act and the regulations0 (%) In particular, and without preDudice to the generality of the foregoing power, such byelaws shall pro'ide for(a) the eligibility criteria for ad(ission and re(o'al of securities in the depository3 (b) the conditions subDect to which the securities shall be dealt with3 (c) the eligibility criteria for ad(ission of any person as a participant3 (d) the (anner and procedure for de(aterialisation of securities3 (e) the procedure for transactions within the depository3 (f) the (anner in which securities shall be dealt with or withdrawn fro( a depository3 (g) the procedure for ensuring safeguards to protect the interests of participants and beneficial owners3 (h) the conditions of ad(ission into and withdrawal fro( a participant by a beneficial owner3 (i) the procedure for con'eying infor(ation to the participants and beneficial owners on di'idend declaration, shareholder (eetings and other (atters of interest to the beneficial owners3 (j) the (anner of distribution of di'idends, interest and (onetary benefits recei'ed fro( the co(pany a(ong beneficial owners3 (k) the (anner of creating pledge or hypothecation in respect of securities held with a depository3 (l) inter #e rights and obligations a(ong the depository, issuer, participants, and beneficial owners3 (") the (anner and the periodicity of furnishing infor(ation to the 8oard, issuer and other persons3 (n) the procedure for resol'ing disputes in'ol'ing depository, issuer, co(pany or a beneficial owner3 ($) the procedure for proceeding against the participant co((itting breach of the regulations and pro'isions for suspension and expulsion of participants fro( the depository and cancellation of agree(ents entered with the depository3 (%) the internal control standards including procedure for auditing, re'iewing and (onitoring0
(3) Khere the 8oard considers it expedient so to do, it (ay, by order in writing, direct a depository to (a)e any bye+laws or to a(end or re'o)e any bye+laws already (ade within such period as it (ay specify in this behalf0 ($) If the depository fails or neglects to co(ply with such order within the specified period, the 8oard (ay (a)e the bye+laws or a(end or re'o)e the bye+laws (ade either in the for( specified in the order or with such (odifications thereof as the 8oard thin)s fit0 R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t. "7. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. ":. .he pro'isions of this Act shall be in addition to, and not in derogation of, any other law for the ti(e being in force relating to the holding and transfer of securities0 Re.o+%l of -iffi'*ltie!. "9. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as appear to it to be necessary or expedient for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of a period of two years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 A.e -.e t! to 'ert%i e %'t.e t!. )=. 40e%ealed bF 0e%ealing H A"ending Act' 20010: Re$e%l % - !%+i (. )1. ( ) .he 9epositories (.hird) Crdinance, !!# (Crd0 %> of !!#), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 /@(5A9( 4 ee section 30: A?7E9?7E.S .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0:
SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 SECTIONS !'APT"R I 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions !'APT"R II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA
). 7stablish(ent and incorporation of 8oard 3. ?anage(ent of the 8oard 5. .er( of office and conditions of ser'ice of Chair(an and (e(bers of the 8oard 8. Re(o'al of (e(ber fro( office 7. ?eetings 7A. ?e(ber not to participate in (eetings in certain cases :. Bacancies, etc0, not to in'alidate proceedings of 8oard 9. Cfficers and e(ployees of the 8oard !'APT"R III TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD 1=. .ransfer of assets, liabilities, etc0, of existing Securities and 7xchange 8oard to the 8oard !'APT"R IV 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 11. 6unctions of 8oard 11A. 8oard to regulate or prohibit issue of prospectus, offer docu(ent or ad'ertise(ent soliciting (oney for issue of securities 11AA. Collecti'e in'est(ent sche(e 11;. <ower to issue directions 11C. In'estigation 11D. Cease and desist proceedings !'APT"R V REGISTRATION CERTI2ICATE 1". Registration of stoc) bro)ers, sub+bro)ers, share transfer agents, etc0
%
!'APT"R VA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 1"A. <rohibition of (anipulati'e and decepti'e de'ices, insider trading and substantial ac*uisition of securities or control !'APT"R VI 2INANCE, ACCOUNTS AND AUDIT 1). &rants by the Central &o'ern(ent 13. 6und 15. Accounts and audit !'APT"R VIA 4ENALTIES AND ADEUDICATION 15A. <enalty for failure to furnish infor(ation, return, etc & 15;. <enalty for failure by any person to enter into agree(ent with clients 15C. <enalty for failure to redress in'estorsJ grie'ances 15D. <enalty for certain defaults in case of (utual funds 15E. <enalty for failure to obser'e rules and regulations by an asset (anage(ent co(pany 152. <enalty for default in case of stoc) bro)ers 15G. <enalty for insider trading 15D. <enalty for non+disclosure of ac*uisition of shares and ta)eo'ers 15DA. <enalty for fraudulent and unfair trade practices 15D;. <enalty for contra'ention where no separate penalty has been pro'ided
150I. <ower to adDudicate 15E. 6actors to be ta)en into account by the AdDudicating Cfficer 15EA. Crediting su(s realised by way of penalties to Consolidated 6und of India 15E;. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! !'APT"R VIB ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL 15F. 7stablish(ent of Securities Appellate .ribunals 15L. Co(position of Securities Appellate .ribunal 15@. Qualification for appoint(ent as <residing Cfficer or ?e(ber of Securities Appellate .ribunal
3
15N. .enure of office of <residing Cfficer and other (e(bers of Securities Appellate .ribunal 150O. Salary and allowances and other ter(s and conditions of ser'ice of <residing Cfficers 154. 6illing up of 'acancies 159. Resignation and re(o'al 15R. Crders constituting Appellate .ribunal to be final and not to in'alidate its proceedings 15S. Staff of the Securities Appellate .ribunal 15T. Appeal to the Securities Appellate .ribunal 15U. <rocedure and powers of the Securities Appellate .ribunal 15I. Right to legal representation 15?. =i(itation 15A. <residing Cfficer, (e(bers and staff of Securities Appellate .ribunals to be public ser'ants 15M. Ci'il Court not to ha'e Durisdiction 15N. Appeal to Supre(e Court !'APT"R VII @ISCELLANEOUS 18. <ower of Central &o'ern(ent to issue directions 17. <ower of Central &o'ern(ent to supersede the 8oard 1:. Returns and reports 19. 9elegation "=. Appeals "=A. 8ar of Durisdiction "1. Sa'ings "". ?e(bers, officers and e(ployees of the 8oard to be public ser'ants "). <rotection of action ta)en in good faith "3. Cffences "3A. Co(position of certain offences "3;. <ower to grant i((unity "5. 7xe(ption fro( tax on wealth and inco(e "8. CogniFance of offences by Courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! "7. Cffences by co(panies
":. 4C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!":
$
":A. Re'o+er> of %.o* t! "9. <ower to (a)e rules )=. <ower to (a)e regulations )1. Rules and regulations to be laid before <arlia(ent )". Application of other laws not barred )). 4Repealed by Repealing R A(ending Act, %00 : )3. <ower to re(o'e difficulties )5. Repeal and sa'ing .I7 SCI79H=7 4Repealed by Repealing R A(ending Act, %00 : SECURITIES AND EACDANGE ;OARD O2 INDIA ACT, 199" 515 O2 199"< 53th A$ril, 199"< A A't to $ro+i-e for the e!t%,li!h.e t of % ;o%r- to $rote't the i tere!t! of i +e!tor! i !e'*ritie! % - to $ro.ote the -e+elo$.e t of, % - to re(*l%te, the !e'*ritie! .%r6et % - for .%tter! 'o e'te- there/ith or i 'i-e t%l thereto B( it enacted bF 8arlia"ent in the E$rtF7third ;ear $f the 0e%!blic $f :ndia a# f$ll$.# , CDA4TER I 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities and 7xchange 8oard of India Act, !!%0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the 30th day of Manuary, !!%0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 33 (b) 1Chair(an2 (eans the Chair(an of the 8oard3 4(ba) 1collecti'e in'est(ent sche(e2 (eans any sche(e or arrange(ent which satisfies the conditions specified in section AA3: (c) 1existing Securities and 7xchange 8oard2 (eans the Securities and 7xchange 8oard of India constituted under the Resolution of the &o'ern(ent of India in the 9epart(ent of 7cono(ic Affairs Eo0 ($$) S7L>#, dated the %th day of April, !>>3 (d) 16und2 (eans the 6und constituted under section $3 (e) 1(e(ber2 (eans a (e(ber of the 8oard and includes the Chair(an3 (f) 1notification2 (eans a notification published in the Cfficial &aFette3 (g) 1prescribed2 (eans prescribed by rules (ade under this Act3
Inserted by the Securities =aws (A(end(ent) Act, !!!, w0e0f0 %%+%+%0000
"
(h) 1regulations2 (eans the regulations (ade by the 8oard under this Act3 4(ha) 1Reser'e 8an)2 (eans the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)3: (i) 1securities2 has the (eaning assigned to it in section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#)0 %4(%) Kords and expressions used and not defined in this Act but defined in the Securities Contracts (Regulation) Act, !"# ($% of !"#) 34or the 9epositories Act, !!#:, shall ha'e the (eanings respecti'ely assigned to the( in that Act:0 CDA4TER II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA E!t%,li!h.e t % - i 'or$or%tio of ;o%r-.
). ( ) Kith effect fro( such date as the Central &o'ern(ent (ay, by notification, appoint, there shall be established, for the purposes of this Act, a 8oard by the na(e of the Securities and 7xchange 8oard of India0 (%) .he 8oard shall be a body corporate by the na(e aforesaid, ha'ing perpetual succession and a co((on seal, with power subDect to the pro'isions of this Act, to ac*uire, hold and dispose of property, both (o'able and i((o'able, and to contract, and shall, by the said na(e, sue or be sued0 (3) .he head office of the 8oard shall be at 8o(bay0 ($) .he 8oard (ay establish offices at other places in India0 @% %(e.e t of the ;o%r-. 3. ( ) .he 8oard shall consist of the following (e(bers, na(ely,(a) a Chair(an3 (b) two (e(bers fro( a(ongst the officials of the $4?inistry: of the Central &o'ern(ent dealing with 6inance "4and ad(inistration of the Co(panies Act, !"# ( of !"#):3 (c) one (e(ber fro( a(ongst the officials of #4the Reser'e 8an):3 /4(d) fi'e other (e(bers of who( at least three shall be the whole+ti(e (e(bers,: to be appointed by the Central &o'ern(ent0
Inserted by the Securities =aws (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0 <rior to its substitution, sub+section (%) reads as under, 1(%) Kords and expressions used and not defined in this Act but defined in the Capital Issues (Control) Act, !$/ or the Securities Contracts Regulation Act, !"# shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts02 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 $ Substituted for 1?inistries2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1and law2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act !3$ (% of !3$)2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 / Substituted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, clause (d) read as, 1(d) two other (e(bers20
% Substituted
#
(%) .he general superintendence, direction and (anage(ent of the affairs of the 8oard shall 'est in a 8oard of (e(bers, which (ay exercise all powers and do all acts and things which (ay be exercised or done by the 8oard0 (3) Sa'e as otherwise deter(ined by regulations, the Chair(an shall also ha'e powers of general superintendence and direction of the affairs of the 8oard and (ay also exercise all powers and do all acts and things which (ay be exercised or done by that 8oard0 ($) .he Chair(an and (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be appointed by the Central &o'ern(ent and the (e(bers referred to in clauses ( b) and (c) of that sub+section shall be no(inated by the Central &o'ern(ent and the 4Reser'e 8an): respecti'ely0 (") .he Chair(an and the other (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be persons of ability, integrity and standing who ha'e shown capacity in dealing with proble(s relating to securities (ar)et or ha'e special )nowledge or experience of law, finance, econo(ics, accountancy, ad(inistration or in any other discipline which, in the opinion of the Central &o'ern(ent, shall be useful to the 8oard0 Ter. of offi'e % - 'o -itio ! of !er+i'e of Ch%ir.% % - .e.,er! of the ;o%r-. 5. ( ) .he ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers referred to in clause (d) of sub+section ( ) of section $ shall be such as (ay be prescribed0 (%) Eotwithstanding anything contained in sub+section ( ), the Central &o'ern(ent shall ha'e the right to ter(inate the ser'ices of the Chair(an or a (e(ber appointed under clause ( d) of
sub+section ( ) of section $, at any ti(e before the expiry of the period prescribed under subsection ( ), by gi'ing hi( notice of not less than three (onths in writing or three (onthsJ salary and allowances in lieu thereof, and the Chair(an or a (e(ber, as the case (ay be, shall also ha'e the right to relin*uish his office, at any ti(e before the expiry of the period prescribed under sub+section ( ), by gi'ing to the Central &o'ern(ent notice of not less than three (onths in writing0 Re.o+%l of .e.,er fro. offi'e. 8. %4G G G: .he Central &o'ern(ent shall re(o'e a (e(ber fro( office if he(a) is, or at any ti(e has been, adDudicated as insol'ent3 (b) is of unsound (ind and stands so declared by a co(petent court3 (c) has been con'icted of an offence which, in the opinion of the Central &o'ern(ent, in'ol'es a (oral turpitude3 (d) 34G G G: (e) has, in the opinion of the Central &o'ern(ent, so abused his position as to render his continuation in office detri(ental to the public interest , 4ro+i-e- that no (e(ber shall be re(o'ed under this clause unless he has been gi'en a reasonable opportunity of being heard in the (atter0
Substituted for 1Reser'e 8an) of India2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 )2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 C(itted, by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to o(ission clause (d) read read as, 1(d) is appointed as a director of a co(pany20
% 1(
/
@eeti (!. 7. ( ) .he 8oard shall (eet at such ti(es and places, and shall obser'e such rules of procedure in regard to the transaction of business at its (eetings (including *uoru( at such (eetings) as (ay be pro'ided by regulations0 (%) .he Chair(an or, if for any reason, he is unable to attend a (eeting of the 8oard, any other (e(ber chosen by the (e(bers present fro( a(ongst the(sel'es at the (eeting shall preside at the (eeting0 (3) All *uestions which co(e up before any (eeting of the 8oard shall be decided by a (aDority 'otes of the (e(bers present and 'oting, and, in the e'ent of an e*uality of 'otes, the Chair(an, or in his absence, the person presiding, shall ha'e a second or casting 'ote0 4@e.,er ot to $%rti'i$%te i .eeti (! i 'ert%i '%!e!. 7A. Any (e(ber, who is a director of a co(pany and who as such director has any direct or indirect pecuniary interest in any (atter co(ing up for consideration at a (eeting of the 8oard, shall, as soon as possible after rele'ant circu(stances ha'e co(e to his )nowledge, disclose the nature of his interest at such (eeting and such disclosure shall be recorded in the proceedings of the 8oard, and the (e(ber shall not ta)e any part in any deliberation or decision of the 8oard with respect to that (atter0: I%'% 'ie!, et'., ot to i +%li-%te $ro'ee-i (! of ;o%r-. :. Eo act or proceeding of the 8oard shall be in'alid (erely by reason of(a) any 'acancy in, or any defect in the constitution of, the 8oard3 or (b) any defect in the appoint(ent of a person acting as a (e(ber of the 8oard3 or (c) any irregularity in the procedure of the 8oard not affecting the (erits of the case0 Offi'er! % - e.$lo>ee! of the ;o%r-. 9. ( ) .he 8oard (ay appoint such other officers and e(ployees as it considers necessary for the efficient discharge of its functions under this Act0 (%) .he ter( and other conditions of ser'ice of officers and e(ployees of the 8oard appointed under sub+section ( ) shall be such as (ay be deter(ined by regulations0 CDA4TER III
TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD Tr% !fer of %!!et!, li%,ilitie!, et'., of e#i!ti ( Se'*ritie! % - E#'h% (e ;o%r- to the ;o%r-. 1=. ( ) Cn and fro( the date of establish(ent of the 8oard,(a) any reference to the existing Securities and 7xchange 8oard in any law other than this Act or in any contract or other instru(ent shall be dee(ed as a reference to the 8oard3 (b) all properties and assets, (o'able and i((o'able, of, or belonging to, the existing Securities and 7xchange 8oard, shall 'est in the 8oard3
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
>
(c) all rights and liabilities of the existing Securities and 7xchange 8oard shall be transferred to, and be the rights and liabilities of, the 8oard3 (d) without preDudice to the pro'isions of clause (c), all debts, obligations and liabilities incurred, all contracts entered into and all (atters and things engaged to be done by, with or for the existing Securities and 7xchange 8oard i((ediately before that date, for or in connection with the purpose of the said existing 8oard shall be dee(ed to ha'e been incurred, entered into, or engaged to be done by, with or for, the 8oard3 (e) all su(s of (oney due to the existing Securities and 7xchange 8oard i((ediately before that date shall be dee(ed to be due to the 8oard3 (f) all suits and other legal proceedings instituted or which could ha'e been instituted by or against the existing Securities and 7xchange 8oard i((ediately before that date (ay be continued or (ay be instituted by or against the 8oard3 and (g) e'ery e(ployee holding any office under the existing Securities and 7xchange 8oard i((ediately before that date shall hold his office in the 8oard by the sa(e tenure and upon the sa(e ter(s and conditions of ser'ice as respects re(uneration, lea'e, pro'ident fund, retire(ent and other ter(inal benefits as he would ha'e held such office if the 8oard had not been established and shall continue to do so as an e(ployee of the 8oard or until the expiry of the period of six (onths fro( that date if such e(ployee opts not to be the e(ployee of the 8oard within such period0 (%) Eotwithstanding anything contained in the Industrial 9isputes Act, !$/ ( $ of !$/), or in any other law for the ti(e being in force, absorption of any e(ployee by the 8oard in its regular ser'ice under this section shall not entitle such e(ployee to any co(pensation under that Act or other law and no such clai( shall be entertained by any court, tribunal or other authority0 CDA4TER II 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 2* 'tio ! of ;o%r-. 11. ( ) SubDect to the pro'isions of this Act, it shall be the duty of the 8oard to protect the interests of in'estors in securities and to pro(ote the de'elop(ent of, and to regulate the securities (ar)et, by such (easures as it thin)s fit0 (%) Kithout preDudice to the generality of the foregoing pro'isions, the (easures referred to therein (ay pro'ide for(a) regulating the business in stoc) exchanges and any other securities (ar)ets3 (b) registering and regulating the wor)ing of stoc) bro)ers, sub+bro)ers, share transfer agents, ban)ers to an issue, trustees of trust deeds, registrars to an issue, (erchant ban)ers, underwriters, portfolio (anagers, in'est(ent ad'isers and such other inter(ediaries who (ay be associated with securities (ar)ets in any (anner3 4(ba) registering and regulating the wor)ing of the depositories, %4participants:, custodians of securities, foreign institutional in'estors, credit rating agencies and such other inter(ediaries as the 8oard (ay, by notification, specify in this behalf3: (c) registering and regulating the wor)ing of 4'enture capital funds and collecti'e
in'est(ent sche(es:, including (utual funds3
% Inserted
Inserted by Securities =aws (A(end(ent) Act !!", w0r0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+!+ !!"0
!
(d) pro(oting and regulating self+regulatory organisations3 (e) prohibiting fraudulent and unfair trade practices relating to securities (ar)ets3 (f) pro(oting in'estorsJ education and training of inter(ediaries of securities (ar)ets3 (g) prohibiting insider trading in securities3 (h) regulating substantial ac*uisition of shares and ta)e o'er of co(panies3 (i) calling for infor(ation fro(, underta)ing inspection, conducting in*uiries and audits of the %4stoc) exchanges, (utual funds, other persons associated with the securities (ar)et:, inter(ediaries and self+regulatory organisations in the securities (ar)et3 34(ia) '%lli ( for i for.%tio % - re'or-! fro. % > $er!o i 'l*-i ( % > ,% 6 or % > other %*thorit> or ,o%r- or 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l or St%te A't /hi'h, i the o$i io of the ;o%r-, !h%ll ,e rele+% t to % > i +e!ti(%tio or i 7*ir> ,> the ;o%r- i re!$e't of % > tr% !%'tio i !e'*ritie! 3: $5(i,) '%lli ( for i for.%tio fro., or f*r i!hi ( i for.%tio to, other %*thoritie!, /hether i I -i% or o*t!i-e I -i%, h%+i ( f* 'tio ! !i.il%r to tho!e of the ;o%r-, i the .%tter! rel%ti ( to the $re+e tio or -ete'tio of +iol%tio ! i re!$e't of !e'*ritie! l%/!, !*,Ge't to the $ro+i!io ! of other l%/! for the ti.e ,ei ( i for'e i thi! re(%r-& 4ro+i-e- th%t the ;o%r-, for the $*r$o!e of f*r i!hi ( % > i for.%tio to % > %*thorit> o*t!i-e I -i%, .%> e ter i to % %rr% (e.e t or %(ree.e t or * -er!t% -i ( /ith !*'h %*thorit> /ith the $rior %$$ro+%l of the Ce tr%l Go+er .e tH< (j) perfor(ing such functions and exercising such powers under the pro'isions of "4G G G: the Securities Contracts (Regulation) Act, !"# ($% of !"#), as (ay be delegated to it by the Central &o'ern(ent3 (k) le'ying fees or other charges for carrying out the purposes of this section3 (l) conducting research for the abo'e purposes3 #4(la) calling fro( or furnishing to any such agencies, as (ay be specified by the 8oard, such infor(ation as (ay be considered necessary by it for the efficient discharge of its functions3: (") perfor(ing such other functions as (ay be prescribed0 /4(%A) Kithout preDudice to the pro'isions contained in sub+section (%), the 8oard (ay ta)e (easures to underta)e inspection of any boo), or register, or other docu(ent or record of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard
Substituted for 1collecti'e in'est(ent sche(es2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % Substituted for 1stoc) exchanges and2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 S*,!tit*te- for J'%lli ( for i for.%tio % - re'or- fro. % > ,% 6 or % > other %*thorit> or ,o%ror 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l, St%te or 4ro+i 'i%l A't i re!$e't of % > tr% !%'tio i !e'*ritie! /hi'h i! * -er i +e!ti(%tio or i 7*ir> ,> the ;o%r-K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). E%rlier Se'tio 11(")(i%) /%! i !erte- ,> the SE;I (A.e -.e t) A't, "==" /.e.f. "901=0"=="0 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. =80=)0 199:) " .he words 1the Capital Issues (Control) Act, !$/ (%! of !$/) and2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
0
has reasonable grounds to belie'e that such co(pany has been indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et0: 4(3) Eotwithstanding anything contained in any other law for the ti(e being in force while exercising the powers under %4clause (i) or clause (ia) of sub+section (%) or sub+ section (2A):, the 8oard shall ha'e the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(i) the disco'ery and production of boo)s of account and other docu(ents, at such place and such ti(e as (ay be specified by the 8oard3 (ii) su((oning and enforcing the attendance of persons and exa(ining the( on oath3 (iii) inspection of any boo)s, registers and other docu(ents of any person referred to in section %, at any place3: 34(iv) inspection of any boo), or register, or other docu(ent or record of the co(pany referred to in sub+section (%A)3 (v) issuing co((issions for the exa(ination of witnesses or docu(ents0: $4($) Kithout preDudice to the pro'isions contained in sub+sections ( ), (%), (%A) and (3) and section 8, the 8oard (ay, by an order, for reasons to be recorded in writing, in the interests of in'estors or securities (ar)et, ta)e any of the following (easures, either pending in'estigation or in*uiry or on co(pletion of such in'estigation or in*uiry, na(ely,(a) suspend the trading of any security in a recognised stoc) exchange3 (b) restrain persons fro( accessing the securities (ar)et and prohibit any person associated with securities (ar)et to buy, sell or deal in securities3 (c) suspend any office+bearer of any stoc) exchange or self+regulatory organisation fro( holding such position3 (d) i(pound and retain the proceeds or securities in respect of any transaction which is under in'estigation3 (e) attach, after passing of an order on an application (ade for appro'al by the Mudicial ?agistrate of the first class ha'ing Durisdiction, for a period not exceeding one (onth, one or (ore ban) account or accounts of any inter(ediary or any person associated with the securities (ar)et in any (anner in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder , 4ro+i-e- that only the ban) account or accounts or any transaction entered therein, so far as it relates to the proceeds actually in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder shall be allowed to be attached3 (f) direct any inter(ediary or any person associated with the securities (ar)et in any (anner not to dispose of or alienate an asset for(ing part of any transaction which is under in'estigation , 4ro+i-e- that the 8oard (ay, without preDudice to the pro'isions contained in sub+section (%) or sub+section (%A), ta)e any of the (easures specified in clause ( d) or clause (e) or clause (f), in respect of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard has reasonable grounds to belie'e that such co(pany has been
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1clause (i) of sub+section (%)2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 3 Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 $ Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
% Substituted
indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et , 4ro+i-e- f*rther that the 8oard shall, either before or after passing such orders, gi'e an
opportunity of hearing to such inter(ediaries or persons concerned0: 15(5) The %.o* t -i!(or(e-, $*r!*% t to % -ire'tio i!!*e- * -er !e'tio 11; or !e'tio 1"A of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 or !e'tio 19 of the De$o!itorie! A't, 1998, %! the '%!e .%> ,e, !h%ll ,e 're-ite- to the I +e!tor 4rote'tio % - E-*'%tio 2* e!t%,li!he- ,> the ;o%r- % - !*'h %.o* t !h%ll ,e *tiliLe- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< %4;o%r- to re(*l%te or $rohi,it i!!*e of $ro!$e't*!, offer -o'*.e t or %-+erti!e.e t !oli'iti ( .o e> for i!!*e of !e'*ritie!. 11A. ( ) Kithout preDudice to the pro'isions of the Co(panies Act, !"# ( of !"#), the 8oard (ay, for the protection of in'estors,(a) specify, by regulations(i) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (ii) the (anner in which such (atters shall be disclosed by the co(panies3 (b) by general or special orders(i) prohibit any co(pany fro( issuing prospectus, any offer docu(ent, or ad'ertise(ent soliciting (oney fro( the public for the issue of securities3 (ii) specify the conditions subDect to which the prospectus, such offer docu(ent or ad'ertise(ent, if not prohibited, (ay be issued0 (%) Kithout preDudice to the pro'isions of section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the 8oard (ay specify the re*uire(ents for listing and transfer of securities and other (atters incidental thereto0: 34Colle'ti+e i +e!t.e t !'he.e. 11AA. ( ) Any sche(e or arrange(ent which satisfies the conditions referred to in subsection (%) $5or !*,0!e'tio ("A)< shall be a collecti'e in'est(ent sche(e0 "44ro+i-e- th%t % > $ooli ( of f* -! * -er % > !'he.e or %rr% (e.e t, /hi'h i! ot re(i!tere- /ith the ;o%r- or i! ot 'o+ere- * -er !*,0!e'tio ()), i +ol+i ( %
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 7arlier S0 A was inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" for S0 A0 <rior to its substitution, S0 A read as under,+ 1 A0 ?atters to be disclosed by the co(panies0+ Kithout <reDudice to the <ro'isions of the Co(panies Act , !"# ( of !"#), the board (ay , for the protection of in'estors, specify, by regulations,+ (a) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (b) the (anner in which such (atters, shall be disclosed by the co(panies02 3 Inserted by S78I (A(end(ent) Act !!!, w0e0f0 %%+%+%0000 $I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% Substituted
%
'or$*! %.o* t of o e h* -re- 'rore r*$ee! or .ore !h%ll ,e -ee.e- to ,e % 'olle'ti+e i +e!t.e t !'he.e.< (%) Any sche(e or arrange(ent (ade or offered by any 5$er!o < under which,(i) the contributions, or pay(ents (ade by the in'estors, by whate'er na(e called, are pooled and utiliFed for the purposes of the sche(e or arrange(ent3 (ii) the contributions or pay(ents are (ade to such sche(e or arrange(ent by the in'estors with a 'iew to recei'e profits, inco(e, produce or property, whether (o'able or i((o'able, fro( such sche(e or arrange(ent3 (iii) the property, contribution or in'est(ent for(ing part of sche(e or arrange(ent, whether identifiable or not, is (anaged on behalf of the in'estors3
(iv) the in'estors do not ha'e day+to+day control o'er the (anage(ent and operation of the sche(e or arrange(ent0 "5("A)< A > !'he.e or %rr% (e.e t .%-e or offere- ,> % > $er!o !%ti!f>i ( the 'o -itio ! %! .%> ,e !$e'ifie- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< (3) Eotwithstanding anything contained in sub+section (%) 35or !*,0!e'tio ("A)<, any sche(e or arrange(ent(i) (ade or offered by a co+operati'e society registered under the Co+operati'e Societies Act, ! % (% of ! %) or a society being a society registered or dee(ed to be registered under any law relating to co+operati'e societies for the ti(e being in force in any State3 (ii) under which deposits are accepted by non+ban)ing financial co(panies as defined in clause (f) of section $"+I of the Reser'e 8an) of India Act, !3$ (% of !3$)3 (iii) being a contract of insurance to which the Insurance Act, !3> ($ of !3>), applies3 (iv) pro'iding for any Sche(e, <ension Sche(e or the Insurance Sche(e fra(ed under the 7(ployees <ro'ident 6und and ?iscellaneous <ro'isions Act, !"% ( ! of !"%)3 (v) under which deposits are accepted under section ">A of the Co(panies Act, !"# ( of !"#)3 (vi) under which deposits are accepted by a co(pany declared as a Eidhi or a (utual benefit society under section #%0A of the Co(panies Act, !"# ( of !"#)3 (vii) falling within the (eaning of Chit business as defined in clause ( d) of section % of the Chit 6und Act, !>% ($0 of !>%)3 (viii) under which contributions (ade are in the nature of subscription to a (utual fund3 35(i#) !*'h other !'he.e or %rr% (e.e t /hi'h the Ce tr%l Go+er .e t .%>, i 'o !*lt%tio /ith the ;o%r-, otif>H< shall not be a collecti'e in'est(ent sche(e0: "54o/er to i!!*e -ire'tio !. 11;. Sa'e as otherwise pro'ided in section , if after (a)ing or causing to be (ade an en*uiry, the 8oard is satisfied that it is necessary,S*,!tit*te- for J'o.$% >K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) 3I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
%I
3
(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any inter(ediary or other persons referred to in section % being conducted in a (anner detri(ental to the interest of in'estors or securities (ar)et3 or (iii) to secure the proper (anage(ent of any such inter(ediary or person, it (ay issue such directions,(a) to any person or class of persons referred to in section %, or associated with the securities (ar)et3 or (b) to any co(pany in respect of (atters specified in section A, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 15E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< %4I +e!ti(%tio . 11C. ( ) Khere the 8oard has reasonable ground to belie'e that-
(a) the transactions in securities are being dealt with in a (anner detri(ental to the in'estors or the securities (ar)et3 or (b) any inter(ediary or any person associated with the securities (ar)et has 'iolated any of the pro'isions of this Act or the rules or the regulations (ade or directions issued by the 8oard thereunder, it (ay, at any ti(e by order in writing, direct any person (hereafter in this section referred to as the In'estigating Authority) specified in the order to in'estigate the affairs of such inter(ediary or persons associated with the securities (ar)et and to report thereon to the 8oard0 (%) Kithout preDudice to the pro'isions of sections %3" to %$ of the Co(panies Act, !"# ( of !"#), it shall be the duty of e'ery (anager, (anaging director, officer and other e(ployee of the co(pany and e'ery inter(ediary referred to in section % or e'ery person associated with the securities (ar)et to preser'e and to produce to the In'estigating Authority or any person authorised by it in this behalf, all the boo)s, registers, other docu(ents and record of, or relating to, the co(pany or, as the case (ay be, of or relating to, the inter(ediary or such person, which are in their custody or power0 (3) .he In'estigating Authority (ay re*uire any inter(ediary or any person associated with securities (ar)et in any (anner to furnish such infor(ation to, or produce such boo)s, or registers, or other docu(ents, or record before hi( or any person authorised by it in this behalf as it (ay consider necessary if the furnishing of such infor(ation or the production of such boo)s, or registers, or other docu(ents, or record is rele'ant or necessary for the purposes of its in'estigation0 ($) .he In'estigating Authority (ay )eep in its custody any boo)s, registers, other docu(ents and record produced under sub+section (%) or sub+section (3) for six (onths and thereafter
% Inserted
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
$
shall return the sa(e to any inter(ediary or any person associated with securities (ar)et by who( or on whose behalf the boo)s, registers, other docu(ents and record are produced , 4ro+i-e- that the In'estigating Authority (ay call for any boo), register, other docu(ent and record if they are needed again , 4ro+i-e- f*rther that if the person on whose behalf the boo)s, registers, other docu(ents and record are produced re*uires certified copies of the boo)s, registers, other docu(ents and record produced before the In'estigating Authority, it shall gi'e certified copies of such boo)s, registers, other docu(ents and record to such person or on whose behalf the boo)s, registers, other docu(ents and record were produced0 (") Any person, directed to (a)e an in'estigation under sub+section ( ), (ay exa(ine on oath, any (anager, (anaging director, officer and other e(ployee of any inter(ediary or any person associated with securities (ar)et in any (anner, in relation to the affairs of his business and (ay ad(inister an oath accordingly and for that purpose (ay re*uire any of those persons to appear before it personally0 (#) If any person fails without reasonable cause or refuses(a) to produce to the In'estigating Authority or any person authorised by it in this behalf any boo), register, other docu(ent and record which is his duty under sub+section (%) or sub+section (3) to produce3 or (b) to furnish any infor(ation which is his duty under sub+section (3) to furnish3 or (c) to appear before the In'estigating Authority personally when re*uired to do so under sub+section (") or to answer any *uestion which is put to hi( by the In'estigating Authority in pursuance of that sub+section3 or (d) to sign the notes of any exa(ination referred to in sub+section (/), he shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with
fine, which (ay extend to one crore rupees, or with both, and also with a further fine which (ay extend to fi'e la)h rupees for e'ery day after the first during which the failure or refusal continues0 (/) Eotes of any exa(ination under sub+section (") shall be ta)en down in writing and shall be read o'er to, or by, and signed by, the person exa(ined, and (ay thereafter be used in e'idence against hi(0 4(:) ?here i the 'o*r!e of % i +e!ti(%tio , the I +e!ti(%ti ( A*thorit> h%! re%!o to ,elie+e th%t % > $er!o or e ter$ri!e, %! the '%!e .%> ,e, to /ho. % oti'e * -er !*,!e'tio ()) h%! ,ee i!!*e- or .i(ht ,e i!!*e-, 0 (%) h%! o.itte- or f%ile- to $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! %! re7*irei the oti'eH or (,) /o*l- ot $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! /hi'h !h%ll ,e *!ef*l for, or rele+% t to, the i +e!ti(%tio H or (') /o*l- -e!tro>, .*til%te, %lter, f%l!if> or !e'rete the i for.%tio or -o'*.e t! *!ef*l for, or rele+% t to, the i +e!ti(%tio ,
S*,!tit*te- for JKhere in the course of in'estigation, the In'estigating Authority has reasonable ground to belie'e that the boo)s, registers, other docu(ents and record of, or relating to, any inter(ediary or any person associated with securities (ar)et in any (anner, (ay be destroyed, (utilated, altered, falsified or secreted, the In'estigating Authority (ay (a)e an application to the Mudicial ?agistrate of the first class ha'ing Durisdiction for an order for the seiFure of such boo)s, registers, other docu(ents and record K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
"
the , the Ch%ir.% .%>, %fter ,ei ( !%ti!fie- th%t it i! e'e!!%r> to -o !o, %*thoriLe the I +e!ti(%ti ( A*thorit> or % > other offi'er of the ;o%r- (the offi'er !o %*thoriLe- i %ll '%!e! ,ei ( herei %fter referre- to %! the %*thori!e- offi'er), to0 (i) e ter % - !e%r'h, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft /here !*'h i for.%tio or -o'*.e t! %re e#$e'te- or ,elie+e- to ,e 6e$tH (ii) ,re%6 o$e the lo'6 of % > -oor, ,o#, lo'6er, !%fe, %l.ir%h or other re'e$t%'le for e#er'i!i ( the $o/er! 'o ferre- ,> !*,0'l%*!e (i), /here the 6e>! thereof %re ot %+%il%,leH (iii) !e%r'h % > $er!o /ho h%! (ot o*t of, or i! %,o*t to (et i to, or i! i , the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft, if the %*thoriLe- offi'er h%! re%!o to !*!$e't th%t !*'h $er!o h%! !e'rete- %,o*t hi! $er!o % > !*'h ,oo6! of %''o* t or other -o'*.e t!H (i+) re7*ire % > $er!o /ho i! fo* - to ,e i $o!!e!!io or 'o trol of % > ,oo6! of %''o* t or other -o'*.e t!, .%i t%i e- i the for. of ele'tro i' re'or-, to $ro+i-e the %*thori!e- offi'er the e'e!!%r> f%'ilit> to i !$e't !*'h ,oo6! of %''o* t or other -o'*.e t!. "#planation0 2or the $*r$o!e of thi! !*,0'l%*!e, the e#$re!!io Jele'tro i' re'or-K !h%ll h%+e the .e% i ( %!!i( e- to it i 'l%*!e (t) of !*,0!e'tio (1) of !e'tio " of the I for.%tio Te'h olo(> A't, "===. (+) !eiLe % > !*'h ,oo6! of %''o* t or other -o'*.e t! fo* - %! % re!*lt of !*'h !e%r'hH (+i) $l%'e .%r6! of i-e tifi'%tio o % > ,oo6! of %''o* t or other -o'*.e t! or .%6e or '%*!e to ,e .%-e e#tr%'t! or 'o$ie! therefro.H (+ii) re'or- o o%th the !t%te.e t of % > $er!o /ho i! fo* - to ,e i $o!!e!!io or i 'o trol of the i for.%tio or -o'*.e t! referre- to i !*,0'l%*!e! (i), (iii) % - (i+).< 4(9) The ;o%r- .%> .%6e re(*l%tio ! i rel%tio to % > !e%r'h or !eiL*re * -er thi! !e'tio H % - i $%rti'*l%r, /itho*t $reG*-i'e to the (e er%lit> of the fore(oi ( $o/er, !*'h re(*l%tio ! .%> $ro+i-e for the $ro'e-*re to ,e follo/e- ,> the %*thori!e- offi'er0
(%) for o,t%i i ( i (re!! i to % > ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft to ,e !e%r'he- /here free i (re!! thereto i! ot %+%il%,leH
1 S*,!tit*te-
,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) for the follo/i (& JAfter 'o !i-eri ( the %$$li'%tio % - he%ri ( the I +e!ti(%ti ( A*thorit>, if e'e!!%r>, the @%(i!tr%te .%>, ,> or-er, %*thori!e the I +e!ti(%ti ( A*thorit>O (a) to e ter, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the $l%'e or $l%'e! /here !*'h ,oo6!, re(i!ter!, other -o'*.e t! % - re'or- %re 6e$tH (b) to !e%r'h th%t $l%'e or tho!e $l%'e! i the .% er !$e'ifie- i the or-erH % (c) to !eiLe ,oo6!, re(i!ter!, other -o'*.e t! % - re'or-, it 'o !i-er! e'e!!%r> for the $*r$o!e! of the i +e!ti(%tio & 4ro+i-e- th%t the @%(i!tr%te !h%ll ot %*thori!e !eiL*re of ,oo6!, re(i!ter!, other -o'*.e t! % re'or-, of % > li!te- $*,li' 'o.$% > or % $*,li' 'o.$% > ( ot ,ei ( the i ter.e-i%rie! !$e'ifie* -er !e'tio 1") /hi'h i te -! to (et it! !e'*ritie! li!te- o % > re'o( i!e- !to'6 e#'h% (e * le!! !*'h 'o.$% > i -*l(e! i i !i-er tr%-i ( or .%r6et .% i$*l%tio .K
#
(,) for e !*ri ( !%fe '*!to-> of % > ,oo6! of %''o* t or other -o'*.e t! or %!!et! !eiLe-.< ( 0) .he In'estigating Authority shall )eep in its custody the boo)s, registers, other docu(ents and record seiFed under this section for such period not later than the conclusion of the in'estigation as it considers necessary and thereafter shall return the sa(e to the co(pany or the other body corporate, or, as the case (ay be, to the (anaging director or the (anager or any other person, fro( whose custody or power they were seiFed 5***<, 4ro+i-e- that the In'estigating Authority (ay, before returning such boo)s, registers, other docu(ents and record as aforesaid, place identification (ar)s on the( or any part thereof0 ( ) Sa'e as otherwise pro'ided in this section, e'ery search or seiFure (ade under this section shall be carried out in accordance with the pro'isions of the Code of Cri(inal <rocedure, !/3 (% of !/$) relating to searches or seiFures (ade under that Code0 Ce%!e % - -e!i!t $ro'ee-i (!. 11D. If the 8oard finds, after causing an in*uiry to be (ade, that any person has 'iolated, or is li)ely to 'iolate, any pro'isions of this Act, or any rules or regulations (ade thereunder, it (ay pass an order re*uiring such person to cease and desist fro( co((itting or causing such 'iolation, 4ro+i-e- that the 8oard shall not pass such order in respect of any listed public co(pany or a public co(pany (other than the inter(ediaries specified under section %) which intends to get its securities listed on any recognised stoc) exchange unless the 8oard has reasonable grounds to belie'e that such co(pany has indulged in insider trading or (ar)et (anipulation0: CDA4TER I REGISTRATION CERTI2ICATE Re(i!tr%tio of !to'6 ,ro6er!, !*,0,ro6er!, !h%re tr% !fer %(e t!, et'. 1". ( ) Eo stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et shall buy, sell or deal in securities except under, and in accordance with, the conditions of a certificate of registration obtained fro( the 8oard in accordance with the %4regulations: (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et i((ediately before the establish(ent of the 8oard for which no registration certificate was
necessary prior to such establish(ent, (ay continue to do so for a period of three (onths fro( such establish(ent or, if he has (ade an application for such registration within the said period of three (onths, till the disposal of such application,
The /or-! P% - i for. the @%(i!tr%te of !*'h ret*r P, o.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) % Substituted for 1rules2 by Securities =aw (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0
/
44ro+i-e- f*rther that any certificate of registration, obtained i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", shall be dee(ed to ha'e been obtained fro( the 8oard in accordance with the regulations pro'iding for such registration0 ( A) Eo depository, %4participant,: custodian of securities, foreign institutional in'estor, credit rating agency, or any other inter(ediary associated with the securities (ar)et as the 8oard (ay by notification in this behalf specify, shall buy or sell or deal in securities except under and in accordance with the conditions of a certificate of registration obtained fro( the 8oard in accordance with the regulations (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a depository, 34participant,: custodian of securities, foreign institutional in'estor or credit rating agency i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to buy or sell securities or otherwise deal with the securities (ar)et until such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300 ( 8) Eo person shall sponsor or cause to be sponsored or carry on or caused to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es including (utual funds, unless he obtains a certificate of registration fro( the 8oard in accordance with the regulations, 4ro+i-e- that any person sponsoring or causing to be sponsored, carrying or causing to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es operating in the securities (ar)et i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to operate till such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300:
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0
% Inserted
>
4()%lanati$n7 6or the re(o'al of doubts, it is hereby declared that, for purposes of this section, a collecti'e in'est(ent sche(e or (utual fund shall not be include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(ponent of in'est(ent besides the co(ponent of insurance issued by the insurer0: (%) 7'ery application for registration shall be in such (anner and on pay(ent of such fees as (ay be deter(ined by regulations0 (3) .he 8oard (ay, by order, suspend or cancel a certificate of registration in such (anner as (ay be deter(ined by regulations, 4ro+i-e- that no order under this sub+section shall be (ade unless the person concerned has been gi'en a reasonable opportunity of being heard0 %4CIA<.7R BA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 4rohi,itio of .% i$*l%ti+e % - -e'e$ti+e -e+i'e!, i !i-er tr%-i ( % - !*,!t% ti%l %'7*i!itio of !e'*ritie! or 'o trol.
1"A. Eo person shall directly or indirectly(a) use or e(ploy, in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recogniFed stoc) exchange, any (anipulati'e or decepti'e de'ice or contri'ance in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3
Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, w0r0e0f !+$+ %0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, reads as under, /@A81(0 D: ?ISC7==AE7CHS #0 Balidation+ Eotwithstanding anything contained in any Dudg(ent, decree or order of any court, tribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 Repeal and sa'ings + (1) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (2) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0 % Chapter BA inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
!
(b) e(ploy any de'ice, sche(e or artifice to defraud in connection with issue or dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange3 (c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange, in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (d) engage in insider trading3 (e) deal in securities while in possession of (aterial or non+public infor(ation or co((unicate such (aterial or non+public infor(ation to any other person, in a (anner which is in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (f) ac*uire control of any co(pany or securities (ore than the percentage of e*uity share capital of a co(pany whose securities are listed or proposed to be listed on a recognised stoc) exchange in contra'ention of the regulations (ade under this Act0: CDA4TER II 2INANCE, ACCOUNTS AND AUDIT Gr% t! ,> the Ce tr%l Go+er .e t. 1). .he Central &o'ern(ent (ay, after due appropriation (ade by <arlia(ent by law in this behalf, (a)e to the 8oard grants of such su(s of (oney as that &o'ern(ent (ay thin) fit for being utiliFed for the purposes of this Act0 2* -. 13. ( ) .here shall be constituted a 6und to be called the Securities and 7xchange 8oard of
India &eneral 6und and there shall be credited thereto(a) all grants, fees and charges recei'ed by the 8oard under this Act3 4G G G: (aa) %4G G G: (b) all su(s recei'ed by the 8oard fro( such other sources as (ay be decided upon by the Central &o'ern(ent0 (%) .he 6und shall be applied for (eeting(a) the salaries, allowances and other re(uneration of the (e(bers, officers and other e(ployees of the 8oard3 (b) the expenses of the 8oard in the discharge of its functions under section 3 (c) the expenses on obDects and for purposes authorised by this Act0
.he word 1and2 o(itted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 (aa) o(itted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 It was inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Clause (aa) reads as under,+ 1(aa) all su(s realiFed by way of <enalties under this Act3 and20
% Clause
%0
A''o* t! % - %*-it. 15. ( ) .he 8oard shall (aintain proper accounts and other rele'ant records and prepare an annual state(ent of accounts in such for( as (ay be prescribed by the Central &o'ern(ent in consultation with the Co(ptroller and Auditor+&eneral of India0 (%) .he accounts of the 8oard shall be audited by the Co(ptroller and Auditor+&eneral of India at such inter'als as (ay be specified by hi( and any expenditure incurred in connection with such audit shall be payable by the 8oard to the Co(ptroller and Auditor+&eneral of India0 (3) .he Co(ptroller and Auditor+&eneral of India and any other person appointed by hi( in connection with the audit of the accounts of the 8oard shall ha'e the sa(e rights and pri'ileges and authority in connection with such audit as the Co(ptroller and Auditor+ &eneral generally has in connection with the audit of the &o'ern(ent accounts and, in particular, shall ha'e the right to de(and the production of boo)s, accounts, connected 'ouchers and other docu(ents and papers and to inspect any of the offices of the 8oard0 ($) .he accounts of the 8oard as certified by the Co(ptroller and Auditor+&eneral of India or any other person appointed by hi( in this behalf together with the audit report thereon shall be forwarded annually to the Central &o'ern(ent and that &o'ern(ent shall cause the sa(e to be laid before each Iouse of <arlia(ent0 5CDA4TER IIA 4ENALTIES AND ADEUDICATION 4e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 15A. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder,(a) to furnish any docu(ent, return or report to the 8oard, fails to furnish the sa(e, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations, fails to file return or furnish the sa(e within the ti(e specified therefor in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0
Chapters BI A and BI 8 containing Ss0 "A to "M and "@ to "S respecti'ely, inserted by Securities =aws (A(end(ent) Act, !!" w0e0f0 %"+ + !!"0 % Substituted for 1a penalty not exceeding one la)h and fifty thousand rupees for each such failure2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding fi'e thousand rupees for e'ery day during which such failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for e'ery day during which the failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%
4e %lt> for f%il*re ,> % > $er!o to e ter i to %(ree.e t /ith 'lie t!. 15;. If any person, who is registered as an inter(ediary and is re*uired under this Act or any rules or regulations (ade thereunder to enter into an agree(ent with his client, fails to enter into such agree(ent, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 %54e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 15C. If any listed co(pany or any person who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such co(pany or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 4e %lt> for 'ert%i -ef%*lt! i '%!e of .*t*%l f* -!. 15D. If any person, who is(a) re*uired under this Act or any rules or regulations (ade thereunder to obtain a certificate of registration fro( the 8oard for sponsoring or carrying on any collecti'e in'est(ent sche(e, including (utual funds, sponsors or carries on any collecti'e in'est(ent sche(e, including (utual funds, without obtaining such certificate of registration, he shall be liable to 34a penalty of one la)h rupees for each day during which he sponsors or carries on any such collecti'e in'est(ent sche(e including (utual funds, or one crore rupees, whiche'er is less:3 (b) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, for sponsoring or carrying on any in'est(ent sche(e, fails to co(ply with the ter(s and conditions of certificate of registration, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, fails to (a)e an application for listing of its sche(es as pro'ided for in the regulations
Substituted for 1a penalty not exceeding fi'e la)h rupees for e'ery such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1If any person, who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing to redress the grie'ances of in'estors, fails to redress such grie'ances, he shall be liable to a penalty not exceeding ten thousand rupees for each such failure2, by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding ten thousand rupees for each day during which he carries on any such collecti'e in'est(ent sche(e including (utual funds, or ten la)h rupees whiche'er is higher02 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for each day during which such failure continues or ten la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0
%%
go'erning such listing, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (d) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to despatch
unit certificates of any sche(e in the (anner pro'ided in the regulation go'erning such despatch, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (e) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to refund the application (onies paid by the in'estors within the period specified in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (f) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to in'est (oney collected by such collecti'e in'est(ent sche(es in the (anner or within the period specified in the regulations, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for f%il*re to o,!er+e r*le! % - re(*l%tio ! ,> % %!!et .% %(e.e t 'o.$% >. 15E. Khere any asset (anage(ent co(pany of a (utual fund registered under this Act, fails to co(ply with any of the regulations pro'iding for restrictions on the acti'ities of the asset (anage(ent co(panies, such asset (anage(ent co(pany shall be liable to "4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for -ef%*lt i '%!e of !to'6 ,ro6er!. 152. If any person, who is registered as a stoc) bro)er under this Act,(a) fails to issue contract notes in the for( and (anner specified by the stoc) exchange of which such bro)er is a (e(ber, he shall be liable to a penalty not exceeding fi'e ti(es the a(ount for which the contract note was re*uired to be issued by that bro)er3 (b) fails to deli'er any security or fails to (a)e pay(ent of the a(ount due to the in'estor in the (anner within the period specified in the regulations, he shall be liable to #4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3
Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues or fi'e la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding one thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%3
(c) charges an a(ount of bro)erage which is in excess of the bro)erage specified in the regulations, he shall be liable to 4a penalty of one la)h rupees: or fi'e ti(es the a(ount of bro)erage charged in excess of the specified bro)erage, whiche'er is higher0 4e %lt> for i !i-er tr%-i (. 15G. If any insider who,(i) either on his own behalf or on behalf of any other person, deals in securities of a body corporate listed on any stoc) exchange on the basis of any unpublished price+sensiti'e infor(ation3 or (ii) co((unicates any unpublished price+sensiti'e infor(ation to any person, with or without his re*uest for such infor(ation except as re*uired in the ordinary course of business or under any law3 or
(iii) counsels, or procures for any other person to deal in any securities of any body corporate on the basis of unpublished price+sensiti'e infor(ation, shall be liable to a penalty %4of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of insider trading, whiche'er is higher:0 4e %lt> for o 0-i!'lo!*re of %'7*i!itio of !h%re! % - t%6eo+er!. 15D. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder, fails to,(i) disclose the aggregate of his shareholding in the body corporate before he ac*uires any shares of that body corporate3 or (ii) (a)e a public announce(ent to ac*uire shares at a (ini(u( price3 or 34(iii) (a)e a public offer by sending letter of offer to the shareholders of the concerned co(pany3 or (iv) (a)e pay(ent of consideration to the shareholders who sold their shares pursuant to letter of offer,: he shall be liable to a penalty $4of twenty+fi'e crore rupees or three ti(es the a(ount of profits profits (ade out of such failure, whiche'er is higher:0 554e %lt> for fr%*-*le t % - * f%ir tr%-e $r%'ti'e!. 15DA. If any person indulges in fraudulent and unfair trade practices relating to securities, he shall be liable to a penalty of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of such practices, whiche'er is higher0
Substituted for 1a penalty not exceeding fi'e thousand rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00% 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00% %00% " Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00%0
%$
4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 15D;. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 4o/er to %-G*-i'%te. 150I. ( ) 6or the purpose of adDudging under sections "A, "8, "C, "9, "7, "6, "& 4, "I, "IA and "I8:, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in subsection ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> the %-G*-i'%ti ( offi'er. 15E. Khile adDudging *uantu( of penalty under section "+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade
as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 "5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 15EA. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: )5Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!. 15E;. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 11, !e'tio 11;, !e'tio 11D, !*,0!e'tio ()) of !e'tio 1" or !e'tio 150I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e- -ef%*lt!.
Substituted for 1and "I2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the S78I (A(end(ent) Act, %00%, S0 ! w0e0f0 %!+ 0+%00%0 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
% Inserted
%"
(") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't. ()) The !ettle.e t $ro'ee-i (! * -er thi! !e'tio !h%ll ,e 'o -*'te- i %''or-% 'e /ith the $ro'e-*re !$e'ifie- i the re(*l%tio ! .%-e * -er thi! A't. (3) No %$$e%l !h%ll lie * -er !e'tio 15T %(%i !t % > or-er $%!!e- ,> the ;o%r- or %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio . < CDA4TER II; ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL E!t%,li!h.e t of Se'*ritie! A$$ell%te Tri,* %l!. 15F. ( ) .he Central &o'ern(ent shall by notification, establish one or (ore Appellate .ribunals to be )nown as the Securities Appellate .ribunal to exercise the Durisdiction, powers and authority conferred on such .ribunal by or under this Act 4or any other law for the ti(e being in force:0 (%) .he Central &o'ern(ent shall also specify in the notification referred to in sub+section ( ) the (atters and places in relation to which the Securities Appellate .ribunal (ay exercise Durisdiction0 "5Co.$o!itio of Se'*ritie! A$$ell%te Tri,* %l. 15L. A Securities Appellate .ribunal shall consist of a <residing Cfficer and two other (e(bers, to be appointed, by notification, by the Central &o'ern(ent, 4ro+i-e- that the Securities Appellate .ribunal, consisting of one person only, established before the co((ence(ent of the Securities and 7xchange 8oard of India (A(end(ent) Act, %00%, shall continue to exercise the Durisdiction, powers and authority conferred on it by or under this Act or any other law for the ti(e being in force till two other ?e(bers are appointed under this section0 9*%lifi'%tio for %$$oi t.e t %! 4re!i-i ( Offi'er or @e.,er of Se'*ritie! A$$ell%te Tri,* %l.
Inserted by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for Sections "= and "? by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "= and "? read as under,+ 1 "+=0 Co(position of securities Appellate .ribunal0 5 A Securities Appellate .ribunal shall consist of
% Substituted
one person only (hereinafter referred to as the <residing Cfficer of the Securities Appellate .ribunal) to be appointed, by notification, by the central &o'ern(ent0 "?0 Qualifications for appoint(ent as <residing Cfficer of the Securities Appellate .ribunal0 5 A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he + (a) is, or has been, or is *ualified to be, a Mudge of a Iigh Court3 or (b) has been a (e(ber of the Indian =egal Ser'ice and has held a post in &rade I of that ser'ice for at least three years3 or (c) has held office as the <residing Cfficer of a tribunal for at least three years02
%#
15@. 15( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of the Securities Appellate .ribunal unless he + (a) is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court3 or (b) is a sitting or retired Mudge of a Iigh Court who has co(pleted not less than se'en years of ser'ice as a Mudge in a Iigh Court0 ( A) .he <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0: (%) A person shall not be *ualified for appoint(ent as (e(ber of a Securities Appellate .ribunal unless he is a person of ability, integrity and standing who has shown capacity in dealing with proble(s relating to securities (ar)et and has *ualification and experience of corporate law, securities laws, finance, econo(ics or accountancy, 4ro+i-e- that a (e(ber of the 8oard or any person holding a post at senior (anage(ent le'el e*ui'alent to 7xecuti'e 9irector in the 8oard shall not be appointed as <residing Cfficer or ?e(ber of a Securities Appellate .ribunal during his ser'ice or tenure as such with the 8oard or within two years fro( the date on which he ceases to hold office as such in the 8oard0: %4Te *re of offi'e of 4re!i-i ( Offi'er % - other @e.,er! of Se'*ritie! A$$ell%te Tri,* %l. 15N. .he <residing Cfficer and e'ery other ?e(ber of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office and shall be eligible for re+appoint(ent, 4ro+i-e- that no person shall hold office as the <residing Cfficer of the Securities Appellate .ribunal after he has attained the age of sixty+eight years, 4ro+i-e- f*rther that no person shall hold office as a ?e(ber of the Securities Appellate .ribunal after he has attained the age of sixty+two years0: S%l%r> % - %llo/% 'e! % - other ter.! % - 'o -itio ! of !er+i'e of 4re!i-i ( Offi'er!. 150O. .he salary and allowances payable to and the other ter(s and conditions of ser'ice including pension, gratuity and other retire(ent benefits of the 4<residing Cfficer and other ?e(bers: of a Securities Appellate .ribunal shall be such as (ay be prescribed,
Substituted for sub+section ( ) of Section "? by the S78I (A(end(ent) Crdinance, %0 3 w0e0f0 % 00 0%0 30 <rior to substitution, it read as under,+ ;( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court , 4ro+i-e- that the <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0; % Substituted for Section "E, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "E read as under,+ 1 "E0 .er( of office0+ .he <residing officer of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office or until he attains the age of sixtyfi'e years, whiche'er is earlier02
%/
4ro+i-e- that neither the salary and allowances nor the other ter(s and conditions of ser'ice of the %4<residing Cfficer and other ?e(bers of a Securities Appellate .ribunal: shall be 'aried to their disad'antage after appoint(ent0 2illi ( *$ of +%'% 'ie!. 154. If, for reason other than te(porary absence, any 'acancy occurs in the 34office of the <residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal, then the Central &o'ern(ent shall appoint another person in accordance with the pro'isions of this Act to fill the 'acancy and the proceedings (ay be continued before the Securities Appellate .ribunal fro( the stage at which the 'acancy is filled0 Re!i( %tio % - re.o+%l. 159. ( ) .he $4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal (ay, by notice in writing under his hand addressed to the Central &o'ern(ent, resign his office, 4ro+i-e- that "4the <residing Cfficer or any other ?e(ber: shall, unless he is per(itted by the Central &o'ern(ent to relin*uish his office sooner, continue to hold office, until the expiry of three (onths fro( the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his ter( of office, whiche'er is the earliest0 (%) .he #4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal shall not be re(o'ed fro( his office except by an order by the Central &o'ern(ent on the ground of pro'ed (isbeha'iour or incapacity after an in*uiry (ade by a Mudge of the Supre(e Court, in which the /4<residing Cfficer or any other ?e(ber: concerned has been infor(ed of the charges against hi( and gi'en a reasonable opportunity of being heard in respect of these charges0 (3) .he Central &o'ern(ent (ay, by rules, regulate the procedure for the in'estigation of (isbeha'iour or incapacity of the >4<residing Cfficer or any other ?e(ber:0 Or-er! 'o !tit*ti ( A$$ell%te Tri,* %l to ,e fi %l % - ot to i +%li-%te it! $ro'ee-i (!. 15R. Eo order of the Central &o'ern(ent appointing any person as the !4<residing Cfficer or a ?e(ber: of a Securities Appellate .ribunal shall be called in *uestion in any (anner, and no act or proceeding before a Securities Appellate .ribunal shall be called in *uestion in any (anner on the ground (erely of any defect in the constitution of a Securities Appellate .ribunal0
Substituted for 1<residing Cfficer of a Securities Appellate .ribunal2 by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 / Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 > Substituted for 1aforesaid <residing Cfficer2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 ! Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0
%>
St%ff of the Se'*ritie! A$$ell%te Tri,* %l. 15S. ( ) .he Central &o'ern(ent shall pro'ide the Securities Appellate .ribunal with such officers and e(ployees as that &o'ern(ent (ay thin) fit0 (%) .he officers and e(ployees of the Securities Appellate .ribunal shall discharge their functions under general superintendence of the <residing Cfficer0 (3) .he salaries and allowances and other conditions of ser'ice of the officers and e(ployees of the Securities Appellate .ribunal shall be such as (ay be prescribed0 A$$e%l to the Se'*ritie! A$$ell%te Tri,* %l. 15T. 4( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed,(a) by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws
(Second A(end(ent) Act, !!!, under this Act, or the rules or regulations (ade thereunder3 or (b) by an order (ade by an adDudicating officer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 "5(") ********< (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 348oard or the AdDudicating Cfficer, as the case case (ay be,: is recei'ed by hi( and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 ($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0
Substituted for Sub+sec ( ) R (%) by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, Sub+sections ( ) R (%) were read as under, 1( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by any order (ade by any AdDudicating Cfficer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 (%) Eo appeal shall lie to the Securities Appellate .ribunal fro( an order (ade by an AdDudicating Cfficer with the consent of the parties02 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , o.i!!io , S*,0!e'tio (") re%- %! * -er& J(") No %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-eO (a) ,> the ;o%r- o % - %fter the 'o..e 'e.e t of the Se'*ritie! L%/! (Se'o - A.e -.e t) A't, 1999H (b) ,> % %-G*-i'%ti ( offi'er, /ith the 'o !e t of the $%rtie!.2 3 Substituted for 1a copy of the order (ade by the adDudicating officer2 by S78I (A(end(ent) Act !!!, !!!, w0e0f0 #+ %+ !!!0
%!
(") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 48oard, the: parties to the appeal and to the concerned AdDudicating Cfficer0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of the Se'*ritie! A$$ell%te Tri,* %l. 15U. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act, and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purposes of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3
(e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte 3 (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0), and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 %4Ri(ht to le(%l re$re!e t%tio . 15I. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,Substituted for 1parties2, S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for S0 "B by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, S0 "B read as under,+ 1 "B0 .he appellant (ay either appear in person or authorise one or (ore legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal02
% Substituted
30
(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of subsection ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or any attorney of any Iigh Court, and includes a pleader in practice0: Li.it%tio . 15?. .he pro'isions of the =i(itation Act, !#3 (3# of !#3), shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 54re!i-i ( Offi'er, @e.,er! % - !t%ff of Se'*ritie! A$$ell%te Tri,* %l! to ,e $*,li' !er+% t!. 15A. .he <residing Cfficer, ?e(bers and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0: Ci+il Co*rt ot to h%+e G*ri!-i'tio . 15M. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which an adDudicating officer appointed under this Act or a Securities Appellate .ribunal constituted under this Act is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "5A$$e%l to S*$re.e Co*rt.
Substituted for S0 "A by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, it read as under, + 1 "A0 .he <residing Cfficer and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian penal Code( $" of >#0)20 % Substituted for S0 "S by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution , it
was read as under,+ 1 "S0 Appeal to Iigh Court0+ Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, <ro'ided that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
3
15N. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order , 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the applicant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: CDA4TER III @ISCELLANEOUS 4o/er of Ce tr%l Go+er .e t to i!!*e -ire'tio !. 18. ( ) Kithout preDudice to the foregoing pro'isions of this Act 4or the 9epositories Act, !!#:, the 8oard shall, in exercise of its powers or the perfor(ance of its functions under this Act, be bound by such directions on *uestions of policy as the Central &o'ern(ent (ay gi'e in writing to it fro( ti(e to ti(e , 4ro+i-e- that the 8oard shall, as far as practicable, be gi'en an opportunity to express its 'iews before any direction is gi'en under this sub+section0 (%) .he decision of the Central &o'ern(ent whether a *uestion is one of policy or not shall be final0 4o/er of Ce tr%l Go+er .e t to !*$er!e-e the ;o%r-. 17. ( ) If at any ti(e the Central &o'ern(ent is of opinion(a) that on account of gra'e e(ergency, the 8oard is unable to discharge the functions and duties i(posed on it by or under the pro'isions of this Act3 or (b) that the 8oard has persistently (ade default in co(plying with any direction issued by the Central &o'ern(ent under this Act or in the discharge of the functions and duties i(posed on it by or under the pro'isions of this Act and as a result of such default the financial position of the 8oard or the ad(inistration of the 8oard has deteriorated3 or (c) that circu(stances exist which render it necessary in the public interest so to do, the Central &o'ern(ent (ay, by notification, supersede the 8oard for such period, not exceeding six (onths, as (ay be specified in the notification0 (%) Hpon the publication of a notification under sub+section ( ) superseding the 8oard,(a) all the (e(bers shall, as fro( the date of supersession, 'acate their offices as such3 (b) all the powers, functions and duties which (ay, by or under the pro'isions of this Act, be exercised or discharged by or on behalf of the 8oard, shall until the 8oard is reconstituted under sub+section (3), be exercised and discharged by such person or persons as the Central &o'ern(ent (ay direct3 and (c) all property owned or controlled by the 8oard shall, until the 8oard is reconstituted under sub+section (3), 'est in the Central &o'ern(ent0
Substituted for 1this Act2 by the 9epositories Act !!#, w0r0e0f0 %0+!+ !!"0
3%
(3) Cn the expiration of the period of supersession specified in the notification issued under sub+section ( ), the Central &o'ern(ent (ay reconstitute the 8oard by a fresh appoint(ent
and in such case any person or persons who 'acated their offices under clause ( a) of subsection (%), shall not be dee(ed dis*ualified for appoint(ent , 4ro+i-e- that the Central &o'ern(ent (ay, at any ti(e, before the expiration of the period of supersession, ta)e action under this sub+section0 ($) .he Central &o'ern(ent shall cause a notification issued under sub+section ( ) and a full report of any action ta)en under this section and the circu(stances leading to such action to be laid before each Iouse of <arlia(ent at the earliest0 Ret*r ! % - re$ort!. 1:. ( ) .he 8oard shall furnish to the Central &o'ern(ent at such ti(e and in such for( and (anner as (ay be prescribed or as the Central &o'ern(ent (ay direct, such returns and state(ents and such particulars in regard to any proposed or existing progra((e for the pro(otion and de'elop(ent of the securities (ar)et, as the Central &o'ern(ent (ay, fro( ti(e to ti(e, re*uire0 (%) Kithout preDudice to the pro'isions of sub+section ( ), the 8oard shall, within 4ninety: days after the end of each financial year, sub(it to the Central &o'ern(ent a report in such for(, as (ay be prescribed, gi'ing a true and full account of its acti'ities, policy and progra((es during the pre'ious financial year0 (3) A copy of the report recei'ed under sub+section (%) shall be laid, as soon as (ay be after it is recei'ed, before each Iouse of <arlia(ent0 Dele(%tio . 19. .he 8oard (ay, by general or special order in writing delegate to any (e(ber, officer of the 8oard or any other person subDect to such conditions, if any, as (ay be specified in the order, such of its powers and functions under this Act (except the powers under section %!) as it (ay dee( necessary0 A$$e%l!. "=. ( ) Any person aggrie'ed by an order of the 8oard (ade %4, before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!,: under this Act, or the rules or regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor, 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0
Substituted for 1sixty days2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1an order of the 8oard (ade2 by Securities =aws (Second A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0
% Substituted
33
(3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed, 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 4;%r of G*ri!-i'tio . "=A. Eo order passed by the 8oard %4or the AdDudicating Cfficer: under this Act shall be appealable except as pro'ided in 34section ". or: section %0 and no ci'il court shall ha'e Durisdiction in respect of any (atter which the 8oard $4or the AdDudicating Cfficer: is e(powered by, or under, this Act to pass any order and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any order passed by the 8oard "4or the AdDudicating Cfficer: by, or under, this Act0: S%+i (!.
"1. Eothing in this Act shall exe(pt any person fro( any suit or other proceedings which (ight, apart fro( this Act, be brought against hi(0 @e.,er!, offi'er! % - e.$lo>ee! of the ;o%r- to ,e $*,li' !er+% t!. "". All (e(bers, officers and other e(ployees of the 8oard shall be dee(ed, when acting or purporting to act in pursuance of any of the pro'isions of this Act, to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0 4rote'tio of %'tio t%6e i (oo- f%ith. "). Eo suit, prosecution or other legal proceedings shall lie against the Central &o'ern(ent #4or 8oard: or any officer of the Central &o'ern(ent or any (e(ber, officer or other e(ployee of the 8oard for anything which is in good faith done or intended to be done under this Act or the rules or regulations (ade thereunder0 /4Offe 'e!. "3. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, he shall be punishable with
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 18oard2 by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 3 Substituted for 1Section %02, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 $ Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 " Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Substituted by for S0 %$, Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" && <rior to its substitution S0%$ read as under, 1%$0 <enalty0+ Khoe'er contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both02
% Substituted
3$
i(prison(ent for a ter( which (ay extend to 4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to %4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 34Co.$o!itio of 'ert%i offe 'e!. "3A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "3;. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of the alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation, 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0
(%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0:
Substituted for 1one year, or with fine, or with both2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%, for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both20 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3"
E#e.$tio fro. t%# o /e%lth % - i 'o.e. "5. Eotwithstanding anything contained in the Kealth+tax Act, !"/ (%/ of !"/), the Inco(etax Act, !# ($3 of !# ) or any other enact(ent for the ti(e being in force relating to tax on wealth, inco(e, profits or gains(a) the 8oard3 (b) the existing Securities and 7xchange 8oard fro( the date of its constitution to the date of establish(ent of the 8oard, shall not be liable to pay wealth+tax, inco(e+tax or any other tax in respect of their wealth, inco(e, profits or gains deri'ed0 Co( iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations (ade thereunder, sa'e on a co(plaint (ade by the 8oard 4G G G:0 "5(") *****< )5 E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
.he words 1with the pre'ious sanction of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to the o.i!!io , S*,0!e'tio (") re%- %! * -er& 1(") No 'o*rt i ferior to th%t of "5% Co*rt of Se!!io < !h%ll tr> % > offe 'e $* i!h%,le * -er thi!
A't.2 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3#
A$$e%l % - re+i!io "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e of Cri.i %l 4ro'e-*re, 197) to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< Offe 'e! ,> 'o.$% ie!. "7. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly, 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n , 6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and
3/
(b) 1director2, in relation to a fir(, (eans a partner in the fir(0 4o/er to e#e.$t. ":. 4GGGGGG: "5 Re'o+er> of %.o* t! ":A. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith %
-ire'tio of -i!(or(e.e t or-er i!!*e- * -er !e'tio 11; or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifiefor. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.et%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't.
C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Section %> read as under, 1%>0 8$.er t$ e)e"%t+ If the central go'ern(ent if of the opinion that it is necessary or expedient so to do in public interest, it (ay, by order published in the Cfficial gaFette, exe(pt any person or class of persons buying or selling securities or otherwise dealing with the securities (ar)et fro( the operation of sub+section ! ) of Section %02 % I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3>
"#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio 15T of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 11;, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% !
% > offi'er of the ;o%r- /ho .%> ,e %*thoriLe-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 4o/er to .%6e r*le!. "9. ( ) .he Central &o'ern(ent (ay, by notification, (a)e rules for carrying out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers under sub+section ( ) of section "3 (b) the additional functions that (ay be perfor(ed by the 8oard under section 3 (c) 4G G G: (d) the (anner in which the accounts of the 8oard shall be (aintained under section "3 %4(da) the (anner of in*uiry under sub+section ( ) of section "+I3 (db) the salaries and allowances and other ter(s and conditions of ser'ice of the 34<residing Cfficers, ?e(bers: and other officers and e(ployees of the Securities Appellate .ribunal under section "+C and sub+section (3) of section "S3 (dc) the procedure for the in'estigation of (isbeha'iour or incapacity of the 4<residing Cfficers, or other ?e(bers: of the Securities Appellate .ribunal under sub+section (3) of section "Q3
Clause (c) o(itted by Securities laws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, clause (c) it read as under, 1(c) the conditions subDect to which registration certificate is to be issued under sub+section ( ) of section %20 % Inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 3 Substituted for 1<residing Cfficers2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3!
(dd) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section ". and the fees payable in respect of such appeal3: (e) the for( and the (anner in which returns and report to be (ade to the Central &o'ern(ent under section >3 (f) any other (atter which is to be, or (ay be, prescribed, or in respect of which pro'ision is to be, or (ay be, (ade by rules0 4o/er to .%6e re(*l%tio !. )=. ( ) .he 8oard (ay, %4GGG: by notification, (a)e regulations consistent with this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ti(es and places of (eetings of the 8oard and the procedure to be followed at such (eetings under sub+section ( ) of section / including *uoru( necessary for the transaction of business3 (b) the ter(s and other conditions of ser'ice of officers and e(ployees of the 8oard under sub+section (%) of section !3 34(c) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto and the (anner in which such (atters shall be disclosed by the co(panies under section A3 35('%) the *tiliL%tio of the %.o* t 're-ite- * -er !*,0!e'tio (5) of !e'tio 11H (',) the f*lfill.e t of other 'o -itio ! rel%ti ( to 'olle'ti+e i +e!t.e t !'he.e * -er !*,0!e'tio ("A) of !e'tio 11AAH ('') the $ro'e-*re to ,e follo/e- ,> the %*thoriLe- offi'er for !e%r'h or !eiL*re * -er !*,0!e'tio (9) of !e'tio 11CH < (d) the conditions subDect to which certificate of registration is to be issued, the a(ount of
fee to be paid for certificate of registration and the (anner of suspension or cancellation of certificate of registration under section %0: 55(-%) the ter.! -eter.i e- ,> the ;o%r- for !ettle.e t of $ro'ee-i (! * -er !*,!e'tio (") % - the $ro'e-*re for 'o -*'ti ( of !ettle.e t $ro'ee-i (! * -er !*,!e'tio ()) of !e'tio 15E;H (-,) % > other .%tter /hi'h i! re7*ire- to ,e, or .%> ,e, !$e'ifie- ,> re(*l%tio ! or i re!$e't of /hi'h $ro+i!io i! to ,e .%-e ,> re(*l%tio !.< R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t.
Substituted for 1<residing Cfficers2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 words 1with the pre'ious appro'al of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 3 Substituted for the existing clause (c) by the Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 <rior to substitution this clause read as under, 1(c) the a(ount of fee to be paid for registration certificate and (anner of suspension or cancellation of registration certificate under sub+section (%) and (3) of section %02 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% .he
$0
)1. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. )". .he pro'isions of this Act shall be in addition to, and not in derogation of, the pro'isions of any other law for the ti(e being in force0 A.e -.e t of 'ert%i e %'t.e t!. )). 40e%ealed bF 0e%ealing H A"ending Act' 2001&: 4o/er to re.o+e -iffi'*ltie!. )3. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order, published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as (ay appear to be necessary for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of fi'e years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 Re$e%l % - !%+i (. )5. ( ) .he Securities and 7xchange 8oard of India Crdinance, !!% (Crd0 " of !!%), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 1@( /@(5A9( 4 ee section 33: A@END@ENT O2 CERTAIN ENACT@ENTS 40e%ealed bF 0e%ealing H A"ending Act' 2001:
*SECURITIES CONTRACTS (REGULATION) RULES, 1957
In exercise of the powers conferred by section 30 of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the Central &o'ern(ent hereby (a)es the following rules, the sa(e ha'ing been pre'iously published as re*uired by sub+section (3) of the said section, na(ely ,Short title. 1. .hese rules (ay be called the Securities Contracts (Regulation) Rules, !"/0 Defi itio !. ". In these rules, unless the context otherwise re*uires,(a) 1for(2 (eans a for( appended to these rules3 (b) 1the Act2 (eans the Securities Contracts (Regulation) Act, !"# ($% of !"#)3 (c) 1&o'ern(ent co(pany2 (eans a co(pany in which not less than fifty+one per cent of the share capital is held by the Central &o'ern(ent or by any State &o'ern(ent or &o'ern(ents or partly by the Central &o'ern(ent and partly by one or (ore State &o'ern(ents ; 4(d) 1public2 (eans persons other than 5 (i) the pro(oter and pro(oter group3 (ii) subsidiaries and associates of the co(pany0 E#$l% %tio & 6or the purpose of this clause the words 1pro(oter2 and 1pro(oter group2 shall ha'e the sa(e (eaning as assigned to the( under the Securities and 7xchange 8oard of India (Issue of Capital and 9isclosure Re*uire(ents) Regulations, %00!3: %4(da) ;public sector co(pany; (eans a body corporate constituted by an Act of <arlia(ent or any State =egislature and includes a go'ern(ent co(pany,: 4(e) 1public shareholding2 (eans e*uity shares of the co(pany held by public and shall exclude shares which are held by custodian against depository receipts issued o'erseas0: A$$li'%tio for re'o( itio . ). An application under section 3 of the Act for recognition of a stoc) exchange shall be (ade to the 34Securities and 7xchange 8oard of India: in 6or( A0
* The!e R*le! h%+e ,ee *$-%te- ,%!e- o the R*le! % - A.e -.e t! %+%il%,le o the /e,!ite of the De$%rt.e t of E'o o.i' Aff%ir!0 htt$&11fi .i . i'.i 1l%/1i -e#.%!$ % - %+%il%,le %.e -.e t otifi'%tio !. Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 % Inserted by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3 Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
2ee! for %$$li'%tio . 3. ( ) .here shall be paid in respect of e'ery application under rule 3 a fee of rupees fi'e hundred0 (%) .he a(ount of the fee shall be deposited in the nearest &o'ern(ent treasury or the nearest branch of the State 8an) of India, 4ro+i-e- that at 8o(bay, Calcutta, ?adras, 9elhi and @anpur, the a(ount shall be deposited in the Reser'e 8an) of India0 (3) .he a(ount of the fee so deposited shall be credited to the receipt head 1A=BI?iscellaneous-Cther fees, fines and forfeitures20 Do'*.e t! to ,e file- %lo ( /ith the %$$li'%tio % - $%rti'*l%r! it !ho*l- 'o t%i . 5. 7'ery application shall be acco(panied by four copies of the rules (including the (e(orandu( and articles of association where the applicant stoc) exchange is an
incorporated body) and bye+laws of the stoc) exchange applying for recognition as specified in section 3 of the Act and the receipt granted by the &o'ern(ent treasury, or as the case (ay be, the State 8an) of India or the Reser'e 8an) of India, in respect of the a(ount of the fee deposited and shall contain clear particulars as to the (atters specified in the Annexure to 6or( A0 $54o/er to .%6e i 7*irie! % - '%ll for i for.%tio . 5A. 8efore granting recognition to a stoc) exchange under section $ of the Act, the "4Securities and 7xchange 8oard of India: (ay (a)e such in*uiries and re*uire such further infor(ation to be furnished, as it dee(s necessary, relating to the infor(ation furnished by the stoc) exchange in the Annexure to its application in 6or( A0: 2or. of re'o( itio . 8. .he recognition granted to a stoc) exchange shall be in 6or( 8 and be subDect to the following conditions, na(ely ,(a) that the recognition unless granted on a per(anent basis, shall be for such period not less than one year as (ay be specified in the recognition3 (b) that the stoc) exchange shall co(ply with such conditions as are or (ay be prescribed or i(posed under the pro'isions of the Act and these rules fro( ti(e to ti(e0
$ Inserted
by &SR 0!# dated $00/0 !#/, w0e0f0 %%00/0 !#/ for 1Central &o'ern(ent2 by the Securities Contracts (Regulation)(A(end(ent )Rules, !!#, w0e0f0 %30 %0 !!#0
" Substituted
Re e/%l of re'o( itio . 7. ( ) .hree (onths before the expiry of the period of recognition, a recognised stoc) exchange desirous of renewal of such recognition (ay (a)e an application to the #4Securities and 7xchange 8oard of India: in 6or( A0 (%) .he pro'isions of rule 3, rule $, rule ", rule "A and rule # shall apply in relation to renewal of recognition as they apply in relation to grant of recognition except that the fee payable in respect of an application for renewal of recognition shall be rupees two hundred0 9*%lifi'%tio ! for .e.,er!hi$ of % re'o( i!e- !to'6 e#'h% (e. :. .he rules relating to ad(ission of (e(bers of a stoc) exchange see)ing recognition shall inter alia pro'ide that , (1) Eo person shall be eligible to be elected as a (e(ber if(a) he is less than twenty+one years of age3 (b) he is not a citiFen of India3 pro'ided that the go'erning body (ay in suitable cases relax this condition with the prior appro'al of the !4Securities and 7xchange 8oard of India:3 (c) he has been adDudged ban)rupt or a recei'ing order in ban)ruptcy has been (ade against hi( or he has been pro'ed to be insol'ent e'en though he has obtained his final discharge3 (d) he has co(pounded with his creditors unless he has paid sixteen annas in the rupee3 (e) he has been con'icted of an offence in'ol'ing fraud or dishonesty3 (f) he is engaged as principal or e(ployee in any business other than that of securities /4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability unless he underta)es on ad(ission to se'er his connection with such business ,
>44ro+i-e-
that no (e(ber (ay conduct business in co((odity deri'ati'es, except by setting up a separate co(pany which shall co(ply with the regulatory re*uire(ents, such as, networth, capital ade*uacy, (argins and exposure nor(s as (ay be specified by the 6orward ?ar)et Co((ission, fro( ti(e to ti(e ,
# Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, w0e0f0 %30 %0 !!#0 / Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 > Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 <rior to its substitution, the pro'iso as a(ended by Securities Contracts (Regulation) (A(end(ent) Rules, !!# w0e0f0 %30 %0 !!#, read as under, 1<ro'ided that the Securities and 7xchange 8oard of India (ay, for reasons sufficient in the opinion of the said 8oard, per(it a recogniFed stoc) exchange to suspend the enforce(ent of this clause for a specified period on condition that the applicant is not associated with or is a (e(ber of or subscriber to or shareholder or debenture holder in or connected through a partner or e(ployee with any other organisation, institution, association, co(pany or corporation in India where forward business of any )ind whether in goods or co((odities or otherwise is carried on or is not engaged as a principal or e(ployee ion any such business02
4ro+i-e- f*rther that nothing herein shall be applicable to any corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to ()) of the pro'iso to sub+rule ($)0:3 (g) !4GGG: (h) he has been at any ti(e expelled or declared a defaulter by any other stoc) exchange3 (i) he has been pre'iously refused ad(ission to (e(bership unless a period of one year has elapsed since the date of such reDection0 (2) Eo person eligible for ad(ission as a (e(ber under sub+rule ( ) shall be ad(itted as a (e(ber unless ,(a) he has wor)ed for not less than two years as a partner with, or an authorised assistant or authorised cler) or re(isier or apprentice to, a (e(ber3 or (b) he agrees to wor) for a (ini(u( period of two years as a partner or representati'e (e(ber with another (e(ber and to enter into bargains on the floor of the stoc) exchange and not in his own na(e but in the na(e of such other (e(ber 3 or (c) he succeeds to the established business of a deceased or retiring (e(ber who is his father, uncle, brother or any other person who is, in the opinion of the go'erning body, a close relati'e , 4ro+i-e- that the rules of the stoc) exchange (ay authorise the go'erning body to wai'e co(pliance with any of the foregoing conditions if the person see)ing ad(ission is in respect of (eans, position, integrity, )nowledge and experience of business in securities, considered by the go'erning body to be otherwise *ualified for (e(bership0 (3) Eo person who is a (e(ber at the ti(e of application for recognition or subse*uently ad(itted as a (e(ber shall continue as such if(a) he ceases to be a citiFen of India , 4ro+i-e- that nothing herein shall affect those who are not citiFens of India but who were (e(bers at the ti(e of such application or were ad(itted subse*uently under the pro'isions of clause (b) of sub+rule ( ) of this rule, subDect to their co(plying with all other re*uire(ents of this rule3
(b) he is adDudged ban)rupt or a recei'ing order in ban)ruptcy is (ade against hi( or he is pro'ed to be insol'ent3 (c) he is con'icted of an offence in'ol'ing fraud or dishonesty3 (d) 04G G G: (e) 4G G G: (f) he engages either as principal or e(ployee in any business other than that of securities %4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability, pro'ided that! C(itted 0 Ibid0
by &SR 0/0(7) dated "0
0 !>>
Ibid0
% Inserted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(i) the go'erning body (ay, for reasons, to be recorded in writing, per(it a (e(ber to engage hi(self as principal or e(ployee in any such business, if the (e(ber in *uestion ceases to carry on business on the stoc) exchange either as an indi'idual or as a partner in a fir(, (ii) in the case of those (e(bers who were under the rules in force at the ti(e of such application per(itted to engage in any such business and were actually so engaged on the date of such application, a period of three years fro( the date of the grant of recognition shall be allowed for se'ering their connection with any such business, 34(iii) nothing herein shall affect (e(bers of a recognised stoc) exchange which are corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to (k) of the pro'iso to sub+rule ($)0: (4) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section 3%% of the said Act3 (ii) a (aDority of the directors of such co(pany are shareholders of such co(pany and also (e(bers of that stoc) exchange3 and (iii) the directors of such co(pany, who are (e(bers of that stoc) exchange, ha'e ulti(ate liability in such co(pany , 4ro+i-e- that where the $4Securities and 7xchange 8oard of India: (a)es a reco((endation in this regard, the go'erning body of a stoc) exchange shall, in relaxation of the re*uire(ents of this clause, ad(it as (e(ber the following corporations "4,bodies corporate:, co(panies or institutions, na(ely ,(a) the Industrial 6inance Corporation, established under the Industrial 6inance Corporation Act, !$> ( " of !$>)3 (b) the Industrial 9e'elop(ent 8an) of India, established under the Industrial 9e'elop(ent 8an) Act, !#$ ( > of !#$)3 (c) the =ife Insurance Corporation of India, established under the =ife Insurance Corporation Act, !"# (3 of !"#)3 (d) the &eneral Insurance Corporation of India constituted under the &eneral Insurance Corporation (Eationalisation) Act, !/% ("/ of !/%)3 (e) the Hnit .rust of India, established under the Hnit .rust of India Act, !#3 ("% of !#3)3
3 Substituted, ibid0 <rior to its substitution, sub+clause (iii) read as under, 1(iii) nothing herein shall affect (e(bers of a recogniFed stoc) exchange per(itted under the pro'iso to clause (f) of sub+rule( ) to suspend the enforce(ent of the aforesaid clause, for so long as such suspension is effecti'e, except that no (e(ber of such exchange shall engage in forward business of any )ind whether in goods or co((odities or otherwise and , if actually so engaged on the date of such application , he shall se'er his connection with any such business within a period of three years fro( the date of the grant of recognition02 $ Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# " Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(f) the Industrial Credit and In'est(ent Corporation of India, a co(pany registered under the Co(panies Act, !"# ( of !"#)3 (g) the subsidiaries of any of the corporations or co(panies specified in (a) to (f) and any subsidiary of the State 8an) of India or any nationalised ban) set up for pro'iding (erchant ban)ing ser'ices, buying and selling securities and other si(ilar acti'ities0 #4(h) any ban) included in the Second Schedule to the Reser'e 8an) of India Act, !3$ (% of !3$)3 (i) the 7xport I(port 8an) of India, established under the 7xport I(port 8an) of India Act, !> (%> of !> )3 (j) the Eational 8an) for Agriculture and Rural 9e'elop(ent, established under the Eational 8an) for Agriculture and Rural 9e'elop(ent Act, !> (# of !> )3 and (k) the Eational Iousing 8an), established under the Eational Iousing 8an) Act, !>/ ("3 of !>/)0: (4A) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall also be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section % of the said Act3 (ii) such co(pany underta)es to co(ply with such financial re*uire(ents and nor(s as (ay be specified by the Securities and 7xchange 8oard of India for the registration of such co(pany under sub+section ( ) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (iii) /4G G G: (iv) the directors of the co(pany are not dis*ualified fro( being (e(bers of a stoc) exchange under >4clause ( ) 4except sub+clause (b) and sub+clause (f) thereof: or clause (3) 4except sub+clause (a) and sub+clause (f) thereof:: and the 9irectors of the co(pany had not held the offices of the 9irectors in any co(pany which had been a (e(ber of the stoc) exchange and had been declared defaulter or expelled by the stoc) exchange3 and (v) not less than two directors of the co(pany are persons who possess a (ini(u( two yearsJ experience , (a) in dealing in securities3 or (b) as portfolio (anagers3 or (c) as in'est(ent consultants0 (5) Khere any (e(ber of a stoc) exchange is a fir(, the pro'isions of sub+rules ( ), (3) and ($), shall, so far as they can, apply to the ad(ission or continuation of any partner in such fir(0
# Inserted, / C(itted
ibid0 by &SR /$! (7), dated %0 00 !!$ > Substituted by &SR /!0(7), dated 0/0 0 !!$
Co tr%'t! ,et/ee .e.,er! of re'o( i!e- !to'6 e#'h% (e. 9. All contracts between the (e(bers of a recognised stoc) exchange shall be confir(ed in writing and shall be enforced in accordance with the rules and bye+laws of the stoc) exchange of which they are (e(bers0 !5No.i ee! of the Se'*ritie! % - E#'h% (e ;o%r- of I -i%< o the (o+er i ( ,o-ie! of re'o( i!e- !to'6 e#'h% (e!. 1=. .he %04Securities and 7xchange 8oard of India: (ay no(inate one or (ore persons not exceeding three in nu(ber, as (e(ber or (e(bers of the go'erning body of e'ery recognised stoc) exchange0 Such (e(ber or (e(bers shall enDoy the sa(e status and powers as other (e(bers of the go'erning body0 O,li(%tio of the (o+er i ( ,o-> to t%6e -i!'i$li %r> %'tio %(%i !t % .e.,er if !o -ire'te- ,> the % 5Se'*ritie! % - E#'h% (e ;o%r- of I -i%<. 11. After recei'ing the report of the result of an en*uiry (ade under clause (b) of subsection (3) of section # of the Act, the % 4Securities and 7xchange 8oard of India: (ay ta)e such action as they dee( proper and, in particular, (ay direct the go'erning body of the stoc) exchange to ta)e such disciplinary action against the offending (e(ber, including fine, expulsion, suspension or any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney, as (ay be specified by the % 4Securities and 7xchange 8oard of India:3 notwithstanding anything to the contrary contained in the rules or bye+laws of the stoc) exchange concerned, the go'erning body shall gi'e effect to the directions of the % 4Securities and 7xchange 8oard of India: in this behalf and shall not in any (anner co((ute, re'o)e or (odify the action ta)en in pursuance of such directions, without the prior appro'al of the % 4Securities and 7xchange 8oard of India:0 .he % 4Securities and 7xchange 8oard of India: (ay, howe'er, either of its own (otion or on the representation of the (e(ber concerned, (odify or withdraw its direction to the go'erning body0 A*-it of %''o* t! of .e.,er!. 1". 7'ery (e(ber shall get his accounts audited by a chartered accountant whene'er such audit is re*uired by the % 4Securities and 7xchange 8oard of India:0 ?ith-r%/%l of re'o( itio . 1). .he written notice referred to in section " of the Act shall be in 6or( C0
! Substituted %0 Ibid0 %
by 60 Eo0 L3/LS7L!$, dated %#0 00 !!$0
Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> re'o( i!e- !to'6 e#'h% (e. 13. 7'ery recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years, (1) ?inute boo)s of the (eetings of(a) (e(bers3 (b) go'erning body3 (c) any standing co((ittee or co((ittees of the go'erning body or of the general body of (e(bers0
(2) Register of (e(bers showing their full na(es and addresses0 Khere any (e(ber of the stoc) exchange is a fir(, full na(es and addresses of all partners shall be shown0 (3) Register of authorised cler)s0 (4) Register of re(isiers of authorised assistants0 (5) Record of security deposits0 (6) ?argin deposits boo)0 (7) =edgers0 (8) Mournals0 (9) Cash boo)0 (10) 8an) pass+boo)0 ;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> .e.,er of % re'o( i!e- !to'6 e#'h% (e. 15. ( ) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years , (a) Register of transactions ( a!da boo))0 (b) ClientsJ ledger0 (c) &eneral ledger0 (d) Mournals0 (e) Cash boo)0 (f) 8an) pass+boo)0 (g) 9ocu(ents register showing full particulars of shares and securities recei'ed and deli'ered0 (2) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following docu(ents for a period of two years, (a) ?e(berJs contract boo)s showing details of all contracts entered into by hi( with other (e(bers of the sa(e exchange or counterfoils or duplicates of (e(os of confir(ation issued to such other (e(bers0 (b) Counterfoils or duplicates of contract notes issued to clients0 (c) Kritten consent of clients in respect of contracts entered into as principals0 @% er of i 7*ir> i rel%tio to the %ff%ir! of the (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e or the %ff%ir! of % > .e.,er of the !to'6 e#'h% (e i rel%tio to the !to'6 e#'h% (e. 18. ( )(a) .he person or persons appointed by the %%4Securities and 7xchange 8oard of India: to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act shall hereafter in this rule be referred to as the Nin*uiring authorityJ3 (b) where the in*uiring authority consists of two or (ore persons, one of the( shall be appointed as the chair(an or senior (e(ber thereof3 (c) the in*uiring authority shall hand o'er a state(ent of issues to be in*uired into to the go'erning body or the (e(ber concerned, as the case (ay be, who will be gi'en a reasonable opportunity to state their or his side of the case3 (d) if any witness is called for exa(ination, an opportunity shall be pro'ided to the go'erning body or the (e(ber whose affairs are being in*uired into, as the case (ay be, to cross+exa(ine such witness3 (e) where the in*uiring authority consists of (ore than one person, the 'iews of the (aDority shall be dee(ed to represent the findings of such authority and, in the e'ent of
an e*uality of 'otes, the chair(an or senior (e(ber shall ha'e a casting 'ote3 (f) the in*uiring authority shall sub(it its report in writing to the %%4Securities and 7xchange 8oard of India: within the period specified in the order of appoint(ent3 (g) te(porary absence fro( any hearing or hearings of any (e(ber of the in*uiring authority shall not 'itiate its proceedings0 (%) Khere the %%4Securities and 7xchange 8oard of India: has directed the go'erning body of a stoc) exchange to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act, the go'erning body concerned shall appoint one or (ore (e(bers thereof to (a)e the in*uiry and the pro'isions of sub+rule ( ) shall apply "!tati# "!tandi# to such in*uiry0 S*,.i!!io of % *%l re$ort. 17. ( ) 7'ery recognised stoc) exchange shall before the 3 st day of Manuary in each year or within such extended ti(e as the %34Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, allow, furnish the %34Securities and 7xchange 8oard of India: annually with a report about its acti'ities during the preceding calendar year, which shall inter alia contain detailed infor(ation about the following (atters , (a) changes in rules and bye+laws, if any3 (b) changes in the co(position of the go'erning body3 (c) any new sub+co((ittees set up and changes in the co(position of existing ones3
%% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# %3 Ibid0
(d) ad(issions, re+ad(issions, deaths or resignations of (e(bers3 (e) disciplinary action against (e(bers3 (f) arbitration of disputes (nature and nu(ber) between (e(bers and non+(e(bers3 (g) defaults3 (h) action ta)en to co(bat any e(ergency in trade3 (i) securities listed and de+listed3 and (j) securities brought on or re(o'ed fro( the forward list0 (%) 7'ery recognised stoc) exchange shall within one (onth of the date of the holding of its annual general (eeting, furnish the %$4Securities and 7xchange 8oard of India: with a copy of its audited balance+sheet and profit and loss account for its preceding financial year0 S*,.i!!io of $erio-i'%l ret*r !. 17A. 7'ery recognised stoc) exchange shall furnish the %$4Securities and 7xchange 8oard of India: periodical returns relating to(i) the official rates for the securities enlisted thereon3 (ii) the nu(ber of shares deli'ered through the clearing house3 (iii) the (a)ing+up prices3 (iv) the clearing house progra((es3 (v) the nu(ber of securities listed and de+listed during the pre'ious three (onths3 (vi) the nu(ber of securities brought on or re(o'ed fro( the forward list during the pre'ious three (onths3 and (vii) any other (atter as (ay be specified by the %$4Securities and 7xchange 8oard of India:0 @% er of $*,li'%tio of ,>e0l%/! for 'riti'i!.. 1:. .he bye+laws to be (ade, a(ended or re'ised under the Act shall be published for
criticis( in accordance with the pro'isions of section %3 of the &eneral Clauses Act, >!/ both in the &aFette of India and Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate0 Re7*ire.e t! /ith re!$e't to the li!ti ( of !e'*ritie! o % re'o( i!e- !to'6 e#'h% (e. 19. ( ) A public co(pany as defined under the Co(panies Act, !"#, desirous of getting its securities listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars ,
%$ Ibid0
(a) ?e(orandu( and articles of association and, in the case of a debenture issue, a copy of the trust deed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any securities for subscription or sale during the last fi'e years0 (d) Copies of balance+sheets and audited accounts for the last fi'e years, or in the case of new co(panies, for such shorter period for which accounts ha'e been (ade up0 (e) A state(ent showing(i) di'idends and cash bonuses, if any, paid during the last ten years (or such shorter period as the co(pany has been in existence, whether as a pri'ate or public co(pany), (ii) di'idends or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents with or between ,(i) 'endors andLor pro(oters, (ii) underwriters and sub+underwriters, (iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents with(i) (anaging agents and secretaries and treasurers, (ii) selling agents, (iii) (anaging directors and technical directors, (iv) general (anager, sales (anager, (anager or secretary0 (h) Certified copy of e'ery letter, report, balance+sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering securities for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents0 (j) A brief history of the co(pany since its incorporation gi'ing details of its acti'ities including any reorganisation, reconstruction or a(alga(ation, changes in its capital structure, (authorised, issued and subscribed) and debenture borrowings, if any0
(k) <articulars of shares and debentures issued-(i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s including an option for the issue of any )ind of the securities granted to any person0 (") Certified copies of%"4(i) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3: (ii) agree(ents, if any, with the Industrial 6inance Corporation, Industrial Credit and In'est(ent Corporation and si(ilar bodies0 (n) <articulars of shares forfeited0 ($) A list of highest ten holders of each class or )ind of securities of the co(pany as on the date of application along with particulars as to the nu(ber of shares or debentures held by and the address of each such holder0 (%) <articulars of shares or debentures for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0 (%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant co(pany shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer, (ii) that the fully paid shares will be free fro( all lien, while in the case of partly paid shares, the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such shares, (iii) that any a(ount paid+up in ad'ance of calls on any share (ay carry interest but shall not entitle the holder of the share to participate in respect thereof, in a di'idend subse*uently declared, (iv) there will be no forfeiture of unclai(ed di'idends before the clai( beco(es barred by law, (v) that option or right to call of shares shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the securities of a co(pany which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0
%" Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 <rior to its substitution, sub+clause (i), read as under, 1(i) letters of consent of the Controller of Capital Issues02
%#4(b)
(i) At least twenty fi'e per cent0 of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent3 or (ii) At least ten per cent of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent if the post issue capital of the
co(pany calculated at offer price is (ore than four thousand crore rupees, <ro'ided that the re*uire(ent of post issue capital being (ore than four thousand crore rupees shall not apply to a co(pany whose draft offer docu(ent is pending with the Securities and 7xchange 8oard of India on or before the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, if it satisfies the conditions prescribed in clause (b) of sub+rule % of rule ! of the Securities Contracts (Regulation) Rules, !"# as existed prior to the date of such co((ence(ent, %/4<ro'ided further that the co(pany, referred to in sub clause (ii), shall increase its public shareholding to at least twenty fi'e per cent, within a
%# Substituted
by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, clause (b) as a(ended by the A(end(ent Rules, %00 , w0e0f0 0/00#0%00 , read as under, 1(b) At least 0 per cent of each class or )ind of securities issued by a co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted subDect to the following conditions, (a) (ini(u( %0 la)h securities (excluding reser'ations, fir( allot(ent and pro(otersJ contribution) was offered to the public3 (b) the siFe of the offer to the public, i&e&' the offer price (ultiplied by the nu(ber of securities offered to the public was (ini(u( Rs0 00 crores3 and (c) the issue was (ade only through boo) building (ethod with allocation of #0 per cent of the issue siFe to the *ualified institutional buyers as specified by the Securities and 7xchange 8oard of India, 4ro+i-e- that if a co(pany does not fulfil the conditions, it shall offer at least %" per cent of each class or )ind of securities to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted, 4ro+i-e- f*rther that a recognised stoc) exchange (ay relax any of the conditions with the pre'ious appro'al of the Securities and 7xchange 8oard of India, in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#), and subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*6or the purpose of this clause, it is hereby clarified that where any part of the securities sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental 6ire and &eneral Insurance Co(pany =i(ited and the Hnited 6ire and &eneral Insurance Co(pany =i(ited or Hnit .rust of India, the total subscription to the securities, whether by one or (ore of such bodies, shall not for( part of the 0 per cent or %" per cent of the securities, as the case (ay be, to be offered to the public02 %/ Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 <rior to its substitution, second pro'iso, read as under, 1<ro'ided further that the co(pany, referred in sub+clause (ii), shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of atleast fi'e per
period of three years fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India0: %>4GGG:: %!4(c) Eotwithstanding anything contained in clause (b), a public sector co(pany, shall offer and allot at least ten per cent, of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares to public in ter(s of an offer docu(ent0: (3) A co(pany applying for listing shall, as a condition precedent, underta)e inter alia(a) (i) that letters of allot(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to
that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been posted, (ii) that letters of right will be issued si(ultaneously, (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the securities to which they relate, (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right, (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or di'idend on the securities will be calculated, (b) to issue, when so re*uired, receipts for all securities deposited with it whether for registration, sub+di'ision, exchange or for other purposes 3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of certificates and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (bb) to issue, when so re*uired, consolidation and renewal certificates in deno(inations of the (ar)et unit of trading to split certificates, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3
cent per annu( beginning fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India,2 %> C(itted, ibid <rior to its o(ission, third pro'iso, read as under, 1<ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase beings its public shareholding to the le'el of twenty fi'e per cent in that year02 %! Inserted, ibid0
(c) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders, and (ii) to 'erify when the co(pany is unable to issue certificates or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (d) on production of the necessary docu(ents by shareholders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or certificate of the Controller of 7state 9uty or si(ilar other docu(ent has been duly exhibited to
and registered by the co(pany3 (e) to issue certificates in respect of shares or debentures lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance certificates within the sa(e period where the transfer is acco(panied by a larger certificate3 (f) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a di'idend or the issue of right or bonus share will be considered3 (g) to reco((end or declare all di'idends andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all di'idends andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (h) to notify the stoc) exchange of any (aterial change in the general character or nature of the co(panyJs business3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (anaging agent or secretaries and treasurers, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued, copies of all other notices and circulars sent to the shareholders including proceedings of ordinary and extraordinary general (eetings of the co(pany and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the shareholders of any new issue of securities whether by way of right, pri'ilege bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited securities or the issue of securities held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of di'idend or issue of right or bonus shares or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s (or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its shareholders or debentureholders) and specifying the purpose or purposes for which the transfer boo)s are to be closed (or the record is to be ta)en)3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority subDect to which the issue is proposed to be (ade ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after each annual general (eeting of at least ten principal holders of each class of security of the co(pany along with particulars as to the nu(ber of shares or debentures held by,
and address of, each such holder3 (+) to grant to shareholders the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e not being less than four wee)s within which to record, exercise, or renounce such rights, pri'ileges and benefits and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3 (r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any securities listed on the exchange, (ii) of the intention to (a)e a drawing of such securities, inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing of the balance) for the drawing, (iii) of the a(ount of securities outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the shareholders to apprise the position of the co(pany and to a'oid the establish(ent of a false (ar)et in the shares of the co(pany3 (t) (t)that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 304($) An application for listing shall be necessary in respect of the following, (a) all new issues of any class or )ind of securities of a co(pany to be offered to the public3 (b) all further issues of any class or )ind of securities of a co(pany if such class or )ind of securities of the co(pany are already listed on a recognised stoc) exchange0: (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the securities of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 3 44ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any security, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and its orders shall be carried out by the stoc) exchange0: 3%4(#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore
or re+ad(it to dealings any securities suspended or withdrawn fro( the list0: 334(#A) 7xcept as otherwise pro'ided in these rules or per(itted by the Securities and 7xchange 8oard of India under sub+rule (/), all re*uire(ents with respect to listing
30 Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, sub+rule ($), read as under, 1($) A fresh application for listing will be necessary in respect of all new issues desired to be dealt in, pro'ided that, where such new securities are identical in all respects with those already listed, ad(ission to dealings will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new issues0 7xplanation, Shares are identical in all respects only if(a) they are of the sa(e no(inal 'alue and the sa(e a(ount per share has been called up3 (b) they are entitled to di'idend at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the di'idend payable on each share will a(ount to exactly the sa(e su(, net and gross3 and (c) they carry the sa(e rights in all other respects02 3 Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%0000 7arlier, the second pro'iso was a(ended by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 3% Substituted by the Securities Contracts (Regulation) (A(end(ent), %000, w0e0f0 0>00>0%0000 7arlier, subrule (#) was a(ended by the Securities Contracts (Regulation) (A(end(ent), !!#, w0e0f0 %30 %0 !!#0 33 Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!0>0%0 00 <rior to its substitution, sub+rule (#A) as a(ended by the Securities Contracts
prescribed by these rules shall, so far as they (ay be, also apply to a public sector co(pany0: 3$4GGG: (/) .he 3"4Securities and 7xchange 8oard of India: (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect to listing prescribed by these rules0 3#4Co ti *o*! Li!ti ( Re7*ire.e t. 19A. ( ) 7'ery listed co(pany 3/4other than public sector co(pany: shall (aintain public shareholding of at least twenty fi'e per cent0, 3>4<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent, on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall increase its public shareholding to at least twenty fi'e per cent, within a period of three years fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India0 7xplanation, 6or the purposes of this sub+rule, a co(pany whose securities has been listed pursuant to an offer and allot(ent (ade to public in ter(s of sub+clause (ii) of clause (b) of sub+rule (%) of rule !, shall (aintain (ini(u( twenty fi'e per cent, public shareholding fro( the date on which the public shareholding in the co(pany reaches the le'el of twenty fi'e percent in ter(s of said sub+clause0: (%) Khere the public shareholding in a listed co(pany falls below twenty fi'e per cent0 at any ti(e, such co(pany shall bring the public shareholding to twenty fi'e per cent0
(Regulations)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 and &SR % (7) w0e0f0 0!0030 !!", read as under, 1(#A) All the re*uire(ents with respect to listing and continuous listing prescribed by these rules, shall so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature ,2 3$ C(itted by the Securities Contracts (Regulation)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its o(ission, pro'iso, as substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# and inserted by &SR %! (7) dated %/0030 !!", read as under,
1<ro'ided that a recognised stoc) exchange (ay relax the re*uire(ent of offer to public for subscription of atleast twenty+fi'e percent of the each class or )ind of securities issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e02 3" Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent), Rules, !!#, w0e0f0 %30 %0 !!#0 3# Inserted by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 3/ Inserted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3> Substituted, ibid0 <rior to substitution, pro'isos, read as under, 1<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of at least fi'e per cent per annu( beginning fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India, <ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase brings its public shareholding to the le'el of twenty fi'e per cent in that year02
within a (axi(u( period of twel'e (onths fro( the date of such fall in the (anner specified by the Securities and 7xchange 8oard of India0: 3!4(3) Eotwithstanding anything contained in this rule, e'ery listed public sector co(pany shall (aintain public shareholding of at least ten per cent0, <ro'ided that a listed public sector co(pany+ (a) which has public shareholding below ten per cent, on the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of three years fro( the date of such co((ence(ent3 (b) whose public shareholding reduces below ten per cent, after the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of twel'e (onths fro( the date of such reduction,0: $04Re7*ire.e t! /ith re!$e't to the li!ti ( of * it! or % > other i !tr*.e t of % Colle'ti+e I +e!t.e t S'he.e o % re'o( i!e- !to'6 e#'h% (e. "=. ( ) A Collecti'e In'est(ent ?anage(ent Co(pany (CI?C) which is desirous of getting its any collecti'e in'est(ent sche(e listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars , (a) Certificate of incorporation, (e(orandu( and articles of association of the co(pany and the copy of the trust deed of the sche(e intended to be listed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any unit or other instru(ent for subscription or sale during the last fi'e years, or in the case of a new co(pany, such shorter period during which the co(pany has been in existence0 (d) Copies of balance sheets and audited accounts for the last fi'e years, or in the case of a new co(pany, for such co(pleted financial year for which accounts ha'e been (ade up0 (e) A state(ent showing,(i) returns and cash bonuses, if any, paid during the last ten years (or such
shorter period as the co(pany has been in existence whether as a pri'ate or public co(pany)3 (ii) returns or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents pertaining to each sche(e of the co(pany with or between,(i) 'endors andLor pro(oters3 (ii) underwriters and sub+underwriters3
3! Inserted $0 Inserted
by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 0 by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%000
(iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents pertaining to each sche(e of a co(pany with(i) selling agents and other ser'ice pro'iders3 (ii) (anaging directors and technical directors3 (iii) general (anager, sales (anager, (anager or secretary0 (h) Certified copies of e'ery letter, report, balance sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering units or any other instru(ents of the sche(e for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents pertaining to such sche(e0 (j) A brief history of the Co(pany since its incorporation gi'ing details of its acti'ities including any re+organisation, reconstruction or a(alga(ation, changes in its capital structure (authorised, issued and subscribed) and debenture borrowings, if any, and the perfor(ance of other collecti'e in'est(ent sche(es of the co(pany0 (k) <articulars of units of the sche(e andLor shares, debentures of the co(pany issued (i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s granted to any person pertaining to such sche(e0 (") Certified copies of(i) certificate of registration granted by the Securities and 7xchange 8oard of India3 (ii) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3 (iii) agree(ents, if any, with any public financial institution as specified in section $A of the Co(panies Act, !"# ( of !"#)0 (n) A list of the highest ten holders of units of each sche(e of the co(pany as on the date of application along with particulars as to the nu(ber of units held by and the address of each such holder0 ($) <articulars of units of the sche(e for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0
(%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer of units of a particular sche(e3 (ii) that the fully paid units issued under the sche(e will be free fro( all lien, while in the case of partly paid units the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such units3 (iii) that any a(ount paid+up in ad'ance of calls on any units (ay carry interest but shall not entitle the holder of the unit to participate in respect thereof, in a return subse*uently declared3 (iv) there will be no forfeiture of unclai(ed returns before the clai( beco(es barred by law3 (v) that option or right to call of units shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the units of a sche(e which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0 (b) At least twenty+fi'e per cent of the units or any other instru(ent of a sche(e issued by the co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and not (ore than ninety days, and that applications recei'ed in pursuance of such offer were allotted fairly and unconditionally , 4ro+i-e- that a recognised stoc) exchange (ay relax this re*uire(ent, with the pre'ious appro'al of the Securities and 7xchange 8oard of India in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#) and subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*Khere any part of the units or any other instru(ents sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely, the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental Insurance Co(pany =i(ited and the Hnited Insurance Co(pany =i(ited, or Hnit .rust of India, the total subscription to the units or any other instru(ent, whether by one or (ore of such bodies, shall not for( part of the twenty+fi'e per cent of the units or any other instru(ent to be offered to the public0 (3) A co(pany applying for listing of a sche(e shall, as a condition precedent, underta)e, inter alia,(a) (i) that letters of allot(ent of units or any other instru(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been
posted3 (ii) that letters of right will be issued si(ultaneously3 (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and, exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the units or any other instru(ent to which they relate3 (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right3 (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or return on the units or any other instru(ent will be calculated3 (b) to issue, when so re*uired, receipts for all units and any other instru(ent deposited with it whether for registration, sub+di'ision, exchange or for other purposes3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of units and any other instru(ent and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (c) to issue, when so re*uired, consolidation and renewal units or any other instru(ent in deno(inations of the (ar)et unit of trading, to split units or any other instru(ent, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3 (d) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders3 and (ii) to 'erify when the co(pany is unable to issue units or any other instru(ents or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (e) on production of the necessary docu(ents by unit holders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or si(ilar other docu(ent has been duly exhibited to and registered by the co(pany3 (f) to issue certificates in respect of units or any other instru(ent lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance units or any other instru(ent within the sa(e period where the transfer is acco(panied by a larger unit or any other instru(ent certificate3 (g) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a return or the issue or right or bonus units or
any other instru(ent will be considered3 (h) to reco((end or declare all returns andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all returns andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts of such sche(e as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued copies of all other notices and circulars sent to the unitLother instru(ent holders regarding any i(portant de'elop(ent or resolutions passed by the co(pany affecting the perfor(ance of the sche(e and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the unitLany other instru(ent holders, of any new issue of unitsLother instru(ents whether by way of right, pri'ilege, bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited unitsLother instru(ents or the issue of unitsLother instru(ents held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of unit capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of returns or issue of right or bonus unitsLany other instru(ents in the sche(e or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its unitLother instru(ent holders and specifying the purpose or purposes for which the transfer boo)s are to be closed or the record is to be ta)en3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority, subDect to which the issue is proposed to be (ade, ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after the preparation of annual accounts of at least ten principal holders of each class of unitsLany other instru(ents of the co(pany along with particulars as to the nu(ber of unitsLany other instru(ent held by, and address of, each such holder3 (+) to grant to unitLany other instru(ent holders of the sche(e the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e, not being less than four wee)s, within which to record, exercise, or renounce such rights, pri'ileges and benefits, and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3
(r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any unitLother instru(ent listed on the exchange3 (ii) of the intention to (a)e a drawing of such unitLother instru(ent inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing off the balance) for the drawing3 (iii) of the a(ount of unitsLother instru(ents outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the unitLany other instru(ent holders to appraise the position of the sche(e and to a'oid the establish(ent of a false (ar)et in the unitsLany other instru(ents of the co(pany3 (t) that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 ($) A fresh application for listing will be necessary in respect of all new sche(es desired to be dealt in , 4ro+i-e- that, where such new unitsLother instru(ents are identical in all respects with those already listed, ad(ission to dealing will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new sche(es0 ()%lanati$n0-HnitsLany other instru(ents are identical in all respects only if(a) they are issued under the sa(e sche(e3 (b) they are of the sa(e no(inal 'alue and the sa(e a(ount per unitLother instru(ents has been called up3 (c) they are entitled to returns at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the return payable on each unitLother issue will a(ount to exactly the sa(e su(, net and gross3 and (d) they carry the sa(e rights in all other respects0 (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the unitsLother instru(ents of a sche(e of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 4ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any unitLother instru(ent of a collecti'e in'est(ent sche(e, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an
opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and thereupon the orders of the Securities Appellate .ribunal shall be carried out by the stoc) exchange0 (#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore or read(it to dealings any unitsLother instru(ents suspended or withdrawn fro( the list0 (/) All the re*uire(ents with respect to listing prescribed by these rules, shall, so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature , 4ro+i-e- that a recognised stoc) exchange (ay relax the re*uire(ent of offer to the public for subscription of at least twenty+fi'e per cent of the units or any other instru(ent of a collecti'e in'est(ent sche(e issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 (>) .he Securities and 7xchange 8oard of India (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect of listing prescribed by these rules0: $ 4Deli!ti ( of !e'*ritie!. "1. A recogniFed stoc) exchange (ay, without preDudice to any other action that (ay be ta)en under the Act or under any other law for the ti(e being in force, delist any securities listed thereon on any of the following grounds in accordance with the regulations (ade by the Securities and 7xchange 8oard of India, na(ely,(a) the co(pany has incurred losses during the preceding three consecuti'e years and it has negati'e networth3 (b) trading in the securities of the co(pany has re(ained suspended for a period of (ore than six (onths3 (c) the securities of the co(pany ha'e re(ained infre*uently traded during the preceding three years3 (d) the co(pany or any of its pro(oters or any of its director has been con'icted for failure to co(ply with any of the pro'isions of the Act or the Securities and 7xchange 8oard of India Act, !!% or the 9epositories Act, !!# (%% of !!#) or rules, regulations, agree(ents (ade thereunder, as the case (ay be and awarded a penalty of not less than rupees one crore or i(prison(ent of not less than three years3 (e) the addresses of the co(pany or any of its pro(oter or any of its directors, are not )nown or false addresses ha'e been furnished or the co(pany has changed its registered office in contra'ention of the pro'isions of the Co(panies Act, !"# ( of !"#)3 or
$
Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %00>, w0e0f0 000#0%00!
(f) shareholding of the co(pany held by the public has co(e below the (ini(u( le'el applicable to the co(pany as per the listing agree(ent under the Act and the co(pany has failed to raise public holding to the re*uired le'el within the ti(e specified by the recogniFed stoc) exchange , 4ro+i-e- that no securities shall be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) If the securities is delisted under clause ( ),
(a) the co(pany, pro(oter and director of the co(pany shall be Dointly and se'erally liable to purchase the outstanding securities fro( those holders who wish to sell the( at a fair price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India, under the Act3 and (b) the said securities shall be delisted fro( all recogniFed stoc) exchanges0 (3) A recogniFed stoc) exchange (ay, on the re*uest of the co(pany, delist any securities listed thereon in accordance with the regulations (ade under the Act by Securities and 7xchange 8oard of India, subDect to the following conditions, na(ely ,(a) the securities of the co(pany ha'e been listed for a (ini(u( period of three years on the recogniFed stoc) exchange3 (b) the delisting of such securities has been appro'ed by the two+third of public shareholders3 and (c) the co(pany, pro(oter andLor the director of the co(pany purchase the outstanding securities fro( those holders who wish to sell the( at a price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India under the Act, 4ro+i-e- that the condition at (c) (ay be dispensed with by Securities and 7xchange 8oard of India if the securities re(ain listed at least on the Eational Stoc) 7xchange of India =i(ited or the 8o(bay Stoc) 7xchange =i(ited0: FORM A ( ee Rules 3 and /) A$$li'%tio for re'o( itio 1re e/%l of re'o( itio of % !to'6 e#'h% (e * -er !e'tio ) of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 .o 00000000000000000000000000000000000000 00000000000000000000000000000000000000 !bject,*A%%licati$n f$r rec$gniti$n-rene.al $f rec$gniti$n $f a #t$ck e)change !nder #ecti$n 3 $f the ec!ritie# /$ntract# (0eg!lati$n) Act' 1956& Sir, <ursuant to the $%4Securities and 7xchange 8oard of India: Eotification Eo0 00000000000000000000000000 00000000000000000 dated 000000000000000000000000000000000LCertificate of recognition dated0000000000000000000000000000000KeLI on behalf of 000000000000000000 (na(e and address of stoc) exchange) being a stoc) exchange as defined in section % of the Securities Contracts
$% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
(Regulation) Act, !"# hereby apply for recognitionLrenewal of recognition for the purposes of the said Act in respect of contracts in securities0 ". 6our copies of the rules, (e(orandu( and articles of association relating in general to the constitution and (anage(ent of the stoc) exchange and four copies of the bye+laws for the regulation and control contracts in securities are enclosed0 ). All the necessary infor(ation re*uired in the Annexure to this 6or( is enclosed0 Any additional infor(ation will be furnished as and when called for by the $34Securities and 7xchange 8oard of India:0 3. KeLI on behalf of the said stoc) exchange hereby underta)e to co(ply with the re*uire(ents of section $ of the said Act and such other conditions and ter(s as (ay be contained in the certificate of recognition or be prescribed or i(posed subse*uently0 5. .reasury Receipt Eo0 000000dated000000for Rs000000000000is attached0
Oours faithfully, Signature of applicant ANNEAURE TO 2OR@ BAC Part I - General 0 Ea(e of the applicant stoc) exchange0 %0 Address0 30 9ate of establish(ent0 $0 Is your exchange a Doint stoc) co(pany (state whether public or pri'ate) registered under the Indian Co(panies Act or an association for profit or otherwise P If it is organised on so(e other basis, this (ay be stated0 "0 &i'e details of your capital structure and attach three copies of the audited balance sheets and profit and loss account of the 7xchange for the preceding three years0 Part II - Membership #0 State the nu(ber of (e(bers at the ti(e of application0 Also specify how (any are inacti'e0 /0 State whether there is any pro'ision, resolution or con'ention for li(iting the nu(ber of (e(bers and whether in pursuance thereof you ha'e fixed a ceiling on the nu(ber of (e(bers that you would ta)e0 >0 9o you insist on any (ini(u( *ualifications and experience before enrolling new (e(bers P If so gi'e details0 !0 State the different classes of (e(bers, if any, the nu(ber thereof and the pri'ileges enDoyed by each class0 Khat is the procedure followed by your exchange for the ad(ission of different classes of new (e(bers P 00 Khat are the rates of your annual subscription in respect of the different classes of (e(bers P 0 9o you collect any security deposit fro( your (e(bers P If so, gi'e details and also state the (anner in which such deposits are utilised and the rate of interest allowed, if any0
$3 Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
%0 9o you collect any ad(ission or entrance fees fro( your (e(bers or fro( partners of fir(s who are (e(bers P If so, how (uch P 30 9o you insist on your (e(bers and partners of fir(s who are (e(bers di'esting the(sel'es of other acti'ities either as principal or as e(ployee P $0 9o your rules per(it fir(s to beco(e (e(bers P If so, is it incu(bent on (e(bers to see) the appro'al of the go'erning body before ad(itting new partners P State the conditions, if any, laid down in your rules for the ad(ission of such partners0 "0 If your rules do not per(it of fir(s being enrolled as (e(bers, do you per(it indi'idual (e(bers to for( a partnership P State the procedure followed for the recognition of such partnership0 #0 9o you per(it (e(bers to wor) in partnership with non+(e(bers P If so, how far such non+(e(bers subDect to the control of the stoc) exchange P Part III - Governing Body /0 Khat is the present strength of your go'erning body P &i'e details of the constitution, powers of (anage(ent, election and tenure of office of (e(bers of the go'erning body, and the (anner in which its business is transacted0 >0 Are any trade or co((ercial interest represented on your go'erning body P If so,
gi'e details of interests represented0 !0 9o you associate shareholders of in'estors associations with the (anage(ent of your exchange P If so, state the (anner in which it is done0 %00 Are there any &o'ern(ent representati'es on your go'erning body P If so, furnish their na(es0 % 0 9o your rules pro'ide for the direct election by (e(bers of any other bodies or co((ittees, apart fro( the go'erning body P If so, gi'e details of their constitution, tenure, powers and functions0 %%0 9o you ha'e any pro'ision for the appoint(ent of standing or ad h$c subco((ittees of the go'erning body P If so, furnish details of the (ethod of their appoint(ent, ter(s of office, powers and functions0 %30 &i'e the designations, powers and duties of principal office+bearers of your exchange0 Are any of these office+bearers in the pay of the stoc) exchange P If so, gi'e details as to the (ode of their appoint(ent, tenure of office and re(uneration0 Part IV - Trading %$0 9o you ha'e a trading ring P If not, how do you carry on the business P &i'e details0 %"0 State the different )inds of contracts in use on your exchange e&g&' spot, ready and forward0 State the period of deli'ery and pay(ent in each case0 %#0 &i'e details of business hours for each type of contract0 %/0 &i'e details of the scale of bro)erage and other charges, if any, prescribed by your exchange0 %>0 9o you prescribe standard for(s of contract for the use of your (e(bers P Attach three copies of each such contract for(0 %!0 9o you classify your (e(bers into bro)ers and Dobbers P If so, specify the bye+law under which this is done0 300 9o you ha'e a syste( of registration of re(isiers andLor authorised cler)s P If so, gi'e details as to their *ualifications, obligations and rights, etc0 3 0 9o you ha'e any regulations regarding dealings by (e(bers on their own account whether in the nature of 1aravani (day+to+day) or otherwise P 3%0 9o you ha'e any pro'isions for regulating the 'olu(e of business done by any indi'idual (e(ber other than through a syste( of (argins P If so, gi'e details0 330 Khat pro'isions ha'e you (ade for periodical settle(ent of contracts and differences thereunder, the deli'ery of, and pay(ent for securities and the passing of deli'ery orders P 3$0 9o you ha'e a clearing house for the settle(ent of contracts P If so, gi'e details of its organisation and (anage(ent0 3"0 If you ha'e clearing house, what returns do the (e(bers of your exchange sub(it regarding the transactions cleared through such clearing house P 9oes the exchange as) for any regular returns in respect of transactions settled outside the clearing house P Sub(it three copies of for(s used in this connection0 3#0 Iow do you fix, alter or postpone the dates of settle(ent P 3/0 Iow do you deter(ine and declare (a)ing+up prices P 3>0 9o you ha'e any arrange(ents for (a)ing or recording of bargains P 3!0 Ia'e you any arrange(ents for recording and publishing (ar)et rates including opening, closing, highest and lowest rates P $00 Khat pro'isions ha'e you (ade for regulating-(a) the entering into contracts, their
perfor(ance and rescission, including contracts , (i) between (e(bers, (ii) between a (e(ber and his constituent, and (iii) between a (e(ber and a non+(e(ber3 (b) the conse*uences of breach, default or insol'ency on the part of (e(bers whether acting as buyers, sellers or inter(ediaries 3 and (c) 2havala#3 and other (atters relating to conduct of business of (e(bers in the exchange P $ 0 9o you prescribe (argin re*uire(ents P If yes, gi'e details0 $%0 9o you prescribe (axi(u( and (ini(u( prices for securities P If so, how and under what conditions0 $30 9o you pro'ide any safeguards for the pre'ention of Nbulls*ueeFesJ and 3 NbearraidsJ and for (eeting e(ergencies in trade P &i'e details0 $$0 Khat are the (easures adopted by you to regulate or prohibit ad'ertising or issue of circulars by your (e(bers P $"0 Khat are the disciplinary power with the go'erning body to enforce due co(pliance by (e(bers of the rules and bye+laws of the exchange and generally to ensure proper standard of business conduct P $#0 9o you re*uire (e(bers to supply such infor(ation or explanation and to produce such boo)s relating to their business as your go'erning body (ay re*uire P $/0 9o you publish any statistics in regard to business done on the exchange including the transactions settled through the clearing house, if (aintained P In particular, ha'e you e'ol'ed any (achinery for co(puting the 'olu(e of transactions in the different )inds of contracts per(itted on your exchange P &i'e details0 $>0 9o you ha'e any bye+laws contra'ention of which (a)es a contract 'oid P Part V - Miscellaneo s $!0 9o you ha'e any (achinery for arbitration of disputes between (e(bers andLor between (e(bers and their constituents P &i'e details0 "00 Khat are the conditions subDect to which securities are listed for dealings on your exchange P " 0 Khat are your re*uire(ents for ad(itting securities to forward+trading P "%0 9o you ha'e the right to prohibit, withdraw or suspend dealings in a listed security P If so, under what circu(stances is this right exercised P "30 Khat pro'isions ha'e you (ade for the le'y and reco'ery of fees, fines and penalties P FORM B ( ee rules # and /) $$5The Se'*ritie! % - E#'h% (e ;o%r- of I -i%< 4e. 5elhi' the 20&&&&&&&&&&&&& Eo0 000000000000000000000000000000000000.he $"4Securities and 7xchange 8oard of India:, ha'ing considered the application for recognitionLrenewal of recognition (ade under section 3 of the Securities Contracts (Regulation) Act, !"# by000000000000000000000000000000 (na(e and address of exchange) and being satisfied that it would be in the interest of the trade and also in the public interest so to do, hereby grants, in exercise of the powers conferred by section $ of the Securities Contracts (Regulation) Act, !"# recognition to the said exchange under section $ of the said Act for 0000000000000000000 yearLyears ending 0000000000000000000000%0 0000000on a per(anent basis in respect of contracts in securities subDect to the conditions stated herein below or as (ay be prescribed or i(posed hereafter0 Seal of the $#48oard: Signature of Cfficer
Note&-Application for renewal of recognition shall be (ade so as to reach the Central &o'ern(ent not less than three (onths before the expiry of the period0 (.his certificate, will also ha'e to be published as a Eotification in the &aFette of India and also in the Cfficial &aFette of the State in which principal office of the recognised stoc) exchange is situate)0 $/5FORM ! ( ee rule 3) Noti'e to !ho/ '%*!e %(%i !t the /ith-r%/%l of re'o( itio .I7 S7CHRI.I7S AE9 7ACIAE&7 8CAR9 C6 IE9IA 6!"bai' the&&&&&&&&&&& .o 0000000000000000000000000000000000000000000000000000000000000000000000000000000000
$$ Substituted
for 1&o'ern(ent of India, ?inistry of 6inance2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 $" Substituted for 1Central &o'ern(ent2, ibid0 $# Substituted for 1?inistry2, ibid0 $/ Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#
0000000000000000000000000000000000000000000000000000000000000000000000000000000000 (na(e and address of the exchange) Oou are hereby called upon to show cause on or before 0000000000000000000000000000000000000 at the office of 0000000000000000000000000000000000000000000000000000 ( designation of the officer) why the recognition granted to you under the ?inistry of 6inanceLthe Securities and 7xchange 8oard of India, Eotification Eo0 0000000000000000000000000000 dated 000000000000000000000000000000000000000 and Certificate Eo0 00000000000000000000000000000 dated 000000000000000000000000000000 should not be withdrawn for the reasons gi'en in the annexure to this notice0 8y order and in the na(e of the Securities and 7xchange 8oard of India0 Seal of the Securities and 7xchange 8oard of India0 Notifi'%tio & 4$& 576' dated 217271957&
SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< SECTIONS
80(9:6:4A0; 1. Short title, extent and co((ence(ent ". 9efinitions 0(/<=4: (5 1</> (?/@A4=( ). Application for recognition of stoc) exchanges 3. &rant of recognition to stoc) exchanges0 3A. Corporatisation and de(utualisation of stoc) exchanges 3;. <rocedure for corporatisation and de(utualisation 5. Kithdrawal of recognition 8. <ower of Central &o'ern(ent to call for periodical returns or direct in*uiries to be (ade 7. Annual reports to be furnished to Central &o'ern(ent by stoc) exchanges 7A. <ower of recognised stoc) exchange to (a)e rules restricting 'oting rights, etc :. <ower of Central &o'ern(ent to direct rules to be (ade or to (a)e rules :A. Clearing corporation 9. <ower of recognised stoc) exchanges to (a)e bye+laws 1=. <ower of Securities and 7xchange 8oard of India to (a)e or a(end byelaws of recognised stoc) exchanges 11. <ower of Central &o'ern(ent to supersede go'erning body of a recognised stoc) exchange 1". <ower to suspend business of recognised stoc) exchanges0 1"A. <ower to issue directions 1). Contracts in notified areas illegal in certain circu(stances 1)A. Additional trading floor 13. Contracts in notified areas to be 'oid in certain circu(stances 15. ?e(bers (ay not act as principals in certain circu(stances 18. <ower to prohibit contracts in certain cases 17. =icensing of dealers in securities in certain areas 17A. <ublic issue and listing of securities referred to in sub+clause ( ie) of clause (h) of section % 1:. 7xclusion of spot deli'ery contracts fro( sections 3, $, " and / 1:A. Contracts in deri'ati'e 19. Stoc) exchanges other than recognised stoc) exchanges prohibited "=. <rohibition of options in securities "1. Conditions for listing "1A. 9elisting of securities "". Right of appeal against refusal of stoc) exchanges to list securities of public co(panies ""A. Right of appeal to Securities Appellate .ribunal against refusal of stoc) exchange to list securities of public co(panies "";. <rocedure and powers of Securities Appellate .ribunal ""C. Right to legal representation ""D. =i(itation ""E. Ci'il court not to ha'e Durisdiction
""2. Appeal to Supre(e Court 8(4A91:( A45 80</(5A0( "). <enalties ")A. <enalty for failure to furnish infor(ation, return, etc0 ");. <enalty for failure by any person to enter into an agree(ent with clients ")C. <enalty for failure to redress in'estorsJ grie'ances ")D. <enalty for failure to segregate securities or (oneys of client or clients ")E. <enalty for failure to co(ply with pro'ision of listing conditions or delisting conditions or grounds ")2. <enalty for excess de(aterialisation or deli'ery of unlisted securities ")G. <enalty for failure to furnish periodical returns, etc0 ")D. <enalty for contra'ention where no separate penalty has been pro'ided ")0I. <ower to adDudicate ")E. 6actors to be ta)en into account by adDudicating officer ")EA. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! ")E;. Re'o+er> of %.o* t! ")F. Crediting su(s realised by way of penalties to Consolidated 6und of India ")L. Appeal to Securities Appellate .ribunal ")@. Cffences ")N. Co(position of certain offences ")0O. <ower to grant i((unity "3. Cffences by co(panies "5. Certain offences to be cogniFable "8. CogniFance of offences by courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! 6: /(99A4(<A "7. .itle to di'idends "7A. Right to recei'e inco(e fro( collecti'e in'est(ent sche(e "7;. Right to recei'e inco(e fro( (utual fund ":. Act not to apply in certain cases "9. <rotection of action ta)en in good faith "9A. <ower to delegate )=. <ower to (a)e rules )1. <ower of Securities and 7xchange 8oard of India to (a)e regulations SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< 53th Se$te.,er, 1958< A A't to $re+e t * -e!ir%,le tr% !%'tio ! i !e'*ritie! ,> re(*l%ti ( the ,*!i e!! of -e%li ( therei , 14***: ,> $ro+i-i ( for 'ert%i other .%tter! 'o e'te- there/ith. 87 it enacted by <arlia(ent in the Se'enth Oear of the Republic of India as follows ,
80(9:6:4A0; Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities Contracts (Regulation) Act, !"#0 (%) It extends to the whole of India0
Kords 1by prohibiting options and2 o(itted by the Securities =aws (A(end(ent) Act, !!", Sec0 >, w0e0f0 %"+0 + !!".
(3) It shall co(e into force on such date% as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 Defi itio !. ". In this Act, unless the context otherwise re*uires,(a) 1contract2 (eans a contract for or relating to the purchase or sale of securities3 3 4(aa) 1corporatisation2 (eans the succession of a recognised stoc) exchange, being a body of indi'iduals or a society registered under the Societies Registration Act, >#0 (% of >#0), by another stoc) exchange, being a co(pany incorporated for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities carried on by such indi'iduals or society3 (ab) 1de(utualisation2 (eans the segregation of ownership and (anage(ent fro( the trading rights of the (e(bers of a recognised stoc) exchange in accordance with a sche(e appro'ed by the Securities and 7xchange 8oard of India3: $4"4(ac): 1deri'ati'e2 includes(A) a security deri'ed fro( a debt instru(ent, share, loan, whether secured or unsecured, ris) instru(ent or contract for differences or any other for( of security3 (B) a contract which deri'es its 'alue fro( the prices, or index of prices, of underlying securities3: (b) 1&o'ern(ent security2 (eans a security created and issued, whether before or after the co((ence(ent of this Act, by the Central &o'ern(ent or a State &o'ern(ent for the purpose of raising a public loan and ha'ing one of the for(s specified in clause (2) of section % of the <ublic 9ebt Act, !$$ ( > of !$$)3 (c) 1(e(ber2 (eans a (e(ber of a recognised stoc) exchange3 (d) 1option in securities2 (eans a contract for the purchase or sale of a right to buy or sell, or a right to buy and sell, securities in future, and includes a teji' a "andi' a teji "andi' a galli' a put, a call or a put and call in securities3 (e) 1prescribed2 (eans prescribed by rules (ade under this Act3
% %0+%+
!"/ vide SRC "%>, dated #+0%+ !"/, published in the &aFette of India, 7xtra0, <t0 II, Sec0 3, p0 "$!, dated #+0%+ !"/0 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 $ Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000 " Clause (aa) renu(bered as clause (ac) by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0
(f) 1recognised stoc) exchange2 (eans a stoc) exchange which is for the ti(e
being recognised by the Central &o'ern(ent under section $3 (g) 1rules2, with reference to the rules relating in general to the constitution and (anage(ent of a stoc) exchange, includes, in the case of a stoc) exchange which is an incorporated association, its (e(orandu( and articles of association3 64(ga) 1sche(e2 (eans a sche(e for corporatisation or de(utualisation of a recognised stoc) exchange which (ay pro'ide for(i) the issue of shares for a lawful consideration and pro'ision of trading rights in lieu of (e(bership cards of (e(bers of a recognised stoc) exchange3 (ii) the restrictions on 'oting rights3 (iii) the transfer of property, business, assets, rights, liabilities, recognitions, contracts of the recognised stoc) exchange, legal proceedings by, or against, the recognised stoc) exchange, whether in the na(e of the recognised stoc) exchange or any trustee or otherwise and any per(ission gi'en to, or by, the recognised stoc) exchange3 (iv) the transfer of e(ployees of a recognised stoc) exchange to another recognised stoc) exchange3 (v) any other (atter re*uired for the purpose of, or in connection with, the corporatisation or de(utualisation, as the case (ay be, of the recognised stoc) exchange3: /4>4(gb): 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (h) 1securities2 include(i) shares, scrips, stoc)s, bonds, debentures, debenture stoc) or other (ar)etable securities of a li)e nature in or of any incorporated co(pany or other body corporate3 !4(ia) deri'ati'e3 (ib) units or any other instru(ent issued by any collecti'e in'est(ent sche(e to the in'estors in such sche(es3:
# Inserted / Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (Second A(end(ent) Act, !!!, Sec %, w0e0f0 #+ %+ !!!0 > Clause (ga) renu(bered as clause (gb) by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 ! Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000
04(ic) security receipt as defined in clause ( Cg) of section % of the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%3: 114(id) units or any other such instru(ent issued to the in'estors under any (utual fund sche(e3: %47xplanation0-6or the re(o'al of doubts, it is hereby declared that ;securities; shall not include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(bined benefit ris) on the life of the persons and in'est(ent by such
persons and issued by an insurer referred to in clause (!) of section % of the Insurance Act, !3> ($ of !3>)3: 35(ie) any certificate or instru(ent (by whate'er na(e called), issued to an in'estor by any issuer being a special purpose distinct entity which possesses any debt or recei'able, including (ortgage debt, assigned to such entity, and ac)nowledging beneficial interest of such in'estor in such debt or recei'able, including (ortgage debt, as the case (ay be3 <
0 Inserted by the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%, Sec0 $ and Schedule, w0r0e0f0 % +#+%00%0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0e0f0 %+ 0+%00$0 % Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, Sec $, w0r0e0f0 0!+0$+%0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, read as under , ;CIA<.7R BI ?ISC7==AE7CHS #0 Dalidati$n&-Eotwithstanding anything contained in any Dudg(ent, decree or order of any Court, .ribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly, any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 0e%eal and #aving#&*( ) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0; 3 Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec %, w0e0f0 %>+"+ %00/0
$4(ii) &o'ern(ent securities3 (iia) such other instru(ents as (ay be declared by the Central &o'ern(ent to be securities3 and: (iii) rights or interest in securities3 "4(i) 1spot deli'ery contract2 (eans a contract which pro'ides for,(a) actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e
town or locality3 (b) transfer of the securities by the depository fro( the account of a beneficial owner to the account of another beneficial owner when such securities are dealt with by a depository3: #4(j) 1stoc) exchange2 (eans(a) any body of indi'iduals, whether incorporated or not, constituted before corporatisation and de(utualisation under sections $A and $8, or (b) a body corporate incorporated under the Co(panies Act, !"# ( of !"#) whether under a sche(e of corporatisation and de(utualisation or otherwise, for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0: /4I ter$ret%tio of 'ert%i /or-! % - e#$re!!io !. "A. Kords and expressions used herein and not defined in this Act but defined in the Co(panies Act, !"# ( of !"#) or the Securities and 7xchange 8oard of India
$ Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, for sub+clause (ii), w0r0e0f0 30+0 + !!%0 " Substituted by the 9epositories Act, !!#, Sec 30 and Schedule, <t0 III, w0r0e0f0 %0+0!+ !!" . <rior to its substitution, clause (i) read as under , N(i) 1spot deli'ery contract2 (eans a contract which pro'ides for the actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e town or locality3J # Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (j) read as under ,N(j) 1stoc) exchange2 (eans any body of indi'iduals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0J / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
Act, !!% ( " of !!%) or the 9epositories Act, !!# (%% of !!#) shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts0: 0(/<=4: (5 1</> (?/@A4=( A$$li'%tio for re'o( itio of !to'6 e#'h% (e!. ). ( ) Any stoc) exchange, which is desirous of being recognised for the purposes of this Act, (ay (a)e an application in the prescribed (anner to the Central &o'ern(ent01: (%) 7'ery application under sub+section ( ) shall contain such particulars as (ay be prescribed, and shall be acco(panied by a copy of the bye+laws of the stoc) exchange for the regulation and control of contracts and also a copy of the rules relating in general to the constitution of the stoc) exchange and in particular, to(a) the go'erning body of such stoc) exchange, its constitution and powers of (anage(ent and the (anner in which its business is to be transacted3 (b) the powers and duties of the office bearers of the stoc) exchange3 (c) the ad(ission into the stoc) exchange of 'arious classes of (e(bers, the *ualifications for (e(bership, and the exclusion, suspension, expulsion and
re+ad(ission of (e(bers therefro( or thereinto3 (d) the procedure for the registration of partnerships as (e(bers of the stoc) exchange in cases where the rules pro'ide for such (e(bership3 and the no(ination and appoint(ent of authorised representati'es and cler)s0 Gr% t of re'o( itio to !to'6 e#'h% (e!. 3. ( ) If the Central &o'ern(ent ! is satisfied, after (a)ing such in*uiry as (ay be necessary in this behalf and after obtaining such further infor(ation, if any, as it (ay re*uire,(a) that the rules and bye+laws of a stoc) exchange applying for registration are in confor(ity with such conditions as (ay be prescribed with a 'iew to ensure fair dealing and to protect in'estors3 (b) that the stoc) exchange is willing to co(ply with any other conditions (including conditions as to the nu(ber of (e(bers) which the Central &o'ern(ent, after consultation with the go'erning body of the stoc) exchange and ha'ing regard to the area ser'ed by the stoc) exchange and its standing and the nature of the securities dealt with by it, (ay i(pose for the purpose of carrying out the obDects of this Act3 and
> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 ! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
(c) that it would be in the interest of the trade and also in the public interest to grant recognition to the stoc) exchange3 it (ay grant recognition to the stoc) exchange subDect to the conditions i(posed upon it as aforesaid and in such for( as (ay be prescribed0 (%) .he conditions which the Central &o'ern(ent %0 (ay prescribe under clause (a) of sub+section ( ) for the grant of recognition to the stoc) exchanges (ay include, a(ong other (atters, conditions relating to,(i) the *ualifications for (e(bership of stoc) exchanges3 (ii) the (anner in which contracts shall be entered into and enforced as between (e(bers3 (iii) the representation of the Central &o'ern(ent on each of the stoc) exchange by such nu(ber of persons not exceeding three as the Central &o'ern(ent (ay no(inate in this behalf3 and (iv) the (aintenance of accounts of (e(bers and their audit by chartered accountants whene'er such audit is re*uired by the Central &o'ern(ent0 (3) 7'ery grant of recognition to a stoc) exchange under this section shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office as of the stoc) exchange is situate, and such recognition shall ha'e effect as fro( the date of its publication in the &aFette of India0 % ($) Eo application for the grant of recognition shall be refused except after gi'ing an opportunity to the stoc) exchange concerned to be heard in the (atter3 and the reasons for such refusal shall be co((unicated to the stoc) exchange in writing0 %% (") Eo rules of a recognised stoc) exchange relating to any of the (atters specified in sub+section (%) of section 3 shall be a(ended except with the appro'al of the
Central &o'ern(ent0%3 "35Cor$or%ti!%tio % - -e.*t*%li!%tio of !to'6 e#'h% (e!. 3A. Cn and fro( the appointed date, all recognised stoc) exchanges (if not corporatised and de(utualised before the appointed date) shall be corporatised and de(utualised in accordance with the pro'isions contained in section $8 ,
%0 <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 % <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %% <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %3 <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 %$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
4ro+i-e- that the Securities and 7xchange 8oard of India (ay, if it is satisfied that any recognised stoc) exchange was pre'ented by sufficient cause fro( being corporatised and de(utualised on or after the appointed date, specify another appointed date in respect of that recognised stoc) exchange and such recognised stoc) exchange (ay continue as such before such appointed date0 ()%lanati$n&*6or the purposes of this section, 1appointed date2 (eans the date which the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, appoint and different appointed dates (ay be appointed for different recognised stoc) exchanges0: "554ro'e-*re for 'or$or%ti!%tio % - -e.*t*%li!%tio . 3;. ( ) All recognised stoc) exchanges referred to in section $A shall, within such ti(e as (ay be specified by the Securities and 7xchange 8oard of India, sub(it a sche(e for corporatisation and de(utualisation for its appro'al , 4ro+i-e- that the Securities and 7xchange 8oard of India, (ay, by notification in the Cfficial &aFette, specify na(e of the recognised stoc) exchange, which had already been corporatised and de(utualised, and such stoc) exchange shall not be re*uired to sub(it the sche(e under this section0 (%) Cn receipt of the sche(e referred to in sub+section ( ), the Securities and 7xchange 8oard of India (ay, after (a)ing such en*uiry as (ay be necessary in this behalf and obtaining such further infor(ation, if any, as it (ay re*uire and if it is satisfied that it would be in the interest of the trade and also in the public interest, appro'e the sche(e with or without (odification0 (3) Eo sche(e under sub+section (%) shall be appro'ed by the Securities and 7xchange 8oard of India if the issue of shares for a lawful consideration or pro'ision of trading rights in lieu of (e(bership card of the (e(bers of a recognised stoc) exchange or pay(ent of di'idends to (e(bers ha'e been proposed out of any reser'es or assets of that stoc) exchange0 ($) Khere the sche(e is appro'ed under sub+section (%), the sche(e so appro'ed shall be published i((ediately by(a) the Securities and 7xchange 8oard of India in the Cfficial &aFette3 (b) the recognised stoc) exchange in such two daily newspapers circulating in India, as (ay be specified by the Securities and 7xchange 8oard of India,
and upon such publication, notwithstanding anything to the contrary contained in this Act or any other law for the ti(e being in force or any agree(ent, award, Dudg(ent, decree or other instru(ent for the ti(e being in force, the sche(e shall ha'e effect and be binding on all persons and authorities including all (e(bers, creditors, depositors and e(ployees of the recognised stoc) exchange and on all
%" Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
persons ha'ing any contract, right, power, obligation or liability with, against, o'er, to, or in connection with, the recognised stoc) exchange or its (e(bers0 (") Khere the Securities and 7xchange 8oard of India is satisfied that it would not be in the interest of the trade and also in the public interest to appro'e the sche(e under sub+section (%), it (ay, by an order, reDect the sche(e and such order of reDection shall be published by it in the Cfficial &aFette , 4ro+i-e- that the Securities and 7xchange 8oard of India shall gi'e a reasonable opportunity of being heard to all the persons concerned and the recognised stoc) exchange concerned before passing an order reDecting the sche(e0 (#) .he Securities and 7xchange 8oard of India (ay, while appro'ing the sche(e under sub+section (%), by an order in writing, restrict(a) the 'oting rights of the shareholders who are also stoc) bro)ers of the reognised stoc) exchange3 (b) the right of shareholders or a stoc) bro)er of the recognised stoc) exchange to appoint the representati'es on the go'erning board of the stoc) exchange3 (c) the (axi(u( nu(ber of representati'es of the stoc) bro)ers of the recognised stoc) exchange to be appointed on the go'erning board of the recognised stoc) exchange, which shall not exceed one+fourth of the total strength of the go'erning board0 (/) .he order (ade under sub+section (#) shall be published in the Cfficial &aFette and on the publication thereof, the order shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#), or any other law for the ti(e being in force, ha'e full effect0 (>) 7'ery recognised stoc) exchange, in respect of which the sche(e for corporatisation or de(utualisation has been appro'ed under sub+section (%), shall, either by fresh issue of e*uity shares to the public or in any other (anner as (ay be specified by the regulations (ade by the Securities and 7xchange 8oard of India %#, ensure that at least fifty+one per cent of its e*uity share capital is held, within twel'e (onths fro( the date of publication of the order under sub+section (/), by the public other than shareholders ha'ing trading rights , 4ro+i-e- that the Securities and 7xchange 8oard of India (ay, on sufficient cause being shown to it and in the public interest, extend the said period by another twel'e (onths0:
ee Securities Contracts (Regulation) (Stoc) 7xchanges and Clearing Corporations) Regulations, %0 %, w0e0f0 %0+0#+%0 % notified vide &aFette Eotification Eo0 =A9+ ERCL&EL%0 %+ 3L0/L 3"$#, 7xtra0, <t0 III, Section $, dtd %0+0#+%0 %0
%#
?ith-r%/%l of re'o( itio .
5. %/4( ): If the Central &o'ern(ent%> is of opinion that the recognition granted to a stoc) exchange under the pro'isions of this Act should, in the interest of the trade or in the public interest, be withdrawn, the Central &o'ern(ent (ay ser'e on the go'erning body of the stoc) exchange a written notice that the Central &o'ern(ent is considering the withdrawal of the recognition for the reasons stated in the notice and after gi'ing an opportunity to the go'erning body to be heard in the (atter, the Central &o'ern(ent (ay withdraw, by notification in the Cfficial &aFette, the recognition granted to the stoc) exchange , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Central &o'ern(ent (ay, after consultation with the stoc) exchange, (a)e such pro'ision as it dee(s fit in the notification of withdrawal or in any subse*uent notification si(ilarly published for the due perfor(ance of any contracts outstanding on that date0 %!4(%) Khere the recognised stoc) exchange has not been corporatised or de(utualised or it fails to sub(it the sche(e referred to in sub+section ( ) of section $8 within the specified ti(e therefor or the sche(e has been reDected by the Securities and 7xchange 8oard of India under sub+section (") of section $8, the recognition granted to such stoc) exchange under section $, shall, notwithstanding anything to the contrary contained in this Act, stand withdrawn and the Central &o'ern(ent shall publish, by notification in the Cfficial &aFette, such withdrawal of recognition , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Securities and 7xchange 8oard of India (ay, after consultation with the stoc) exchange, (a)e such pro'isions as it dee(s fit in the order reDecting the sche(e published in the Cfficial &aFette under sub+section (") of section $80: 4o/er of Ce tr%l Go+er .e t to '%ll for $erio-i'%l ret*r ! or -ire't i 7*irie! to ,e .%-e. 8. ( ) 7'ery recognised stoc) exchange shall furnish to the 304Securities and 7xchange 8oard of India: such periodical returns relating to its affairs as (ay be prescribed0
%/ Section
" renu(bered as sub+section ( ) by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 %> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 30 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(%) 7'ery recognised stoc) exchange and e'ery (e(ber thereof shall (aintain and preser'e for such periods not exceeding fi'e years such boo)s of account, and other docu(ents as the Central &o'ern(ent, after consultation with the stoc) exchange concerned, (ay prescribe in the interest of the trade or in the public interest, and such boo)s of account, and other docu(ents shall be subDect to inspection at all reasonable ti(es 3 4by the Securities and 7xchange 8oard of India:0 (3) Kithout preDudice to the pro'isions contained in sub+sections ( ) and (%), the
3%4Securities
and 7xchange 8oard of India:, if it is satisfied that it is in the interest of the trade or in the public interest so to do, (ay, by order in writing,(a) call upon a recognised stoc) exchange or any (e(ber thereof to furnish in writing such infor(ation or explanation relating to the affairs of the stoc) exchange or of the (e(ber in relation to the stoc) exchange as the 334Securities and 7xchange 8oard of India: (ay re*uire3 or (b) appoint one or (ore persons to (a)e an in*uiry in the prescribed (anner in relation to the affairs of the go'erning body of a stoc) exchange or the affairs of any of the (e(bers of the stoc) exchange in relation to the stoc) exchange and sub(it a report of the result of such in*uiry to the 3$4Securities and 7xchange 8oard of India: within such ti(e as (ay be specified in the order or, in the case of an in*uiry in relation to the affairs of any of the (e(bers of a stoc) exchange, direct the go'erning body to (a)e the in*uiry and sub(it its report to the 3"4Securities and 7xchange 8oard of India:0 ($) Khere an in*uiry in relation to the affairs of a recognised stoc) exchange or the affairs of any of its (e(bers in relation to the stoc) exchange has been underta)en under sub+section (3),(a) e'ery director, (anager, secretary or other officer of such stoc) exchange3 (b) e'ery (e(ber of such stoc) exchange3 (c) if the (e(ber of the stoc) exchange is a fir(, e'ery partner, (anager, secretary or other officer of the fir(3 and (d) e'ery other person or body of persons who has had dealings in the course of business with any of the persons (entioned in clauses ( a), (b) and (c), whether directly or indirectly3
Substituted for ;by the Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3% Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 33 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3" Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
3
shall be bound to produce before the authority (a)ing the in*uiry all such boo)s of account, and other docu(ents in his custody or power relating to or ha'ing a bearing on the subDect+(atter of such in*uiry and also to furnish the authorities within such ti(e as (ay be specified with any such state(ent or infor(ation relating thereto as (ay be re*uired of hi(0 )8A *%l re$ort! to ,e f*r i!he- to Ce tr%l Go+er .e t ,> !to'6 e#'h% (e!. 7. 7'ery recognised stoc) exchange shall furnish the Central &o'ern(ent with a copy of the annual report, and such annual report shall contain such particulars as (ay be prescribed0 )754o/er of re'o( i!e- !to'6 e#'h% (e to .%6e r*le! re!tri'ti ( +oti ( ri(ht!, et'. 7A. ( ) A recognised stoc) exchange (ay (a)e rules or a(end any rules (ade by it
to pro'ide for all or any of the following (atters, na(ely ,(a) the restriction of 'oting rights to (e(bers only in respect of any (atter placed before the stoc) exchange at any (eeting3 (b) the regulation of 'oting rights in respect of any (atter placed before the stoc) exchange at any (eeting so that each (e(ber (ay be entitled to ha'e one 'ote only, irrespecti'e of his share of the paid+up e*uity capital of the stoc) exchange3 (c) the restriction on the right of a (e(ber to appoint another person as his proxy to attend and 'ote at a (eeting of the stoc) exchange3 (d) such incidental, conse*uential and supple(entary (atters as (ay be necessary to gi'e effect to any of the (atters specified in clauses ( a), (b) and (c)0 (%) Eo rules of a recognised stoc) exchange (ade or a(ended in relation to any (atter referred to in clauses (a) to (d) of sub+section ( ) shall ha'e effect until they ha'e been appro'ed by the Central &o'ern(ent 3> and published by that &o'ern(ent in the Cfficial &aFette and, in appro'ing the rules so (ade or a(ended, the Central &o'ern(ent (ay (a)e such (odifications therein as it thin)s fit, and on such publication, the rules as appro'ed by the Central &o'ern(ent shall be dee(ed to ha'e been 'alidly (ade, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#)0:
3# <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 3/ Inserted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec %, w0e0f0 0>+ %+ !"!0 3> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
4o/er of Ce tr%l Go+er .e t )9 to -ire't r*le! to ,e .%-e or to .%6e r*le!. :. ( ) Khere, after consultation with the go'erning bodies of stoc) exchanges generally or with the go'erning body of any stoc) exchange in particular, the Central &o'ern(ent is of opinion that it is necessary or expedient so to do, it (ay, by order in writing together with a state(ent of the reasons therefor, direct recognised stoc) exchanges generally or any recognised stoc) exchange in particular, as the case (ay be, to (a)e any rules or to a(end any rules already (ade in respect of all or any of the (atters specified in sub+section (%) of section 3 within a period of $04two (onths: fro( the date of the order0 (%) If any recognised stoc) exchange fails or neglects to co(ply with any order (ade under sub+section ( ) within the period specified therein, the Central &o'ern(ent (ay (a)e the rules for, or a(end the rules (ade by, the recognised stoc) exchange, either in the for( proposed in the order or with such (odifications thereof as (ay be agreed to between the stoc) exchange and the Central &o'ern(ent0 (3) Khere in pursuance of this section any rules ha'e been (ade or a(ended, the rules so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette or &aFettes of the State or States in which the principal office or offices of the recognised stoc) exchange or exchanges is or are situate, and, on the publication thereof in the &aFette of India, the rules so (ade or a(ended shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# (
of !"#), or in any other law for the ti(e being in force, ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange or stoc) exchanges, as the case (ay be0 315Cle%ri ( 'or$or%tio . :A. ( ) A recognised stoc) exchange (ay, with the prior appro'al of the Securities and 7xchange 8oard of India, transfer the duties and functions of a clearing house to a clearing corporation, being a co(pany incorporated under the Co(panies Act, !"# ( of !"#), for the purpose of(a) the periodical settle(ent of contracts and differences thereunder3 (b) the deli'ery of, and pay(ent for, securities3 (c) any other (atter incidental to, or connected with, such transfer0 (%) 7'ery clearing corporation shall, for the purpose of transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( ),
3! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 $0 Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec !, w0e0f0 %"+ 0 + !!"0 $ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0
(a)e bye+laws and sub(it the sa(e to the Securities and 7xchange 8oard of India for its appro'al0 (3) .he Securities and 7xchange 8oard of India (ay, on being satisfied that it is in the interest of the trade and also in the public interest to transfer the duties and functions of a clearing house to a clearing corporation, grant appro'al to the byelaws sub(itted to it under sub+section (%) and appro'e the transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( )0 ($) .he pro'isions of sections $, ", #, /, >, !, 0, and % shall, as far as (ay be, apply to a clearing corporation referred to in sub+section ( ) as they apply in relation to a recognised stoc) exchange0: 4o/er of re'o( i!e- !to'6 e#'h% (e! to .%6e ,>e0l%/!. 9. ( ) Any recognised stoc) exchange (ay, subDect to the pre'ious appro'al of the $%4Securities and 7xchange 8oard of India:, (a)e bye+laws for the regulation and control of contracts0 (%) In particular, and without preDudice to the generality of the foregoing power, such bye+laws (ay pro'ide for , (a) the opening and closing of (ar)ets and the regulation of the hours of trade3 (b) a clearing house for the periodical settle(ent of contracts and differences thereunder, the deli'ery of and pay(ent for securities, the passing on of deli'ery orders and the regulation and (aintenance of such clearing house3 (c) the sub(ission to the $34Securities and 7xchange 8oard of India: by the clearing house as soon as (ay be after each periodical settle(ent of all or any of the following particulars as the $$4Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, re*uire, na(ely ,(i) the total nu(ber of each category of security carried o'er fro( one settle(ent period to another3 (ii) the total nu(ber of each category of security, contracts in respect of
which ha'e been s*uared up during the course of each settle(ent period3 (iii) the total nu(ber of each category of security actually deli'ered at each clearing3
$% Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(d) the publication by the clearing house of all or any of the particulars sub(itted to the $"4Securities and 7xchange 8oard of India: under clause ( c) subDect to the directions, if any, issued by the $#4Securities and 7xchange 8oard of India: in this behalf3 (e) the regulation or prohibition of blan) transfers3 (f) the nu(ber and classes of contracts in respect of which settle(ents shall be (ade or differences paid through the clearing house3 (g) the regulation, or prohibition of b!dla# or carry+o'er facilities3 (h) the fixing, altering or postponing of days for settle(ents3 (i) the deter(ination and declaration of (ar)et rates, including the opening, closing highest and lowest rates for securities3 (j) the ter(s, conditions and incidents of contracts, including the prescription of (argin re*uire(ents, if any, and conditions relating thereto, and the for(s of contracts in writing3 (k) the regulation of the entering into, (a)ing, perfor(ance, recession and ter(ination, of contracts, including contracts between (e(bers or between a (e(ber and his constituent or between a (e(ber and a person who is not a (e(ber, and the conse*uences of default or insol'ency on the part of a seller or buyer or inter(ediary, the conse*uences of a breach or o(ission by a seller or buyer, and the responsibility of (e(bers who are not parties to such contracts3 (l) the regulation of taravani business including the placing of li(itations thereon3 (") the listing of securities on the stoc) exchange, the inclusion of any security for the purpose of dealings and the suspension or withdrawal of any such securities, and the suspension or prohibition of trading in any specified securities3 (n) the (ethod and procedure for the settle(ent of clai(s or disputes, including settle(ent by arbitration3 ($) the le'y and reco'ery of fees, fines and penalties3 (%) the regulation of the course of business between parties to contracts in any capacity3 (+) the fixing of a scale of bro)erage and other charges3 (r) the (a)ing, co(paring, settling and closing of bargains3 (#) the e(ergencies in trade which (ay arise, whether as a result of pool or syndicated operations or cornering or otherwise, and the exercise of powers in
$" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%,
Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $# Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
such e(ergencies, including the power to fix (axi(u( and (ini(u( prices for securities3 (t) the regulation of dealings by (e(bers for their own account3 (!) the separation of the functions of Dobbers and bro)ers3 (v) the li(itations on the 'olu(e of trade done by any indi'idual (e(ber in exceptional circu(stances3 (.) the obligation of (e(bers to supply such infor(ation or explanation and to produce such docu(ents relating to the business as the go'erning body (ay re*uire0 (3) .he bye+laws (ade under this section (ay(a) specify the bye+laws the contra'ention of which shall (a)e a contract entered into otherwise than in accordance with the bye+laws 'oid under sub+section ( ) of section $3 (b) pro'ide that the contra'ention of any of the bye+laws shall render the (e(ber concerned liable to one or (ore of the following punish(ents, na(ely ,(i) fine, (ii) expulsion fro( (e(bership, (iii) suspension fro( (e(bership for a specified period, (iv) any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney0 ($) Any bye+laws (ade under this section shall be subDect to such conditions in regard to pre'ious publication as (ay be prescribed, and, when appro'ed by the $/4Securities and 7xchange 8oard of India:, shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and shall ha'e effect as fro( the date of its publication in the &aFette of India , 4ro+i-e- that if the $>4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+law should be (ade i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0
$/ Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $> Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4o/er of 395Se'*ritie! % - E#'h% (e ;o%r- of I -i%< to .%6e or %.e - ,>e0l%/! of re'o( i!e- !to'6 e#'h% (e!. 1=. ( ) .he "04Securities and 7xchange 8oard of India: (ay, either on a re*uest in writing recei'ed by it in this behalf fro( the go'erning body of a recognised stoc) exchange or on its own (otion, if it is satisfied after consultation with the go'erning body of the stoc) exchange that it is necessary or expedient so to do and after recording its reasons for so doing, (a)e bye+laws for all or any of the (atters specified in section ! or a(end any bye+laws (ade by such stoc) exchange under that section0
(%) Khere in pursuance of this section any bye+laws ha'e been (ade or a(ended the bye+laws so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and on the publication thereof in the &aFette of India, the bye+laws so (ade or a(ended shall ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange concerned0 (3) Eotwithstanding anything contained in this section, where the go'erning body of a recognised stoc) exchange obDects to any bye+laws (ade or a(ended under this section by the " 4Securities and 7xchange 8oard of India: on its own (otion, it (ay, within "%4two (onths: of the publication thereof in the &aFette of India under subsection (%), apply to the "34Securities and 7xchange 8oard of India: for re'ision thereof, and the "$4Securities and 7xchange 8oard of India: (ay, after gi'ing an opportunity to the go'erning body of the stoc) exchange to be heard in the (atter, re'ise the bye+laws so (ade or a(ended, anywhere any bye+laws so (ade or a(ended are re'ised as a result of any action ta)en under this sub+section, the byelaws so re'ised shall be published and shall beco(e effecti'e as pro'ided in subsection (%)0 ($) .he (a)ing or the a(end(ent or re'ision of any bye+laws under this section shall in all cases be subDect to the condition of pre'ious publication ,
$! Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "0 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 " Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "% Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec %0, w0e0f0 %"+ 0 + !!"0 "3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4ro+i-e- that if the ""4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+laws should be (ade, a(ended or re'ised i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0 4o/er of Ce tr%l Go+er .e t 58 to !*$er!e-e (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e. 11. ( ) Kithout preDudice to any other powers 'ested in the Central &o'ern(ent under this Act, where the Central &o'ern(ent is of opinion that the go'erning body of any recognised stoc) exchange should be superseded, then, notwithstanding anything contained in any other law for the ti(e being in force, in the Central &o'ern(ent (ay ser'e on the go'erning body a written notice that the Central &o'ern(ent is considering the supersession of the go'erning body for the reasons specified in the notice and after gi'ing an opportunity to the go'erning body to be
heard in the (atter, it (ay, by notification in the Cfficial &aFette, declare the go'erning body of such stoc) exchange to be superseded, and (ay appoint any person or persons to exercise and perfor( all the powers and duties of the go'erning body, and, where (ore persons than one are appointed, (ay appoint one of such persons to be the chair(an and another to be the 'ice+chair(an thereof0 (%) Cn the publication of a notification in the Cfficial &aFette under sub+section ( ), the following conse*uences shall ensue, na(ely,(a) the (e(bers of the go'erning body which has been superseded shall, as fro( the date of the notification of supersession, cease to hold office as such (e(bers3 (b) the person or persons appointed under sub+section ( ) (ay exercise and perfor( all the powers and duties of the go'erning body which has been superseded3 (c) all such property of the recognised stoc) exchange as the person or persons appointed under sub+section ( ) (ay, by order in writing, specify in this behalf as being necessary for the purpose of enabling hi( or the( to carry on the business of the stoc) exchange, shall 'est in such person or persons0 (3) Eotwithstanding anything to the contrary contained in any law or the rules or bye+laws of the recognised stoc) exchange the go'erning body of which is superseded under sub+section ( ), the person or persons appointed under that subsection shall hold office for such period as (ay be specified in the notification published under that sub+section and the Central &o'ern(ent (ay fro( ti(e to ti(e, by li)e notification, 'ary such period0
"" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "# <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0
($) .he Central &o'ern(ent (ay at any ti(e before the deter(ination of the period of office of any person or persons appointed under this section call upon the recognised stoc) exchange to re+constitute the go'erning body in accordance with its rules and on such re+constitution all the property of the recognised stoc) exchange which has 'ested in, or was in the possession of, the person or persons appointed under sub+section ( ), shall re+'est or 'est, as the case (ay be, in the go'erning body so re+constituted , 4ro+i-e- that until a go'erning body is so re+constituted, the person or persons appointed under sub+section ( ) shall continue to exercise and perfor( their powers and duties0 4o/er57 to !*!$e - ,*!i e!! of re'o( i!e- !to'6 e#'h% (e!. 1". If in the opinion of the Central &o'ern(ent an e(ergency has arisen and for the purpose of (eeting the e(ergency the Central &o'ern(ent considers it expedient so to do, it (ay, by notification in the Cfficial &aFette, for reasons to be set out therein, direct a recognised stoc) exchange to suspend such of its business for such period not exceeding se'en days and subDect to such conditions as (ay be specified in the notification, and, if, in the opinion of the Central &o'ern(ent, the interest of
the trade or the public interest re*uires that the period should be extended, (ay, by li)e notification extend the said period fro( ti(e to ti(e , 4ro+i-e- that where the period of suspension is to be extended beyond the first period, no notification extending the period of suspension shall be issued unless the go'erning body of the ">4recognised stoc) exchange: has been gi'en an opportunity of being heard in the (atter0 "!54o/er to i!!*e -ire'tio !. 1"A. If, after (a)ing or causing to be (ade an in*uiry, the Securities and 7xchange 8oard of India is satisfied that it is necessary(a) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (b) to pre'ent the affairs of any recognised stoc) exchange or clearing corporation, or such other agency or person, pro'iding trading or clearing or settle(ent facility in respect of securities, being conducted in a (anner detri(ental to the interests of in'estors or securities (ar)et3 or (c) to secure the proper (anage(ent of any such stoc) exchange or clearing corporation or agency or person, referred to in clause ( b),
"/ <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 "> Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 "! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0
it (ay issue such directions,(i) to any stoc) exchange or clearing corporation or agency or person referred to in clause (b) or any person or class of persons associated with the securities (ar)et3 or (ii) to any co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 8=5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< /<410A/1 A45 <81:<4 :4 (/A0:1:( Co tr%'t! i otifie- %re%! ille(%l i 'ert%i 'ir'*.!t% 'e!. 1). If the Central &o'ern(ent# is satisfied, ha'ing regard to the nature or the 'olu(e of transactions in securities in any #%4State or States or area: that it is necessary so to do, it (ay, by notification in the Cfficial &aFette, declared this section to apply to such #34State or States or area:, and thereupon e'ery contract in such #$4State or States or area: which is entered into after the date of the notification otherwise than #"4between (e(bers of a recognised stoc) exchange or recognised stoc) exchanges: in such ##4State or States or area: or through or with such (e(ber shall be illegal ,
#0 I #
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 #% Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #3 Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #$ Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$ for ;between (e(bers of a recognised stoc) exchange; & ## Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0
#/54ro+i-e-
that any contract entered into between (e(bers of two or (ore recognised stoc) exchanges in such State or States or area, shall(i) be subDect to such ter(s and conditions as (ay be stipulated by the respecti'e stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India3 (ii) re*uire prior per(ission fro( the respecti'e stoc) exchanges if so stipulated by the stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India0: #>4A--itio %l tr%-i ( floor. 1)A. A stoc) exchange (ay establish additional trading floor with the prior appro'al of the Securities and 7xchange 8oard of India in accordance with the ter(s and conditions stipulated by the said 8oard0 ()%lanati$n , 6or the purposes of this section, 1additional trading floor2 (eans a trading ring or trading facility offered by a recognised stoc) exchange outside its area of operation to enable the in'estors to buy and sell securities through such trading floor under the regulatory fra(ewor) of that stoc) exchange0: Co tr%'t! i otifie- %re%! to ,e +oi- i 'ert%i 'ir'*.!t% 'e!. 13. ( ) Any contract entered into in any State or area specified in the notification under section 3 which is in contra'ention of any of the bye+laws specified in that behalf under clause (a) of sub+section (3) of section ! shall be 'oid , (i) as respects the rights of any (e(ber of the recognised stoc) exchange who has entered into such contract in contra'ention of any such bye+law, and also (ii) as respects the rights of any other person who has )nowingly participated in the transaction entailing such contra'ention0 (%) Eothing in sub+section ( ) shall be construed to affect the right of any person other than a (e(ber of the recognised stoc) exchange to enforce any such contract or to reco'er any su( under or in respect of such contract if such person had no )nowledge that the transaction was in contra'ention of any of the bye+laws specified in clause (a) of sub+section (3) of section !0 @e.,er! .%> ot %'t %! $ri 'i$%l! i 'ert%i 'ir'*.!t% 'e!. 15. Eo (e(ber of a recognised stoc) exchange shall in respect of any securities enter into any contract as a principal with any person other than a (e(ber of a recognised stoc) exchange, unless he has secured the consent or authority of such
#/ Inserted #> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (A(end(ent) Act, !!", Sec % , w0e0f0 %"+0 + !!"0
person and discloses in the note, (e(orandu( or agree(ent of sale or purchase that he is acting as a principal , 4ro+i-e- that where the (e(ber has secured the consent or authority of such person otherwise than in writing he shall secure written confir(ation by such person or such consent or authority within three days fro( the date of the contract , 4ro+i-e- f*rther that no such written consent or authority of such person shall be necessary for closing out any outstanding contract entered into by such person in accordance with the bye+laws, if the (e(ber discloses in the note, (e(orandu( or agree(ent of sale or purchase in respect of such closing out that he is acting as a principal0 4o/er89 to $rohi,it 'o tr%'t! i 'ert%i '%!e!. 18. ( ) If the Central &o'ern(ent is of opinion that it is necessary to pre'ent undesirable speculation in specified securities in any State or area, it (ay, by notification in the Cfficial &aFette, declare that no person in the State or area specified in the notification shall, sa'e with the per(ission of the Central &o'ern(ent, enter into any contract for the sale or purchase of any security specified in the notification except to the extent and in the (anner, if any, specified therein0 (%) All contracts in contra'ention of the pro'isions of sub+section ( ) entered into after the date of notification issued thereunder shall be illegal0 Li'e !i ( of -e%ler! i !e'*ritie! i 'ert%i %re%!. 17. ( ) SubDect to the pro'isions of sub+section (3) and to the other pro'isions contained in this Act, no person shall carry on or purport to carry on, whether on his own behalf or on behalf of any other person, the business of dealing in securities in any State or area to which section 3 has not been declared to apply and to which the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, declare this section to apply, except under the authority of a /04licence granted by the Securities and 7xchange 8oard of India: in this behalf0 (%) Eo notification under sub+section ( ) shall be issued with respect to any State or area unless the Central &o'ern(ent is satisfied, ha'ing regard to the (anner in which securities are being dealt with in such State or area, that it is desirable or
#! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 <owers are exercisable by R8I also 'ide &o'ern(ent of India Eotification Eo0 >3 (7), 9ated 0 +03+%000 in relation to any contracts in go'ern(ent securities, (oney (ar)et securities etc0 /0 Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% for ;licence granted by the Central &o'ern(ent;0
expedient in the interest of the trade or in the public interest that such dealings should be regulated by a syste( of licensing0 (3) .he restrictions i(posed by sub+section ( ) in relation to dealings in securities shall not apply to the doing of anything by or on behalf of a (e(ber of any recognised stoc) exchange0
7154*,li'
i!!*e % - li!ti ( of !e'*ritie! referre- to i !*,0'l%*!e ( ie) of 'l%*!e (h)
of !e'tio ". 17A. ( ) Kithout preDudice to the pro'isions contained in this Act or any other law for the ti(e being in force, no securities of the nature referred to in sub+clause (ie) of clause (h) of section % shall be offered to the public or listed on any recognised stoc) exchange unless the issuer fulfils such eligibility criteria and co(plies with such other re*uire(ents as (ay be specified by regulations (ade by the Securities and 7xchange 8oard of India0 (%) 7'ery issuer referred to in sub+clause (ie) of clause (h) of section % intending to offer the certificates or instru(ents referred therein to the public shall (a)e an application, before issuing the offer docu(ent to the public, to one or (ore recognised stoc) exchanges for per(ission for such certificates or instru(ents to be listed on the stoc) exchange or each such stoc) exchange0 (3) Khere the per(ission applied for under sub+section (%) for listing has not been granted or refused by the recognised stoc) exchanges or any of the(, the issuer shall forthwith repay all (oneys, if any, recei'ed fro( applicants in pursuance of the offer docu(ent, and if any such (oney is not repaid within eight days after the issuer beco(es liable to repay it, the issuer and e'ery director or trustee thereof, as the case (ay be, who is in default shall, on and fro( the expiry of the eighth day, be Dointly and se'erally liable to repay that (oney with interest at the rate of fifteen per cent per annu(0 7xplanation0-In rec)oning the eighth day after another day, any inter'ening day which is a public holiday under the Eegotiable Instru(ents Act, >> (%# of >> ), shall be disregarded, and if the eighth day (as so rec)oned) is itself such a public holiday, there shall for the said purposes be substituted the first day thereafter which is not a holiday0 ($) All the pro'isions of this Act relating to listing of securities of a public co(pany on a recognised stoc) exchange shall, (utatis (utandis, apply to the listing of the securities of the nature referred to in sub+clause (ie) of clause (h) of section % by the issuer, being a special purpose distinct entity0 <
Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec 3, w0e0f0 %>+0"+ %00/0
/
E#'l*!io of !$ot -eli+er> 'o tr%'t! fro. !e'tio ! 1), 13, 15 % - 17. 1:. ( ) Eothing contained in sections 3, $, " and / shall apply to spot deli'ery contracts0 (%) Eotwithstanding anything contained in sub+section ( ), if the Central &o'ern(ent/% is of opinion that in the interest of the trade or in the public interest it is expedient to regulate and control the business of dealing in spot deli'ery contracts also in any State or area (whether section 3 has been declared to apply to that State or area or not), it (ay, by notification in the Cfficial &aFette, declare that the pro'isions of section / shall also apply to such State or area in respect of spot deli'ery contracts generally or in respect of spot deli'ery contracts for the sale or purchase of such securities as (ay be specified in the notification, and (ay also specify the (anner in which, and the extent to which, the pro'isions of that section
shall so apply0 /34Co tr%'t! i -eri+%ti+e. 1:A. Eotwithstanding anything contained in any other law for the ti(e being in force, contracts in deri'ati'e shall be legal and 'alid if such contracts are(a) traded on a recognised stoc) exchange3 (b) settled on the clearing house of the recognised stoc) exchange, in accordance with the rules and bye+laws of such stoc) exchange0: Sto'6 e#'h% (e! other th% re'o( i!e- !to'6 e#'h% (e! $rohi,ite-. 19. ( ) Eo person shall, except with the per(ission of the Central &o'ern(ent, organise or assist in organising or be a (e(ber of any stoc) exchange (other than a recognised stoc) exchange) for the purpose of assisting in, entering into or perfor(ing any contracts in securities0 (%) .his section shall co(e into force in any State or area on such date as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 4rohi,itio of o$tio ! i !e'*ritie!. "=. 734GGGGG:
/% <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 /3 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec 3, w0e0f0 %%+%+%0000 /$ C(itted by the Securities =aws (A(end(ent) Act, !!", Sec %%, w0e0f0 %"+0 + !!"0 <rior to o(ission, section %0 read as under , 1%00 8r$hibiti$n $f $%ti$n# in #ec!ritie#&-( ) Eotwithstanding anything contained in this Act or in any other law for the ti(e being in force, all options in securities entered into after the co((ence(ent of this Act shall be illegal0
9: 1:4= <E (/A0:1:( 754GGG: /#4Co -itio ! for li!ti (. "1. Khere securities are listed on the application of any person in any recognised stoc) exchange, such person shall co(ply with the conditions of the listing agree(ent with that stoc) exchange&: 775Deli!ti ( of !e'*ritie!. "1A. ( ) A recognised stoc) exchange (ay delist the securities, after recording the reasons therefor, fro( any recognised stoc) exchange on any of the ground or grounds as (ay be prescribed under this Act , 4ro+i-e- that the securities of a co(pany shall not be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) A listed co(pany or an aggrie'ed in'estor (ay file an appeal before the Securities Appellate .ribunal against the decision of the recognised stoc) exchange delisting the securities within fifteen days fro( the date of the decision of the recognised stoc) exchange delisting the securities and the pro'isions of sections %%8 to %%7 of this Act, shall apply, as far as (ay be, to such appeals , 4ro+i-e- that the Securities Appellate .ribunal (ay, if it is satisfied that the co(pany was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding one (onth0:
(%) Any option in securities which has been entered into before such co((ence(ent and which re(ains to be perfor(ed, whether wholly or in part, after such co((ence(ent shall, to that
extent, beco(e 'oid02 /" Kords 18O <H8=IC CC?<AEI7S2 o(itted by the Securities =aws (A(end(ent) Act, !!!, Sec $, w0e0f0 %%+0%+%0000 /# Substituted by the Securities =aws (A(end(ent) Act, !!", Sec 33, w0e0f0 %"+0 + !!" . <rior to substitution, section % read as under , 1% 0 8$.er t$ c$"%el li#ting $f #ec!ritie# bF %!blic c$"%anie#& -Eotwithstanding anything contained in any other law for the ti(e being in force, if the Securities and 7xchange 8oard of India is of opinion, ha'ing regard to the nature of the securities issued by any public co(pany as defined in the Co(panies Act, !"# ( of !"#), or to the dealings in the(, that it is necessary or expedient in the interest of the trade or in the public interest so to do, it (ay re*uire the co(pany, after gi'ing it an opportunity of being heard in the (atter, to co(ply with such re*uire(ents as (ay be prescribed with respect to the listing of its securities on any recognised stoc) exchange02 // Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec >, w0r0e0f0 %+ 0+%00$0
7:5Ri(ht
of %$$e%l %(%i !t ref*!%l of !to'6 e#'h% (e! to li!t !e'*ritie! of $*,li' 'o.$% ie!. 79"". Khere a recognised stoc) exchange acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any public co(pany >04or collecti'e in'est(ent sche(e:, the co(pany > 4or sche(e: shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( ) of section /3 of the Co(panies Act, !"# ( of !"#) (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Central &o'ern(ent (ay, on sufficient cause being shown, allow, appeal to the Central &o'ern(ent against such refusal, o(ission or failure, as the case (ay be, and thereupon the Central &o'ern(ent (ay, after gi'ing the stoc) exchange an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange, or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Central &o'ern(ent sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Central &o'ern(ent: , >%44ro+i-e- that no appeal shall be preferred against refusal, o(ission or failure, as the case (ay be, under this section on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!0: :)5Ri(ht of %$$e%l to Se'*ritie! A$$ell%te Tri,* %l %(%i !t ref*!%l of !to'6 e#'h% (e to li!t !e'*ritie! of $*,li' 'o.$% ie!.
/> Substituted
by .he Co(panies (A(end(ent) Act, !/$ (Act Eo0 $ of !/$), Sec $%, w0e0f0 0 + 0%+ !/"0 /! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the
&aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 >0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%00003 Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 > Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%0000 >% Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec $, w0e0f0 #+ %+ !!!0 >3 Sections %%A, %%8, %%C, %%9, %%7 and %%6 inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!!& 7arlier section %%A was inserted by .he
""A. ( ) Khere a recognised stoc) exchange, acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any co(pany, the co(pany shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( A) of section /3 of the Co(panies Act, !"# ( of !"#), (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Securities Appellate .ribunal (ay, on sufficient cause being shown, allow, appeal to the Securities Appellate .ribunal ha'ing Durisdiction in the (atter against such refusal, o(ission or failure, as the case (ay be, and thereupon the Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange, an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange3 or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Securities Appellate .ribunal sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Securities Appellate .ribunal0 (%) 7'ery appeal under sub+section ( ) shall be in such for( and be acco(panied by such fee as (ay be prescribed0 (3) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 ($) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: :354ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. "";. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of
Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec %, w0e0f0 /+ 0 + !>#, and o(itted by the 9epositories Act, !!#, Sec 30 and Sch0, <t0III, w0r0e0f0 %0+0!+ !!"0 >$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath 3 (b) re*uiring the disco'ery and production of docu(ents 3 (c) recei'ing e'idence on affida'its 3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents 3 (e) re'iewing its decisions 3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte ; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0: :55Ri(ht to le(%l re$re!e t%tio . ""C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of sub+section ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of subsection ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of
>" Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
!"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, vakil or an attorney of any Iigh Court, and includes a pleader in practice0: :85Li.it%tio . ""D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0: :75Ci+il 'o*rt ot to h%+e G*ri!-i'tio .
""E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0: ::5A$$e%l to S*$re.e Co*rt. ""2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order, 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: 8(4A91:( A45 80</(5A0( 4e %ltie!. "). ( ) Any person who+
># Inserted >/ Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & >> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec !, w0r0e0f0 %+ 0+%00$0 7arlier section %%6 as inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", read as under,+ 1""2. A$$e%l to Di(h Co*rt.+Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order , 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
(a) without reasonable excuse (the burden of pro'ing which shall be on hi() fails to co(ply with any re*uisition (ade under sub+section ($) of section #3 or (b) enters into any contract in contra'ention of any of the pro'isions contained in section 3 or section #3 or (c) contra'enes the pro'isions contained in >!5section / or section /A<, or section !3 or 90 4(d) enters into any contract in deri'ati'e in contra'ention of section >A or the rules (ade under section 303: (e) owns or )eeps a place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act and )nowingly per(its such place to be used for such purposes3 or (f) (anages, controls, or assists in )eeping any place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act or at which contracts are recorded or adDusted or rights or liabilities arising out of contracts are adDusted, regulated or enforced in any (anner whatsoe'er3 or (g) not being a (e(ber of a recognised stoc) exchange or his agent authorised as
such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section / wilfully represents to or induces any person to belie'e that contracts can be entered into or perfor(ed under this Act through hi(3 or (h) not being a (e(ber of a recognised stoc) exchange or his agent authorised as such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section /, can'asses, ad'ertises or touts in any (anner either for hi(self or on behalf of any other persons for any business connected with contracts in contra'ention of any of the pro'isions of this Act3 or (i) Doins, gathers or assists in gathering at any place other than the place of business specified in the bye+laws of a recognised stoc) exchange any person or persons for (a)ing bids or offers or for entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act3 ! 4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which
>! Inserted
by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec $, w0e0f0 %>+0"+ %00/ for ;section /;0 !0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec #, w0e0f0 %%+0%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 ! Substituted for 1shall, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0
(ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: (%) Any person who enters into any contract in contra'ention of the pro'isions contained in section " !%4or who fails to co(ply with the pro'isions of !34section % or section % A: or with the orders of: or section %% !$4or with the orders of the Securities Appellate .ribunal: !"4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 9854e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. ")A. Any person, who is re*uired under this Act or any rules (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to a recognised stoc) exchange, fails to furnish the sa(e within the ti(e specified therefor in the listing agree(ent or conditions or bye+laws of the recognised stoc) exchange, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to (aintain boo)s of account or records, as per the listing agree(ent or conditions, or bye+laws of a recognised stoc) exchange, fails to (aintain the sa(e, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0:
9754e
%lt> for f%il*re ,> % > $er!o to e ter i to % %(ree.e t /ith 'lie t!. ");. If any person, who is re*uired under this Act or any bye+laws of a recognised stoc) exchange (ade thereunder, to enter into an agree(ent with his client, fails to enter into such an agree(ent, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0:
!% Substituted
for 1or who fails to co(ply with the orders of the Securities and 7xchange 8oard of India under section % 2 by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 <rior to !!", ;Securities and 7xchange 8oard of India under section % or Central &o'ern(ent under section %%; were substituted for ;Central &o'ern(ent under section % or section %%; vide .he Schedule, <art II of Securities and 7xchange 8oard of India Act, !!%, w0e0f0 30+0 + !!%0 !3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec #, w0e0f0 #+ %+ !!!0 !" Substituted for 1shall, on con'iction, be punishable with fine which (ay extend to one thousand rupees2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !# Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$ & !/ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$0
9:54e
%lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. ")C. If any stoc) bro)er or sub+bro)er or a co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, after ha'ing been called upon by the Securities and 7xchange 8oard of India or a recognised stoc) exchange in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e stipulated by the Securities and 7xchange 8oard of India or a recognised stoc) exchange, he or it shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 9954e %lt> for f%il*re to !e(re(%te !e'*ritie! or .o e>! of 'lie t or 'lie t!. ")D. If any person, who is registered under section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%) as a stoc) bro)er or sub+bro)er, fails to segregate securities or (oneys of the client or clients or uses the securities or (oneys of a client or clients for self or for any other client, he shall be liable to a penalty not exceeding one crore rupees0: 1==54e %lt> for f%il*re to 'o.$l> /ith $ro+i!io of li!ti ( 'o -itio ! or -eli!ti ( 'o -itio ! or (ro* -!. ")E. If a co(pany or any person (anaging collecti'e in'est(ent sche(e or (utual fund, fails to co(ply with the listing conditions or delisting conditions or grounds or co((its a breach thereof, it or he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0: 1=154e %lt> for e#'e!! -e.%teri%li!%tio or -eli+er> of * li!te- !e'*ritie!. ")2. If any issuer de(aterialises securities (ore than the issued securities of a co(pany or deli'ers in the stoc) exchanges the securities which are not listed in the recognised stoc) exchange or deli'ers securities where no trading per(ission has been gi'en by the recognised stoc) exchange, he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0:
!> Inserted !! Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 00 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0
%+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0
1="54e
%lt> for f%il*re to f*r i!h $erio-i'%l ret*r !, et'. ")G. If a recognised stoc) exchange fails or neglects to furnish periodical returns to the Securities and 7xchange 8oard of India or fails or neglects to (a)e or a(end its rules or bye+laws as directed by the Securities and 7xchange 8oard of India or fails to co(ply with directions issued by the Securities and 7xchange 8oard of India, such recognised stoc) exchange shall be liable to a penalty which (ay extend to twenty+fi'e crore rupees0: 1=)54e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. ")D. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or articles or bye+ laws or the regulations of the recognised stoc) exchange or directions issued by the Securities and 7xchange 8oard of India for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 1=354o/er to %-G*-i'%te. ")0I. ( ) 6or the purpose of adDudging under sections %3A, %38, %3C, %39, %37, %36, %3& and %3I, the Securities and 7xchange 8oard of India shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0: 1=552%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. ")E. Khile adDudging the *uantu( of penalty under section %3+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3
0% Inserted 03 Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec 0$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0" Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 , w0r0e0f0 , w0r0e0f0 , w0r0e0f0
%+ %+ %+ %+
0+%00$0 0+%00$0 0+%00$0 0+%00$0
(b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0: 1=85 Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!.
")EA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 1"A or !e'tio ")0I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%tefor the %lle(e- -ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re %! !$e'ifie,> the ;o%r- * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")L %(%i !t % > or-er $%!!e- ,> the ;o%ror %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 1=75Re'o+er> of %.o* t!. ")E;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 1"A or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H
0# I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30"==7) 0/ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %!
.%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - ThirS'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")L of thi! A't. (") The re'o+er> offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ())Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 0'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 1"A, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1),(") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 1=:5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. ")F. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: 1=95A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")L. ( ) Any person aggrie'ed, by the order or decision of the recogniFed stoc) exchange or the adDudicating officer or any order (ade by the Securities and 7xchange 8oard of India under section $8, (ay prefer an appeal before the Securities Appellate .ribunal and the pro'isions of sections %%8, %%C, %%9 and %%7 of this Act, shall apply, as far as (ay be, to such appeals0 (%) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order or decision is recei'ed by the
appellant and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 (3) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 ($) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the parties to the appeal and to the concerned adDudicating officer0 (") .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: 11=5Offe 'e!. ")@. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws
0> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 0! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
(ade thereunder, for which no punish(ent is pro'ided elsewhere in this Act, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 1115Co.$o!itio of 'ert%i offe 'e!. ")N. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0: 11"54o/er to (r% t i..* it>. ")0O. ( ) .he Central &o'ern(ent (ay, on reco((endation by the Securities and 7xchange 8oard of India, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation,
4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that the reco((endation of the Securities and 7xchange 8oard of India under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under
% Inserted
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
this Act to which such person would ha'e been liable, had not such i((unity been granted0: Offe 'e! ,> 'o.$% ie!. "3. ( ) Khere an offence has been co((itted by a co(pany, e'ery person who, at the ti(e when the offence was co((itted, was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence, and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any gross negligence on the part of any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer of the co(pany, shall also be dee(ed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n0-6or the purpose of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals, and 34(b) 1director2, in relation to(i) a fir(, (eans a partner in the fir(3 (ii) any association of persons or a body of indi'iduals, (eans any (e(ber controlling the affairs thereof0: $4(3) .he pro'isions of this section shall be in addition to, and not in derogation of, the pro'isions of section %%A0: Cert%i offe 'e! to ,e 'o( iL%,le. "5. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, >!> (" of >!>) ", any offence punishable under #4GGG: section %3 shall be dee(ed to be a
cogniFable offence within the (eaning of that Code0
3 Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec /, w0e0f0 %%+%+%0000 <rior to its substitution, sub+clause (b) read as under, N(b) 1director2, in relation to a fir(, (eans a partner in the fir(0J $ Inserted by .he Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec 3, w0e0f0 /+0 + !>#0
iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central &o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or a recognised stoc) exchange or by any person0 >5(")********< 1195E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
ee now the Code of Cri(inal <rocedure, !/3 (% of !/$) 1sub+section ( ) of2 o(itted by the Securities =aws (A(end(ent) Act, %00$, w0e0f0 %+ 0+%00$0 / Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$ & <rior to its substitution section %# read as under ,1%#0 G!ri#dicti$n t$ trF $ffence# !nder thi# Act&-Eo court inferior to that of a presidency (agistrate or a (agistrate of the first class shall ta)e cogniFance of or try any offence punishable under this Act02 > O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JEo court inferior to that of a Court of Session shall try any offence punishable under this Act .K ! I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
" # Kords
/4Co(
A$$e%l % - Re+i!io . "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt. "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel% $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io !. "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< 6: /(99A4(<A Title to -i+i-e -!. "7. ( ) It shall be lawful for the holder of any security whose na(e appears on the boo)s of the co(pany issuing the said security to recei'e and retain any di'idend declared by the co(pany in respect thereof for any year, notwithstanding that the said security has already been transferred by hi( for consideration, unless the transferee who clai(s the di'idend fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the co(pany with the co(pany for being registered in his na(e within fifteen days of the date on which the di'idend beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the di'idend3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security and other docu(ents relating to
the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a co(pany to pay any di'idend which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the co(pany as the holder of the security in respect of which the di'idend has beco(e due3 or (b) the right of the transferee of any security to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security in the na(e of the transferee0 %04Ri(ht to re'ei+e i 'o.e fro. 'olle'ti+e i +e!t.e t !'he.e. "7A. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, whose na(e appears on the boo)s of the collecti'e in'est(ent sche(e issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e declared by the collecti'e in'est(ent sche(e in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e fro( the transfer or has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the collecti'e in'est(ent sche(e with the collecti'e in'est(ent sche(e for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec >, w0e0f0 %%+%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the collecti'e in'est(ent sche(e3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a collecti'e in'est(ent sche(e to pay any inco(e fro( units or other instru(ents issued by the collecti'e in'est(ent sche(e which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the collecti'e in'est(ent sche(e as the holder of the security being
units or other instru(ents issued by the collecti'e in'est(ent sche(e in respect of which the inco(e in respect of units or other instru(ents issued by the collecti'e sche(e has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security being units or other instru(ents issued by the collecti'e in'est(ent sche(e in the na(e of the transferee0: % 4Ri(ht to re'ei+e i 'o.e fro. .*t*%l f* -. "7;. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by any (utual fund, whose na(e appears on the boo)s of the (utual fund issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the (utual fund declared by the (utual fund in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the (utual fund, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the (utual fund fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the (utual fund with the (utual fund for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the (utual fund beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the (utual fund3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the (utual fund, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a (utual fund to pay any inco(e fro( units or other instru(ents issued by the (utual fund which has beco(e due to any person, whose na(e is for the ti(e being registered in the boo)s of the (utual fund as the holder of the security being units or other instru(ents issued by the (utual fund in respect of which the inco(e in respect of units or other instru(ents issued by the (utual fund has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the (utual fund, to enforce against the transferor or any other person, his rights, if any, in relation to the transfer in any case where the (utual fund has refused to register the transfer of the security being units or other instru(ents issued by the (utual fund in the na(e of the transferee0:
1""5A't
ot to %$$l> i 'ert%i '%!e!. ":. ( ) .he pro'isions of this Act shall not apply to(a) the &o'ern(ent, the Reser'e 8an) of India, any local authority or any corporation set up by a special law or any person who has effected any transaction with or through the agency of any such authority as is referred to in this clause3 (b) any con'ertible bond or share warrant or any option or right in relation thereto, in so far as it entitles the person in whose fa'our any of the foregoing has been issued to obtain at his option fro( the co(pany or other body corporate, issuing the sa(e or fro( any of its shareholders or duly appointed agentsJ shares of the co(pany or other body corporate, whether by con'ersion of the bond or warrant or otherwise, on the basis of the price agreed upon when the sa(e was issued0 (%) Kithout preDudice to the pro'isions contained in sub+section ( ), if the Central &o'ern(ent %3 is satisfied that in the interests of trade and co((erce or the
%% Substituted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec 3, w0e0f0 0>+ %+ !"!0
econo(ic de'elop(ent of the country it is necessary or expedient so to do, it (ay, by notification in the Cfficial &aFette, specify any class of contracts as contracts to which this Act or any pro'ision contained therein shall not apply, and also the conditions, li(itations or restrictions, if any, subDect to which it shall not so apply0: 4rote'tio of %'tio t%6e i (oo- f%ith. "9. Eo suit, prosecution or other legal proceeding whatsoe'er shall lie in any court against the go'erning body or any (e(ber, office bearer or ser'ant of any recognised stoc) exchange or against any person or persons appointed under subsection ( ) of section for anything which is in good faith done or intended to be done in pursuance of this Act or of any rules or bye+laws (ade thereunder0 %$44o/er to -ele(%te. "9A. .he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers (except the power under section 30) exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India or the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)0: 4o/er to .%6e r*le!. )=. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for the purpose of carrying into effect the obDects of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for,(a) the (anner in which applications (ay be (ade, the particulars which they should contain and the le'y of a fee in respect of such applications 3 (b) the (anner in which any in*uiry for the purpose of recognising any stoc) exchange (ay be (ade, the conditions which (ay be i(posed for the grant of such recognition, including conditions as to the ad(ission of (e(bers if the
%3 <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %$ Inserted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% and Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec !, w0e0f0 %%+0%+%0000 <rior to its substitution, section %!A read as under , 1%!A0 8$.er t$ delegate&*.he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India02
stoc) exchange concerned is to be the only recognised stoc) exchange in the area3 and the for( in which such recognition shall be granted3 (c) the particulars which should be contained in the periodical returns and annual reports to be furnished to the Central &o'ern(ent3 (d) the docu(ents which should be (aintained and preser'ed under section # and the periods for which they should be preser'ed3 (e) the (anner in which any in*uiry by the go'erning body of a stoc) exchange shall be (ade under section #3 (f) the (anner in which the bye+laws to be (ade or a(ended under this Act shall before being so (ade or a(ended be published for criticis(3 (g) the (anner in which applications (ay be (ade by dealers in securities for licences under section /, the fee payable in respect thereof and the period of such licences, the conditions subDect to which licences (ay be granted, including conditions relating to the for(s which (ay be used in (a)ing contracts, the docu(ents to be (aintained by licensed dealers and the furnishing of periodical infor(ation to such authority as (ay be specified and the re'ocation of licences for breach of conditions3 %"4(h) the re*uire(ents which shall be co(plied with(A) by public co(panies for the purpose of getting their securities listed on any stoc) exchange3 (B) by collecti'e in'est(ent sche(e for the purpose of getting their units listed on any stoc) exchange3: %#4GGG: %/4(ha) the grounds on which the securities of a co(pany (ay be delisted fro( any recognised stoc) exchange under sub+section ( ) of section % A3 (hb) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under sub+section (%) of section % A and the fees payable in respect of such appeal3 (hc) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3
%" Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec 0, w0e0f0 %%+0%+%0000 <rior to its substitution, clause (h) read as under , 1(h) the re*uire(ents which shall be co(plied with by public co(panies for the purpose of getting their securities listed on any stoc) exchange32 %# .he word ;and; o(itted by .he Securities Contracts (Regulation) A(end(ent Act, !>", Sec $, w0e0f0 /+0 + !>#0 %/ Substituted for clause (ha) by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 7arlier clause (ha), as a(ended by the Securities =aws (A(end(ent) Act, !!!, read as
under ,1(ha) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3 and2
(hd) the (anner of in*uiry under sub+section ( ) of section %3+I3 (he) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3= and the fees payable in respect of such appeal3: (i) any other (atter which is to be or (ay be prescribed0 %>4(3) 7'ery rule (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule0: 1"954o/er of Se'*ritie! % - E#'h% (e ;o%r- of I -i% to .%6e re(*l%tio !. )1. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 305(%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,%> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 <rior to its substitution, sub+section (3), as a(ended by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!", read as under , 1(3) 7'ery rule (ade under this section shall, as soon as (ay be, after its publication in the Cfficial &aFette, be laid before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e session aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule02 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0 7arlier it was repealed by the Repealing and A(ending Act, !#0, Sec % and 6irst Sch0 w0e0f0 %>+ %+ !#00 30 Substituted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec ", w0e0f0 %>+ 0"+%00/0 <rior to substitution it read as under , 1(%) In particular and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for the (anner in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section02
(a) the (anner, in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of
publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section3 (b) the eligibility criteria and other re*uire(ents under section /A0 < (3) 7'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the regulation or both Iouses agree that the regulation should not be (ade, the regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that regulation0:
DE4OSITORIES ACT, 1998 SECTIONS /@A81(0 : 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS ). Certificate of co((ence(ent of business by depositories /@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS 3. Agree(ent between depository and participant 5. Ser'ices of depository 8. Surrender of certificate of security 7. Registration of transfer of securities with depositories :. Cptions to recei'e security certificate or hold securities with depository 9. Securities in depositories to be in fungible for( 1=. Rights of depositories and beneficial owner 11. Register of beneficial owner 1". <ledge or hypothecation of securities held in a depository 1). 6urnishing of infor(ation and records by depository and issuer 13. Cption to opt out in respect of any security 15. Act > of >! to apply to depositories 18. 9epositories to inde(nify loss in certain cases 17. Rights and obligations of depositories, etc0 /@A81(0 :: EN9UIRM AND INS4ECTION 1:. <ower of 8oard to call for infor(ation and en*uiry 19. <ower of 8oard to gi'e directions in certain cases 19A. <enalty for failure to furnish infor(ation, return, etc0 19;. <enalty for failure to enter into an agree(ent 19C. <enalty for failure to redress in'estorsJ grie'ances
19D. <enalty for delay in de(aterialisation or issue of certificate of securities 19E. <enalty for failure to reconcile records 192. <enalty for failure to co(ply with directions issued by 8oard under section ! of the Act 19G. <enalty for contra'ention where no separate penalty has been pro'ided 19D. <ower to adDudicate 190I. 6actors to be ta)en into account by adDudicating officer 190IA. Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (! 190I;. Re'o+er> of %.o* t! 190E. Crediting su(s realised by way of penalties to Consolidated 6und of India /@A81(0 D 4ENALTM "=. Cffences "1. Cffences by co(panies /@A81(0 D: @ISCELLANEOUS "". CogniFance of offences by courts ""A. Co(position of certain offences "";. <ower to grant i((unity ""C. E!t%,li!h.e t of S$e'i%l Co*rt! ""D. Offe 'e! tri%,le ,> S$e'i%l Co*rt! ""E. A$$e%l % - re+i!io ""2. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""G. Tr% !itio %l 4ro+i!io ! "). Appeals ")A. Appeal to Securities Appellate .ribunal ")A. Appeal to Securities Appellate .ribunal ");. <rocedure and powers of Securities Appellate .ribunal ")C. Right to =egal Representation ")D. =i(itation ")E. Ci'il court not to ha'e Durisdiction ")2. Appeal to Supre(e Court "3. <ower of Central &o'ern(ent to (a)e rules "5. <ower of 8oard to (a)e regulations "8. <ower of depositories to (a)e bye+laws "7. Rules and regulations to be laid before <arlia(ent ":. Application of other laws not barred "9. Re(o'al of difficulties )=. A(end(ents to certain enact(ents )1. Repeal and sa'ing /@(5A9( A?7E9?7E. .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0: DE4OSITORIES ACT, 1998 5"" O2 1998< 51=th A*(*!t, 1998< An Act to provide $or reg lation o$ depositories in sec rities and $or matters connected there%ith or incidental thereto& B( it enacted bF 8arlia"ent in the E$rtF7#eventh ;ear $f the 0e%!blic $f :ndia a# f$ll$.# ,*
/@A81(0 : 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the 9epositories Act, !!#0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the %0th day of Septe(ber, !!"0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 1beneficial owner2 (eans a person whose na(e is recorded as such with a depository3 (b) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 3 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (c) 1bye+laws2 (eans bye+laws (ade by a depository under section %#3 (d) 1Co(pany =aw 8oard2 (eans the 8oard of Co(pany =aw Ad(inistration constituted under section 07 of the Co(panies Act, !"# ( of !"#)3 (e) 1depository2 (eans a co(pany for(ed and registered under the Co(panies Act, !"# ( of !"#), and which has been granted a certificate of registration under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (f) 1issuer2 (eans any person (a)ing an issue of securities3 (g) 1participant2 (eans a person registered as such under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (h) 1prescribed2 (eans prescribed by rules (ade under this Act3 (i) 1record2 includes the records (aintained in the for( of boo)s or stored in a co(puter or in such other for( as (ay be deter(ined by regulations3 (j) 1registered owner2 (eans a depository whose na(e is entered as such in the register of the issuer3 (k) 1regulations2 (eans the regulations (ade by the 8oard3 4(ka) 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (l) 1security2 (eans such security as (ay be specified by the 8oard3 (") 1ser'ice2 (eans any ser'ice connected with recording of allot(ent of securities or transfer of ownership of securities in the record of a depository0 (%) Kords and expressions used herein and not defined but defined in the Co(panies Act, !"# ( of !"#), or the Securities Contracts (Regulation) Act, !"# ($% of !"#), or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), shall ha'e the (eanings respecti'ely assigned to the( in those Acts0 /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS Certifi'%te of 'o..e 'e.e t of ,*!i e!! ,> -e$o!itorie!. ). ( ) Eo depository shall act as a depository unless it obtains a certificate of co((ence(ent of business fro( the 8oard0 (%) A certificate granted under sub+section ( ) shall be in such for( as (ay be specified by the regulations0 (3) .he 8oard shall not grant a certificate under sub+section ( ) unless it is satisfied that the depository has ade*uate syste(s and safeguards to pre'ent (anipulation of records and transactions , 4ro+i-e- that no certificate shall be refused under this section unless the depository concerned has been gi'en a reasonable opportunity of being heard0
Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
/@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS A(ree.e t ,et/ee -e$o!itor> % - $%rti'i$% t. 3. ( ) A depository shall enter into an agree(ent with one or (ore participants as its agent0 (%) 7'ery agree(ent under sub+section ( ) shall be in such for( as (ay be specified by the bye+laws0 Ser+i'e! of -e$o!itor>. 5. Any person, through a participant, (ay enter into an agree(ent, in such for( as (ay be specified by the bye+laws, with any depository for a'ailing its ser'ices0 S*rre -er of 'ertifi'%te of !e'*rit>. 8. ( ) Any person who has entered into an agree(ent under section " shall surrender the certificate of security, for which he see)s to a'ail the ser'ices of a depository, to the issuer in such (anner as (ay be specified by the regulations0 (%) .he issuer, on receipt of certificate of security under sub+section ( ), shall cancel the certificate of security and substitute in its records the na(e of the depository as a registered owner in respect of that security and infor( the depository accordingly0 (3) A depository shall, on receipt of infor(ation under sub+section (%), enter the na(e of the person referred to in sub+section ( ) in its records, as the beneficial owner0 Re(i!tr%tio of tr% !fer of !e'*ritie! /ith -e$o!itor>. 7. ( ) 7'ery depository shall, on receipt of inti(ation fro( a participant, register the transfer of security in the na(e of the transferee0 (%) If a beneficial owner or a transferee of any security see)s to ha'e custody of such security the depository shall infor( the issuer accordingly0 O$tio ! to re'ei+e !e'*rit> 'ertifi'%te or hol- !e'*ritie! /ith -e$o!itor>. :. ( ) 7'ery person subscribing to securities offered by an issuer shall ha'e the option either to recei'e the security certificates or hold securities with a depository0 (%) Khere a person opts to hold a security with a depository, the issuer shall inti(ate such depository the details of allot(ent of the security, and on receipt of such infor(ation the depository shall enter in its records the na(e of the allottee as the beneficial owner of that security0 Se'*ritie! i -e$o!itorie! to ,e i f* (i,le for.. 9. ( ) All securities held by a depository shall be de(aterialised and shall be in a fungible for(0 %4(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#), shall apply to a depository in respect of securities held by it on behalf of the beneficial owners&: Ri(ht! of -e$o!itorie! % - ,e efi'i%l o/ er. 1=. ( ) Eotwithstanding anything contained in any other law for the ti(e being in force, a depository shall be dee(ed to be the registered owner for the purposes of effecting transfer of ownership of security on behalf of a beneficial owner0 (%) Sa'e as otherwise pro'ided in sub+section ( ), the depository as a registered owner shall not ha'e any 'oting rights or any other rights in respect of securities held by it0 (3) .he beneficial owner shall be entitled to all the rights and benefits and be subDected to all the liabilities in respect of his securities held by a depository0 Re(i!ter of ,e efi'i%l o/ er. 11. 7'ery depository shall (aintain a register and an index of beneficial owners in the
(anner pro'ided in sections "0, " and "% of the Co(panies Act, !"# ( of !"#)0 4le-(e or h>$othe'%tio of !e'*ritie! hel- i % -e$o!itor>. 1". ( ) SubDect to such regulations and bye+laws, as (ay be (ade in this behalf, a beneficial owner (ay with the pre'ious appro'al of the depository create a pledge or hypothecation in respect of a security owned by hi( through a depository0 (%) 7'ery beneficial owner shall gi'e inti(ation of such pledge or hypothecation to the depository and such depository shall thereupon (a)e entries in its records accordingly0 (3) Any entry in the records of a depository under sub+section (%) shall be e'idence of a pledge or hypothecation0 2*r i!hi ( of i for.%tio % - re'or-! ,> -e$o!itor> % - i!!*er. 1). ( ) 7'ery depository shall furnish to the issuer infor(ation about the transfer of securities in the na(e of beneficial owners at such inter'als and in such (anner as (ay be specified by the bye+laws0 (%) 7'ery issuer shall (a)e a'ailable to the depository copies of the rele'ant records in respect of securities held by such depository0 O$tio to o$t o*t i re!$e't of % > !e'*rit>.
% Substituted
by the 9epositories Related =aws (A(end(ent) Act, !!/, Sec %%, w0e0f0 "+0 + !!/0 <rior to its substitution sub+section (%) read as under , 1(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#) shall apply to the securities held by a depository on behalf of the beneficial owners02
13. ( ) If a beneficial owner see)s to opt out of a depository in respect of any security he shall infor( the depository accordingly0 (%) .he depository shall on receipt of inti(ation under sub+section ( ) (a)e appropriate entries in its records and shall infor( the issuer0 (3) 7'ery issuer shall, within thirty days of the receipt of inti(ation fro( the depository and on fulfil(ent of such conditions and on pay(ent of such fees as (ay be specified by the regulations, issue the certificate of securities to the beneficial owner or the transferee, as the case (ay be0 A't 1: of 1:91 to %$$l> to -e$o!itorie!. 15. .he 8an)ersJ 8oo)s 7'idence Act, >! shall apply in relation to a depository as if it were a ban) as defined in section % of that Act0 De$o!itorie! to i -e. if> lo!! i 'ert%i '%!e!. 18. ( ) Kithout preDudice to the pro'isions of any other law for the ti(e being in force, any loss caused to the beneficial owner due to the negligence of the depository or the participant, the depository shall inde(nify such beneficial owner0 (%) Khere the loss due to the negligence of the participant under sub+section ( ) is inde(nified by the depository, the depository shall ha'e the right to reco'er the sa(e fro( such participant0 Ri(ht! % - o,li(%tio ! of -e$o!itorie!, et'. 17. ( ) SubDect to the pro'isions of this Act, the rights and obligations of the depositories, participants and the issuers whose securities are dealt with by a depository shall be specified by the regulations0 (%) .he eligibility criteria for ad(ission of securities into the depository shall be specified by the regulations0 /@A81(0 :D EN9UIRM AND INS4ECTION 4o/er of ;o%r- to '%ll for i for.%tio % - e 7*ir>. 1:. ( ) .he 8oard, on being satisfied that it is necessary in the public interest or in the interest of in'estors so to do, (ay, by order in writing,-
(a) call upon any issuer, depository, participant or beneficial owner to furnish in writing such infor(ation relating to the securities held in a depository as it (ay re*uire3 or (b) authorise any person to (a)e an en*uiry or inspection in relation to the affairs of the issuer, beneficial owner, depository or participant, who shall sub(it a report of such en*uiry or inspection to it within such period as (ay be specified in the order0 (%) 7'ery director, (anager, partner, secretary, officer or e(ployee of the depository or issuer or the participant or beneficial owner shall on de(and produce before the person (a)ing the en*uiry or inspection all infor(ation or such records and other docu(ents in his custody ha'ing a bearing on the subDect+(atter of such en*uiry or inspection0 4o/er of ;o%r- to (i+e -ire'tio ! i 'ert%i '%!e!. 19. Sa'e as pro'ided in this Act, if after (a)ing or causing to be (ade an en*uiry or inspection, the 8oard is satisfied that it is necessary(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any depository or participant being conducted in the (anner detri(ental to the interests of in'estors or securities (ar)et, it (ay issue such directions,(a) to any depository or participant or any person associated with the securities (ar)et3 or (b) to any issuer, as (ay be appropriate in the interest of in'estors or the securities (ar)et0 )5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< $44e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 19A. Any person, who is re*uired under this Act or any rules or regulations or bye+laws (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to the 8oard, fails to furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations or bye+laws, fails to file return or furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0
3I $ Inserted
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the Securities =aws (A(end(ent) Act, %00$, Sec0 /, w0r0e0f0 %+ 0+%00$0
4e %lt> for f%il*re to e ter i to % %(ree.e t. 19;. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and is re*uired under this Act or any rules or regulations (ade thereunder, to enter into an agree(ent, fails to enter into such agree(ent, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0
4e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 19C. If any depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such depository or participant or issuer or its agents or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for -el%> i -e.%teri%li!%tio or i!!*e of 'ertifi'%te of !e'*ritie!. 19D. If any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to de(aterialise or issue the certificate of securities on opting out of a depository by the in'estors, within the ti(e specified under this Act or regulations or bye+laws (ade thereunder or abets in delaying the process of de(aterialisation or issue the certificate of securities on opting out of a depository of securities, such issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to re'o 'ile re'or-!. 19E. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to reconcile the records of de(aterialised securities with all the securities issued by the issuer as specified in the regulations, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to 'o.$l> /ith -ire'tio ! i!!*e- ,> ;o%r- * -er !e'tio 19 of the A't. 192. If any person fails to co(ply with the directions issued by the 8oard under section !, within the ti(e specified by it, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 19G. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations or bye+laws (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0 4o/er to %-G*-i'%te. 19D. ( ) 6or the purpose of adDudging under sections !A, !8, !C, !9, !7, !6 and !&, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the
sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. 190I. Khile adDudging the *uantu( of penalty under section !I, the adDudicating officer shall ha'e due regard to the following factors, na(ely,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 55 Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (!. 190IA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 19, !e'tio 19D, %! the '%!e .%> ,e, .%> file % %$$li'%tio i /riti ( to the ;o%r$ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e-ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h
"I
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re !$e'ifie- ,> the ;o%r* -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")A %(%i !t % > or-er $%!!e- ,> the ;o%r- or the %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 85 Re'o+er> of %.o* t!. 190I;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 19 or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6
%''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hilor !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C!
#I
!erte- ,> The Se'*ritie! L%/! (A.e- .e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
.o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")A of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 19, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 19E. All su(s realiFed by way of penalties under this Act shall be credited to the Consolidated 6und of India0: /@A81(0 D 4ENALTM /4Offe 'e!. "=. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws (ade thereunder, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0
/ Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 >, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %0 read as under,1%00 <ffence#0- Khoe'er contran'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or any regulations or bye+laws (ade thereunder shall be punishable with i(prison(ent for a ter( which (ay extend to fi'e years, or with fine or with both02
(%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with
fine, which (ay extend to twenty+fi'e crore rupees, or with both0: Offe 'e! ,> 'o.$% ie!. "1. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n&-6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and (b) 1director2, in relation to a fir(, (eans a partner in the fir(0 /@A81(0 D: @ISCELLANEOUS >4Co( iL% 'e of offe 'e! ,> 'o*rt!. "". ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central
> Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 !, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %% read as under,1%%0 /$gniCance $f $ffence# bF c$!rt#&*( ) Eo Court shall ta)e cogniFance of any offence punishable under this Act or any regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the 8oard0 (%) Eo court inferior to that of a ?etropolitan ?agistrate or a Dudicial ?agistrate of the first class shall try any offence punishable under this Act02
&o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or by any person0 !5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < Co.$o!itio of 'ert%i offe 'e!. ""A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "";. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any
penalty under this Act with respect to the alleged 'iolation , 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity , 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0: 1=5 E!t%,li!h.e t of S$e'i%l Co*rt!. ""C. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>.
! <rior
to o(ission, Sub+section(%) read 1Eo court inferior to that of a Court of Session shall try any offence punishable under this Act02 0 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. ""D. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-. A$$e%l % - Re+i!io ""E. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""2. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197).
(") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erioof ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! ""G. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< A$$e%l!. "). ( ) Any person aggrie'ed by an order of the 8oard (ade 4before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!: under this Act, or the regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor , 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0 (3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed , 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 %4A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")A. ( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!, under this Act, or the regulations (ade thereunder, 34or by an order (ade by an adDudicating officer under this Act: (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 $5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 8oard is recei'ed by the person referred to in sub+section ( ) and it shall be in such for( and be acco(panied by such fee as (ay be prescribed ,
Substituted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 $, w0e0f0 #+ %+ !!! for ;an order of the 8oard (ade;0 % Sections %3A to %36 inserted by the Securities =aws (Second A(end(ent) Act, !!! , Sec0 ", w0e0f0 #+ %+ !!!& 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %0, w0r0e0f0 %+ 0+%00$0 $ 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JNo %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-e ,> the ;o%r- /ith the 'o !e t of the $%rtie!.K
4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0
($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 (") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. ");. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3 (e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte; (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 Ri(ht to le(%l re$re!e t%tio . ")C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or an attorney of any Iigh Court, and
includes a pleader in practice0 Li.it%tio . ")D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 Ci+il 'o*rt ot to h%+e G*ri!-i'tio . ")E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "4A$$e%l to S*$re.e Co*rt. ")2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order ,
" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 % , w0r0e0f0 %+ 0+%00$0 <rior to its substitution, Section %36, as inserted by Securities =aws (Second A(end(ent) Act, !!!, w0e0f0 #+ %+ !!!, read as under,1%360 A%%eal t$ @igh /$!rt&-Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0:: 4o/er of Ce tr%l Go+er .e t to .%6e r*le!. "3. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for carrying out the pro'isions of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,164(a) the (anner of in*uiry under sub+section ( ) of section !I3 (aa) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %33: (b) the for( in which an appeal (ay be preferred under sub+section (3) of section %3 and the fees payable in respect of such appeal 3 (c) the procedure for disposing of an appeal under sub+section ($) of section %33 /4(d) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3A and the fees payable in respect of such appeal0: 4o/er of ;o%r- to .%6e re(*l%tio !. "5. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the 8oard (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for(a) the for( in which record is to be (aintained under clause ( i) of sub+section ( ) of section %3 (b) the for( in which the certificate of co((ence(ent of business shall be issued under
sub+section (%) of section 33 (c) the (anner in which the certificate of security shall be surrendered under sub+section ( ) of section #3 (d) the (anner of creating a pledge or hypothecation in respect of security owned by a beneficial owner under sub+section ( ) of section %3 (e) the conditions and the fees payable with respect to the issue of certificate of securities under sub+section (3) of section $3
# Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %%, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (a) read as under,1(a) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %332 / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 #, w0e0f0 #+ %+ !!!0
(f) the rights and obligations of the depositories, participants and the issuers under subsection ( ) of section /3 (g) the eligibility criteria for ad(ission of securities into the depository under sub+section (%) of section /0 4o/er of -e$o!itorie! to .%6e ,>e0l%/!. "8. ( ) A depository shall, with the pre'ious appro'al of the 8oard, (a)e bye+laws consistent with the pro'isions of this Act and the regulations0 (%) In particular, and without preDudice to the generality of the foregoing power, such byelaws shall pro'ide for(a) the eligibility criteria for ad(ission and re(o'al of securities in the depository3 (b) the conditions subDect to which the securities shall be dealt with3 (c) the eligibility criteria for ad(ission of any person as a participant3 (d) the (anner and procedure for de(aterialisation of securities3 (e) the procedure for transactions within the depository3 (f) the (anner in which securities shall be dealt with or withdrawn fro( a depository3 (g) the procedure for ensuring safeguards to protect the interests of participants and beneficial owners3 (h) the conditions of ad(ission into and withdrawal fro( a participant by a beneficial owner3 (i) the procedure for con'eying infor(ation to the participants and beneficial owners on di'idend declaration, shareholder (eetings and other (atters of interest to the beneficial owners3 (j) the (anner of distribution of di'idends, interest and (onetary benefits recei'ed fro( the co(pany a(ong beneficial owners3 (k) the (anner of creating pledge or hypothecation in respect of securities held with a depository3 (l) inter #e rights and obligations a(ong the depository, issuer, participants, and beneficial owners3 (") the (anner and the periodicity of furnishing infor(ation to the 8oard, issuer and other persons3 (n) the procedure for resol'ing disputes in'ol'ing depository, issuer, co(pany or a beneficial owner3 ($) the procedure for proceeding against the participant co((itting breach of the regulations and pro'isions for suspension and expulsion of participants fro( the depository and cancellation of agree(ents entered with the depository3 (%) the internal control standards including procedure for auditing, re'iewing and (onitoring0
(3) Khere the 8oard considers it expedient so to do, it (ay, by order in writing, direct a depository to (a)e any bye+laws or to a(end or re'o)e any bye+laws already (ade within such period as it (ay specify in this behalf0 ($) If the depository fails or neglects to co(ply with such order within the specified period, the 8oard (ay (a)e the bye+laws or a(end or re'o)e the bye+laws (ade either in the for( specified in the order or with such (odifications thereof as the 8oard thin)s fit0 R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t. "7. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. ":. .he pro'isions of this Act shall be in addition to, and not in derogation of, any other law for the ti(e being in force relating to the holding and transfer of securities0 Re.o+%l of -iffi'*ltie!. "9. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as appear to it to be necessary or expedient for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of a period of two years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 A.e -.e t! to 'ert%i e %'t.e t!. )=. 40e%ealed bF 0e%ealing H A"ending Act' 20010: Re$e%l % - !%+i (. )1. ( ) .he 9epositories (.hird) Crdinance, !!# (Crd0 %> of !!#), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 /@(5A9( 4 ee section 30: A?7E9?7E.S .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0:
SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 SECTIONS !'APT"R I 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions !'APT"R II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA
). 7stablish(ent and incorporation of 8oard 3. ?anage(ent of the 8oard 5. .er( of office and conditions of ser'ice of Chair(an and (e(bers of the 8oard 8. Re(o'al of (e(ber fro( office 7. ?eetings 7A. ?e(ber not to participate in (eetings in certain cases :. Bacancies, etc0, not to in'alidate proceedings of 8oard 9. Cfficers and e(ployees of the 8oard !'APT"R III TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD 1=. .ransfer of assets, liabilities, etc0, of existing Securities and 7xchange 8oard to the 8oard !'APT"R IV 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 11. 6unctions of 8oard 11A. 8oard to regulate or prohibit issue of prospectus, offer docu(ent or ad'ertise(ent soliciting (oney for issue of securities 11AA. Collecti'e in'est(ent sche(e 11;. <ower to issue directions 11C. In'estigation 11D. Cease and desist proceedings !'APT"R V REGISTRATION CERTI2ICATE 1". Registration of stoc) bro)ers, sub+bro)ers, share transfer agents, etc0
%
!'APT"R VA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 1"A. <rohibition of (anipulati'e and decepti'e de'ices, insider trading and substantial ac*uisition of securities or control !'APT"R VI 2INANCE, ACCOUNTS AND AUDIT 1). &rants by the Central &o'ern(ent 13. 6und 15. Accounts and audit !'APT"R VIA 4ENALTIES AND ADEUDICATION 15A. <enalty for failure to furnish infor(ation, return, etc & 15;. <enalty for failure by any person to enter into agree(ent with clients 15C. <enalty for failure to redress in'estorsJ grie'ances 15D. <enalty for certain defaults in case of (utual funds 15E. <enalty for failure to obser'e rules and regulations by an asset (anage(ent co(pany 152. <enalty for default in case of stoc) bro)ers 15G. <enalty for insider trading 15D. <enalty for non+disclosure of ac*uisition of shares and ta)eo'ers 15DA. <enalty for fraudulent and unfair trade practices 15D;. <enalty for contra'ention where no separate penalty has been pro'ided
150I. <ower to adDudicate 15E. 6actors to be ta)en into account by the AdDudicating Cfficer 15EA. Crediting su(s realised by way of penalties to Consolidated 6und of India 15E;. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! !'APT"R VIB ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL 15F. 7stablish(ent of Securities Appellate .ribunals 15L. Co(position of Securities Appellate .ribunal 15@. Qualification for appoint(ent as <residing Cfficer or ?e(ber of Securities Appellate .ribunal
3
15N. .enure of office of <residing Cfficer and other (e(bers of Securities Appellate .ribunal 150O. Salary and allowances and other ter(s and conditions of ser'ice of <residing Cfficers 154. 6illing up of 'acancies 159. Resignation and re(o'al 15R. Crders constituting Appellate .ribunal to be final and not to in'alidate its proceedings 15S. Staff of the Securities Appellate .ribunal 15T. Appeal to the Securities Appellate .ribunal 15U. <rocedure and powers of the Securities Appellate .ribunal 15I. Right to legal representation 15?. =i(itation 15A. <residing Cfficer, (e(bers and staff of Securities Appellate .ribunals to be public ser'ants 15M. Ci'il Court not to ha'e Durisdiction 15N. Appeal to Supre(e Court !'APT"R VII @ISCELLANEOUS 18. <ower of Central &o'ern(ent to issue directions 17. <ower of Central &o'ern(ent to supersede the 8oard 1:. Returns and reports 19. 9elegation "=. Appeals "=A. 8ar of Durisdiction "1. Sa'ings "". ?e(bers, officers and e(ployees of the 8oard to be public ser'ants "). <rotection of action ta)en in good faith "3. Cffences "3A. Co(position of certain offences "3;. <ower to grant i((unity "5. 7xe(ption fro( tax on wealth and inco(e "8. CogniFance of offences by Courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! "7. Cffences by co(panies
":. 4C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!":
$
":A. Re'o+er> of %.o* t! "9. <ower to (a)e rules )=. <ower to (a)e regulations )1. Rules and regulations to be laid before <arlia(ent )". Application of other laws not barred )). 4Repealed by Repealing R A(ending Act, %00 : )3. <ower to re(o'e difficulties )5. Repeal and sa'ing .I7 SCI79H=7 4Repealed by Repealing R A(ending Act, %00 : SECURITIES AND EACDANGE ;OARD O2 INDIA ACT, 199" 515 O2 199"< 53th A$ril, 199"< A A't to $ro+i-e for the e!t%,li!h.e t of % ;o%r- to $rote't the i tere!t! of i +e!tor! i !e'*ritie! % - to $ro.ote the -e+elo$.e t of, % - to re(*l%te, the !e'*ritie! .%r6et % - for .%tter! 'o e'te- there/ith or i 'i-e t%l thereto B( it enacted bF 8arlia"ent in the E$rtF7third ;ear $f the 0e%!blic $f :ndia a# f$ll$.# , CDA4TER I 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities and 7xchange 8oard of India Act, !!%0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the 30th day of Manuary, !!%0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 33 (b) 1Chair(an2 (eans the Chair(an of the 8oard3 4(ba) 1collecti'e in'est(ent sche(e2 (eans any sche(e or arrange(ent which satisfies the conditions specified in section AA3: (c) 1existing Securities and 7xchange 8oard2 (eans the Securities and 7xchange 8oard of India constituted under the Resolution of the &o'ern(ent of India in the 9epart(ent of 7cono(ic Affairs Eo0 ($$) S7L>#, dated the %th day of April, !>>3 (d) 16und2 (eans the 6und constituted under section $3 (e) 1(e(ber2 (eans a (e(ber of the 8oard and includes the Chair(an3 (f) 1notification2 (eans a notification published in the Cfficial &aFette3 (g) 1prescribed2 (eans prescribed by rules (ade under this Act3
Inserted by the Securities =aws (A(end(ent) Act, !!!, w0e0f0 %%+%+%0000
"
(h) 1regulations2 (eans the regulations (ade by the 8oard under this Act3 4(ha) 1Reser'e 8an)2 (eans the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)3: (i) 1securities2 has the (eaning assigned to it in section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#)0 %4(%) Kords and expressions used and not defined in this Act but defined in the Securities Contracts (Regulation) Act, !"# ($% of !"#) 34or the 9epositories Act, !!#:, shall ha'e the (eanings respecti'ely assigned to the( in that Act:0 CDA4TER II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA E!t%,li!h.e t % - i 'or$or%tio of ;o%r-.
). ( ) Kith effect fro( such date as the Central &o'ern(ent (ay, by notification, appoint, there shall be established, for the purposes of this Act, a 8oard by the na(e of the Securities and 7xchange 8oard of India0 (%) .he 8oard shall be a body corporate by the na(e aforesaid, ha'ing perpetual succession and a co((on seal, with power subDect to the pro'isions of this Act, to ac*uire, hold and dispose of property, both (o'able and i((o'able, and to contract, and shall, by the said na(e, sue or be sued0 (3) .he head office of the 8oard shall be at 8o(bay0 ($) .he 8oard (ay establish offices at other places in India0 @% %(e.e t of the ;o%r-. 3. ( ) .he 8oard shall consist of the following (e(bers, na(ely,(a) a Chair(an3 (b) two (e(bers fro( a(ongst the officials of the $4?inistry: of the Central &o'ern(ent dealing with 6inance "4and ad(inistration of the Co(panies Act, !"# ( of !"#):3 (c) one (e(ber fro( a(ongst the officials of #4the Reser'e 8an):3 /4(d) fi'e other (e(bers of who( at least three shall be the whole+ti(e (e(bers,: to be appointed by the Central &o'ern(ent0
Inserted by the Securities =aws (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0 <rior to its substitution, sub+section (%) reads as under, 1(%) Kords and expressions used and not defined in this Act but defined in the Capital Issues (Control) Act, !$/ or the Securities Contracts Regulation Act, !"# shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts02 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 $ Substituted for 1?inistries2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1and law2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act !3$ (% of !3$)2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 / Substituted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, clause (d) read as, 1(d) two other (e(bers20
% Substituted
#
(%) .he general superintendence, direction and (anage(ent of the affairs of the 8oard shall 'est in a 8oard of (e(bers, which (ay exercise all powers and do all acts and things which (ay be exercised or done by the 8oard0 (3) Sa'e as otherwise deter(ined by regulations, the Chair(an shall also ha'e powers of general superintendence and direction of the affairs of the 8oard and (ay also exercise all powers and do all acts and things which (ay be exercised or done by that 8oard0 ($) .he Chair(an and (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be appointed by the Central &o'ern(ent and the (e(bers referred to in clauses ( b) and (c) of that sub+section shall be no(inated by the Central &o'ern(ent and the 4Reser'e 8an): respecti'ely0 (") .he Chair(an and the other (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be persons of ability, integrity and standing who ha'e shown capacity in dealing with proble(s relating to securities (ar)et or ha'e special )nowledge or experience of law, finance, econo(ics, accountancy, ad(inistration or in any other discipline which, in the opinion of the Central &o'ern(ent, shall be useful to the 8oard0 Ter. of offi'e % - 'o -itio ! of !er+i'e of Ch%ir.% % - .e.,er! of the ;o%r-. 5. ( ) .he ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers referred to in clause (d) of sub+section ( ) of section $ shall be such as (ay be prescribed0 (%) Eotwithstanding anything contained in sub+section ( ), the Central &o'ern(ent shall ha'e the right to ter(inate the ser'ices of the Chair(an or a (e(ber appointed under clause ( d) of
sub+section ( ) of section $, at any ti(e before the expiry of the period prescribed under subsection ( ), by gi'ing hi( notice of not less than three (onths in writing or three (onthsJ salary and allowances in lieu thereof, and the Chair(an or a (e(ber, as the case (ay be, shall also ha'e the right to relin*uish his office, at any ti(e before the expiry of the period prescribed under sub+section ( ), by gi'ing to the Central &o'ern(ent notice of not less than three (onths in writing0 Re.o+%l of .e.,er fro. offi'e. 8. %4G G G: .he Central &o'ern(ent shall re(o'e a (e(ber fro( office if he(a) is, or at any ti(e has been, adDudicated as insol'ent3 (b) is of unsound (ind and stands so declared by a co(petent court3 (c) has been con'icted of an offence which, in the opinion of the Central &o'ern(ent, in'ol'es a (oral turpitude3 (d) 34G G G: (e) has, in the opinion of the Central &o'ern(ent, so abused his position as to render his continuation in office detri(ental to the public interest , 4ro+i-e- that no (e(ber shall be re(o'ed under this clause unless he has been gi'en a reasonable opportunity of being heard in the (atter0
Substituted for 1Reser'e 8an) of India2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 )2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 C(itted, by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to o(ission clause (d) read read as, 1(d) is appointed as a director of a co(pany20
% 1(
/
@eeti (!. 7. ( ) .he 8oard shall (eet at such ti(es and places, and shall obser'e such rules of procedure in regard to the transaction of business at its (eetings (including *uoru( at such (eetings) as (ay be pro'ided by regulations0 (%) .he Chair(an or, if for any reason, he is unable to attend a (eeting of the 8oard, any other (e(ber chosen by the (e(bers present fro( a(ongst the(sel'es at the (eeting shall preside at the (eeting0 (3) All *uestions which co(e up before any (eeting of the 8oard shall be decided by a (aDority 'otes of the (e(bers present and 'oting, and, in the e'ent of an e*uality of 'otes, the Chair(an, or in his absence, the person presiding, shall ha'e a second or casting 'ote0 4@e.,er ot to $%rti'i$%te i .eeti (! i 'ert%i '%!e!. 7A. Any (e(ber, who is a director of a co(pany and who as such director has any direct or indirect pecuniary interest in any (atter co(ing up for consideration at a (eeting of the 8oard, shall, as soon as possible after rele'ant circu(stances ha'e co(e to his )nowledge, disclose the nature of his interest at such (eeting and such disclosure shall be recorded in the proceedings of the 8oard, and the (e(ber shall not ta)e any part in any deliberation or decision of the 8oard with respect to that (atter0: I%'% 'ie!, et'., ot to i +%li-%te $ro'ee-i (! of ;o%r-. :. Eo act or proceeding of the 8oard shall be in'alid (erely by reason of(a) any 'acancy in, or any defect in the constitution of, the 8oard3 or (b) any defect in the appoint(ent of a person acting as a (e(ber of the 8oard3 or (c) any irregularity in the procedure of the 8oard not affecting the (erits of the case0 Offi'er! % - e.$lo>ee! of the ;o%r-. 9. ( ) .he 8oard (ay appoint such other officers and e(ployees as it considers necessary for the efficient discharge of its functions under this Act0 (%) .he ter( and other conditions of ser'ice of officers and e(ployees of the 8oard appointed under sub+section ( ) shall be such as (ay be deter(ined by regulations0 CDA4TER III
TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD Tr% !fer of %!!et!, li%,ilitie!, et'., of e#i!ti ( Se'*ritie! % - E#'h% (e ;o%r- to the ;o%r-. 1=. ( ) Cn and fro( the date of establish(ent of the 8oard,(a) any reference to the existing Securities and 7xchange 8oard in any law other than this Act or in any contract or other instru(ent shall be dee(ed as a reference to the 8oard3 (b) all properties and assets, (o'able and i((o'able, of, or belonging to, the existing Securities and 7xchange 8oard, shall 'est in the 8oard3
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
>
(c) all rights and liabilities of the existing Securities and 7xchange 8oard shall be transferred to, and be the rights and liabilities of, the 8oard3 (d) without preDudice to the pro'isions of clause (c), all debts, obligations and liabilities incurred, all contracts entered into and all (atters and things engaged to be done by, with or for the existing Securities and 7xchange 8oard i((ediately before that date, for or in connection with the purpose of the said existing 8oard shall be dee(ed to ha'e been incurred, entered into, or engaged to be done by, with or for, the 8oard3 (e) all su(s of (oney due to the existing Securities and 7xchange 8oard i((ediately before that date shall be dee(ed to be due to the 8oard3 (f) all suits and other legal proceedings instituted or which could ha'e been instituted by or against the existing Securities and 7xchange 8oard i((ediately before that date (ay be continued or (ay be instituted by or against the 8oard3 and (g) e'ery e(ployee holding any office under the existing Securities and 7xchange 8oard i((ediately before that date shall hold his office in the 8oard by the sa(e tenure and upon the sa(e ter(s and conditions of ser'ice as respects re(uneration, lea'e, pro'ident fund, retire(ent and other ter(inal benefits as he would ha'e held such office if the 8oard had not been established and shall continue to do so as an e(ployee of the 8oard or until the expiry of the period of six (onths fro( that date if such e(ployee opts not to be the e(ployee of the 8oard within such period0 (%) Eotwithstanding anything contained in the Industrial 9isputes Act, !$/ ( $ of !$/), or in any other law for the ti(e being in force, absorption of any e(ployee by the 8oard in its regular ser'ice under this section shall not entitle such e(ployee to any co(pensation under that Act or other law and no such clai( shall be entertained by any court, tribunal or other authority0 CDA4TER II 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 2* 'tio ! of ;o%r-. 11. ( ) SubDect to the pro'isions of this Act, it shall be the duty of the 8oard to protect the interests of in'estors in securities and to pro(ote the de'elop(ent of, and to regulate the securities (ar)et, by such (easures as it thin)s fit0 (%) Kithout preDudice to the generality of the foregoing pro'isions, the (easures referred to therein (ay pro'ide for(a) regulating the business in stoc) exchanges and any other securities (ar)ets3 (b) registering and regulating the wor)ing of stoc) bro)ers, sub+bro)ers, share transfer agents, ban)ers to an issue, trustees of trust deeds, registrars to an issue, (erchant ban)ers, underwriters, portfolio (anagers, in'est(ent ad'isers and such other inter(ediaries who (ay be associated with securities (ar)ets in any (anner3 4(ba) registering and regulating the wor)ing of the depositories, %4participants:, custodians of securities, foreign institutional in'estors, credit rating agencies and such other inter(ediaries as the 8oard (ay, by notification, specify in this behalf3: (c) registering and regulating the wor)ing of 4'enture capital funds and collecti'e
in'est(ent sche(es:, including (utual funds3
% Inserted
Inserted by Securities =aws (A(end(ent) Act !!", w0r0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+!+ !!"0
!
(d) pro(oting and regulating self+regulatory organisations3 (e) prohibiting fraudulent and unfair trade practices relating to securities (ar)ets3 (f) pro(oting in'estorsJ education and training of inter(ediaries of securities (ar)ets3 (g) prohibiting insider trading in securities3 (h) regulating substantial ac*uisition of shares and ta)e o'er of co(panies3 (i) calling for infor(ation fro(, underta)ing inspection, conducting in*uiries and audits of the %4stoc) exchanges, (utual funds, other persons associated with the securities (ar)et:, inter(ediaries and self+regulatory organisations in the securities (ar)et3 34(ia) '%lli ( for i for.%tio % - re'or-! fro. % > $er!o i 'l*-i ( % > ,% 6 or % > other %*thorit> or ,o%r- or 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l or St%te A't /hi'h, i the o$i io of the ;o%r-, !h%ll ,e rele+% t to % > i +e!ti(%tio or i 7*ir> ,> the ;o%r- i re!$e't of % > tr% !%'tio i !e'*ritie! 3: $5(i,) '%lli ( for i for.%tio fro., or f*r i!hi ( i for.%tio to, other %*thoritie!, /hether i I -i% or o*t!i-e I -i%, h%+i ( f* 'tio ! !i.il%r to tho!e of the ;o%r-, i the .%tter! rel%ti ( to the $re+e tio or -ete'tio of +iol%tio ! i re!$e't of !e'*ritie! l%/!, !*,Ge't to the $ro+i!io ! of other l%/! for the ti.e ,ei ( i for'e i thi! re(%r-& 4ro+i-e- th%t the ;o%r-, for the $*r$o!e of f*r i!hi ( % > i for.%tio to % > %*thorit> o*t!i-e I -i%, .%> e ter i to % %rr% (e.e t or %(ree.e t or * -er!t% -i ( /ith !*'h %*thorit> /ith the $rior %$$ro+%l of the Ce tr%l Go+er .e tH< (j) perfor(ing such functions and exercising such powers under the pro'isions of "4G G G: the Securities Contracts (Regulation) Act, !"# ($% of !"#), as (ay be delegated to it by the Central &o'ern(ent3 (k) le'ying fees or other charges for carrying out the purposes of this section3 (l) conducting research for the abo'e purposes3 #4(la) calling fro( or furnishing to any such agencies, as (ay be specified by the 8oard, such infor(ation as (ay be considered necessary by it for the efficient discharge of its functions3: (") perfor(ing such other functions as (ay be prescribed0 /4(%A) Kithout preDudice to the pro'isions contained in sub+section (%), the 8oard (ay ta)e (easures to underta)e inspection of any boo), or register, or other docu(ent or record of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard
Substituted for 1collecti'e in'est(ent sche(es2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % Substituted for 1stoc) exchanges and2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 S*,!tit*te- for J'%lli ( for i for.%tio % - re'or- fro. % > ,% 6 or % > other %*thorit> or ,o%ror 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l, St%te or 4ro+i 'i%l A't i re!$e't of % > tr% !%'tio i !e'*ritie! /hi'h i! * -er i +e!ti(%tio or i 7*ir> ,> the ;o%r-K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). E%rlier Se'tio 11(")(i%) /%! i !erte- ,> the SE;I (A.e -.e t) A't, "==" /.e.f. "901=0"=="0 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. =80=)0 199:) " .he words 1the Capital Issues (Control) Act, !$/ (%! of !$/) and2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
0
has reasonable grounds to belie'e that such co(pany has been indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et0: 4(3) Eotwithstanding anything contained in any other law for the ti(e being in force while exercising the powers under %4clause (i) or clause (ia) of sub+section (%) or sub+ section (2A):, the 8oard shall ha'e the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(i) the disco'ery and production of boo)s of account and other docu(ents, at such place and such ti(e as (ay be specified by the 8oard3 (ii) su((oning and enforcing the attendance of persons and exa(ining the( on oath3 (iii) inspection of any boo)s, registers and other docu(ents of any person referred to in section %, at any place3: 34(iv) inspection of any boo), or register, or other docu(ent or record of the co(pany referred to in sub+section (%A)3 (v) issuing co((issions for the exa(ination of witnesses or docu(ents0: $4($) Kithout preDudice to the pro'isions contained in sub+sections ( ), (%), (%A) and (3) and section 8, the 8oard (ay, by an order, for reasons to be recorded in writing, in the interests of in'estors or securities (ar)et, ta)e any of the following (easures, either pending in'estigation or in*uiry or on co(pletion of such in'estigation or in*uiry, na(ely,(a) suspend the trading of any security in a recognised stoc) exchange3 (b) restrain persons fro( accessing the securities (ar)et and prohibit any person associated with securities (ar)et to buy, sell or deal in securities3 (c) suspend any office+bearer of any stoc) exchange or self+regulatory organisation fro( holding such position3 (d) i(pound and retain the proceeds or securities in respect of any transaction which is under in'estigation3 (e) attach, after passing of an order on an application (ade for appro'al by the Mudicial ?agistrate of the first class ha'ing Durisdiction, for a period not exceeding one (onth, one or (ore ban) account or accounts of any inter(ediary or any person associated with the securities (ar)et in any (anner in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder , 4ro+i-e- that only the ban) account or accounts or any transaction entered therein, so far as it relates to the proceeds actually in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder shall be allowed to be attached3 (f) direct any inter(ediary or any person associated with the securities (ar)et in any (anner not to dispose of or alienate an asset for(ing part of any transaction which is under in'estigation , 4ro+i-e- that the 8oard (ay, without preDudice to the pro'isions contained in sub+section (%) or sub+section (%A), ta)e any of the (easures specified in clause ( d) or clause (e) or clause (f), in respect of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard has reasonable grounds to belie'e that such co(pany has been
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1clause (i) of sub+section (%)2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 3 Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 $ Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
% Substituted
indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et , 4ro+i-e- f*rther that the 8oard shall, either before or after passing such orders, gi'e an
opportunity of hearing to such inter(ediaries or persons concerned0: 15(5) The %.o* t -i!(or(e-, $*r!*% t to % -ire'tio i!!*e- * -er !e'tio 11; or !e'tio 1"A of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 or !e'tio 19 of the De$o!itorie! A't, 1998, %! the '%!e .%> ,e, !h%ll ,e 're-ite- to the I +e!tor 4rote'tio % - E-*'%tio 2* e!t%,li!he- ,> the ;o%r- % - !*'h %.o* t !h%ll ,e *tiliLe- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< %4;o%r- to re(*l%te or $rohi,it i!!*e of $ro!$e't*!, offer -o'*.e t or %-+erti!e.e t !oli'iti ( .o e> for i!!*e of !e'*ritie!. 11A. ( ) Kithout preDudice to the pro'isions of the Co(panies Act, !"# ( of !"#), the 8oard (ay, for the protection of in'estors,(a) specify, by regulations(i) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (ii) the (anner in which such (atters shall be disclosed by the co(panies3 (b) by general or special orders(i) prohibit any co(pany fro( issuing prospectus, any offer docu(ent, or ad'ertise(ent soliciting (oney fro( the public for the issue of securities3 (ii) specify the conditions subDect to which the prospectus, such offer docu(ent or ad'ertise(ent, if not prohibited, (ay be issued0 (%) Kithout preDudice to the pro'isions of section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the 8oard (ay specify the re*uire(ents for listing and transfer of securities and other (atters incidental thereto0: 34Colle'ti+e i +e!t.e t !'he.e. 11AA. ( ) Any sche(e or arrange(ent which satisfies the conditions referred to in subsection (%) $5or !*,0!e'tio ("A)< shall be a collecti'e in'est(ent sche(e0 "44ro+i-e- th%t % > $ooli ( of f* -! * -er % > !'he.e or %rr% (e.e t, /hi'h i! ot re(i!tere- /ith the ;o%r- or i! ot 'o+ere- * -er !*,0!e'tio ()), i +ol+i ( %
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 7arlier S0 A was inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" for S0 A0 <rior to its substitution, S0 A read as under,+ 1 A0 ?atters to be disclosed by the co(panies0+ Kithout <reDudice to the <ro'isions of the Co(panies Act , !"# ( of !"#), the board (ay , for the protection of in'estors, specify, by regulations,+ (a) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (b) the (anner in which such (atters, shall be disclosed by the co(panies02 3 Inserted by S78I (A(end(ent) Act !!!, w0e0f0 %%+%+%0000 $I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% Substituted
%
'or$*! %.o* t of o e h* -re- 'rore r*$ee! or .ore !h%ll ,e -ee.e- to ,e % 'olle'ti+e i +e!t.e t !'he.e.< (%) Any sche(e or arrange(ent (ade or offered by any 5$er!o < under which,(i) the contributions, or pay(ents (ade by the in'estors, by whate'er na(e called, are pooled and utiliFed for the purposes of the sche(e or arrange(ent3 (ii) the contributions or pay(ents are (ade to such sche(e or arrange(ent by the in'estors with a 'iew to recei'e profits, inco(e, produce or property, whether (o'able or i((o'able, fro( such sche(e or arrange(ent3 (iii) the property, contribution or in'est(ent for(ing part of sche(e or arrange(ent, whether identifiable or not, is (anaged on behalf of the in'estors3
(iv) the in'estors do not ha'e day+to+day control o'er the (anage(ent and operation of the sche(e or arrange(ent0 "5("A)< A > !'he.e or %rr% (e.e t .%-e or offere- ,> % > $er!o !%ti!f>i ( the 'o -itio ! %! .%> ,e !$e'ifie- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< (3) Eotwithstanding anything contained in sub+section (%) 35or !*,0!e'tio ("A)<, any sche(e or arrange(ent(i) (ade or offered by a co+operati'e society registered under the Co+operati'e Societies Act, ! % (% of ! %) or a society being a society registered or dee(ed to be registered under any law relating to co+operati'e societies for the ti(e being in force in any State3 (ii) under which deposits are accepted by non+ban)ing financial co(panies as defined in clause (f) of section $"+I of the Reser'e 8an) of India Act, !3$ (% of !3$)3 (iii) being a contract of insurance to which the Insurance Act, !3> ($ of !3>), applies3 (iv) pro'iding for any Sche(e, <ension Sche(e or the Insurance Sche(e fra(ed under the 7(ployees <ro'ident 6und and ?iscellaneous <ro'isions Act, !"% ( ! of !"%)3 (v) under which deposits are accepted under section ">A of the Co(panies Act, !"# ( of !"#)3 (vi) under which deposits are accepted by a co(pany declared as a Eidhi or a (utual benefit society under section #%0A of the Co(panies Act, !"# ( of !"#)3 (vii) falling within the (eaning of Chit business as defined in clause ( d) of section % of the Chit 6und Act, !>% ($0 of !>%)3 (viii) under which contributions (ade are in the nature of subscription to a (utual fund3 35(i#) !*'h other !'he.e or %rr% (e.e t /hi'h the Ce tr%l Go+er .e t .%>, i 'o !*lt%tio /ith the ;o%r-, otif>H< shall not be a collecti'e in'est(ent sche(e0: "54o/er to i!!*e -ire'tio !. 11;. Sa'e as otherwise pro'ided in section , if after (a)ing or causing to be (ade an en*uiry, the 8oard is satisfied that it is necessary,S*,!tit*te- for J'o.$% >K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) 3I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
%I
3
(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any inter(ediary or other persons referred to in section % being conducted in a (anner detri(ental to the interest of in'estors or securities (ar)et3 or (iii) to secure the proper (anage(ent of any such inter(ediary or person, it (ay issue such directions,(a) to any person or class of persons referred to in section %, or associated with the securities (ar)et3 or (b) to any co(pany in respect of (atters specified in section A, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 15E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< %4I +e!ti(%tio . 11C. ( ) Khere the 8oard has reasonable ground to belie'e that-
(a) the transactions in securities are being dealt with in a (anner detri(ental to the in'estors or the securities (ar)et3 or (b) any inter(ediary or any person associated with the securities (ar)et has 'iolated any of the pro'isions of this Act or the rules or the regulations (ade or directions issued by the 8oard thereunder, it (ay, at any ti(e by order in writing, direct any person (hereafter in this section referred to as the In'estigating Authority) specified in the order to in'estigate the affairs of such inter(ediary or persons associated with the securities (ar)et and to report thereon to the 8oard0 (%) Kithout preDudice to the pro'isions of sections %3" to %$ of the Co(panies Act, !"# ( of !"#), it shall be the duty of e'ery (anager, (anaging director, officer and other e(ployee of the co(pany and e'ery inter(ediary referred to in section % or e'ery person associated with the securities (ar)et to preser'e and to produce to the In'estigating Authority or any person authorised by it in this behalf, all the boo)s, registers, other docu(ents and record of, or relating to, the co(pany or, as the case (ay be, of or relating to, the inter(ediary or such person, which are in their custody or power0 (3) .he In'estigating Authority (ay re*uire any inter(ediary or any person associated with securities (ar)et in any (anner to furnish such infor(ation to, or produce such boo)s, or registers, or other docu(ents, or record before hi( or any person authorised by it in this behalf as it (ay consider necessary if the furnishing of such infor(ation or the production of such boo)s, or registers, or other docu(ents, or record is rele'ant or necessary for the purposes of its in'estigation0 ($) .he In'estigating Authority (ay )eep in its custody any boo)s, registers, other docu(ents and record produced under sub+section (%) or sub+section (3) for six (onths and thereafter
% Inserted
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
$
shall return the sa(e to any inter(ediary or any person associated with securities (ar)et by who( or on whose behalf the boo)s, registers, other docu(ents and record are produced , 4ro+i-e- that the In'estigating Authority (ay call for any boo), register, other docu(ent and record if they are needed again , 4ro+i-e- f*rther that if the person on whose behalf the boo)s, registers, other docu(ents and record are produced re*uires certified copies of the boo)s, registers, other docu(ents and record produced before the In'estigating Authority, it shall gi'e certified copies of such boo)s, registers, other docu(ents and record to such person or on whose behalf the boo)s, registers, other docu(ents and record were produced0 (") Any person, directed to (a)e an in'estigation under sub+section ( ), (ay exa(ine on oath, any (anager, (anaging director, officer and other e(ployee of any inter(ediary or any person associated with securities (ar)et in any (anner, in relation to the affairs of his business and (ay ad(inister an oath accordingly and for that purpose (ay re*uire any of those persons to appear before it personally0 (#) If any person fails without reasonable cause or refuses(a) to produce to the In'estigating Authority or any person authorised by it in this behalf any boo), register, other docu(ent and record which is his duty under sub+section (%) or sub+section (3) to produce3 or (b) to furnish any infor(ation which is his duty under sub+section (3) to furnish3 or (c) to appear before the In'estigating Authority personally when re*uired to do so under sub+section (") or to answer any *uestion which is put to hi( by the In'estigating Authority in pursuance of that sub+section3 or (d) to sign the notes of any exa(ination referred to in sub+section (/), he shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with
fine, which (ay extend to one crore rupees, or with both, and also with a further fine which (ay extend to fi'e la)h rupees for e'ery day after the first during which the failure or refusal continues0 (/) Eotes of any exa(ination under sub+section (") shall be ta)en down in writing and shall be read o'er to, or by, and signed by, the person exa(ined, and (ay thereafter be used in e'idence against hi(0 4(:) ?here i the 'o*r!e of % i +e!ti(%tio , the I +e!ti(%ti ( A*thorit> h%! re%!o to ,elie+e th%t % > $er!o or e ter$ri!e, %! the '%!e .%> ,e, to /ho. % oti'e * -er !*,!e'tio ()) h%! ,ee i!!*e- or .i(ht ,e i!!*e-, 0 (%) h%! o.itte- or f%ile- to $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! %! re7*irei the oti'eH or (,) /o*l- ot $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! /hi'h !h%ll ,e *!ef*l for, or rele+% t to, the i +e!ti(%tio H or (') /o*l- -e!tro>, .*til%te, %lter, f%l!if> or !e'rete the i for.%tio or -o'*.e t! *!ef*l for, or rele+% t to, the i +e!ti(%tio ,
S*,!tit*te- for JKhere in the course of in'estigation, the In'estigating Authority has reasonable ground to belie'e that the boo)s, registers, other docu(ents and record of, or relating to, any inter(ediary or any person associated with securities (ar)et in any (anner, (ay be destroyed, (utilated, altered, falsified or secreted, the In'estigating Authority (ay (a)e an application to the Mudicial ?agistrate of the first class ha'ing Durisdiction for an order for the seiFure of such boo)s, registers, other docu(ents and record K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
"
the , the Ch%ir.% .%>, %fter ,ei ( !%ti!fie- th%t it i! e'e!!%r> to -o !o, %*thoriLe the I +e!ti(%ti ( A*thorit> or % > other offi'er of the ;o%r- (the offi'er !o %*thoriLe- i %ll '%!e! ,ei ( herei %fter referre- to %! the %*thori!e- offi'er), to0 (i) e ter % - !e%r'h, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft /here !*'h i for.%tio or -o'*.e t! %re e#$e'te- or ,elie+e- to ,e 6e$tH (ii) ,re%6 o$e the lo'6 of % > -oor, ,o#, lo'6er, !%fe, %l.ir%h or other re'e$t%'le for e#er'i!i ( the $o/er! 'o ferre- ,> !*,0'l%*!e (i), /here the 6e>! thereof %re ot %+%il%,leH (iii) !e%r'h % > $er!o /ho h%! (ot o*t of, or i! %,o*t to (et i to, or i! i , the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft, if the %*thoriLe- offi'er h%! re%!o to !*!$e't th%t !*'h $er!o h%! !e'rete- %,o*t hi! $er!o % > !*'h ,oo6! of %''o* t or other -o'*.e t!H (i+) re7*ire % > $er!o /ho i! fo* - to ,e i $o!!e!!io or 'o trol of % > ,oo6! of %''o* t or other -o'*.e t!, .%i t%i e- i the for. of ele'tro i' re'or-, to $ro+i-e the %*thori!e- offi'er the e'e!!%r> f%'ilit> to i !$e't !*'h ,oo6! of %''o* t or other -o'*.e t!. "#planation0 2or the $*r$o!e of thi! !*,0'l%*!e, the e#$re!!io Jele'tro i' re'or-K !h%ll h%+e the .e% i ( %!!i( e- to it i 'l%*!e (t) of !*,0!e'tio (1) of !e'tio " of the I for.%tio Te'h olo(> A't, "===. (+) !eiLe % > !*'h ,oo6! of %''o* t or other -o'*.e t! fo* - %! % re!*lt of !*'h !e%r'hH (+i) $l%'e .%r6! of i-e tifi'%tio o % > ,oo6! of %''o* t or other -o'*.e t! or .%6e or '%*!e to ,e .%-e e#tr%'t! or 'o$ie! therefro.H (+ii) re'or- o o%th the !t%te.e t of % > $er!o /ho i! fo* - to ,e i $o!!e!!io or i 'o trol of the i for.%tio or -o'*.e t! referre- to i !*,0'l%*!e! (i), (iii) % - (i+).< 4(9) The ;o%r- .%> .%6e re(*l%tio ! i rel%tio to % > !e%r'h or !eiL*re * -er thi! !e'tio H % - i $%rti'*l%r, /itho*t $reG*-i'e to the (e er%lit> of the fore(oi ( $o/er, !*'h re(*l%tio ! .%> $ro+i-e for the $ro'e-*re to ,e follo/e- ,> the %*thori!e- offi'er0
(%) for o,t%i i ( i (re!! i to % > ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft to ,e !e%r'he- /here free i (re!! thereto i! ot %+%il%,leH
1 S*,!tit*te-
,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) for the follo/i (& JAfter 'o !i-eri ( the %$$li'%tio % - he%ri ( the I +e!ti(%ti ( A*thorit>, if e'e!!%r>, the @%(i!tr%te .%>, ,> or-er, %*thori!e the I +e!ti(%ti ( A*thorit>O (a) to e ter, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the $l%'e or $l%'e! /here !*'h ,oo6!, re(i!ter!, other -o'*.e t! % - re'or- %re 6e$tH (b) to !e%r'h th%t $l%'e or tho!e $l%'e! i the .% er !$e'ifie- i the or-erH % (c) to !eiLe ,oo6!, re(i!ter!, other -o'*.e t! % - re'or-, it 'o !i-er! e'e!!%r> for the $*r$o!e! of the i +e!ti(%tio & 4ro+i-e- th%t the @%(i!tr%te !h%ll ot %*thori!e !eiL*re of ,oo6!, re(i!ter!, other -o'*.e t! % re'or-, of % > li!te- $*,li' 'o.$% > or % $*,li' 'o.$% > ( ot ,ei ( the i ter.e-i%rie! !$e'ifie* -er !e'tio 1") /hi'h i te -! to (et it! !e'*ritie! li!te- o % > re'o( i!e- !to'6 e#'h% (e * le!! !*'h 'o.$% > i -*l(e! i i !i-er tr%-i ( or .%r6et .% i$*l%tio .K
#
(,) for e !*ri ( !%fe '*!to-> of % > ,oo6! of %''o* t or other -o'*.e t! or %!!et! !eiLe-.< ( 0) .he In'estigating Authority shall )eep in its custody the boo)s, registers, other docu(ents and record seiFed under this section for such period not later than the conclusion of the in'estigation as it considers necessary and thereafter shall return the sa(e to the co(pany or the other body corporate, or, as the case (ay be, to the (anaging director or the (anager or any other person, fro( whose custody or power they were seiFed 5***<, 4ro+i-e- that the In'estigating Authority (ay, before returning such boo)s, registers, other docu(ents and record as aforesaid, place identification (ar)s on the( or any part thereof0 ( ) Sa'e as otherwise pro'ided in this section, e'ery search or seiFure (ade under this section shall be carried out in accordance with the pro'isions of the Code of Cri(inal <rocedure, !/3 (% of !/$) relating to searches or seiFures (ade under that Code0 Ce%!e % - -e!i!t $ro'ee-i (!. 11D. If the 8oard finds, after causing an in*uiry to be (ade, that any person has 'iolated, or is li)ely to 'iolate, any pro'isions of this Act, or any rules or regulations (ade thereunder, it (ay pass an order re*uiring such person to cease and desist fro( co((itting or causing such 'iolation, 4ro+i-e- that the 8oard shall not pass such order in respect of any listed public co(pany or a public co(pany (other than the inter(ediaries specified under section %) which intends to get its securities listed on any recognised stoc) exchange unless the 8oard has reasonable grounds to belie'e that such co(pany has indulged in insider trading or (ar)et (anipulation0: CDA4TER I REGISTRATION CERTI2ICATE Re(i!tr%tio of !to'6 ,ro6er!, !*,0,ro6er!, !h%re tr% !fer %(e t!, et'. 1". ( ) Eo stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et shall buy, sell or deal in securities except under, and in accordance with, the conditions of a certificate of registration obtained fro( the 8oard in accordance with the %4regulations: (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et i((ediately before the establish(ent of the 8oard for which no registration certificate was
necessary prior to such establish(ent, (ay continue to do so for a period of three (onths fro( such establish(ent or, if he has (ade an application for such registration within the said period of three (onths, till the disposal of such application,
The /or-! P% - i for. the @%(i!tr%te of !*'h ret*r P, o.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) % Substituted for 1rules2 by Securities =aw (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0
/
44ro+i-e- f*rther that any certificate of registration, obtained i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", shall be dee(ed to ha'e been obtained fro( the 8oard in accordance with the regulations pro'iding for such registration0 ( A) Eo depository, %4participant,: custodian of securities, foreign institutional in'estor, credit rating agency, or any other inter(ediary associated with the securities (ar)et as the 8oard (ay by notification in this behalf specify, shall buy or sell or deal in securities except under and in accordance with the conditions of a certificate of registration obtained fro( the 8oard in accordance with the regulations (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a depository, 34participant,: custodian of securities, foreign institutional in'estor or credit rating agency i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to buy or sell securities or otherwise deal with the securities (ar)et until such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300 ( 8) Eo person shall sponsor or cause to be sponsored or carry on or caused to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es including (utual funds, unless he obtains a certificate of registration fro( the 8oard in accordance with the regulations, 4ro+i-e- that any person sponsoring or causing to be sponsored, carrying or causing to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es operating in the securities (ar)et i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to operate till such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300:
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0
% Inserted
>
4()%lanati$n7 6or the re(o'al of doubts, it is hereby declared that, for purposes of this section, a collecti'e in'est(ent sche(e or (utual fund shall not be include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(ponent of in'est(ent besides the co(ponent of insurance issued by the insurer0: (%) 7'ery application for registration shall be in such (anner and on pay(ent of such fees as (ay be deter(ined by regulations0 (3) .he 8oard (ay, by order, suspend or cancel a certificate of registration in such (anner as (ay be deter(ined by regulations, 4ro+i-e- that no order under this sub+section shall be (ade unless the person concerned has been gi'en a reasonable opportunity of being heard0 %4CIA<.7R BA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 4rohi,itio of .% i$*l%ti+e % - -e'e$ti+e -e+i'e!, i !i-er tr%-i ( % - !*,!t% ti%l %'7*i!itio of !e'*ritie! or 'o trol.
1"A. Eo person shall directly or indirectly(a) use or e(ploy, in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recogniFed stoc) exchange, any (anipulati'e or decepti'e de'ice or contri'ance in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3
Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, w0r0e0f !+$+ %0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, reads as under, /@A81(0 D: ?ISC7==AE7CHS #0 Balidation+ Eotwithstanding anything contained in any Dudg(ent, decree or order of any court, tribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 Repeal and sa'ings + (1) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (2) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0 % Chapter BA inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
!
(b) e(ploy any de'ice, sche(e or artifice to defraud in connection with issue or dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange3 (c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange, in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (d) engage in insider trading3 (e) deal in securities while in possession of (aterial or non+public infor(ation or co((unicate such (aterial or non+public infor(ation to any other person, in a (anner which is in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (f) ac*uire control of any co(pany or securities (ore than the percentage of e*uity share capital of a co(pany whose securities are listed or proposed to be listed on a recognised stoc) exchange in contra'ention of the regulations (ade under this Act0: CDA4TER II 2INANCE, ACCOUNTS AND AUDIT Gr% t! ,> the Ce tr%l Go+er .e t. 1). .he Central &o'ern(ent (ay, after due appropriation (ade by <arlia(ent by law in this behalf, (a)e to the 8oard grants of such su(s of (oney as that &o'ern(ent (ay thin) fit for being utiliFed for the purposes of this Act0 2* -. 13. ( ) .here shall be constituted a 6und to be called the Securities and 7xchange 8oard of
India &eneral 6und and there shall be credited thereto(a) all grants, fees and charges recei'ed by the 8oard under this Act3 4G G G: (aa) %4G G G: (b) all su(s recei'ed by the 8oard fro( such other sources as (ay be decided upon by the Central &o'ern(ent0 (%) .he 6und shall be applied for (eeting(a) the salaries, allowances and other re(uneration of the (e(bers, officers and other e(ployees of the 8oard3 (b) the expenses of the 8oard in the discharge of its functions under section 3 (c) the expenses on obDects and for purposes authorised by this Act0
.he word 1and2 o(itted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 (aa) o(itted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 It was inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Clause (aa) reads as under,+ 1(aa) all su(s realiFed by way of <enalties under this Act3 and20
% Clause
%0
A''o* t! % - %*-it. 15. ( ) .he 8oard shall (aintain proper accounts and other rele'ant records and prepare an annual state(ent of accounts in such for( as (ay be prescribed by the Central &o'ern(ent in consultation with the Co(ptroller and Auditor+&eneral of India0 (%) .he accounts of the 8oard shall be audited by the Co(ptroller and Auditor+&eneral of India at such inter'als as (ay be specified by hi( and any expenditure incurred in connection with such audit shall be payable by the 8oard to the Co(ptroller and Auditor+&eneral of India0 (3) .he Co(ptroller and Auditor+&eneral of India and any other person appointed by hi( in connection with the audit of the accounts of the 8oard shall ha'e the sa(e rights and pri'ileges and authority in connection with such audit as the Co(ptroller and Auditor+ &eneral generally has in connection with the audit of the &o'ern(ent accounts and, in particular, shall ha'e the right to de(and the production of boo)s, accounts, connected 'ouchers and other docu(ents and papers and to inspect any of the offices of the 8oard0 ($) .he accounts of the 8oard as certified by the Co(ptroller and Auditor+&eneral of India or any other person appointed by hi( in this behalf together with the audit report thereon shall be forwarded annually to the Central &o'ern(ent and that &o'ern(ent shall cause the sa(e to be laid before each Iouse of <arlia(ent0 5CDA4TER IIA 4ENALTIES AND ADEUDICATION 4e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 15A. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder,(a) to furnish any docu(ent, return or report to the 8oard, fails to furnish the sa(e, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations, fails to file return or furnish the sa(e within the ti(e specified therefor in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0
Chapters BI A and BI 8 containing Ss0 "A to "M and "@ to "S respecti'ely, inserted by Securities =aws (A(end(ent) Act, !!" w0e0f0 %"+ + !!"0 % Substituted for 1a penalty not exceeding one la)h and fifty thousand rupees for each such failure2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding fi'e thousand rupees for e'ery day during which such failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for e'ery day during which the failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%
4e %lt> for f%il*re ,> % > $er!o to e ter i to %(ree.e t /ith 'lie t!. 15;. If any person, who is registered as an inter(ediary and is re*uired under this Act or any rules or regulations (ade thereunder to enter into an agree(ent with his client, fails to enter into such agree(ent, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 %54e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 15C. If any listed co(pany or any person who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such co(pany or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 4e %lt> for 'ert%i -ef%*lt! i '%!e of .*t*%l f* -!. 15D. If any person, who is(a) re*uired under this Act or any rules or regulations (ade thereunder to obtain a certificate of registration fro( the 8oard for sponsoring or carrying on any collecti'e in'est(ent sche(e, including (utual funds, sponsors or carries on any collecti'e in'est(ent sche(e, including (utual funds, without obtaining such certificate of registration, he shall be liable to 34a penalty of one la)h rupees for each day during which he sponsors or carries on any such collecti'e in'est(ent sche(e including (utual funds, or one crore rupees, whiche'er is less:3 (b) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, for sponsoring or carrying on any in'est(ent sche(e, fails to co(ply with the ter(s and conditions of certificate of registration, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, fails to (a)e an application for listing of its sche(es as pro'ided for in the regulations
Substituted for 1a penalty not exceeding fi'e la)h rupees for e'ery such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1If any person, who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing to redress the grie'ances of in'estors, fails to redress such grie'ances, he shall be liable to a penalty not exceeding ten thousand rupees for each such failure2, by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding ten thousand rupees for each day during which he carries on any such collecti'e in'est(ent sche(e including (utual funds, or ten la)h rupees whiche'er is higher02 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for each day during which such failure continues or ten la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0
%%
go'erning such listing, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (d) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to despatch
unit certificates of any sche(e in the (anner pro'ided in the regulation go'erning such despatch, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (e) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to refund the application (onies paid by the in'estors within the period specified in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (f) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to in'est (oney collected by such collecti'e in'est(ent sche(es in the (anner or within the period specified in the regulations, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for f%il*re to o,!er+e r*le! % - re(*l%tio ! ,> % %!!et .% %(e.e t 'o.$% >. 15E. Khere any asset (anage(ent co(pany of a (utual fund registered under this Act, fails to co(ply with any of the regulations pro'iding for restrictions on the acti'ities of the asset (anage(ent co(panies, such asset (anage(ent co(pany shall be liable to "4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for -ef%*lt i '%!e of !to'6 ,ro6er!. 152. If any person, who is registered as a stoc) bro)er under this Act,(a) fails to issue contract notes in the for( and (anner specified by the stoc) exchange of which such bro)er is a (e(ber, he shall be liable to a penalty not exceeding fi'e ti(es the a(ount for which the contract note was re*uired to be issued by that bro)er3 (b) fails to deli'er any security or fails to (a)e pay(ent of the a(ount due to the in'estor in the (anner within the period specified in the regulations, he shall be liable to #4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3
Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues or fi'e la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding one thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%3
(c) charges an a(ount of bro)erage which is in excess of the bro)erage specified in the regulations, he shall be liable to 4a penalty of one la)h rupees: or fi'e ti(es the a(ount of bro)erage charged in excess of the specified bro)erage, whiche'er is higher0 4e %lt> for i !i-er tr%-i (. 15G. If any insider who,(i) either on his own behalf or on behalf of any other person, deals in securities of a body corporate listed on any stoc) exchange on the basis of any unpublished price+sensiti'e infor(ation3 or (ii) co((unicates any unpublished price+sensiti'e infor(ation to any person, with or without his re*uest for such infor(ation except as re*uired in the ordinary course of business or under any law3 or
(iii) counsels, or procures for any other person to deal in any securities of any body corporate on the basis of unpublished price+sensiti'e infor(ation, shall be liable to a penalty %4of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of insider trading, whiche'er is higher:0 4e %lt> for o 0-i!'lo!*re of %'7*i!itio of !h%re! % - t%6eo+er!. 15D. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder, fails to,(i) disclose the aggregate of his shareholding in the body corporate before he ac*uires any shares of that body corporate3 or (ii) (a)e a public announce(ent to ac*uire shares at a (ini(u( price3 or 34(iii) (a)e a public offer by sending letter of offer to the shareholders of the concerned co(pany3 or (iv) (a)e pay(ent of consideration to the shareholders who sold their shares pursuant to letter of offer,: he shall be liable to a penalty $4of twenty+fi'e crore rupees or three ti(es the a(ount of profits profits (ade out of such failure, whiche'er is higher:0 554e %lt> for fr%*-*le t % - * f%ir tr%-e $r%'ti'e!. 15DA. If any person indulges in fraudulent and unfair trade practices relating to securities, he shall be liable to a penalty of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of such practices, whiche'er is higher0
Substituted for 1a penalty not exceeding fi'e thousand rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00% 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00% %00% " Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00%0
%$
4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 15D;. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 4o/er to %-G*-i'%te. 150I. ( ) 6or the purpose of adDudging under sections "A, "8, "C, "9, "7, "6, "& 4, "I, "IA and "I8:, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in subsection ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> the %-G*-i'%ti ( offi'er. 15E. Khile adDudging *uantu( of penalty under section "+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade
as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 "5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 15EA. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: )5Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!. 15E;. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 11, !e'tio 11;, !e'tio 11D, !*,0!e'tio ()) of !e'tio 1" or !e'tio 150I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e- -ef%*lt!.
Substituted for 1and "I2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the S78I (A(end(ent) Act, %00%, S0 ! w0e0f0 %!+ 0+%00%0 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
% Inserted
%"
(") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't. ()) The !ettle.e t $ro'ee-i (! * -er thi! !e'tio !h%ll ,e 'o -*'te- i %''or-% 'e /ith the $ro'e-*re !$e'ifie- i the re(*l%tio ! .%-e * -er thi! A't. (3) No %$$e%l !h%ll lie * -er !e'tio 15T %(%i !t % > or-er $%!!e- ,> the ;o%r- or %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio . < CDA4TER II; ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL E!t%,li!h.e t of Se'*ritie! A$$ell%te Tri,* %l!. 15F. ( ) .he Central &o'ern(ent shall by notification, establish one or (ore Appellate .ribunals to be )nown as the Securities Appellate .ribunal to exercise the Durisdiction, powers and authority conferred on such .ribunal by or under this Act 4or any other law for the ti(e being in force:0 (%) .he Central &o'ern(ent shall also specify in the notification referred to in sub+section ( ) the (atters and places in relation to which the Securities Appellate .ribunal (ay exercise Durisdiction0 "5Co.$o!itio of Se'*ritie! A$$ell%te Tri,* %l. 15L. A Securities Appellate .ribunal shall consist of a <residing Cfficer and two other (e(bers, to be appointed, by notification, by the Central &o'ern(ent, 4ro+i-e- that the Securities Appellate .ribunal, consisting of one person only, established before the co((ence(ent of the Securities and 7xchange 8oard of India (A(end(ent) Act, %00%, shall continue to exercise the Durisdiction, powers and authority conferred on it by or under this Act or any other law for the ti(e being in force till two other ?e(bers are appointed under this section0 9*%lifi'%tio for %$$oi t.e t %! 4re!i-i ( Offi'er or @e.,er of Se'*ritie! A$$ell%te Tri,* %l.
Inserted by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for Sections "= and "? by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "= and "? read as under,+ 1 "+=0 Co(position of securities Appellate .ribunal0 5 A Securities Appellate .ribunal shall consist of
% Substituted
one person only (hereinafter referred to as the <residing Cfficer of the Securities Appellate .ribunal) to be appointed, by notification, by the central &o'ern(ent0 "?0 Qualifications for appoint(ent as <residing Cfficer of the Securities Appellate .ribunal0 5 A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he + (a) is, or has been, or is *ualified to be, a Mudge of a Iigh Court3 or (b) has been a (e(ber of the Indian =egal Ser'ice and has held a post in &rade I of that ser'ice for at least three years3 or (c) has held office as the <residing Cfficer of a tribunal for at least three years02
%#
15@. 15( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of the Securities Appellate .ribunal unless he + (a) is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court3 or (b) is a sitting or retired Mudge of a Iigh Court who has co(pleted not less than se'en years of ser'ice as a Mudge in a Iigh Court0 ( A) .he <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0: (%) A person shall not be *ualified for appoint(ent as (e(ber of a Securities Appellate .ribunal unless he is a person of ability, integrity and standing who has shown capacity in dealing with proble(s relating to securities (ar)et and has *ualification and experience of corporate law, securities laws, finance, econo(ics or accountancy, 4ro+i-e- that a (e(ber of the 8oard or any person holding a post at senior (anage(ent le'el e*ui'alent to 7xecuti'e 9irector in the 8oard shall not be appointed as <residing Cfficer or ?e(ber of a Securities Appellate .ribunal during his ser'ice or tenure as such with the 8oard or within two years fro( the date on which he ceases to hold office as such in the 8oard0: %4Te *re of offi'e of 4re!i-i ( Offi'er % - other @e.,er! of Se'*ritie! A$$ell%te Tri,* %l. 15N. .he <residing Cfficer and e'ery other ?e(ber of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office and shall be eligible for re+appoint(ent, 4ro+i-e- that no person shall hold office as the <residing Cfficer of the Securities Appellate .ribunal after he has attained the age of sixty+eight years, 4ro+i-e- f*rther that no person shall hold office as a ?e(ber of the Securities Appellate .ribunal after he has attained the age of sixty+two years0: S%l%r> % - %llo/% 'e! % - other ter.! % - 'o -itio ! of !er+i'e of 4re!i-i ( Offi'er!. 150O. .he salary and allowances payable to and the other ter(s and conditions of ser'ice including pension, gratuity and other retire(ent benefits of the 4<residing Cfficer and other ?e(bers: of a Securities Appellate .ribunal shall be such as (ay be prescribed,
Substituted for sub+section ( ) of Section "? by the S78I (A(end(ent) Crdinance, %0 3 w0e0f0 % 00 0%0 30 <rior to substitution, it read as under,+ ;( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court , 4ro+i-e- that the <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0; % Substituted for Section "E, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "E read as under,+ 1 "E0 .er( of office0+ .he <residing officer of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office or until he attains the age of sixtyfi'e years, whiche'er is earlier02
%/
4ro+i-e- that neither the salary and allowances nor the other ter(s and conditions of ser'ice of the %4<residing Cfficer and other ?e(bers of a Securities Appellate .ribunal: shall be 'aried to their disad'antage after appoint(ent0 2illi ( *$ of +%'% 'ie!. 154. If, for reason other than te(porary absence, any 'acancy occurs in the 34office of the <residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal, then the Central &o'ern(ent shall appoint another person in accordance with the pro'isions of this Act to fill the 'acancy and the proceedings (ay be continued before the Securities Appellate .ribunal fro( the stage at which the 'acancy is filled0 Re!i( %tio % - re.o+%l. 159. ( ) .he $4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal (ay, by notice in writing under his hand addressed to the Central &o'ern(ent, resign his office, 4ro+i-e- that "4the <residing Cfficer or any other ?e(ber: shall, unless he is per(itted by the Central &o'ern(ent to relin*uish his office sooner, continue to hold office, until the expiry of three (onths fro( the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his ter( of office, whiche'er is the earliest0 (%) .he #4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal shall not be re(o'ed fro( his office except by an order by the Central &o'ern(ent on the ground of pro'ed (isbeha'iour or incapacity after an in*uiry (ade by a Mudge of the Supre(e Court, in which the /4<residing Cfficer or any other ?e(ber: concerned has been infor(ed of the charges against hi( and gi'en a reasonable opportunity of being heard in respect of these charges0 (3) .he Central &o'ern(ent (ay, by rules, regulate the procedure for the in'estigation of (isbeha'iour or incapacity of the >4<residing Cfficer or any other ?e(ber:0 Or-er! 'o !tit*ti ( A$$ell%te Tri,* %l to ,e fi %l % - ot to i +%li-%te it! $ro'ee-i (!. 15R. Eo order of the Central &o'ern(ent appointing any person as the !4<residing Cfficer or a ?e(ber: of a Securities Appellate .ribunal shall be called in *uestion in any (anner, and no act or proceeding before a Securities Appellate .ribunal shall be called in *uestion in any (anner on the ground (erely of any defect in the constitution of a Securities Appellate .ribunal0
Substituted for 1<residing Cfficer of a Securities Appellate .ribunal2 by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 / Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 > Substituted for 1aforesaid <residing Cfficer2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 ! Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0
%>
St%ff of the Se'*ritie! A$$ell%te Tri,* %l. 15S. ( ) .he Central &o'ern(ent shall pro'ide the Securities Appellate .ribunal with such officers and e(ployees as that &o'ern(ent (ay thin) fit0 (%) .he officers and e(ployees of the Securities Appellate .ribunal shall discharge their functions under general superintendence of the <residing Cfficer0 (3) .he salaries and allowances and other conditions of ser'ice of the officers and e(ployees of the Securities Appellate .ribunal shall be such as (ay be prescribed0 A$$e%l to the Se'*ritie! A$$ell%te Tri,* %l. 15T. 4( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed,(a) by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws
(Second A(end(ent) Act, !!!, under this Act, or the rules or regulations (ade thereunder3 or (b) by an order (ade by an adDudicating officer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 "5(") ********< (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 348oard or the AdDudicating Cfficer, as the case case (ay be,: is recei'ed by hi( and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 ($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0
Substituted for Sub+sec ( ) R (%) by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, Sub+sections ( ) R (%) were read as under, 1( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by any order (ade by any AdDudicating Cfficer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 (%) Eo appeal shall lie to the Securities Appellate .ribunal fro( an order (ade by an AdDudicating Cfficer with the consent of the parties02 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , o.i!!io , S*,0!e'tio (") re%- %! * -er& J(") No %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-eO (a) ,> the ;o%r- o % - %fter the 'o..e 'e.e t of the Se'*ritie! L%/! (Se'o - A.e -.e t) A't, 1999H (b) ,> % %-G*-i'%ti ( offi'er, /ith the 'o !e t of the $%rtie!.2 3 Substituted for 1a copy of the order (ade by the adDudicating officer2 by S78I (A(end(ent) Act !!!, !!!, w0e0f0 #+ %+ !!!0
%!
(") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 48oard, the: parties to the appeal and to the concerned AdDudicating Cfficer0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of the Se'*ritie! A$$ell%te Tri,* %l. 15U. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act, and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purposes of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3
(e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte 3 (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0), and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 %4Ri(ht to le(%l re$re!e t%tio . 15I. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,Substituted for 1parties2, S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for S0 "B by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, S0 "B read as under,+ 1 "B0 .he appellant (ay either appear in person or authorise one or (ore legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal02
% Substituted
30
(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of subsection ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or any attorney of any Iigh Court, and includes a pleader in practice0: Li.it%tio . 15?. .he pro'isions of the =i(itation Act, !#3 (3# of !#3), shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 54re!i-i ( Offi'er, @e.,er! % - !t%ff of Se'*ritie! A$$ell%te Tri,* %l! to ,e $*,li' !er+% t!. 15A. .he <residing Cfficer, ?e(bers and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0: Ci+il Co*rt ot to h%+e G*ri!-i'tio . 15M. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which an adDudicating officer appointed under this Act or a Securities Appellate .ribunal constituted under this Act is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "5A$$e%l to S*$re.e Co*rt.
Substituted for S0 "A by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, it read as under, + 1 "A0 .he <residing Cfficer and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian penal Code( $" of >#0)20 % Substituted for S0 "S by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution , it
was read as under,+ 1 "S0 Appeal to Iigh Court0+ Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, <ro'ided that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
3
15N. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order , 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the applicant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: CDA4TER III @ISCELLANEOUS 4o/er of Ce tr%l Go+er .e t to i!!*e -ire'tio !. 18. ( ) Kithout preDudice to the foregoing pro'isions of this Act 4or the 9epositories Act, !!#:, the 8oard shall, in exercise of its powers or the perfor(ance of its functions under this Act, be bound by such directions on *uestions of policy as the Central &o'ern(ent (ay gi'e in writing to it fro( ti(e to ti(e , 4ro+i-e- that the 8oard shall, as far as practicable, be gi'en an opportunity to express its 'iews before any direction is gi'en under this sub+section0 (%) .he decision of the Central &o'ern(ent whether a *uestion is one of policy or not shall be final0 4o/er of Ce tr%l Go+er .e t to !*$er!e-e the ;o%r-. 17. ( ) If at any ti(e the Central &o'ern(ent is of opinion(a) that on account of gra'e e(ergency, the 8oard is unable to discharge the functions and duties i(posed on it by or under the pro'isions of this Act3 or (b) that the 8oard has persistently (ade default in co(plying with any direction issued by the Central &o'ern(ent under this Act or in the discharge of the functions and duties i(posed on it by or under the pro'isions of this Act and as a result of such default the financial position of the 8oard or the ad(inistration of the 8oard has deteriorated3 or (c) that circu(stances exist which render it necessary in the public interest so to do, the Central &o'ern(ent (ay, by notification, supersede the 8oard for such period, not exceeding six (onths, as (ay be specified in the notification0 (%) Hpon the publication of a notification under sub+section ( ) superseding the 8oard,(a) all the (e(bers shall, as fro( the date of supersession, 'acate their offices as such3 (b) all the powers, functions and duties which (ay, by or under the pro'isions of this Act, be exercised or discharged by or on behalf of the 8oard, shall until the 8oard is reconstituted under sub+section (3), be exercised and discharged by such person or persons as the Central &o'ern(ent (ay direct3 and (c) all property owned or controlled by the 8oard shall, until the 8oard is reconstituted under sub+section (3), 'est in the Central &o'ern(ent0
Substituted for 1this Act2 by the 9epositories Act !!#, w0r0e0f0 %0+!+ !!"0
3%
(3) Cn the expiration of the period of supersession specified in the notification issued under sub+section ( ), the Central &o'ern(ent (ay reconstitute the 8oard by a fresh appoint(ent
and in such case any person or persons who 'acated their offices under clause ( a) of subsection (%), shall not be dee(ed dis*ualified for appoint(ent , 4ro+i-e- that the Central &o'ern(ent (ay, at any ti(e, before the expiration of the period of supersession, ta)e action under this sub+section0 ($) .he Central &o'ern(ent shall cause a notification issued under sub+section ( ) and a full report of any action ta)en under this section and the circu(stances leading to such action to be laid before each Iouse of <arlia(ent at the earliest0 Ret*r ! % - re$ort!. 1:. ( ) .he 8oard shall furnish to the Central &o'ern(ent at such ti(e and in such for( and (anner as (ay be prescribed or as the Central &o'ern(ent (ay direct, such returns and state(ents and such particulars in regard to any proposed or existing progra((e for the pro(otion and de'elop(ent of the securities (ar)et, as the Central &o'ern(ent (ay, fro( ti(e to ti(e, re*uire0 (%) Kithout preDudice to the pro'isions of sub+section ( ), the 8oard shall, within 4ninety: days after the end of each financial year, sub(it to the Central &o'ern(ent a report in such for(, as (ay be prescribed, gi'ing a true and full account of its acti'ities, policy and progra((es during the pre'ious financial year0 (3) A copy of the report recei'ed under sub+section (%) shall be laid, as soon as (ay be after it is recei'ed, before each Iouse of <arlia(ent0 Dele(%tio . 19. .he 8oard (ay, by general or special order in writing delegate to any (e(ber, officer of the 8oard or any other person subDect to such conditions, if any, as (ay be specified in the order, such of its powers and functions under this Act (except the powers under section %!) as it (ay dee( necessary0 A$$e%l!. "=. ( ) Any person aggrie'ed by an order of the 8oard (ade %4, before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!,: under this Act, or the rules or regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor, 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0
Substituted for 1sixty days2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1an order of the 8oard (ade2 by Securities =aws (Second A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0
% Substituted
33
(3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed, 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 4;%r of G*ri!-i'tio . "=A. Eo order passed by the 8oard %4or the AdDudicating Cfficer: under this Act shall be appealable except as pro'ided in 34section ". or: section %0 and no ci'il court shall ha'e Durisdiction in respect of any (atter which the 8oard $4or the AdDudicating Cfficer: is e(powered by, or under, this Act to pass any order and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any order passed by the 8oard "4or the AdDudicating Cfficer: by, or under, this Act0: S%+i (!.
"1. Eothing in this Act shall exe(pt any person fro( any suit or other proceedings which (ight, apart fro( this Act, be brought against hi(0 @e.,er!, offi'er! % - e.$lo>ee! of the ;o%r- to ,e $*,li' !er+% t!. "". All (e(bers, officers and other e(ployees of the 8oard shall be dee(ed, when acting or purporting to act in pursuance of any of the pro'isions of this Act, to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0 4rote'tio of %'tio t%6e i (oo- f%ith. "). Eo suit, prosecution or other legal proceedings shall lie against the Central &o'ern(ent #4or 8oard: or any officer of the Central &o'ern(ent or any (e(ber, officer or other e(ployee of the 8oard for anything which is in good faith done or intended to be done under this Act or the rules or regulations (ade thereunder0 /4Offe 'e!. "3. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, he shall be punishable with
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 18oard2 by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 3 Substituted for 1Section %02, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 $ Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 " Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Substituted by for S0 %$, Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" && <rior to its substitution S0%$ read as under, 1%$0 <enalty0+ Khoe'er contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both02
% Substituted
3$
i(prison(ent for a ter( which (ay extend to 4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to %4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 34Co.$o!itio of 'ert%i offe 'e!. "3A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "3;. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of the alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation, 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0
(%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0:
Substituted for 1one year, or with fine, or with both2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%, for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both20 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3"
E#e.$tio fro. t%# o /e%lth % - i 'o.e. "5. Eotwithstanding anything contained in the Kealth+tax Act, !"/ (%/ of !"/), the Inco(etax Act, !# ($3 of !# ) or any other enact(ent for the ti(e being in force relating to tax on wealth, inco(e, profits or gains(a) the 8oard3 (b) the existing Securities and 7xchange 8oard fro( the date of its constitution to the date of establish(ent of the 8oard, shall not be liable to pay wealth+tax, inco(e+tax or any other tax in respect of their wealth, inco(e, profits or gains deri'ed0 Co( iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations (ade thereunder, sa'e on a co(plaint (ade by the 8oard 4G G G:0 "5(") *****< )5 E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
.he words 1with the pre'ious sanction of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to the o.i!!io , S*,0!e'tio (") re%- %! * -er& 1(") No 'o*rt i ferior to th%t of "5% Co*rt of Se!!io < !h%ll tr> % > offe 'e $* i!h%,le * -er thi!
A't.2 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
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A$$e%l % - re+i!io "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e of Cri.i %l 4ro'e-*re, 197) to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< Offe 'e! ,> 'o.$% ie!. "7. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly, 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n , 6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and
3/
(b) 1director2, in relation to a fir(, (eans a partner in the fir(0 4o/er to e#e.$t. ":. 4GGGGGG: "5 Re'o+er> of %.o* t! ":A. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith %
-ire'tio of -i!(or(e.e t or-er i!!*e- * -er !e'tio 11; or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifiefor. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.et%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't.
C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Section %> read as under, 1%>0 8$.er t$ e)e"%t+ If the central go'ern(ent if of the opinion that it is necessary or expedient so to do in public interest, it (ay, by order published in the Cfficial gaFette, exe(pt any person or class of persons buying or selling securities or otherwise dealing with the securities (ar)et fro( the operation of sub+section ! ) of Section %02 % I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3>
"#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio 15T of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 11;, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% !
% > offi'er of the ;o%r- /ho .%> ,e %*thoriLe-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 4o/er to .%6e r*le!. "9. ( ) .he Central &o'ern(ent (ay, by notification, (a)e rules for carrying out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers under sub+section ( ) of section "3 (b) the additional functions that (ay be perfor(ed by the 8oard under section 3 (c) 4G G G: (d) the (anner in which the accounts of the 8oard shall be (aintained under section "3 %4(da) the (anner of in*uiry under sub+section ( ) of section "+I3 (db) the salaries and allowances and other ter(s and conditions of ser'ice of the 34<residing Cfficers, ?e(bers: and other officers and e(ployees of the Securities Appellate .ribunal under section "+C and sub+section (3) of section "S3 (dc) the procedure for the in'estigation of (isbeha'iour or incapacity of the 4<residing Cfficers, or other ?e(bers: of the Securities Appellate .ribunal under sub+section (3) of section "Q3
Clause (c) o(itted by Securities laws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, clause (c) it read as under, 1(c) the conditions subDect to which registration certificate is to be issued under sub+section ( ) of section %20 % Inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 3 Substituted for 1<residing Cfficers2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3!
(dd) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section ". and the fees payable in respect of such appeal3: (e) the for( and the (anner in which returns and report to be (ade to the Central &o'ern(ent under section >3 (f) any other (atter which is to be, or (ay be, prescribed, or in respect of which pro'ision is to be, or (ay be, (ade by rules0 4o/er to .%6e re(*l%tio !. )=. ( ) .he 8oard (ay, %4GGG: by notification, (a)e regulations consistent with this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ti(es and places of (eetings of the 8oard and the procedure to be followed at such (eetings under sub+section ( ) of section / including *uoru( necessary for the transaction of business3 (b) the ter(s and other conditions of ser'ice of officers and e(ployees of the 8oard under sub+section (%) of section !3 34(c) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto and the (anner in which such (atters shall be disclosed by the co(panies under section A3 35('%) the *tiliL%tio of the %.o* t 're-ite- * -er !*,0!e'tio (5) of !e'tio 11H (',) the f*lfill.e t of other 'o -itio ! rel%ti ( to 'olle'ti+e i +e!t.e t !'he.e * -er !*,0!e'tio ("A) of !e'tio 11AAH ('') the $ro'e-*re to ,e follo/e- ,> the %*thoriLe- offi'er for !e%r'h or !eiL*re * -er !*,0!e'tio (9) of !e'tio 11CH < (d) the conditions subDect to which certificate of registration is to be issued, the a(ount of
fee to be paid for certificate of registration and the (anner of suspension or cancellation of certificate of registration under section %0: 55(-%) the ter.! -eter.i e- ,> the ;o%r- for !ettle.e t of $ro'ee-i (! * -er !*,!e'tio (") % - the $ro'e-*re for 'o -*'ti ( of !ettle.e t $ro'ee-i (! * -er !*,!e'tio ()) of !e'tio 15E;H (-,) % > other .%tter /hi'h i! re7*ire- to ,e, or .%> ,e, !$e'ifie- ,> re(*l%tio ! or i re!$e't of /hi'h $ro+i!io i! to ,e .%-e ,> re(*l%tio !.< R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t.
Substituted for 1<residing Cfficers2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 words 1with the pre'ious appro'al of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 3 Substituted for the existing clause (c) by the Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 <rior to substitution this clause read as under, 1(c) the a(ount of fee to be paid for registration certificate and (anner of suspension or cancellation of registration certificate under sub+section (%) and (3) of section %02 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% .he
$0
)1. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. )". .he pro'isions of this Act shall be in addition to, and not in derogation of, the pro'isions of any other law for the ti(e being in force0 A.e -.e t of 'ert%i e %'t.e t!. )). 40e%ealed bF 0e%ealing H A"ending Act' 2001&: 4o/er to re.o+e -iffi'*ltie!. )3. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order, published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as (ay appear to be necessary for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of fi'e years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 Re$e%l % - !%+i (. )5. ( ) .he Securities and 7xchange 8oard of India Crdinance, !!% (Crd0 " of !!%), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 1@( /@(5A9( 4 ee section 33: A@END@ENT O2 CERTAIN ENACT@ENTS 40e%ealed bF 0e%ealing H A"ending Act' 2001:
* The!e R*le! h%+e ,ee *$-%te- ,%!e- o the R*le! % - A.e -.e t! %+%il%,le o the /e,!ite of the De$%rt.e t of E'o o.i' Aff%ir!0 htt$&11fi .i . i'.i 1l%/1i -e#.%!$ % - %+%il%,le %.e -.e t otifi'%tio !. Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 % Inserted by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3 Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
2ee! for %$$li'%tio . 3. ( ) .here shall be paid in respect of e'ery application under rule 3 a fee of rupees fi'e hundred0 (%) .he a(ount of the fee shall be deposited in the nearest &o'ern(ent treasury or the nearest branch of the State 8an) of India, 4ro+i-e- that at 8o(bay, Calcutta, ?adras, 9elhi and @anpur, the a(ount shall be deposited in the Reser'e 8an) of India0 (3) .he a(ount of the fee so deposited shall be credited to the receipt head 1A=BI?iscellaneous-Cther fees, fines and forfeitures20 Do'*.e t! to ,e file- %lo ( /ith the %$$li'%tio % - $%rti'*l%r! it !ho*l- 'o t%i . 5. 7'ery application shall be acco(panied by four copies of the rules (including the
(e(orandu( and articles of association where the applicant stoc) exchange is an incorporated body) and bye+laws of the stoc) exchange applying for recognition as specified in section 3 of the Act and the receipt granted by the &o'ern(ent treasury, or as the case (ay be, the State 8an) of India or the Reser'e 8an) of India, in respect of the a(ount of the fee deposited and shall contain clear particulars as to the (atters specified in the Annexure to 6or( A0 $54o/er to .%6e i 7*irie! % - '%ll for i for.%tio . 5A. 8efore granting recognition to a stoc) exchange under section $ of the Act, the "4Securities and 7xchange 8oard of India: (ay (a)e such in*uiries and re*uire such further infor(ation to be furnished, as it dee(s necessary, relating to the infor(ation furnished by the stoc) exchange in the Annexure to its application in 6or( A0: 2or. of re'o( itio . 8. .he recognition granted to a stoc) exchange shall be in 6or( 8 and be subDect to the following conditions, na(ely ,(a) that the recognition unless granted on a per(anent basis, shall be for such period not less than one year as (ay be specified in the recognition3 (b) that the stoc) exchange shall co(ply with such conditions as are or (ay be prescribed or i(posed under the pro'isions of the Act and these rules fro( ti(e to ti(e0
$ Inserted
by &SR 0!# dated $00/0 !#/, w0e0f0 %%00/0 !#/ for 1Central &o'ern(ent2 by the Securities Contracts (Regulation)(A(end(ent )Rules, !!#, w0e0f0 %30 %0 !!#0
" Substituted
Re e/%l of re'o( itio . 7. ( ) .hree (onths before the expiry of the period of recognition, a recognised stoc) exchange desirous of renewal of such recognition (ay (a)e an application to the #4Securities and 7xchange 8oard of India: in 6or( A0 (%) .he pro'isions of rule 3, rule $, rule ", rule "A and rule # shall apply in relation to renewal of recognition as they apply in relation to grant of recognition except that the fee payable in respect of an application for renewal of recognition shall be rupees two hundred0 9*%lifi'%tio ! for .e.,er!hi$ of % re'o( i!e- !to'6 e#'h% (e. :. .he rules relating to ad(ission of (e(bers of a stoc) exchange see)ing recognition shall inter alia pro'ide that , (1) Eo person shall be eligible to be elected as a (e(ber if(a) he is less than twenty+one years of age3 (b) he is not a citiFen of India3 pro'ided that the go'erning body (ay in suitable cases relax this condition with the prior appro'al of the !4Securities and 7xchange 8oard of India:3 (c) he has been adDudged ban)rupt or a recei'ing order in ban)ruptcy has been (ade against hi( or he has been pro'ed to be insol'ent e'en though he has obtained his final discharge3 (d) he has co(pounded with his creditors unless he has paid sixteen annas in the rupee3 (e) he has been con'icted of an offence in'ol'ing fraud or dishonesty3 (f) he is engaged as principal or e(ployee in any business other than that of securities /4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability unless he underta)es on ad(ission
to se'er his connection with such business , >44ro+i-e- that no (e(ber (ay conduct business in co((odity deri'ati'es, except by setting up a separate co(pany which shall co(ply with the regulatory re*uire(ents, such as, networth, capital ade*uacy, (argins and exposure nor(s as (ay be specified by the 6orward ?ar)et Co((ission, fro( ti(e to ti(e ,
# Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, w0e0f0 %30 %0 !!#0 / Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 > Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 <rior to its substitution, the pro'iso as a(ended by Securities Contracts (Regulation) (A(end(ent) Rules, !!# w0e0f0 %30 %0 !!#, read as under, 1<ro'ided that the Securities and 7xchange 8oard of India (ay, for reasons sufficient in the opinion of the said 8oard, per(it a recogniFed stoc) exchange to suspend the enforce(ent of this clause for a specified period on condition that the applicant is not associated with or is a (e(ber of or subscriber to or shareholder or debenture holder in or connected through a partner or e(ployee with any other organisation, institution, association, co(pany or corporation in India where forward business of any )ind whether in goods or co((odities or otherwise is carried on or is not engaged as a principal or e(ployee ion any such business02
4ro+i-e- f*rther that nothing herein shall be applicable to any corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to ()) of the pro'iso to sub+rule ($)0:3 (g) !4GGG: (h) he has been at any ti(e expelled or declared a defaulter by any other stoc) exchange3 (i) he has been pre'iously refused ad(ission to (e(bership unless a period of one year has elapsed since the date of such reDection0 (2) Eo person eligible for ad(ission as a (e(ber under sub+rule ( ) shall be ad(itted as a (e(ber unless ,(a) he has wor)ed for not less than two years as a partner with, or an authorised assistant or authorised cler) or re(isier or apprentice to, a (e(ber3 or (b) he agrees to wor) for a (ini(u( period of two years as a partner or representati'e (e(ber with another (e(ber and to enter into bargains on the floor of the stoc) exchange and not in his own na(e but in the na(e of such other (e(ber 3 or (c) he succeeds to the established business of a deceased or retiring (e(ber who is his father, uncle, brother or any other person who is, in the opinion of the go'erning body, a close relati'e , 4ro+i-e- that the rules of the stoc) exchange (ay authorise the go'erning body to wai'e co(pliance with any of the foregoing conditions if the person see)ing ad(ission is in respect of (eans, position, integrity, )nowledge and experience of business in securities, considered by the go'erning body to be otherwise *ualified for (e(bership0 (3) Eo person who is a (e(ber at the ti(e of application for recognition or subse*uently ad(itted as a (e(ber shall continue as such if(a) he ceases to be a citiFen of India , 4ro+i-e- that nothing herein shall affect those who are not citiFens of India but who were (e(bers at the ti(e of such application or were ad(itted subse*uently under the pro'isions of clause (b) of sub+rule ( ) of this rule,
subDect to their co(plying with all other re*uire(ents of this rule3 (b) he is adDudged ban)rupt or a recei'ing order in ban)ruptcy is (ade against hi( or he is pro'ed to be insol'ent3 (c) he is con'icted of an offence in'ol'ing fraud or dishonesty3 (d) 04G G G: (e) 4G G G: (f) he engages either as principal or e(ployee in any business other than that of securities %4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability, pro'ided that! C(itted 0 Ibid0
by &SR 0/0(7) dated "0
0 !>>
Ibid0
% Inserted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(i) the go'erning body (ay, for reasons, to be recorded in writing, per(it a (e(ber to engage hi(self as principal or e(ployee in any such business, if the (e(ber in *uestion ceases to carry on business on the stoc) exchange either as an indi'idual or as a partner in a fir(, (ii) in the case of those (e(bers who were under the rules in force at the ti(e of such application per(itted to engage in any such business and were actually so engaged on the date of such application, a period of three years fro( the date of the grant of recognition shall be allowed for se'ering their connection with any such business, 34(iii) nothing herein shall affect (e(bers of a recognised stoc) exchange which are corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to (k) of the pro'iso to sub+rule ($)0: (4) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section 3%% of the said Act3 (ii) a (aDority of the directors of such co(pany are shareholders of such co(pany and also (e(bers of that stoc) exchange3 and (iii) the directors of such co(pany, who are (e(bers of that stoc) exchange, ha'e ulti(ate liability in such co(pany , 4ro+i-e- that where the $4Securities and 7xchange 8oard of India: (a)es a reco((endation in this regard, the go'erning body of a stoc) exchange shall, in relaxation of the re*uire(ents of this clause, ad(it as (e(ber the following corporations "4,bodies corporate:, co(panies or institutions, na(ely ,(a) the Industrial 6inance Corporation, established under the Industrial 6inance Corporation Act, !$> ( " of !$>)3 (b) the Industrial 9e'elop(ent 8an) of India, established under the Industrial 9e'elop(ent 8an) Act, !#$ ( > of !#$)3 (c) the =ife Insurance Corporation of India, established under the =ife Insurance Corporation Act, !"# (3 of !"#)3 (d) the &eneral Insurance Corporation of India constituted under the &eneral Insurance Corporation (Eationalisation) Act, !/% ("/ of !/%)3 (e) the Hnit .rust of India, established under the Hnit .rust of India Act,
!#3 ("% of !#3)3
ibid0 <rior to its substitution, sub+clause (iii) read as under, 1(iii) nothing herein shall affect (e(bers of a recogniFed stoc) exchange per(itted under the pro'iso to clause (f) of sub+rule( ) to suspend the enforce(ent of the aforesaid clause, for so long as such suspension is effecti'e, except that no (e(ber of such exchange shall engage in forward business of any )ind whether in goods or co((odities or otherwise and , if actually so engaged on the date of such application , he shall se'er his connection with any such business within a period of three years fro( the date of the grant of recognition02 $ Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# " Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
3 Substituted,
(f) the Industrial Credit and In'est(ent Corporation of India, a co(pany registered under the Co(panies Act, !"# ( of !"#)3 (g) the subsidiaries of any of the corporations or co(panies specified in (a) to (f) and any subsidiary of the State 8an) of India or any nationalised ban) set up for pro'iding (erchant ban)ing ser'ices, buying and selling securities and other si(ilar acti'ities0 #4(h) any ban) included in the Second Schedule to the Reser'e 8an) of India Act, !3$ (% of !3$)3 (i) the 7xport I(port 8an) of India, established under the 7xport I(port 8an) of India Act, !> (%> of !> )3 (j) the Eational 8an) for Agriculture and Rural 9e'elop(ent, established under the Eational 8an) for Agriculture and Rural 9e'elop(ent Act, !> (# of !> )3 and (k) the Eational Iousing 8an), established under the Eational Iousing 8an) Act, !>/ ("3 of !>/)0: (4A) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall also be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section % of the said Act3 (ii) such co(pany underta)es to co(ply with such financial re*uire(ents and nor(s as (ay be specified by the Securities and 7xchange 8oard of India for the registration of such co(pany under sub+section ( ) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (iii) /4G G G: (iv) the directors of the co(pany are not dis*ualified fro( being (e(bers of a stoc) exchange under >4clause ( ) 4except sub+clause (b) and sub+clause (f) thereof: or clause (3) 4except sub+clause (a) and sub+clause (f) thereof:: and the 9irectors of the co(pany had not held the offices of the 9irectors in any co(pany which had been a (e(ber of the stoc) exchange and had been declared defaulter or expelled by the stoc) exchange3 and (v) not less than two directors of the co(pany are persons who possess a (ini(u( two yearsJ experience , (a) in dealing in securities3 or (b) as portfolio (anagers3 or (c) as in'est(ent consultants0 (5) Khere any (e(ber of a stoc) exchange is a fir(, the pro'isions of sub+rules ( ), (3) and ($), shall, so far as they can, apply to the ad(ission or continuation of any
partner in such fir(0
# Inserted, / C(itted
ibid0 by &SR /$! (7), dated %0 00 !!$ > Substituted by &SR /!0(7), dated 0/0 0 !!$
Co tr%'t! ,et/ee .e.,er! of re'o( i!e- !to'6 e#'h% (e. 9. All contracts between the (e(bers of a recognised stoc) exchange shall be confir(ed in writing and shall be enforced in accordance with the rules and bye+laws of the stoc) exchange of which they are (e(bers0 !5No.i ee! of the Se'*ritie! % - E#'h% (e ;o%r- of I -i%< o the (o+er i ( ,o-ie! of re'o( i!e- !to'6 e#'h% (e!. 1=. .he %04Securities and 7xchange 8oard of India: (ay no(inate one or (ore persons not exceeding three in nu(ber, as (e(ber or (e(bers of the go'erning body of e'ery recognised stoc) exchange0 Such (e(ber or (e(bers shall enDoy the sa(e status and powers as other (e(bers of the go'erning body0 O,li(%tio of the (o+er i ( ,o-> to t%6e -i!'i$li %r> %'tio %(%i !t % .e.,er if !o -ire'te- ,> the % 5Se'*ritie! % - E#'h% (e ;o%r- of I -i%<. 11. After recei'ing the report of the result of an en*uiry (ade under clause (b) of subsection (3) of section # of the Act, the % 4Securities and 7xchange 8oard of India: (ay ta)e such action as they dee( proper and, in particular, (ay direct the go'erning body of the stoc) exchange to ta)e such disciplinary action against the offending (e(ber, including fine, expulsion, suspension or any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney, as (ay be specified by the % 4Securities and 7xchange 8oard of India:3 notwithstanding anything to the contrary contained in the rules or bye+laws of the stoc) exchange concerned, the go'erning body shall gi'e effect to the directions of the % 4Securities and 7xchange 8oard of India: in this behalf and shall not in any (anner co((ute, re'o)e or (odify the action ta)en in pursuance of such directions, without the prior appro'al of the % 4Securities and 7xchange 8oard of India:0 .he % 4Securities and 7xchange 8oard of India: (ay, howe'er, either of its own (otion or on the representation of the (e(ber concerned, (odify or withdraw its direction to the go'erning body0 A*-it of %''o* t! of .e.,er!. 1". 7'ery (e(ber shall get his accounts audited by a chartered accountant whene'er such audit is re*uired by the % 4Securities and 7xchange 8oard of India:0 ?ith-r%/%l of re'o( itio . 1). .he written notice referred to in section " of the Act shall be in 6or( C0
! Substituted %0 Ibid0 %
by 60 Eo0 L3/LS7L!$, dated %#0 00 !!$0
Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> re'o( i!e- !to'6 e#'h% (e. 13. 7'ery recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years, (1) ?inute boo)s of the (eetings of(a) (e(bers3 (b) go'erning body3 (c) any standing co((ittee or co((ittees of the go'erning body or of the
general body of (e(bers0 (2) Register of (e(bers showing their full na(es and addresses0 Khere any (e(ber of the stoc) exchange is a fir(, full na(es and addresses of all partners shall be shown0 (3) Register of authorised cler)s0 (4) Register of re(isiers of authorised assistants0 (5) Record of security deposits0 (6) ?argin deposits boo)0 (7) =edgers0 (8) Mournals0 (9) Cash boo)0 (10) 8an) pass+boo)0 ;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> .e.,er of % re'o( i!e- !to'6 e#'h% (e. 15. ( ) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years , (a) Register of transactions ( a!da boo))0 (b) ClientsJ ledger0 (c) &eneral ledger0 (d) Mournals0 (e) Cash boo)0 (f) 8an) pass+boo)0 (g) 9ocu(ents register showing full particulars of shares and securities recei'ed and deli'ered0 (2) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following docu(ents for a period of two years, (a) ?e(berJs contract boo)s showing details of all contracts entered into by hi( with other (e(bers of the sa(e exchange or counterfoils or duplicates of (e(os of confir(ation issued to such other (e(bers0 (b) Counterfoils or duplicates of contract notes issued to clients0 (c) Kritten consent of clients in respect of contracts entered into as principals0 @% er of i 7*ir> i rel%tio to the %ff%ir! of the (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e or the %ff%ir! of % > .e.,er of the !to'6 e#'h% (e i rel%tio to the !to'6 e#'h% (e. 18. ( )(a) .he person or persons appointed by the %%4Securities and 7xchange 8oard of India: to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act shall hereafter in this rule be referred to as the Nin*uiring authorityJ3 (b) where the in*uiring authority consists of two or (ore persons, one of the( shall be appointed as the chair(an or senior (e(ber thereof3 (c) the in*uiring authority shall hand o'er a state(ent of issues to be in*uired into to the go'erning body or the (e(ber concerned, as the case (ay be, who will be gi'en a reasonable opportunity to state their or his side of the case3 (d) if any witness is called for exa(ination, an opportunity shall be pro'ided to the go'erning body or the (e(ber whose affairs are being in*uired into, as the case (ay be, to cross+exa(ine such witness3 (e) where the in*uiring authority consists of (ore than one person, the 'iews of the
(aDority shall be dee(ed to represent the findings of such authority and, in the e'ent of an e*uality of 'otes, the chair(an or senior (e(ber shall ha'e a casting 'ote3 (f) the in*uiring authority shall sub(it its report in writing to the %%4Securities and 7xchange 8oard of India: within the period specified in the order of appoint(ent3 (g) te(porary absence fro( any hearing or hearings of any (e(ber of the in*uiring authority shall not 'itiate its proceedings0 (%) Khere the %%4Securities and 7xchange 8oard of India: has directed the go'erning body of a stoc) exchange to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act, the go'erning body concerned shall appoint one or (ore (e(bers thereof to (a)e the in*uiry and the pro'isions of sub+rule ( ) shall apply "!tati# "!tandi# to such in*uiry0 S*,.i!!io of % *%l re$ort. 17. ( ) 7'ery recognised stoc) exchange shall before the 3 st day of Manuary in each year or within such extended ti(e as the %34Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, allow, furnish the %34Securities and 7xchange 8oard of India: annually with a report about its acti'ities during the preceding calendar year, which shall inter alia contain detailed infor(ation about the following (atters , (a) changes in rules and bye+laws, if any3 (b) changes in the co(position of the go'erning body3 (c) any new sub+co((ittees set up and changes in the co(position of existing ones3
%% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# %3 Ibid0
(d) ad(issions, re+ad(issions, deaths or resignations of (e(bers3 (e) disciplinary action against (e(bers3 (f) arbitration of disputes (nature and nu(ber) between (e(bers and non+(e(bers3 (g) defaults3 (h) action ta)en to co(bat any e(ergency in trade3 (i) securities listed and de+listed3 and (j) securities brought on or re(o'ed fro( the forward list0 (%) 7'ery recognised stoc) exchange shall within one (onth of the date of the holding of its annual general (eeting, furnish the %$4Securities and 7xchange 8oard of India: with a copy of its audited balance+sheet and profit and loss account for its preceding financial year0 S*,.i!!io of $erio-i'%l ret*r !. 17A. 7'ery recognised stoc) exchange shall furnish the %$4Securities and 7xchange 8oard of India: periodical returns relating to(i) the official rates for the securities enlisted thereon3 (ii) the nu(ber of shares deli'ered through the clearing house3 (iii) the (a)ing+up prices3 (iv) the clearing house progra((es3 (v) the nu(ber of securities listed and de+listed during the pre'ious three (onths3 (vi) the nu(ber of securities brought on or re(o'ed fro( the forward list during the pre'ious three (onths3 and (vii) any other (atter as (ay be specified by the %$4Securities and 7xchange 8oard of India:0 @% er of $*,li'%tio of ,>e0l%/! for 'riti'i!..
1:. .he bye+laws to be (ade, a(ended or re'ised under the Act shall be published for criticis( in accordance with the pro'isions of section %3 of the &eneral Clauses Act, >!/ both in the &aFette of India and Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate0 Re7*ire.e t! /ith re!$e't to the li!ti ( of !e'*ritie! o % re'o( i!e- !to'6 e#'h% (e. 19. ( ) A public co(pany as defined under the Co(panies Act, !"#, desirous of getting its securities listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars ,
%$ Ibid0
(a) ?e(orandu( and articles of association and, in the case of a debenture issue, a copy of the trust deed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any securities for subscription or sale during the last fi'e years0 (d) Copies of balance+sheets and audited accounts for the last fi'e years, or in the case of new co(panies, for such shorter period for which accounts ha'e been (ade up0 (e) A state(ent showing(i) di'idends and cash bonuses, if any, paid during the last ten years (or such shorter period as the co(pany has been in existence, whether as a pri'ate or public co(pany), (ii) di'idends or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents with or between ,(i) 'endors andLor pro(oters, (ii) underwriters and sub+underwriters, (iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents with(i) (anaging agents and secretaries and treasurers, (ii) selling agents, (iii) (anaging directors and technical directors, (iv) general (anager, sales (anager, (anager or secretary0 (h) Certified copy of e'ery letter, report, balance+sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering securities for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents0 (j) A brief history of the co(pany since its incorporation gi'ing details of its acti'ities including any reorganisation, reconstruction or a(alga(ation, changes in its capital structure, (authorised, issued and subscribed) and debenture borrowings, if
any0 (k) <articulars of shares and debentures issued-(i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s including an option for the issue of any )ind of the securities granted to any person0 (") Certified copies of%"4(i) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3: (ii) agree(ents, if any, with the Industrial 6inance Corporation, Industrial Credit and In'est(ent Corporation and si(ilar bodies0 (n) <articulars of shares forfeited0 ($) A list of highest ten holders of each class or )ind of securities of the co(pany as on the date of application along with particulars as to the nu(ber of shares or debentures held by and the address of each such holder0 (%) <articulars of shares or debentures for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0 (%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant co(pany shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer, (ii) that the fully paid shares will be free fro( all lien, while in the case of partly paid shares, the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such shares, (iii) that any a(ount paid+up in ad'ance of calls on any share (ay carry interest but shall not entitle the holder of the share to participate in respect thereof, in a di'idend subse*uently declared, (iv) there will be no forfeiture of unclai(ed di'idends before the clai( beco(es barred by law, (v) that option or right to call of shares shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the securities of a co(pany which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0
%" Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 <rior to its substitution, sub+clause (i), read as under, 1(i) letters of consent of the Controller of Capital Issues02
%#4(b)
(i) At least twenty fi'e per cent0 of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent3 or (ii) At least ten per cent of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and
allotted to public in ter(s of an offer docu(ent if the post issue capital of the co(pany calculated at offer price is (ore than four thousand crore rupees, <ro'ided that the re*uire(ent of post issue capital being (ore than four thousand crore rupees shall not apply to a co(pany whose draft offer docu(ent is pending with the Securities and 7xchange 8oard of India on or before the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, if it satisfies the conditions prescribed in clause (b) of sub+rule % of rule ! of the Securities Contracts (Regulation) Rules, !"# as existed prior to the date of such co((ence(ent, %/4<ro'ided further that the co(pany, referred to in sub clause (ii), shall increase its public shareholding to at least twenty fi'e per cent, within a
%# Substituted
by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, clause (b) as a(ended by the A(end(ent Rules, %00 , w0e0f0 0/00#0%00 , read as under, 1(b) At least 0 per cent of each class or )ind of securities issued by a co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted subDect to the following conditions, (a) (ini(u( %0 la)h securities (excluding reser'ations, fir( allot(ent and pro(otersJ contribution) was offered to the public3 (b) the siFe of the offer to the public, i&e&' the offer price (ultiplied by the nu(ber of securities offered to the public was (ini(u( Rs0 00 crores3 and (c) the issue was (ade only through boo) building (ethod with allocation of #0 per cent of the issue siFe to the *ualified institutional buyers as specified by the Securities and 7xchange 8oard of India, 4ro+i-e- that if a co(pany does not fulfil the conditions, it shall offer at least %" per cent of each class or )ind of securities to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted, 4ro+i-e- f*rther that a recognised stoc) exchange (ay relax any of the conditions with the pre'ious appro'al of the Securities and 7xchange 8oard of India, in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#), and subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*6or the purpose of this clause, it is hereby clarified that where any part of the securities sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental 6ire and &eneral Insurance Co(pany =i(ited and the Hnited 6ire and &eneral Insurance Co(pany =i(ited or Hnit .rust of India, the total subscription to the securities, whether by one or (ore of such bodies, shall not for( part of the 0 per cent or %" per cent of the securities, as the case (ay be, to be offered to the public02 %/ Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 <rior to its substitution, second pro'iso, read as under, 1<ro'ided further that the co(pany, referred in sub+clause (ii), shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of atleast fi'e per
period of three years fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India0: %>4GGG:: %!4(c) Eotwithstanding anything contained in clause (b), a public sector co(pany, shall offer and allot at least ten per cent, of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares to public in ter(s of an offer docu(ent0: (3) A co(pany applying for listing shall, as a condition precedent, underta)e inter alia(a) (i) that letters of allot(ent will be issued si(ultaneously and that, in the e'ent
of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been posted, (ii) that letters of right will be issued si(ultaneously, (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the securities to which they relate, (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right, (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or di'idend on the securities will be calculated, (b) to issue, when so re*uired, receipts for all securities deposited with it whether for registration, sub+di'ision, exchange or for other purposes 3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of certificates and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (bb) to issue, when so re*uired, consolidation and renewal certificates in deno(inations of the (ar)et unit of trading to split certificates, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3
cent per annu( beginning fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India,2 %> C(itted, ibid <rior to its o(ission, third pro'iso, read as under, 1<ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase beings its public shareholding to the le'el of twenty fi'e per cent in that year02 %! Inserted, ibid0
(c) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders, and (ii) to 'erify when the co(pany is unable to issue certificates or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (d) on production of the necessary docu(ents by shareholders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or certificate of
the Controller of 7state 9uty or si(ilar other docu(ent has been duly exhibited to and registered by the co(pany3 (e) to issue certificates in respect of shares or debentures lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance certificates within the sa(e period where the transfer is acco(panied by a larger certificate3 (f) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a di'idend or the issue of right or bonus share will be considered3 (g) to reco((end or declare all di'idends andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all di'idends andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (h) to notify the stoc) exchange of any (aterial change in the general character or nature of the co(panyJs business3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (anaging agent or secretaries and treasurers, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued, copies of all other notices and circulars sent to the shareholders including proceedings of ordinary and extraordinary general (eetings of the co(pany and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the shareholders of any new issue of securities whether by way of right, pri'ilege bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited securities or the issue of securities held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of di'idend or issue of right or bonus shares or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s (or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its shareholders or debentureholders) and specifying the purpose or purposes for which the transfer boo)s are to be closed (or the record is to be ta)en)3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority subDect to which the issue is proposed to be (ade ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after each annual general (eeting of at least ten principal holders of each class of security of the
co(pany along with particulars as to the nu(ber of shares or debentures held by, and address of, each such holder3 (+) to grant to shareholders the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e not being less than four wee)s within which to record, exercise, or renounce such rights, pri'ileges and benefits and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3 (r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any securities listed on the exchange, (ii) of the intention to (a)e a drawing of such securities, inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing of the balance) for the drawing, (iii) of the a(ount of securities outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the shareholders to apprise the position of the co(pany and to a'oid the establish(ent of a false (ar)et in the shares of the co(pany3 (t) (t)that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 304($) An application for listing shall be necessary in respect of the following, (a) all new issues of any class or )ind of securities of a co(pany to be offered to the public3 (b) all further issues of any class or )ind of securities of a co(pany if such class or )ind of securities of the co(pany are already listed on a recognised stoc) exchange0: (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the securities of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 3 44ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any security, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and its orders shall be carried out by the stoc) exchange0: 3%4(#) A recognised stoc) exchange (ay, either at its own discretion or shall in
accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore or re+ad(it to dealings any securities suspended or withdrawn fro( the list0: 334(#A) 7xcept as otherwise pro'ided in these rules or per(itted by the Securities and 7xchange 8oard of India under sub+rule (/), all re*uire(ents with respect to listing
30 Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, sub+rule ($), read as under, 1($) A fresh application for listing will be necessary in respect of all new issues desired to be dealt in, pro'ided that, where such new securities are identical in all respects with those already listed, ad(ission to dealings will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new issues0 7xplanation, Shares are identical in all respects only if(a) they are of the sa(e no(inal 'alue and the sa(e a(ount per share has been called up3 (b) they are entitled to di'idend at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the di'idend payable on each share will a(ount to exactly the sa(e su(, net and gross3 and (c) they carry the sa(e rights in all other respects02 3 Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%0000 7arlier, the second pro'iso was a(ended by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 3% Substituted by the Securities Contracts (Regulation) (A(end(ent), %000, w0e0f0 0>00>0%0000 7arlier, subrule (#) was a(ended by the Securities Contracts (Regulation) (A(end(ent), !!#, w0e0f0 %30 %0 !!#0 33 Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!0>0%0 00 <rior to its substitution, sub+rule (#A) as a(ended by the Securities Contracts
prescribed by these rules shall, so far as they (ay be, also apply to a public sector co(pany0: 3$4GGG: (/) .he 3"4Securities and 7xchange 8oard of India: (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect to listing prescribed by these rules0 3#4Co ti *o*! Li!ti ( Re7*ire.e t. 19A. ( ) 7'ery listed co(pany 3/4other than public sector co(pany: shall (aintain public shareholding of at least twenty fi'e per cent0, 3>4<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent, on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall increase its public shareholding to at least twenty fi'e per cent, within a period of three years fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India0 7xplanation, 6or the purposes of this sub+rule, a co(pany whose securities has been listed pursuant to an offer and allot(ent (ade to public in ter(s of sub+clause (ii) of clause (b) of sub+rule (%) of rule !, shall (aintain (ini(u( twenty fi'e per cent, public shareholding fro( the date on which the public shareholding in the co(pany reaches the le'el of twenty fi'e percent in ter(s of said sub+clause0: (%) Khere the public shareholding in a listed co(pany falls below twenty fi'e per cent0 at any ti(e, such co(pany shall bring the public shareholding to twenty fi'e per cent0
(Regulations)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 and &SR % (7) w0e0f0 0!0030 !!", read as under, 1(#A) All the re*uire(ents with respect to listing and continuous listing prescribed by these rules, shall so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature ,2 3$ C(itted by the Securities Contracts (Regulation)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its o(ission, pro'iso, as substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#,
w0e0f0 %30 %0 !!# and inserted by &SR %! (7) dated %/0030 !!", read as under, 1<ro'ided that a recognised stoc) exchange (ay relax the re*uire(ent of offer to public for subscription of atleast twenty+fi'e percent of the each class or )ind of securities issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e02 3" Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent), Rules, !!#, w0e0f0 %30 %0 !!#0 3# Inserted by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 3/ Inserted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3> Substituted, ibid0 <rior to substitution, pro'isos, read as under, 1<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of at least fi'e per cent per annu( beginning fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India, <ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase brings its public shareholding to the le'el of twenty fi'e per cent in that year02
within a (axi(u( period of twel'e (onths fro( the date of such fall in the (anner specified by the Securities and 7xchange 8oard of India0: 3!4(3) Eotwithstanding anything contained in this rule, e'ery listed public sector co(pany shall (aintain public shareholding of at least ten per cent0, <ro'ided that a listed public sector co(pany+ (a) which has public shareholding below ten per cent, on the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of three years fro( the date of such co((ence(ent3 (b) whose public shareholding reduces below ten per cent, after the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of twel'e (onths fro( the date of such reduction,0: $04Re7*ire.e t! /ith re!$e't to the li!ti ( of * it! or % > other i !tr*.e t of % Colle'ti+e I +e!t.e t S'he.e o % re'o( i!e- !to'6 e#'h% (e. "=. ( ) A Collecti'e In'est(ent ?anage(ent Co(pany (CI?C) which is desirous of getting its any collecti'e in'est(ent sche(e listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars , (a) Certificate of incorporation, (e(orandu( and articles of association of the co(pany and the copy of the trust deed of the sche(e intended to be listed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any unit or other instru(ent for subscription or sale during the last fi'e years, or in the case of a new co(pany, such shorter period during which the co(pany has been in existence0 (d) Copies of balance sheets and audited accounts for the last fi'e years, or in the case of a new co(pany, for such co(pleted financial year for which accounts ha'e been (ade up0 (e) A state(ent showing,-
(i) returns and cash bonuses, if any, paid during the last ten years (or such shorter period as the co(pany has been in existence whether as a pri'ate or public co(pany)3 (ii) returns or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents pertaining to each sche(e of the co(pany with or between,(i) 'endors andLor pro(oters3 (ii) underwriters and sub+underwriters3
3! Inserted $0 Inserted
by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 0 by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%000
(iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents pertaining to each sche(e of a co(pany with(i) selling agents and other ser'ice pro'iders3 (ii) (anaging directors and technical directors3 (iii) general (anager, sales (anager, (anager or secretary0 (h) Certified copies of e'ery letter, report, balance sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering units or any other instru(ents of the sche(e for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents pertaining to such sche(e0 (j) A brief history of the Co(pany since its incorporation gi'ing details of its acti'ities including any re+organisation, reconstruction or a(alga(ation, changes in its capital structure (authorised, issued and subscribed) and debenture borrowings, if any, and the perfor(ance of other collecti'e in'est(ent sche(es of the co(pany0 (k) <articulars of units of the sche(e andLor shares, debentures of the co(pany issued (i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s granted to any person pertaining to such sche(e0 (") Certified copies of(i) certificate of registration granted by the Securities and 7xchange 8oard of India3 (ii) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3 (iii) agree(ents, if any, with any public financial institution as specified in section $A of the Co(panies Act, !"# ( of !"#)0 (n) A list of the highest ten holders of units of each sche(e of the co(pany as on the date of application along with particulars as to the nu(ber of units held by and the address of each such holder0 ($) <articulars of units of the sche(e for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any
particular case call for such further particulars or docu(ents as it dee(s proper0 (%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer of units of a particular sche(e3 (ii) that the fully paid units issued under the sche(e will be free fro( all lien, while in the case of partly paid units the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such units3 (iii) that any a(ount paid+up in ad'ance of calls on any units (ay carry interest but shall not entitle the holder of the unit to participate in respect thereof, in a return subse*uently declared3 (iv) there will be no forfeiture of unclai(ed returns before the clai( beco(es barred by law3 (v) that option or right to call of units shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the units of a sche(e which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0 (b) At least twenty+fi'e per cent of the units or any other instru(ent of a sche(e issued by the co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and not (ore than ninety days, and that applications recei'ed in pursuance of such offer were allotted fairly and unconditionally , 4ro+i-e- that a recognised stoc) exchange (ay relax this re*uire(ent, with the pre'ious appro'al of the Securities and 7xchange 8oard of India in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#) and subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*Khere any part of the units or any other instru(ents sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely, the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental Insurance Co(pany =i(ited and the Hnited Insurance Co(pany =i(ited, or Hnit .rust of India, the total subscription to the units or any other instru(ent, whether by one or (ore of such bodies, shall not for( part of the twenty+fi'e per cent of the units or any other instru(ent to be offered to the public0 (3) A co(pany applying for listing of a sche(e shall, as a condition precedent, underta)e, inter alia,(a) (i) that letters of allot(ent of units or any other instru(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to that effect will be inserted in the press
so that it will appear on the (orning after the letters of allot(ent ha'e been posted3 (ii) that letters of right will be issued si(ultaneously3 (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and, exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the units or any other instru(ent to which they relate3 (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right3 (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or return on the units or any other instru(ent will be calculated3 (b) to issue, when so re*uired, receipts for all units and any other instru(ent deposited with it whether for registration, sub+di'ision, exchange or for other purposes3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of units and any other instru(ent and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (c) to issue, when so re*uired, consolidation and renewal units or any other instru(ent in deno(inations of the (ar)et unit of trading, to split units or any other instru(ent, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3 (d) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders3 and (ii) to 'erify when the co(pany is unable to issue units or any other instru(ents or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (e) on production of the necessary docu(ents by unit holders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or si(ilar other docu(ent has been duly exhibited to and registered by the co(pany3 (f) to issue certificates in respect of units or any other instru(ent lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance units or any other instru(ent within the sa(e period where the transfer is acco(panied by a larger unit or any other instru(ent certificate3 (g) to ad'ise the stoc) exchange of the date of the board (eeting at which the
declaration or reco((endation of a return or the issue or right or bonus units or any other instru(ent will be considered3 (h) to reco((end or declare all returns andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all returns andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts of such sche(e as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued copies of all other notices and circulars sent to the unitLother instru(ent holders regarding any i(portant de'elop(ent or resolutions passed by the co(pany affecting the perfor(ance of the sche(e and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the unitLany other instru(ent holders, of any new issue of unitsLother instru(ents whether by way of right, pri'ilege, bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited unitsLother instru(ents or the issue of unitsLother instru(ents held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of unit capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of returns or issue of right or bonus unitsLany other instru(ents in the sche(e or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its unitLother instru(ent holders and specifying the purpose or purposes for which the transfer boo)s are to be closed or the record is to be ta)en3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority, subDect to which the issue is proposed to be (ade, ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after the preparation of annual accounts of at least ten principal holders of each class of unitsLany other instru(ents of the co(pany along with particulars as to the nu(ber of unitsLany other instru(ent held by, and address of, each such holder3 (+) to grant to unitLany other instru(ent holders of the sche(e the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e, not being less than four wee)s, within which to record, exercise, or renounce such rights, pri'ileges and benefits, and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc)
exchange agrees otherwise3 (r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any unitLother instru(ent listed on the exchange3 (ii) of the intention to (a)e a drawing of such unitLother instru(ent inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing off the balance) for the drawing3 (iii) of the a(ount of unitsLother instru(ents outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the unitLany other instru(ent holders to appraise the position of the sche(e and to a'oid the establish(ent of a false (ar)et in the unitsLany other instru(ents of the co(pany3 (t) that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 ($) A fresh application for listing will be necessary in respect of all new sche(es desired to be dealt in , 4ro+i-e- that, where such new unitsLother instru(ents are identical in all respects with those already listed, ad(ission to dealing will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new sche(es0 ()%lanati$n0-HnitsLany other instru(ents are identical in all respects only if(a) they are issued under the sa(e sche(e3 (b) they are of the sa(e no(inal 'alue and the sa(e a(ount per unitLother instru(ents has been called up3 (c) they are entitled to returns at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the return payable on each unitLother issue will a(ount to exactly the sa(e su(, net and gross3 and (d) they carry the sa(e rights in all other respects0 (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the unitsLother instru(ents of a sche(e of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 4ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any unitLother instru(ent of a collecti'e in'est(ent sche(e, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply
to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and thereupon the orders of the Securities Appellate .ribunal shall be carried out by the stoc) exchange0 (#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore or read(it to dealings any unitsLother instru(ents suspended or withdrawn fro( the list0 (/) All the re*uire(ents with respect to listing prescribed by these rules, shall, so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature , 4ro+i-e- that a recognised stoc) exchange (ay relax the re*uire(ent of offer to the public for subscription of at least twenty+fi'e per cent of the units or any other instru(ent of a collecti'e in'est(ent sche(e issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 (>) .he Securities and 7xchange 8oard of India (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect of listing prescribed by these rules0: $ 4Deli!ti ( of !e'*ritie!. "1. A recogniFed stoc) exchange (ay, without preDudice to any other action that (ay be ta)en under the Act or under any other law for the ti(e being in force, delist any securities listed thereon on any of the following grounds in accordance with the regulations (ade by the Securities and 7xchange 8oard of India, na(ely,(a) the co(pany has incurred losses during the preceding three consecuti'e years and it has negati'e networth3 (b) trading in the securities of the co(pany has re(ained suspended for a period of (ore than six (onths3 (c) the securities of the co(pany ha'e re(ained infre*uently traded during the preceding three years3 (d) the co(pany or any of its pro(oters or any of its director has been con'icted for failure to co(ply with any of the pro'isions of the Act or the Securities and 7xchange 8oard of India Act, !!% or the 9epositories Act, !!# (%% of !!#) or rules, regulations, agree(ents (ade thereunder, as the case (ay be and awarded a penalty of not less than rupees one crore or i(prison(ent of not less than three years3 (e) the addresses of the co(pany or any of its pro(oter or any of its directors, are not )nown or false addresses ha'e been furnished or the co(pany has changed its registered office in contra'ention of the pro'isions of the Co(panies Act, !"# ( of !"#)3 or
$
Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %00>, w0e0f0 000#0%00!
(f) shareholding of the co(pany held by the public has co(e below the (ini(u( le'el applicable to the co(pany as per the listing agree(ent under the Act and the co(pany has failed to raise public holding to the re*uired le'el within the ti(e specified by the recogniFed stoc) exchange , 4ro+i-e- that no securities shall be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0
(%) If the securities is delisted under clause ( ), (a) the co(pany, pro(oter and director of the co(pany shall be Dointly and se'erally liable to purchase the outstanding securities fro( those holders who wish to sell the( at a fair price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India, under the Act3 and (b) the said securities shall be delisted fro( all recogniFed stoc) exchanges0 (3) A recogniFed stoc) exchange (ay, on the re*uest of the co(pany, delist any securities listed thereon in accordance with the regulations (ade under the Act by Securities and 7xchange 8oard of India, subDect to the following conditions, na(ely ,(a) the securities of the co(pany ha'e been listed for a (ini(u( period of three years on the recogniFed stoc) exchange3 (b) the delisting of such securities has been appro'ed by the two+third of public shareholders3 and (c) the co(pany, pro(oter andLor the director of the co(pany purchase the outstanding securities fro( those holders who wish to sell the( at a price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India under the Act, 4ro+i-e- that the condition at (c) (ay be dispensed with by Securities and 7xchange 8oard of India if the securities re(ain listed at least on the Eational Stoc) 7xchange of India =i(ited or the 8o(bay Stoc) 7xchange =i(ited0: FORM A ( ee Rules 3 and /) A$$li'%tio for re'o( itio 1re e/%l of re'o( itio of % !to'6 e#'h% (e * -er !e'tio ) of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 .o 00000000000000000000000000000000000000 00000000000000000000000000000000000000 !bject,*A%%licati$n f$r rec$gniti$n-rene.al $f rec$gniti$n $f a #t$ck e)change !nder #ecti$n 3 $f the ec!ritie# /$ntract# (0eg!lati$n) Act' 1956& Sir, <ursuant to the $%4Securities and 7xchange 8oard of India: Eotification Eo0 00000000000000000000000000 00000000000000000 dated 000000000000000000000000000000000LCertificate of recognition dated0000000000000000000000000000000KeLI on behalf of 000000000000000000 (na(e and address of stoc) exchange) being a stoc) exchange as defined in section % of the Securities Contracts
$% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
(Regulation) Act, !"# hereby apply for recognitionLrenewal of recognition for the purposes of the said Act in respect of contracts in securities0 ". 6our copies of the rules, (e(orandu( and articles of association relating in general to the constitution and (anage(ent of the stoc) exchange and four copies of the bye+laws for the regulation and control contracts in securities are enclosed0 ). All the necessary infor(ation re*uired in the Annexure to this 6or( is enclosed0 Any additional infor(ation will be furnished as and when called for by the $34Securities and 7xchange 8oard of India:0 3. KeLI on behalf of the said stoc) exchange hereby underta)e to co(ply with the re*uire(ents of section $ of the said Act and such other conditions and ter(s as (ay be contained in the certificate of recognition or be prescribed or i(posed subse*uently0
5. .reasury Receipt Eo0 000000dated000000for Rs000000000000is attached0 Oours faithfully, Signature of applicant ANNEAURE TO 2OR@ BAC Part I - General 0 Ea(e of the applicant stoc) exchange0 %0 Address0 30 9ate of establish(ent0 $0 Is your exchange a Doint stoc) co(pany (state whether public or pri'ate) registered under the Indian Co(panies Act or an association for profit or otherwise P If it is organised on so(e other basis, this (ay be stated0 "0 &i'e details of your capital structure and attach three copies of the audited balance sheets and profit and loss account of the 7xchange for the preceding three years0 Part II - Membership #0 State the nu(ber of (e(bers at the ti(e of application0 Also specify how (any are inacti'e0 /0 State whether there is any pro'ision, resolution or con'ention for li(iting the nu(ber of (e(bers and whether in pursuance thereof you ha'e fixed a ceiling on the nu(ber of (e(bers that you would ta)e0 >0 9o you insist on any (ini(u( *ualifications and experience before enrolling new (e(bers P If so gi'e details0 !0 State the different classes of (e(bers, if any, the nu(ber thereof and the pri'ileges enDoyed by each class0 Khat is the procedure followed by your exchange for the ad(ission of different classes of new (e(bers P 00 Khat are the rates of your annual subscription in respect of the different classes of (e(bers P 0 9o you collect any security deposit fro( your (e(bers P If so, gi'e details and also state the (anner in which such deposits are utilised and the rate of interest allowed, if any0
$3 Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
%0 9o you collect any ad(ission or entrance fees fro( your (e(bers or fro( partners of fir(s who are (e(bers P If so, how (uch P 30 9o you insist on your (e(bers and partners of fir(s who are (e(bers di'esting the(sel'es of other acti'ities either as principal or as e(ployee P $0 9o your rules per(it fir(s to beco(e (e(bers P If so, is it incu(bent on (e(bers to see) the appro'al of the go'erning body before ad(itting new partners P State the conditions, if any, laid down in your rules for the ad(ission of such partners0 "0 If your rules do not per(it of fir(s being enrolled as (e(bers, do you per(it indi'idual (e(bers to for( a partnership P State the procedure followed for the recognition of such partnership0 #0 9o you per(it (e(bers to wor) in partnership with non+(e(bers P If so, how far such non+(e(bers subDect to the control of the stoc) exchange P Part III - Governing Body /0 Khat is the present strength of your go'erning body P &i'e details of the constitution, powers of (anage(ent, election and tenure of office of (e(bers of the go'erning body, and the (anner in which its business is transacted0
>0 Are any trade or co((ercial interest represented on your go'erning body P If so, gi'e details of interests represented0 !0 9o you associate shareholders of in'estors associations with the (anage(ent of your exchange P If so, state the (anner in which it is done0 %00 Are there any &o'ern(ent representati'es on your go'erning body P If so, furnish their na(es0 % 0 9o your rules pro'ide for the direct election by (e(bers of any other bodies or co((ittees, apart fro( the go'erning body P If so, gi'e details of their constitution, tenure, powers and functions0 %%0 9o you ha'e any pro'ision for the appoint(ent of standing or ad h$c subco((ittees of the go'erning body P If so, furnish details of the (ethod of their appoint(ent, ter(s of office, powers and functions0 %30 &i'e the designations, powers and duties of principal office+bearers of your exchange0 Are any of these office+bearers in the pay of the stoc) exchange P If so, gi'e details as to the (ode of their appoint(ent, tenure of office and re(uneration0 Part IV - Trading %$0 9o you ha'e a trading ring P If not, how do you carry on the business P &i'e details0 %"0 State the different )inds of contracts in use on your exchange e&g&' spot, ready and forward0 State the period of deli'ery and pay(ent in each case0 %#0 &i'e details of business hours for each type of contract0 %/0 &i'e details of the scale of bro)erage and other charges, if any, prescribed by your exchange0 %>0 9o you prescribe standard for(s of contract for the use of your (e(bers P Attach three copies of each such contract for(0 %!0 9o you classify your (e(bers into bro)ers and Dobbers P If so, specify the bye+law under which this is done0 300 9o you ha'e a syste( of registration of re(isiers andLor authorised cler)s P If so, gi'e details as to their *ualifications, obligations and rights, etc0 3 0 9o you ha'e any regulations regarding dealings by (e(bers on their own account whether in the nature of 1aravani (day+to+day) or otherwise P 3%0 9o you ha'e any pro'isions for regulating the 'olu(e of business done by any indi'idual (e(ber other than through a syste( of (argins P If so, gi'e details0 330 Khat pro'isions ha'e you (ade for periodical settle(ent of contracts and differences thereunder, the deli'ery of, and pay(ent for securities and the passing of deli'ery orders P 3$0 9o you ha'e a clearing house for the settle(ent of contracts P If so, gi'e details of its organisation and (anage(ent0 3"0 If you ha'e clearing house, what returns do the (e(bers of your exchange sub(it regarding the transactions cleared through such clearing house P 9oes the exchange as) for any regular returns in respect of transactions settled outside the clearing house P Sub(it three copies of for(s used in this connection0 3#0 Iow do you fix, alter or postpone the dates of settle(ent P 3/0 Iow do you deter(ine and declare (a)ing+up prices P 3>0 9o you ha'e any arrange(ents for (a)ing or recording of bargains P 3!0 Ia'e you any arrange(ents for recording and publishing (ar)et rates including opening, closing, highest and lowest rates P
$00 Khat pro'isions ha'e you (ade for regulating-(a) the entering into contracts, their perfor(ance and rescission, including contracts , (i) between (e(bers, (ii) between a (e(ber and his constituent, and (iii) between a (e(ber and a non+(e(ber3 (b) the conse*uences of breach, default or insol'ency on the part of (e(bers whether acting as buyers, sellers or inter(ediaries 3 and (c) 2havala#3 and other (atters relating to conduct of business of (e(bers in the exchange P $ 0 9o you prescribe (argin re*uire(ents P If yes, gi'e details0 $%0 9o you prescribe (axi(u( and (ini(u( prices for securities P If so, how and under what conditions0 $30 9o you pro'ide any safeguards for the pre'ention of Nbulls*ueeFesJ and 3 NbearraidsJ and for (eeting e(ergencies in trade P &i'e details0 $$0 Khat are the (easures adopted by you to regulate or prohibit ad'ertising or issue of circulars by your (e(bers P $"0 Khat are the disciplinary power with the go'erning body to enforce due co(pliance by (e(bers of the rules and bye+laws of the exchange and generally to ensure proper standard of business conduct P $#0 9o you re*uire (e(bers to supply such infor(ation or explanation and to produce such boo)s relating to their business as your go'erning body (ay re*uire P $/0 9o you publish any statistics in regard to business done on the exchange including the transactions settled through the clearing house, if (aintained P In particular, ha'e you e'ol'ed any (achinery for co(puting the 'olu(e of transactions in the different )inds of contracts per(itted on your exchange P &i'e details0 $>0 9o you ha'e any bye+laws contra'ention of which (a)es a contract 'oid P Part V - Miscellaneo s $!0 9o you ha'e any (achinery for arbitration of disputes between (e(bers andLor between (e(bers and their constituents P &i'e details0 "00 Khat are the conditions subDect to which securities are listed for dealings on your exchange P " 0 Khat are your re*uire(ents for ad(itting securities to forward+trading P "%0 9o you ha'e the right to prohibit, withdraw or suspend dealings in a listed security P If so, under what circu(stances is this right exercised P "30 Khat pro'isions ha'e you (ade for the le'y and reco'ery of fees, fines and penalties P FORM B ( ee rules # and /) $$5The Se'*ritie! % - E#'h% (e ;o%r- of I -i%< 4e. 5elhi' the 20&&&&&&&&&&&&& Eo0 000000000000000000000000000000000000.he $"4Securities and 7xchange 8oard of India:, ha'ing considered the application for recognitionLrenewal of recognition (ade under section 3 of the Securities Contracts (Regulation) Act, !"# by000000000000000000000000000000 (na(e and address of exchange) and being satisfied that it would be in the interest of the trade and also in the public interest so to do, hereby grants, in exercise of the powers conferred by section $ of the Securities Contracts (Regulation) Act, !"# recognition to the said exchange under section $ of the said Act for 0000000000000000000 yearLyears ending 0000000000000000000000%0 0000000on a per(anent basis in respect of contracts in securities subDect to the conditions stated herein below or as (ay be prescribed or i(posed hereafter0
Seal of the $#48oard: Signature of Cfficer Note&-Application for renewal of recognition shall be (ade so as to reach the Central &o'ern(ent not less than three (onths before the expiry of the period0 (.his certificate, will also ha'e to be published as a Eotification in the &aFette of India and also in the Cfficial &aFette of the State in which principal office of the recognised stoc) exchange is situate)0 $/5FORM ! ( ee rule 3) Noti'e to !ho/ '%*!e %(%i !t the /ith-r%/%l of re'o( itio .I7 S7CHRI.I7S AE9 7ACIAE&7 8CAR9 C6 IE9IA 6!"bai' the&&&&&&&&&&& .o 0000000000000000000000000000000000000000000000000000000000000000000000000000000000
$$ Substituted
for 1&o'ern(ent of India, ?inistry of 6inance2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 $" Substituted for 1Central &o'ern(ent2, ibid0 $# Substituted for 1?inistry2, ibid0 $/ Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#
0000000000000000000000000000000000000000000000000000000000000000000000000000000000 (na(e and address of the exchange) Oou are hereby called upon to show cause on or before 0000000000000000000000000000000000000 at the office of 0000000000000000000000000000000000000000000000000000 ( designation of the officer) why the recognition granted to you under the ?inistry of 6inanceLthe Securities and 7xchange 8oard of India, Eotification Eo0 0000000000000000000000000000 dated 000000000000000000000000000000000000000 and Certificate Eo0 00000000000000000000000000000 dated 000000000000000000000000000000 should not be withdrawn for the reasons gi'en in the annexure to this notice0 8y order and in the na(e of the Securities and 7xchange 8oard of India0 Seal of the Securities and 7xchange 8oard of India0 Notifi'%tio & 4$& 576' dated 217271957&
SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< SECTIONS
80(9:6:4A0; 1. Short title, extent and co((ence(ent ". 9efinitions 0(/<=4: (5 1</> (?/@A4=( ). Application for recognition of stoc) exchanges 3. &rant of recognition to stoc) exchanges0 3A. Corporatisation and de(utualisation of stoc) exchanges 3;. <rocedure for corporatisation and de(utualisation 5. Kithdrawal of recognition 8. <ower of Central &o'ern(ent to call for periodical returns or direct in*uiries to be (ade 7. Annual reports to be furnished to Central &o'ern(ent by stoc) exchanges 7A. <ower of recognised stoc) exchange to (a)e rules restricting 'oting rights, etc :. <ower of Central &o'ern(ent to direct rules to be (ade or to (a)e rules :A. Clearing corporation 9. <ower of recognised stoc) exchanges to (a)e bye+laws 1=. <ower of Securities and 7xchange 8oard of India to (a)e or a(end byelaws of recognised stoc) exchanges 11. <ower of Central &o'ern(ent to supersede go'erning body of a recognised stoc) exchange 1". <ower to suspend business of recognised stoc) exchanges0 1"A. <ower to issue directions 1). Contracts in notified areas illegal in certain circu(stances 1)A. Additional trading floor 13. Contracts in notified areas to be 'oid in certain circu(stances 15. ?e(bers (ay not act as principals in certain circu(stances 18. <ower to prohibit contracts in certain cases 17. =icensing of dealers in securities in certain areas 17A. <ublic issue and listing of securities referred to in sub+clause ( ie) of clause (h) of section % 1:. 7xclusion of spot deli'ery contracts fro( sections 3, $, " and / 1:A. Contracts in deri'ati'e 19. Stoc) exchanges other than recognised stoc) exchanges prohibited "=. <rohibition of options in securities "1. Conditions for listing "1A. 9elisting of securities "". Right of appeal against refusal of stoc) exchanges to list securities of public co(panies ""A. Right of appeal to Securities Appellate .ribunal against refusal of stoc) exchange to list securities of public co(panies "";. <rocedure and powers of Securities Appellate .ribunal ""C. Right to legal representation ""D. =i(itation ""E. Ci'il court not to ha'e Durisdiction
""2. Appeal to Supre(e Court 8(4A91:( A45 80</(5A0( "). <enalties ")A. <enalty for failure to furnish infor(ation, return, etc0 ");. <enalty for failure by any person to enter into an agree(ent with clients ")C. <enalty for failure to redress in'estorsJ grie'ances ")D. <enalty for failure to segregate securities or (oneys of client or clients ")E. <enalty for failure to co(ply with pro'ision of listing conditions or delisting conditions or grounds ")2. <enalty for excess de(aterialisation or deli'ery of unlisted securities ")G. <enalty for failure to furnish periodical returns, etc0 ")D. <enalty for contra'ention where no separate penalty has been pro'ided ")0I. <ower to adDudicate ")E. 6actors to be ta)en into account by adDudicating officer ")EA. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! ")E;. Re'o+er> of %.o* t! ")F. Crediting su(s realised by way of penalties to Consolidated 6und of India ")L. Appeal to Securities Appellate .ribunal ")@. Cffences ")N. Co(position of certain offences ")0O. <ower to grant i((unity "3. Cffences by co(panies "5. Certain offences to be cogniFable "8. CogniFance of offences by courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! 6: /(99A4(<A "7. .itle to di'idends "7A. Right to recei'e inco(e fro( collecti'e in'est(ent sche(e "7;. Right to recei'e inco(e fro( (utual fund ":. Act not to apply in certain cases "9. <rotection of action ta)en in good faith "9A. <ower to delegate )=. <ower to (a)e rules )1. <ower of Securities and 7xchange 8oard of India to (a)e regulations SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< 53th Se$te.,er, 1958< A A't to $re+e t * -e!ir%,le tr% !%'tio ! i !e'*ritie! ,> re(*l%ti ( the ,*!i e!! of -e%li ( therei , 14***: ,> $ro+i-i ( for 'ert%i other .%tter! 'o e'te- there/ith. 87 it enacted by <arlia(ent in the Se'enth Oear of the Republic of India as follows ,
80(9:6:4A0; Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities Contracts (Regulation) Act, !"#0 (%) It extends to the whole of India0
Kords 1by prohibiting options and2 o(itted by the Securities =aws (A(end(ent) Act, !!", Sec0 >, w0e0f0 %"+0 + !!".
(3) It shall co(e into force on such date% as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 Defi itio !. ". In this Act, unless the context otherwise re*uires,(a) 1contract2 (eans a contract for or relating to the purchase or sale of securities3 3 4(aa) 1corporatisation2 (eans the succession of a recognised stoc) exchange, being a body of indi'iduals or a society registered under the Societies Registration Act, >#0 (% of >#0), by another stoc) exchange, being a co(pany incorporated for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities carried on by such indi'iduals or society3 (ab) 1de(utualisation2 (eans the segregation of ownership and (anage(ent fro( the trading rights of the (e(bers of a recognised stoc) exchange in accordance with a sche(e appro'ed by the Securities and 7xchange 8oard of India3: $4"4(ac): 1deri'ati'e2 includes(A) a security deri'ed fro( a debt instru(ent, share, loan, whether secured or unsecured, ris) instru(ent or contract for differences or any other for( of security3 (B) a contract which deri'es its 'alue fro( the prices, or index of prices, of underlying securities3: (b) 1&o'ern(ent security2 (eans a security created and issued, whether before or after the co((ence(ent of this Act, by the Central &o'ern(ent or a State &o'ern(ent for the purpose of raising a public loan and ha'ing one of the for(s specified in clause (2) of section % of the <ublic 9ebt Act, !$$ ( > of !$$)3 (c) 1(e(ber2 (eans a (e(ber of a recognised stoc) exchange3 (d) 1option in securities2 (eans a contract for the purchase or sale of a right to buy or sell, or a right to buy and sell, securities in future, and includes a teji' a "andi' a teji "andi' a galli' a put, a call or a put and call in securities3 (e) 1prescribed2 (eans prescribed by rules (ade under this Act3
% %0+%+
!"/ vide SRC "%>, dated #+0%+ !"/, published in the &aFette of India, 7xtra0, <t0 II, Sec0 3, p0 "$!, dated #+0%+ !"/0 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 $ Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000 " Clause (aa) renu(bered as clause (ac) by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0
(f) 1recognised stoc) exchange2 (eans a stoc) exchange which is for the ti(e
being recognised by the Central &o'ern(ent under section $3 (g) 1rules2, with reference to the rules relating in general to the constitution and (anage(ent of a stoc) exchange, includes, in the case of a stoc) exchange which is an incorporated association, its (e(orandu( and articles of association3 64(ga) 1sche(e2 (eans a sche(e for corporatisation or de(utualisation of a recognised stoc) exchange which (ay pro'ide for(i) the issue of shares for a lawful consideration and pro'ision of trading rights in lieu of (e(bership cards of (e(bers of a recognised stoc) exchange3 (ii) the restrictions on 'oting rights3 (iii) the transfer of property, business, assets, rights, liabilities, recognitions, contracts of the recognised stoc) exchange, legal proceedings by, or against, the recognised stoc) exchange, whether in the na(e of the recognised stoc) exchange or any trustee or otherwise and any per(ission gi'en to, or by, the recognised stoc) exchange3 (iv) the transfer of e(ployees of a recognised stoc) exchange to another recognised stoc) exchange3 (v) any other (atter re*uired for the purpose of, or in connection with, the corporatisation or de(utualisation, as the case (ay be, of the recognised stoc) exchange3: /4>4(gb): 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (h) 1securities2 include(i) shares, scrips, stoc)s, bonds, debentures, debenture stoc) or other (ar)etable securities of a li)e nature in or of any incorporated co(pany or other body corporate3 !4(ia) deri'ati'e3 (ib) units or any other instru(ent issued by any collecti'e in'est(ent sche(e to the in'estors in such sche(es3:
# Inserted / Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (Second A(end(ent) Act, !!!, Sec %, w0e0f0 #+ %+ !!!0 > Clause (ga) renu(bered as clause (gb) by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 ! Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000
04(ic) security receipt as defined in clause ( Cg) of section % of the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%3: 114(id) units or any other such instru(ent issued to the in'estors under any (utual fund sche(e3: %47xplanation0-6or the re(o'al of doubts, it is hereby declared that ;securities; shall not include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(bined benefit ris) on the life of the persons and in'est(ent by such
persons and issued by an insurer referred to in clause (!) of section % of the Insurance Act, !3> ($ of !3>)3: 35(ie) any certificate or instru(ent (by whate'er na(e called), issued to an in'estor by any issuer being a special purpose distinct entity which possesses any debt or recei'able, including (ortgage debt, assigned to such entity, and ac)nowledging beneficial interest of such in'estor in such debt or recei'able, including (ortgage debt, as the case (ay be3 <
0 Inserted by the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%, Sec0 $ and Schedule, w0r0e0f0 % +#+%00%0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0e0f0 %+ 0+%00$0 % Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, Sec $, w0r0e0f0 0!+0$+%0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, read as under , ;CIA<.7R BI ?ISC7==AE7CHS #0 Dalidati$n&-Eotwithstanding anything contained in any Dudg(ent, decree or order of any Court, .ribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly, any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 0e%eal and #aving#&*( ) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0; 3 Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec %, w0e0f0 %>+"+ %00/0
$4(ii) &o'ern(ent securities3 (iia) such other instru(ents as (ay be declared by the Central &o'ern(ent to be securities3 and: (iii) rights or interest in securities3 "4(i) 1spot deli'ery contract2 (eans a contract which pro'ides for,(a) actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e
town or locality3 (b) transfer of the securities by the depository fro( the account of a beneficial owner to the account of another beneficial owner when such securities are dealt with by a depository3: #4(j) 1stoc) exchange2 (eans(a) any body of indi'iduals, whether incorporated or not, constituted before corporatisation and de(utualisation under sections $A and $8, or (b) a body corporate incorporated under the Co(panies Act, !"# ( of !"#) whether under a sche(e of corporatisation and de(utualisation or otherwise, for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0: /4I ter$ret%tio of 'ert%i /or-! % - e#$re!!io !. "A. Kords and expressions used herein and not defined in this Act but defined in the Co(panies Act, !"# ( of !"#) or the Securities and 7xchange 8oard of India
$ Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, for sub+clause (ii), w0r0e0f0 30+0 + !!%0 " Substituted by the 9epositories Act, !!#, Sec 30 and Schedule, <t0 III, w0r0e0f0 %0+0!+ !!" . <rior to its substitution, clause (i) read as under , N(i) 1spot deli'ery contract2 (eans a contract which pro'ides for the actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e town or locality3J # Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (j) read as under ,N(j) 1stoc) exchange2 (eans any body of indi'iduals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0J / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
Act, !!% ( " of !!%) or the 9epositories Act, !!# (%% of !!#) shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts0: 0(/<=4: (5 1</> (?/@A4=( A$$li'%tio for re'o( itio of !to'6 e#'h% (e!. ). ( ) Any stoc) exchange, which is desirous of being recognised for the purposes of this Act, (ay (a)e an application in the prescribed (anner to the Central &o'ern(ent01: (%) 7'ery application under sub+section ( ) shall contain such particulars as (ay be prescribed, and shall be acco(panied by a copy of the bye+laws of the stoc) exchange for the regulation and control of contracts and also a copy of the rules relating in general to the constitution of the stoc) exchange and in particular, to(a) the go'erning body of such stoc) exchange, its constitution and powers of (anage(ent and the (anner in which its business is to be transacted3 (b) the powers and duties of the office bearers of the stoc) exchange3 (c) the ad(ission into the stoc) exchange of 'arious classes of (e(bers, the *ualifications for (e(bership, and the exclusion, suspension, expulsion and
re+ad(ission of (e(bers therefro( or thereinto3 (d) the procedure for the registration of partnerships as (e(bers of the stoc) exchange in cases where the rules pro'ide for such (e(bership3 and the no(ination and appoint(ent of authorised representati'es and cler)s0 Gr% t of re'o( itio to !to'6 e#'h% (e!. 3. ( ) If the Central &o'ern(ent ! is satisfied, after (a)ing such in*uiry as (ay be necessary in this behalf and after obtaining such further infor(ation, if any, as it (ay re*uire,(a) that the rules and bye+laws of a stoc) exchange applying for registration are in confor(ity with such conditions as (ay be prescribed with a 'iew to ensure fair dealing and to protect in'estors3 (b) that the stoc) exchange is willing to co(ply with any other conditions (including conditions as to the nu(ber of (e(bers) which the Central &o'ern(ent, after consultation with the go'erning body of the stoc) exchange and ha'ing regard to the area ser'ed by the stoc) exchange and its standing and the nature of the securities dealt with by it, (ay i(pose for the purpose of carrying out the obDects of this Act3 and
> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 ! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
(c) that it would be in the interest of the trade and also in the public interest to grant recognition to the stoc) exchange3 it (ay grant recognition to the stoc) exchange subDect to the conditions i(posed upon it as aforesaid and in such for( as (ay be prescribed0 (%) .he conditions which the Central &o'ern(ent %0 (ay prescribe under clause (a) of sub+section ( ) for the grant of recognition to the stoc) exchanges (ay include, a(ong other (atters, conditions relating to,(i) the *ualifications for (e(bership of stoc) exchanges3 (ii) the (anner in which contracts shall be entered into and enforced as between (e(bers3 (iii) the representation of the Central &o'ern(ent on each of the stoc) exchange by such nu(ber of persons not exceeding three as the Central &o'ern(ent (ay no(inate in this behalf3 and (iv) the (aintenance of accounts of (e(bers and their audit by chartered accountants whene'er such audit is re*uired by the Central &o'ern(ent0 (3) 7'ery grant of recognition to a stoc) exchange under this section shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office as of the stoc) exchange is situate, and such recognition shall ha'e effect as fro( the date of its publication in the &aFette of India0 % ($) Eo application for the grant of recognition shall be refused except after gi'ing an opportunity to the stoc) exchange concerned to be heard in the (atter3 and the reasons for such refusal shall be co((unicated to the stoc) exchange in writing0 %% (") Eo rules of a recognised stoc) exchange relating to any of the (atters specified in sub+section (%) of section 3 shall be a(ended except with the appro'al of the
Central &o'ern(ent0%3 "35Cor$or%ti!%tio % - -e.*t*%li!%tio of !to'6 e#'h% (e!. 3A. Cn and fro( the appointed date, all recognised stoc) exchanges (if not corporatised and de(utualised before the appointed date) shall be corporatised and de(utualised in accordance with the pro'isions contained in section $8 ,
%0 <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 % <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %% <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %3 <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 %$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
4ro+i-e- that the Securities and 7xchange 8oard of India (ay, if it is satisfied that any recognised stoc) exchange was pre'ented by sufficient cause fro( being corporatised and de(utualised on or after the appointed date, specify another appointed date in respect of that recognised stoc) exchange and such recognised stoc) exchange (ay continue as such before such appointed date0 ()%lanati$n&*6or the purposes of this section, 1appointed date2 (eans the date which the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, appoint and different appointed dates (ay be appointed for different recognised stoc) exchanges0: "554ro'e-*re for 'or$or%ti!%tio % - -e.*t*%li!%tio . 3;. ( ) All recognised stoc) exchanges referred to in section $A shall, within such ti(e as (ay be specified by the Securities and 7xchange 8oard of India, sub(it a sche(e for corporatisation and de(utualisation for its appro'al , 4ro+i-e- that the Securities and 7xchange 8oard of India, (ay, by notification in the Cfficial &aFette, specify na(e of the recognised stoc) exchange, which had already been corporatised and de(utualised, and such stoc) exchange shall not be re*uired to sub(it the sche(e under this section0 (%) Cn receipt of the sche(e referred to in sub+section ( ), the Securities and 7xchange 8oard of India (ay, after (a)ing such en*uiry as (ay be necessary in this behalf and obtaining such further infor(ation, if any, as it (ay re*uire and if it is satisfied that it would be in the interest of the trade and also in the public interest, appro'e the sche(e with or without (odification0 (3) Eo sche(e under sub+section (%) shall be appro'ed by the Securities and 7xchange 8oard of India if the issue of shares for a lawful consideration or pro'ision of trading rights in lieu of (e(bership card of the (e(bers of a recognised stoc) exchange or pay(ent of di'idends to (e(bers ha'e been proposed out of any reser'es or assets of that stoc) exchange0 ($) Khere the sche(e is appro'ed under sub+section (%), the sche(e so appro'ed shall be published i((ediately by(a) the Securities and 7xchange 8oard of India in the Cfficial &aFette3 (b) the recognised stoc) exchange in such two daily newspapers circulating in India, as (ay be specified by the Securities and 7xchange 8oard of India,
and upon such publication, notwithstanding anything to the contrary contained in this Act or any other law for the ti(e being in force or any agree(ent, award, Dudg(ent, decree or other instru(ent for the ti(e being in force, the sche(e shall ha'e effect and be binding on all persons and authorities including all (e(bers, creditors, depositors and e(ployees of the recognised stoc) exchange and on all
%" Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
persons ha'ing any contract, right, power, obligation or liability with, against, o'er, to, or in connection with, the recognised stoc) exchange or its (e(bers0 (") Khere the Securities and 7xchange 8oard of India is satisfied that it would not be in the interest of the trade and also in the public interest to appro'e the sche(e under sub+section (%), it (ay, by an order, reDect the sche(e and such order of reDection shall be published by it in the Cfficial &aFette , 4ro+i-e- that the Securities and 7xchange 8oard of India shall gi'e a reasonable opportunity of being heard to all the persons concerned and the recognised stoc) exchange concerned before passing an order reDecting the sche(e0 (#) .he Securities and 7xchange 8oard of India (ay, while appro'ing the sche(e under sub+section (%), by an order in writing, restrict(a) the 'oting rights of the shareholders who are also stoc) bro)ers of the reognised stoc) exchange3 (b) the right of shareholders or a stoc) bro)er of the recognised stoc) exchange to appoint the representati'es on the go'erning board of the stoc) exchange3 (c) the (axi(u( nu(ber of representati'es of the stoc) bro)ers of the recognised stoc) exchange to be appointed on the go'erning board of the recognised stoc) exchange, which shall not exceed one+fourth of the total strength of the go'erning board0 (/) .he order (ade under sub+section (#) shall be published in the Cfficial &aFette and on the publication thereof, the order shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#), or any other law for the ti(e being in force, ha'e full effect0 (>) 7'ery recognised stoc) exchange, in respect of which the sche(e for corporatisation or de(utualisation has been appro'ed under sub+section (%), shall, either by fresh issue of e*uity shares to the public or in any other (anner as (ay be specified by the regulations (ade by the Securities and 7xchange 8oard of India %#, ensure that at least fifty+one per cent of its e*uity share capital is held, within twel'e (onths fro( the date of publication of the order under sub+section (/), by the public other than shareholders ha'ing trading rights , 4ro+i-e- that the Securities and 7xchange 8oard of India (ay, on sufficient cause being shown to it and in the public interest, extend the said period by another twel'e (onths0:
ee Securities Contracts (Regulation) (Stoc) 7xchanges and Clearing Corporations) Regulations, %0 %, w0e0f0 %0+0#+%0 % notified vide &aFette Eotification Eo0 =A9+ ERCL&EL%0 %+ 3L0/L 3"$#, 7xtra0, <t0 III, Section $, dtd %0+0#+%0 %0
%#
?ith-r%/%l of re'o( itio .
5. %/4( ): If the Central &o'ern(ent%> is of opinion that the recognition granted to a stoc) exchange under the pro'isions of this Act should, in the interest of the trade or in the public interest, be withdrawn, the Central &o'ern(ent (ay ser'e on the go'erning body of the stoc) exchange a written notice that the Central &o'ern(ent is considering the withdrawal of the recognition for the reasons stated in the notice and after gi'ing an opportunity to the go'erning body to be heard in the (atter, the Central &o'ern(ent (ay withdraw, by notification in the Cfficial &aFette, the recognition granted to the stoc) exchange , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Central &o'ern(ent (ay, after consultation with the stoc) exchange, (a)e such pro'ision as it dee(s fit in the notification of withdrawal or in any subse*uent notification si(ilarly published for the due perfor(ance of any contracts outstanding on that date0 %!4(%) Khere the recognised stoc) exchange has not been corporatised or de(utualised or it fails to sub(it the sche(e referred to in sub+section ( ) of section $8 within the specified ti(e therefor or the sche(e has been reDected by the Securities and 7xchange 8oard of India under sub+section (") of section $8, the recognition granted to such stoc) exchange under section $, shall, notwithstanding anything to the contrary contained in this Act, stand withdrawn and the Central &o'ern(ent shall publish, by notification in the Cfficial &aFette, such withdrawal of recognition , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Securities and 7xchange 8oard of India (ay, after consultation with the stoc) exchange, (a)e such pro'isions as it dee(s fit in the order reDecting the sche(e published in the Cfficial &aFette under sub+section (") of section $80: 4o/er of Ce tr%l Go+er .e t to '%ll for $erio-i'%l ret*r ! or -ire't i 7*irie! to ,e .%-e. 8. ( ) 7'ery recognised stoc) exchange shall furnish to the 304Securities and 7xchange 8oard of India: such periodical returns relating to its affairs as (ay be prescribed0
%/ Section
" renu(bered as sub+section ( ) by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 %> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 30 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(%) 7'ery recognised stoc) exchange and e'ery (e(ber thereof shall (aintain and preser'e for such periods not exceeding fi'e years such boo)s of account, and other docu(ents as the Central &o'ern(ent, after consultation with the stoc) exchange concerned, (ay prescribe in the interest of the trade or in the public interest, and such boo)s of account, and other docu(ents shall be subDect to inspection at all reasonable ti(es 3 4by the Securities and 7xchange 8oard of India:0 (3) Kithout preDudice to the pro'isions contained in sub+sections ( ) and (%), the
3%4Securities
and 7xchange 8oard of India:, if it is satisfied that it is in the interest of the trade or in the public interest so to do, (ay, by order in writing,(a) call upon a recognised stoc) exchange or any (e(ber thereof to furnish in writing such infor(ation or explanation relating to the affairs of the stoc) exchange or of the (e(ber in relation to the stoc) exchange as the 334Securities and 7xchange 8oard of India: (ay re*uire3 or (b) appoint one or (ore persons to (a)e an in*uiry in the prescribed (anner in relation to the affairs of the go'erning body of a stoc) exchange or the affairs of any of the (e(bers of the stoc) exchange in relation to the stoc) exchange and sub(it a report of the result of such in*uiry to the 3$4Securities and 7xchange 8oard of India: within such ti(e as (ay be specified in the order or, in the case of an in*uiry in relation to the affairs of any of the (e(bers of a stoc) exchange, direct the go'erning body to (a)e the in*uiry and sub(it its report to the 3"4Securities and 7xchange 8oard of India:0 ($) Khere an in*uiry in relation to the affairs of a recognised stoc) exchange or the affairs of any of its (e(bers in relation to the stoc) exchange has been underta)en under sub+section (3),(a) e'ery director, (anager, secretary or other officer of such stoc) exchange3 (b) e'ery (e(ber of such stoc) exchange3 (c) if the (e(ber of the stoc) exchange is a fir(, e'ery partner, (anager, secretary or other officer of the fir(3 and (d) e'ery other person or body of persons who has had dealings in the course of business with any of the persons (entioned in clauses ( a), (b) and (c), whether directly or indirectly3
Substituted for ;by the Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3% Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 33 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3" Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
3
shall be bound to produce before the authority (a)ing the in*uiry all such boo)s of account, and other docu(ents in his custody or power relating to or ha'ing a bearing on the subDect+(atter of such in*uiry and also to furnish the authorities within such ti(e as (ay be specified with any such state(ent or infor(ation relating thereto as (ay be re*uired of hi(0 )8A *%l re$ort! to ,e f*r i!he- to Ce tr%l Go+er .e t ,> !to'6 e#'h% (e!. 7. 7'ery recognised stoc) exchange shall furnish the Central &o'ern(ent with a copy of the annual report, and such annual report shall contain such particulars as (ay be prescribed0 )754o/er of re'o( i!e- !to'6 e#'h% (e to .%6e r*le! re!tri'ti ( +oti ( ri(ht!, et'. 7A. ( ) A recognised stoc) exchange (ay (a)e rules or a(end any rules (ade by it
to pro'ide for all or any of the following (atters, na(ely ,(a) the restriction of 'oting rights to (e(bers only in respect of any (atter placed before the stoc) exchange at any (eeting3 (b) the regulation of 'oting rights in respect of any (atter placed before the stoc) exchange at any (eeting so that each (e(ber (ay be entitled to ha'e one 'ote only, irrespecti'e of his share of the paid+up e*uity capital of the stoc) exchange3 (c) the restriction on the right of a (e(ber to appoint another person as his proxy to attend and 'ote at a (eeting of the stoc) exchange3 (d) such incidental, conse*uential and supple(entary (atters as (ay be necessary to gi'e effect to any of the (atters specified in clauses ( a), (b) and (c)0 (%) Eo rules of a recognised stoc) exchange (ade or a(ended in relation to any (atter referred to in clauses (a) to (d) of sub+section ( ) shall ha'e effect until they ha'e been appro'ed by the Central &o'ern(ent 3> and published by that &o'ern(ent in the Cfficial &aFette and, in appro'ing the rules so (ade or a(ended, the Central &o'ern(ent (ay (a)e such (odifications therein as it thin)s fit, and on such publication, the rules as appro'ed by the Central &o'ern(ent shall be dee(ed to ha'e been 'alidly (ade, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#)0:
3# <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 3/ Inserted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec %, w0e0f0 0>+ %+ !"!0 3> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
4o/er of Ce tr%l Go+er .e t )9 to -ire't r*le! to ,e .%-e or to .%6e r*le!. :. ( ) Khere, after consultation with the go'erning bodies of stoc) exchanges generally or with the go'erning body of any stoc) exchange in particular, the Central &o'ern(ent is of opinion that it is necessary or expedient so to do, it (ay, by order in writing together with a state(ent of the reasons therefor, direct recognised stoc) exchanges generally or any recognised stoc) exchange in particular, as the case (ay be, to (a)e any rules or to a(end any rules already (ade in respect of all or any of the (atters specified in sub+section (%) of section 3 within a period of $04two (onths: fro( the date of the order0 (%) If any recognised stoc) exchange fails or neglects to co(ply with any order (ade under sub+section ( ) within the period specified therein, the Central &o'ern(ent (ay (a)e the rules for, or a(end the rules (ade by, the recognised stoc) exchange, either in the for( proposed in the order or with such (odifications thereof as (ay be agreed to between the stoc) exchange and the Central &o'ern(ent0 (3) Khere in pursuance of this section any rules ha'e been (ade or a(ended, the rules so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette or &aFettes of the State or States in which the principal office or offices of the recognised stoc) exchange or exchanges is or are situate, and, on the publication thereof in the &aFette of India, the rules so (ade or a(ended shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# (
of !"#), or in any other law for the ti(e being in force, ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange or stoc) exchanges, as the case (ay be0 315Cle%ri ( 'or$or%tio . :A. ( ) A recognised stoc) exchange (ay, with the prior appro'al of the Securities and 7xchange 8oard of India, transfer the duties and functions of a clearing house to a clearing corporation, being a co(pany incorporated under the Co(panies Act, !"# ( of !"#), for the purpose of(a) the periodical settle(ent of contracts and differences thereunder3 (b) the deli'ery of, and pay(ent for, securities3 (c) any other (atter incidental to, or connected with, such transfer0 (%) 7'ery clearing corporation shall, for the purpose of transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( ),
3! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 $0 Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec !, w0e0f0 %"+ 0 + !!"0 $ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0
(a)e bye+laws and sub(it the sa(e to the Securities and 7xchange 8oard of India for its appro'al0 (3) .he Securities and 7xchange 8oard of India (ay, on being satisfied that it is in the interest of the trade and also in the public interest to transfer the duties and functions of a clearing house to a clearing corporation, grant appro'al to the byelaws sub(itted to it under sub+section (%) and appro'e the transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( )0 ($) .he pro'isions of sections $, ", #, /, >, !, 0, and % shall, as far as (ay be, apply to a clearing corporation referred to in sub+section ( ) as they apply in relation to a recognised stoc) exchange0: 4o/er of re'o( i!e- !to'6 e#'h% (e! to .%6e ,>e0l%/!. 9. ( ) Any recognised stoc) exchange (ay, subDect to the pre'ious appro'al of the $%4Securities and 7xchange 8oard of India:, (a)e bye+laws for the regulation and control of contracts0 (%) In particular, and without preDudice to the generality of the foregoing power, such bye+laws (ay pro'ide for , (a) the opening and closing of (ar)ets and the regulation of the hours of trade3 (b) a clearing house for the periodical settle(ent of contracts and differences thereunder, the deli'ery of and pay(ent for securities, the passing on of deli'ery orders and the regulation and (aintenance of such clearing house3 (c) the sub(ission to the $34Securities and 7xchange 8oard of India: by the clearing house as soon as (ay be after each periodical settle(ent of all or any of the following particulars as the $$4Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, re*uire, na(ely ,(i) the total nu(ber of each category of security carried o'er fro( one settle(ent period to another3 (ii) the total nu(ber of each category of security, contracts in respect of
which ha'e been s*uared up during the course of each settle(ent period3 (iii) the total nu(ber of each category of security actually deli'ered at each clearing3
$% Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(d) the publication by the clearing house of all or any of the particulars sub(itted to the $"4Securities and 7xchange 8oard of India: under clause ( c) subDect to the directions, if any, issued by the $#4Securities and 7xchange 8oard of India: in this behalf3 (e) the regulation or prohibition of blan) transfers3 (f) the nu(ber and classes of contracts in respect of which settle(ents shall be (ade or differences paid through the clearing house3 (g) the regulation, or prohibition of b!dla# or carry+o'er facilities3 (h) the fixing, altering or postponing of days for settle(ents3 (i) the deter(ination and declaration of (ar)et rates, including the opening, closing highest and lowest rates for securities3 (j) the ter(s, conditions and incidents of contracts, including the prescription of (argin re*uire(ents, if any, and conditions relating thereto, and the for(s of contracts in writing3 (k) the regulation of the entering into, (a)ing, perfor(ance, recession and ter(ination, of contracts, including contracts between (e(bers or between a (e(ber and his constituent or between a (e(ber and a person who is not a (e(ber, and the conse*uences of default or insol'ency on the part of a seller or buyer or inter(ediary, the conse*uences of a breach or o(ission by a seller or buyer, and the responsibility of (e(bers who are not parties to such contracts3 (l) the regulation of taravani business including the placing of li(itations thereon3 (") the listing of securities on the stoc) exchange, the inclusion of any security for the purpose of dealings and the suspension or withdrawal of any such securities, and the suspension or prohibition of trading in any specified securities3 (n) the (ethod and procedure for the settle(ent of clai(s or disputes, including settle(ent by arbitration3 ($) the le'y and reco'ery of fees, fines and penalties3 (%) the regulation of the course of business between parties to contracts in any capacity3 (+) the fixing of a scale of bro)erage and other charges3 (r) the (a)ing, co(paring, settling and closing of bargains3 (#) the e(ergencies in trade which (ay arise, whether as a result of pool or syndicated operations or cornering or otherwise, and the exercise of powers in
$" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%,
Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $# Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
such e(ergencies, including the power to fix (axi(u( and (ini(u( prices for securities3 (t) the regulation of dealings by (e(bers for their own account3 (!) the separation of the functions of Dobbers and bro)ers3 (v) the li(itations on the 'olu(e of trade done by any indi'idual (e(ber in exceptional circu(stances3 (.) the obligation of (e(bers to supply such infor(ation or explanation and to produce such docu(ents relating to the business as the go'erning body (ay re*uire0 (3) .he bye+laws (ade under this section (ay(a) specify the bye+laws the contra'ention of which shall (a)e a contract entered into otherwise than in accordance with the bye+laws 'oid under sub+section ( ) of section $3 (b) pro'ide that the contra'ention of any of the bye+laws shall render the (e(ber concerned liable to one or (ore of the following punish(ents, na(ely ,(i) fine, (ii) expulsion fro( (e(bership, (iii) suspension fro( (e(bership for a specified period, (iv) any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney0 ($) Any bye+laws (ade under this section shall be subDect to such conditions in regard to pre'ious publication as (ay be prescribed, and, when appro'ed by the $/4Securities and 7xchange 8oard of India:, shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and shall ha'e effect as fro( the date of its publication in the &aFette of India , 4ro+i-e- that if the $>4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+law should be (ade i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0
$/ Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $> Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4o/er of 395Se'*ritie! % - E#'h% (e ;o%r- of I -i%< to .%6e or %.e - ,>e0l%/! of re'o( i!e- !to'6 e#'h% (e!. 1=. ( ) .he "04Securities and 7xchange 8oard of India: (ay, either on a re*uest in writing recei'ed by it in this behalf fro( the go'erning body of a recognised stoc) exchange or on its own (otion, if it is satisfied after consultation with the go'erning body of the stoc) exchange that it is necessary or expedient so to do and after recording its reasons for so doing, (a)e bye+laws for all or any of the (atters specified in section ! or a(end any bye+laws (ade by such stoc) exchange under that section0
(%) Khere in pursuance of this section any bye+laws ha'e been (ade or a(ended the bye+laws so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and on the publication thereof in the &aFette of India, the bye+laws so (ade or a(ended shall ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange concerned0 (3) Eotwithstanding anything contained in this section, where the go'erning body of a recognised stoc) exchange obDects to any bye+laws (ade or a(ended under this section by the " 4Securities and 7xchange 8oard of India: on its own (otion, it (ay, within "%4two (onths: of the publication thereof in the &aFette of India under subsection (%), apply to the "34Securities and 7xchange 8oard of India: for re'ision thereof, and the "$4Securities and 7xchange 8oard of India: (ay, after gi'ing an opportunity to the go'erning body of the stoc) exchange to be heard in the (atter, re'ise the bye+laws so (ade or a(ended, anywhere any bye+laws so (ade or a(ended are re'ised as a result of any action ta)en under this sub+section, the byelaws so re'ised shall be published and shall beco(e effecti'e as pro'ided in subsection (%)0 ($) .he (a)ing or the a(end(ent or re'ision of any bye+laws under this section shall in all cases be subDect to the condition of pre'ious publication ,
$! Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "0 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 " Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "% Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec %0, w0e0f0 %"+ 0 + !!"0 "3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4ro+i-e- that if the ""4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+laws should be (ade, a(ended or re'ised i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0 4o/er of Ce tr%l Go+er .e t 58 to !*$er!e-e (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e. 11. ( ) Kithout preDudice to any other powers 'ested in the Central &o'ern(ent under this Act, where the Central &o'ern(ent is of opinion that the go'erning body of any recognised stoc) exchange should be superseded, then, notwithstanding anything contained in any other law for the ti(e being in force, in the Central &o'ern(ent (ay ser'e on the go'erning body a written notice that the Central &o'ern(ent is considering the supersession of the go'erning body for the reasons specified in the notice and after gi'ing an opportunity to the go'erning body to be
heard in the (atter, it (ay, by notification in the Cfficial &aFette, declare the go'erning body of such stoc) exchange to be superseded, and (ay appoint any person or persons to exercise and perfor( all the powers and duties of the go'erning body, and, where (ore persons than one are appointed, (ay appoint one of such persons to be the chair(an and another to be the 'ice+chair(an thereof0 (%) Cn the publication of a notification in the Cfficial &aFette under sub+section ( ), the following conse*uences shall ensue, na(ely,(a) the (e(bers of the go'erning body which has been superseded shall, as fro( the date of the notification of supersession, cease to hold office as such (e(bers3 (b) the person or persons appointed under sub+section ( ) (ay exercise and perfor( all the powers and duties of the go'erning body which has been superseded3 (c) all such property of the recognised stoc) exchange as the person or persons appointed under sub+section ( ) (ay, by order in writing, specify in this behalf as being necessary for the purpose of enabling hi( or the( to carry on the business of the stoc) exchange, shall 'est in such person or persons0 (3) Eotwithstanding anything to the contrary contained in any law or the rules or bye+laws of the recognised stoc) exchange the go'erning body of which is superseded under sub+section ( ), the person or persons appointed under that subsection shall hold office for such period as (ay be specified in the notification published under that sub+section and the Central &o'ern(ent (ay fro( ti(e to ti(e, by li)e notification, 'ary such period0
"" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "# <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0
($) .he Central &o'ern(ent (ay at any ti(e before the deter(ination of the period of office of any person or persons appointed under this section call upon the recognised stoc) exchange to re+constitute the go'erning body in accordance with its rules and on such re+constitution all the property of the recognised stoc) exchange which has 'ested in, or was in the possession of, the person or persons appointed under sub+section ( ), shall re+'est or 'est, as the case (ay be, in the go'erning body so re+constituted , 4ro+i-e- that until a go'erning body is so re+constituted, the person or persons appointed under sub+section ( ) shall continue to exercise and perfor( their powers and duties0 4o/er57 to !*!$e - ,*!i e!! of re'o( i!e- !to'6 e#'h% (e!. 1". If in the opinion of the Central &o'ern(ent an e(ergency has arisen and for the purpose of (eeting the e(ergency the Central &o'ern(ent considers it expedient so to do, it (ay, by notification in the Cfficial &aFette, for reasons to be set out therein, direct a recognised stoc) exchange to suspend such of its business for such period not exceeding se'en days and subDect to such conditions as (ay be specified in the notification, and, if, in the opinion of the Central &o'ern(ent, the interest of
the trade or the public interest re*uires that the period should be extended, (ay, by li)e notification extend the said period fro( ti(e to ti(e , 4ro+i-e- that where the period of suspension is to be extended beyond the first period, no notification extending the period of suspension shall be issued unless the go'erning body of the ">4recognised stoc) exchange: has been gi'en an opportunity of being heard in the (atter0 "!54o/er to i!!*e -ire'tio !. 1"A. If, after (a)ing or causing to be (ade an in*uiry, the Securities and 7xchange 8oard of India is satisfied that it is necessary(a) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (b) to pre'ent the affairs of any recognised stoc) exchange or clearing corporation, or such other agency or person, pro'iding trading or clearing or settle(ent facility in respect of securities, being conducted in a (anner detri(ental to the interests of in'estors or securities (ar)et3 or (c) to secure the proper (anage(ent of any such stoc) exchange or clearing corporation or agency or person, referred to in clause ( b),
"/ <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 "> Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 "! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0
it (ay issue such directions,(i) to any stoc) exchange or clearing corporation or agency or person referred to in clause (b) or any person or class of persons associated with the securities (ar)et3 or (ii) to any co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 8=5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< /<410A/1 A45 <81:<4 :4 (/A0:1:( Co tr%'t! i otifie- %re%! ille(%l i 'ert%i 'ir'*.!t% 'e!. 1). If the Central &o'ern(ent# is satisfied, ha'ing regard to the nature or the 'olu(e of transactions in securities in any #%4State or States or area: that it is necessary so to do, it (ay, by notification in the Cfficial &aFette, declared this section to apply to such #34State or States or area:, and thereupon e'ery contract in such #$4State or States or area: which is entered into after the date of the notification otherwise than #"4between (e(bers of a recognised stoc) exchange or recognised stoc) exchanges: in such ##4State or States or area: or through or with such (e(ber shall be illegal ,
#0 I #
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 #% Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #3 Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #$ Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$ for ;between (e(bers of a recognised stoc) exchange; & ## Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0
#/54ro+i-e-
that any contract entered into between (e(bers of two or (ore recognised stoc) exchanges in such State or States or area, shall(i) be subDect to such ter(s and conditions as (ay be stipulated by the respecti'e stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India3 (ii) re*uire prior per(ission fro( the respecti'e stoc) exchanges if so stipulated by the stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India0: #>4A--itio %l tr%-i ( floor. 1)A. A stoc) exchange (ay establish additional trading floor with the prior appro'al of the Securities and 7xchange 8oard of India in accordance with the ter(s and conditions stipulated by the said 8oard0 ()%lanati$n , 6or the purposes of this section, 1additional trading floor2 (eans a trading ring or trading facility offered by a recognised stoc) exchange outside its area of operation to enable the in'estors to buy and sell securities through such trading floor under the regulatory fra(ewor) of that stoc) exchange0: Co tr%'t! i otifie- %re%! to ,e +oi- i 'ert%i 'ir'*.!t% 'e!. 13. ( ) Any contract entered into in any State or area specified in the notification under section 3 which is in contra'ention of any of the bye+laws specified in that behalf under clause (a) of sub+section (3) of section ! shall be 'oid , (i) as respects the rights of any (e(ber of the recognised stoc) exchange who has entered into such contract in contra'ention of any such bye+law, and also (ii) as respects the rights of any other person who has )nowingly participated in the transaction entailing such contra'ention0 (%) Eothing in sub+section ( ) shall be construed to affect the right of any person other than a (e(ber of the recognised stoc) exchange to enforce any such contract or to reco'er any su( under or in respect of such contract if such person had no )nowledge that the transaction was in contra'ention of any of the bye+laws specified in clause (a) of sub+section (3) of section !0 @e.,er! .%> ot %'t %! $ri 'i$%l! i 'ert%i 'ir'*.!t% 'e!. 15. Eo (e(ber of a recognised stoc) exchange shall in respect of any securities enter into any contract as a principal with any person other than a (e(ber of a recognised stoc) exchange, unless he has secured the consent or authority of such
#/ Inserted #> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (A(end(ent) Act, !!", Sec % , w0e0f0 %"+0 + !!"0
person and discloses in the note, (e(orandu( or agree(ent of sale or purchase that he is acting as a principal , 4ro+i-e- that where the (e(ber has secured the consent or authority of such person otherwise than in writing he shall secure written confir(ation by such person or such consent or authority within three days fro( the date of the contract , 4ro+i-e- f*rther that no such written consent or authority of such person shall be necessary for closing out any outstanding contract entered into by such person in accordance with the bye+laws, if the (e(ber discloses in the note, (e(orandu( or agree(ent of sale or purchase in respect of such closing out that he is acting as a principal0 4o/er89 to $rohi,it 'o tr%'t! i 'ert%i '%!e!. 18. ( ) If the Central &o'ern(ent is of opinion that it is necessary to pre'ent undesirable speculation in specified securities in any State or area, it (ay, by notification in the Cfficial &aFette, declare that no person in the State or area specified in the notification shall, sa'e with the per(ission of the Central &o'ern(ent, enter into any contract for the sale or purchase of any security specified in the notification except to the extent and in the (anner, if any, specified therein0 (%) All contracts in contra'ention of the pro'isions of sub+section ( ) entered into after the date of notification issued thereunder shall be illegal0 Li'e !i ( of -e%ler! i !e'*ritie! i 'ert%i %re%!. 17. ( ) SubDect to the pro'isions of sub+section (3) and to the other pro'isions contained in this Act, no person shall carry on or purport to carry on, whether on his own behalf or on behalf of any other person, the business of dealing in securities in any State or area to which section 3 has not been declared to apply and to which the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, declare this section to apply, except under the authority of a /04licence granted by the Securities and 7xchange 8oard of India: in this behalf0 (%) Eo notification under sub+section ( ) shall be issued with respect to any State or area unless the Central &o'ern(ent is satisfied, ha'ing regard to the (anner in which securities are being dealt with in such State or area, that it is desirable or
#! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 <owers are exercisable by R8I also 'ide &o'ern(ent of India Eotification Eo0 >3 (7), 9ated 0 +03+%000 in relation to any contracts in go'ern(ent securities, (oney (ar)et securities etc0 /0 Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% for ;licence granted by the Central &o'ern(ent;0
expedient in the interest of the trade or in the public interest that such dealings should be regulated by a syste( of licensing0 (3) .he restrictions i(posed by sub+section ( ) in relation to dealings in securities shall not apply to the doing of anything by or on behalf of a (e(ber of any recognised stoc) exchange0
7154*,li'
i!!*e % - li!ti ( of !e'*ritie! referre- to i !*,0'l%*!e ( ie) of 'l%*!e (h)
of !e'tio ". 17A. ( ) Kithout preDudice to the pro'isions contained in this Act or any other law for the ti(e being in force, no securities of the nature referred to in sub+clause (ie) of clause (h) of section % shall be offered to the public or listed on any recognised stoc) exchange unless the issuer fulfils such eligibility criteria and co(plies with such other re*uire(ents as (ay be specified by regulations (ade by the Securities and 7xchange 8oard of India0 (%) 7'ery issuer referred to in sub+clause (ie) of clause (h) of section % intending to offer the certificates or instru(ents referred therein to the public shall (a)e an application, before issuing the offer docu(ent to the public, to one or (ore recognised stoc) exchanges for per(ission for such certificates or instru(ents to be listed on the stoc) exchange or each such stoc) exchange0 (3) Khere the per(ission applied for under sub+section (%) for listing has not been granted or refused by the recognised stoc) exchanges or any of the(, the issuer shall forthwith repay all (oneys, if any, recei'ed fro( applicants in pursuance of the offer docu(ent, and if any such (oney is not repaid within eight days after the issuer beco(es liable to repay it, the issuer and e'ery director or trustee thereof, as the case (ay be, who is in default shall, on and fro( the expiry of the eighth day, be Dointly and se'erally liable to repay that (oney with interest at the rate of fifteen per cent per annu(0 7xplanation0-In rec)oning the eighth day after another day, any inter'ening day which is a public holiday under the Eegotiable Instru(ents Act, >> (%# of >> ), shall be disregarded, and if the eighth day (as so rec)oned) is itself such a public holiday, there shall for the said purposes be substituted the first day thereafter which is not a holiday0 ($) All the pro'isions of this Act relating to listing of securities of a public co(pany on a recognised stoc) exchange shall, (utatis (utandis, apply to the listing of the securities of the nature referred to in sub+clause (ie) of clause (h) of section % by the issuer, being a special purpose distinct entity0 <
Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec 3, w0e0f0 %>+0"+ %00/0
/
E#'l*!io of !$ot -eli+er> 'o tr%'t! fro. !e'tio ! 1), 13, 15 % - 17. 1:. ( ) Eothing contained in sections 3, $, " and / shall apply to spot deli'ery contracts0 (%) Eotwithstanding anything contained in sub+section ( ), if the Central &o'ern(ent/% is of opinion that in the interest of the trade or in the public interest it is expedient to regulate and control the business of dealing in spot deli'ery contracts also in any State or area (whether section 3 has been declared to apply to that State or area or not), it (ay, by notification in the Cfficial &aFette, declare that the pro'isions of section / shall also apply to such State or area in respect of spot deli'ery contracts generally or in respect of spot deli'ery contracts for the sale or purchase of such securities as (ay be specified in the notification, and (ay also specify the (anner in which, and the extent to which, the pro'isions of that section
shall so apply0 /34Co tr%'t! i -eri+%ti+e. 1:A. Eotwithstanding anything contained in any other law for the ti(e being in force, contracts in deri'ati'e shall be legal and 'alid if such contracts are(a) traded on a recognised stoc) exchange3 (b) settled on the clearing house of the recognised stoc) exchange, in accordance with the rules and bye+laws of such stoc) exchange0: Sto'6 e#'h% (e! other th% re'o( i!e- !to'6 e#'h% (e! $rohi,ite-. 19. ( ) Eo person shall, except with the per(ission of the Central &o'ern(ent, organise or assist in organising or be a (e(ber of any stoc) exchange (other than a recognised stoc) exchange) for the purpose of assisting in, entering into or perfor(ing any contracts in securities0 (%) .his section shall co(e into force in any State or area on such date as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 4rohi,itio of o$tio ! i !e'*ritie!. "=. 734GGGGG:
/% <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 /3 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec 3, w0e0f0 %%+%+%0000 /$ C(itted by the Securities =aws (A(end(ent) Act, !!", Sec %%, w0e0f0 %"+0 + !!"0 <rior to o(ission, section %0 read as under , 1%00 8r$hibiti$n $f $%ti$n# in #ec!ritie#&-( ) Eotwithstanding anything contained in this Act or in any other law for the ti(e being in force, all options in securities entered into after the co((ence(ent of this Act shall be illegal0
9: 1:4= <E (/A0:1:( 754GGG: /#4Co -itio ! for li!ti (. "1. Khere securities are listed on the application of any person in any recognised stoc) exchange, such person shall co(ply with the conditions of the listing agree(ent with that stoc) exchange&: 775Deli!ti ( of !e'*ritie!. "1A. ( ) A recognised stoc) exchange (ay delist the securities, after recording the reasons therefor, fro( any recognised stoc) exchange on any of the ground or grounds as (ay be prescribed under this Act , 4ro+i-e- that the securities of a co(pany shall not be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) A listed co(pany or an aggrie'ed in'estor (ay file an appeal before the Securities Appellate .ribunal against the decision of the recognised stoc) exchange delisting the securities within fifteen days fro( the date of the decision of the recognised stoc) exchange delisting the securities and the pro'isions of sections %%8 to %%7 of this Act, shall apply, as far as (ay be, to such appeals , 4ro+i-e- that the Securities Appellate .ribunal (ay, if it is satisfied that the co(pany was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding one (onth0:
(%) Any option in securities which has been entered into before such co((ence(ent and which re(ains to be perfor(ed, whether wholly or in part, after such co((ence(ent shall, to that
extent, beco(e 'oid02 /" Kords 18O <H8=IC CC?<AEI7S2 o(itted by the Securities =aws (A(end(ent) Act, !!!, Sec $, w0e0f0 %%+0%+%0000 /# Substituted by the Securities =aws (A(end(ent) Act, !!", Sec 33, w0e0f0 %"+0 + !!" . <rior to substitution, section % read as under , 1% 0 8$.er t$ c$"%el li#ting $f #ec!ritie# bF %!blic c$"%anie#& -Eotwithstanding anything contained in any other law for the ti(e being in force, if the Securities and 7xchange 8oard of India is of opinion, ha'ing regard to the nature of the securities issued by any public co(pany as defined in the Co(panies Act, !"# ( of !"#), or to the dealings in the(, that it is necessary or expedient in the interest of the trade or in the public interest so to do, it (ay re*uire the co(pany, after gi'ing it an opportunity of being heard in the (atter, to co(ply with such re*uire(ents as (ay be prescribed with respect to the listing of its securities on any recognised stoc) exchange02 // Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec >, w0r0e0f0 %+ 0+%00$0
7:5Ri(ht
of %$$e%l %(%i !t ref*!%l of !to'6 e#'h% (e! to li!t !e'*ritie! of $*,li' 'o.$% ie!. 79"". Khere a recognised stoc) exchange acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any public co(pany >04or collecti'e in'est(ent sche(e:, the co(pany > 4or sche(e: shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( ) of section /3 of the Co(panies Act, !"# ( of !"#) (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Central &o'ern(ent (ay, on sufficient cause being shown, allow, appeal to the Central &o'ern(ent against such refusal, o(ission or failure, as the case (ay be, and thereupon the Central &o'ern(ent (ay, after gi'ing the stoc) exchange an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange, or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Central &o'ern(ent sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Central &o'ern(ent: , >%44ro+i-e- that no appeal shall be preferred against refusal, o(ission or failure, as the case (ay be, under this section on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!0: :)5Ri(ht of %$$e%l to Se'*ritie! A$$ell%te Tri,* %l %(%i !t ref*!%l of !to'6 e#'h% (e to li!t !e'*ritie! of $*,li' 'o.$% ie!.
/> Substituted
by .he Co(panies (A(end(ent) Act, !/$ (Act Eo0 $ of !/$), Sec $%, w0e0f0 0 + 0%+ !/"0 /! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the
&aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 >0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%00003 Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 > Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%0000 >% Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec $, w0e0f0 #+ %+ !!!0 >3 Sections %%A, %%8, %%C, %%9, %%7 and %%6 inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!!& 7arlier section %%A was inserted by .he
""A. ( ) Khere a recognised stoc) exchange, acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any co(pany, the co(pany shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( A) of section /3 of the Co(panies Act, !"# ( of !"#), (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Securities Appellate .ribunal (ay, on sufficient cause being shown, allow, appeal to the Securities Appellate .ribunal ha'ing Durisdiction in the (atter against such refusal, o(ission or failure, as the case (ay be, and thereupon the Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange, an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange3 or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Securities Appellate .ribunal sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Securities Appellate .ribunal0 (%) 7'ery appeal under sub+section ( ) shall be in such for( and be acco(panied by such fee as (ay be prescribed0 (3) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 ($) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: :354ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. "";. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of
Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec %, w0e0f0 /+ 0 + !>#, and o(itted by the 9epositories Act, !!#, Sec 30 and Sch0, <t0III, w0r0e0f0 %0+0!+ !!"0 >$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath 3 (b) re*uiring the disco'ery and production of docu(ents 3 (c) recei'ing e'idence on affida'its 3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents 3 (e) re'iewing its decisions 3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte ; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0: :55Ri(ht to le(%l re$re!e t%tio . ""C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of sub+section ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of subsection ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of
>" Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
!"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, vakil or an attorney of any Iigh Court, and includes a pleader in practice0: :85Li.it%tio . ""D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0: :75Ci+il 'o*rt ot to h%+e G*ri!-i'tio .
""E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0: ::5A$$e%l to S*$re.e Co*rt. ""2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order, 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: 8(4A91:( A45 80</(5A0( 4e %ltie!. "). ( ) Any person who+
># Inserted >/ Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & >> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec !, w0r0e0f0 %+ 0+%00$0 7arlier section %%6 as inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", read as under,+ 1""2. A$$e%l to Di(h Co*rt.+Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order , 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
(a) without reasonable excuse (the burden of pro'ing which shall be on hi() fails to co(ply with any re*uisition (ade under sub+section ($) of section #3 or (b) enters into any contract in contra'ention of any of the pro'isions contained in section 3 or section #3 or (c) contra'enes the pro'isions contained in >!5section / or section /A<, or section !3 or 90 4(d) enters into any contract in deri'ati'e in contra'ention of section >A or the rules (ade under section 303: (e) owns or )eeps a place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act and )nowingly per(its such place to be used for such purposes3 or (f) (anages, controls, or assists in )eeping any place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act or at which contracts are recorded or adDusted or rights or liabilities arising out of contracts are adDusted, regulated or enforced in any (anner whatsoe'er3 or (g) not being a (e(ber of a recognised stoc) exchange or his agent authorised as
such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section / wilfully represents to or induces any person to belie'e that contracts can be entered into or perfor(ed under this Act through hi(3 or (h) not being a (e(ber of a recognised stoc) exchange or his agent authorised as such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section /, can'asses, ad'ertises or touts in any (anner either for hi(self or on behalf of any other persons for any business connected with contracts in contra'ention of any of the pro'isions of this Act3 or (i) Doins, gathers or assists in gathering at any place other than the place of business specified in the bye+laws of a recognised stoc) exchange any person or persons for (a)ing bids or offers or for entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act3 ! 4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which
>! Inserted
by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec $, w0e0f0 %>+0"+ %00/ for ;section /;0 !0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec #, w0e0f0 %%+0%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 ! Substituted for 1shall, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0
(ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: (%) Any person who enters into any contract in contra'ention of the pro'isions contained in section " !%4or who fails to co(ply with the pro'isions of !34section % or section % A: or with the orders of: or section %% !$4or with the orders of the Securities Appellate .ribunal: !"4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 9854e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. ")A. Any person, who is re*uired under this Act or any rules (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to a recognised stoc) exchange, fails to furnish the sa(e within the ti(e specified therefor in the listing agree(ent or conditions or bye+laws of the recognised stoc) exchange, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to (aintain boo)s of account or records, as per the listing agree(ent or conditions, or bye+laws of a recognised stoc) exchange, fails to (aintain the sa(e, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0:
9754e
%lt> for f%il*re ,> % > $er!o to e ter i to % %(ree.e t /ith 'lie t!. ");. If any person, who is re*uired under this Act or any bye+laws of a recognised stoc) exchange (ade thereunder, to enter into an agree(ent with his client, fails to enter into such an agree(ent, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0:
!% Substituted
for 1or who fails to co(ply with the orders of the Securities and 7xchange 8oard of India under section % 2 by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 <rior to !!", ;Securities and 7xchange 8oard of India under section % or Central &o'ern(ent under section %%; were substituted for ;Central &o'ern(ent under section % or section %%; vide .he Schedule, <art II of Securities and 7xchange 8oard of India Act, !!%, w0e0f0 30+0 + !!%0 !3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec #, w0e0f0 #+ %+ !!!0 !" Substituted for 1shall, on con'iction, be punishable with fine which (ay extend to one thousand rupees2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !# Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$ & !/ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$0
9:54e
%lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. ")C. If any stoc) bro)er or sub+bro)er or a co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, after ha'ing been called upon by the Securities and 7xchange 8oard of India or a recognised stoc) exchange in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e stipulated by the Securities and 7xchange 8oard of India or a recognised stoc) exchange, he or it shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 9954e %lt> for f%il*re to !e(re(%te !e'*ritie! or .o e>! of 'lie t or 'lie t!. ")D. If any person, who is registered under section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%) as a stoc) bro)er or sub+bro)er, fails to segregate securities or (oneys of the client or clients or uses the securities or (oneys of a client or clients for self or for any other client, he shall be liable to a penalty not exceeding one crore rupees0: 1==54e %lt> for f%il*re to 'o.$l> /ith $ro+i!io of li!ti ( 'o -itio ! or -eli!ti ( 'o -itio ! or (ro* -!. ")E. If a co(pany or any person (anaging collecti'e in'est(ent sche(e or (utual fund, fails to co(ply with the listing conditions or delisting conditions or grounds or co((its a breach thereof, it or he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0: 1=154e %lt> for e#'e!! -e.%teri%li!%tio or -eli+er> of * li!te- !e'*ritie!. ")2. If any issuer de(aterialises securities (ore than the issued securities of a co(pany or deli'ers in the stoc) exchanges the securities which are not listed in the recognised stoc) exchange or deli'ers securities where no trading per(ission has been gi'en by the recognised stoc) exchange, he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0:
!> Inserted !! Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 00 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0
%+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0
1="54e
%lt> for f%il*re to f*r i!h $erio-i'%l ret*r !, et'. ")G. If a recognised stoc) exchange fails or neglects to furnish periodical returns to the Securities and 7xchange 8oard of India or fails or neglects to (a)e or a(end its rules or bye+laws as directed by the Securities and 7xchange 8oard of India or fails to co(ply with directions issued by the Securities and 7xchange 8oard of India, such recognised stoc) exchange shall be liable to a penalty which (ay extend to twenty+fi'e crore rupees0: 1=)54e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. ")D. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or articles or bye+ laws or the regulations of the recognised stoc) exchange or directions issued by the Securities and 7xchange 8oard of India for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 1=354o/er to %-G*-i'%te. ")0I. ( ) 6or the purpose of adDudging under sections %3A, %38, %3C, %39, %37, %36, %3& and %3I, the Securities and 7xchange 8oard of India shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0: 1=552%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. ")E. Khile adDudging the *uantu( of penalty under section %3+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3
0% Inserted 03 Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec 0$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0" Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 , w0r0e0f0 , w0r0e0f0 , w0r0e0f0
%+ %+ %+ %+
0+%00$0 0+%00$0 0+%00$0 0+%00$0
(b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0: 1=85 Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!.
")EA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 1"A or !e'tio ")0I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%tefor the %lle(e- -ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re %! !$e'ifie,> the ;o%r- * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")L %(%i !t % > or-er $%!!e- ,> the ;o%ror %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 1=75Re'o+er> of %.o* t!. ")E;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 1"A or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H
0# I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30"==7) 0/ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %!
.%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - ThirS'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")L of thi! A't. (") The re'o+er> offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ())Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 0'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 1"A, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1),(") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 1=:5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. ")F. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: 1=95A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")L. ( ) Any person aggrie'ed, by the order or decision of the recogniFed stoc) exchange or the adDudicating officer or any order (ade by the Securities and 7xchange 8oard of India under section $8, (ay prefer an appeal before the Securities Appellate .ribunal and the pro'isions of sections %%8, %%C, %%9 and %%7 of this Act, shall apply, as far as (ay be, to such appeals0 (%) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order or decision is recei'ed by the
appellant and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 (3) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 ($) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the parties to the appeal and to the concerned adDudicating officer0 (") .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: 11=5Offe 'e!. ")@. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws
0> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 0! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
(ade thereunder, for which no punish(ent is pro'ided elsewhere in this Act, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 1115Co.$o!itio of 'ert%i offe 'e!. ")N. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0: 11"54o/er to (r% t i..* it>. ")0O. ( ) .he Central &o'ern(ent (ay, on reco((endation by the Securities and 7xchange 8oard of India, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation,
4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that the reco((endation of the Securities and 7xchange 8oard of India under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under
% Inserted
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
this Act to which such person would ha'e been liable, had not such i((unity been granted0: Offe 'e! ,> 'o.$% ie!. "3. ( ) Khere an offence has been co((itted by a co(pany, e'ery person who, at the ti(e when the offence was co((itted, was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence, and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any gross negligence on the part of any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer of the co(pany, shall also be dee(ed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n0-6or the purpose of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals, and 34(b) 1director2, in relation to(i) a fir(, (eans a partner in the fir(3 (ii) any association of persons or a body of indi'iduals, (eans any (e(ber controlling the affairs thereof0: $4(3) .he pro'isions of this section shall be in addition to, and not in derogation of, the pro'isions of section %%A0: Cert%i offe 'e! to ,e 'o( iL%,le. "5. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, >!> (" of >!>) ", any offence punishable under #4GGG: section %3 shall be dee(ed to be a
cogniFable offence within the (eaning of that Code0
3 Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec /, w0e0f0 %%+%+%0000 <rior to its substitution, sub+clause (b) read as under, N(b) 1director2, in relation to a fir(, (eans a partner in the fir(0J $ Inserted by .he Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec 3, w0e0f0 /+0 + !>#0
iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central &o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or a recognised stoc) exchange or by any person0 >5(")********< 1195E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
ee now the Code of Cri(inal <rocedure, !/3 (% of !/$) 1sub+section ( ) of2 o(itted by the Securities =aws (A(end(ent) Act, %00$, w0e0f0 %+ 0+%00$0 / Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$ & <rior to its substitution section %# read as under ,1%#0 G!ri#dicti$n t$ trF $ffence# !nder thi# Act&-Eo court inferior to that of a presidency (agistrate or a (agistrate of the first class shall ta)e cogniFance of or try any offence punishable under this Act02 > O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JEo court inferior to that of a Court of Session shall try any offence punishable under this Act .K ! I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
" # Kords
/4Co(
A$$e%l % - Re+i!io . "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt. "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel% $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io !. "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< 6: /(99A4(<A Title to -i+i-e -!. "7. ( ) It shall be lawful for the holder of any security whose na(e appears on the boo)s of the co(pany issuing the said security to recei'e and retain any di'idend declared by the co(pany in respect thereof for any year, notwithstanding that the said security has already been transferred by hi( for consideration, unless the transferee who clai(s the di'idend fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the co(pany with the co(pany for being registered in his na(e within fifteen days of the date on which the di'idend beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the di'idend3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security and other docu(ents relating to
the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a co(pany to pay any di'idend which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the co(pany as the holder of the security in respect of which the di'idend has beco(e due3 or (b) the right of the transferee of any security to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security in the na(e of the transferee0 %04Ri(ht to re'ei+e i 'o.e fro. 'olle'ti+e i +e!t.e t !'he.e. "7A. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, whose na(e appears on the boo)s of the collecti'e in'est(ent sche(e issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e declared by the collecti'e in'est(ent sche(e in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e fro( the transfer or has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the collecti'e in'est(ent sche(e with the collecti'e in'est(ent sche(e for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec >, w0e0f0 %%+%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the collecti'e in'est(ent sche(e3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a collecti'e in'est(ent sche(e to pay any inco(e fro( units or other instru(ents issued by the collecti'e in'est(ent sche(e which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the collecti'e in'est(ent sche(e as the holder of the security being
units or other instru(ents issued by the collecti'e in'est(ent sche(e in respect of which the inco(e in respect of units or other instru(ents issued by the collecti'e sche(e has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security being units or other instru(ents issued by the collecti'e in'est(ent sche(e in the na(e of the transferee0: % 4Ri(ht to re'ei+e i 'o.e fro. .*t*%l f* -. "7;. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by any (utual fund, whose na(e appears on the boo)s of the (utual fund issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the (utual fund declared by the (utual fund in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the (utual fund, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the (utual fund fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the (utual fund with the (utual fund for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the (utual fund beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the (utual fund3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the (utual fund, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a (utual fund to pay any inco(e fro( units or other instru(ents issued by the (utual fund which has beco(e due to any person, whose na(e is for the ti(e being registered in the boo)s of the (utual fund as the holder of the security being units or other instru(ents issued by the (utual fund in respect of which the inco(e in respect of units or other instru(ents issued by the (utual fund has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the (utual fund, to enforce against the transferor or any other person, his rights, if any, in relation to the transfer in any case where the (utual fund has refused to register the transfer of the security being units or other instru(ents issued by the (utual fund in the na(e of the transferee0:
1""5A't
ot to %$$l> i 'ert%i '%!e!. ":. ( ) .he pro'isions of this Act shall not apply to(a) the &o'ern(ent, the Reser'e 8an) of India, any local authority or any corporation set up by a special law or any person who has effected any transaction with or through the agency of any such authority as is referred to in this clause3 (b) any con'ertible bond or share warrant or any option or right in relation thereto, in so far as it entitles the person in whose fa'our any of the foregoing has been issued to obtain at his option fro( the co(pany or other body corporate, issuing the sa(e or fro( any of its shareholders or duly appointed agentsJ shares of the co(pany or other body corporate, whether by con'ersion of the bond or warrant or otherwise, on the basis of the price agreed upon when the sa(e was issued0 (%) Kithout preDudice to the pro'isions contained in sub+section ( ), if the Central &o'ern(ent %3 is satisfied that in the interests of trade and co((erce or the
%% Substituted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec 3, w0e0f0 0>+ %+ !"!0
econo(ic de'elop(ent of the country it is necessary or expedient so to do, it (ay, by notification in the Cfficial &aFette, specify any class of contracts as contracts to which this Act or any pro'ision contained therein shall not apply, and also the conditions, li(itations or restrictions, if any, subDect to which it shall not so apply0: 4rote'tio of %'tio t%6e i (oo- f%ith. "9. Eo suit, prosecution or other legal proceeding whatsoe'er shall lie in any court against the go'erning body or any (e(ber, office bearer or ser'ant of any recognised stoc) exchange or against any person or persons appointed under subsection ( ) of section for anything which is in good faith done or intended to be done in pursuance of this Act or of any rules or bye+laws (ade thereunder0 %$44o/er to -ele(%te. "9A. .he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers (except the power under section 30) exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India or the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)0: 4o/er to .%6e r*le!. )=. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for the purpose of carrying into effect the obDects of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for,(a) the (anner in which applications (ay be (ade, the particulars which they should contain and the le'y of a fee in respect of such applications 3 (b) the (anner in which any in*uiry for the purpose of recognising any stoc) exchange (ay be (ade, the conditions which (ay be i(posed for the grant of such recognition, including conditions as to the ad(ission of (e(bers if the
%3 <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %$ Inserted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% and Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec !, w0e0f0 %%+0%+%0000 <rior to its substitution, section %!A read as under , 1%!A0 8$.er t$ delegate&*.he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India02
stoc) exchange concerned is to be the only recognised stoc) exchange in the area3 and the for( in which such recognition shall be granted3 (c) the particulars which should be contained in the periodical returns and annual reports to be furnished to the Central &o'ern(ent3 (d) the docu(ents which should be (aintained and preser'ed under section # and the periods for which they should be preser'ed3 (e) the (anner in which any in*uiry by the go'erning body of a stoc) exchange shall be (ade under section #3 (f) the (anner in which the bye+laws to be (ade or a(ended under this Act shall before being so (ade or a(ended be published for criticis(3 (g) the (anner in which applications (ay be (ade by dealers in securities for licences under section /, the fee payable in respect thereof and the period of such licences, the conditions subDect to which licences (ay be granted, including conditions relating to the for(s which (ay be used in (a)ing contracts, the docu(ents to be (aintained by licensed dealers and the furnishing of periodical infor(ation to such authority as (ay be specified and the re'ocation of licences for breach of conditions3 %"4(h) the re*uire(ents which shall be co(plied with(A) by public co(panies for the purpose of getting their securities listed on any stoc) exchange3 (B) by collecti'e in'est(ent sche(e for the purpose of getting their units listed on any stoc) exchange3: %#4GGG: %/4(ha) the grounds on which the securities of a co(pany (ay be delisted fro( any recognised stoc) exchange under sub+section ( ) of section % A3 (hb) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under sub+section (%) of section % A and the fees payable in respect of such appeal3 (hc) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3
%" Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec 0, w0e0f0 %%+0%+%0000 <rior to its substitution, clause (h) read as under , 1(h) the re*uire(ents which shall be co(plied with by public co(panies for the purpose of getting their securities listed on any stoc) exchange32 %# .he word ;and; o(itted by .he Securities Contracts (Regulation) A(end(ent Act, !>", Sec $, w0e0f0 /+0 + !>#0 %/ Substituted for clause (ha) by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 7arlier clause (ha), as a(ended by the Securities =aws (A(end(ent) Act, !!!, read as
under ,1(ha) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3 and2
(hd) the (anner of in*uiry under sub+section ( ) of section %3+I3 (he) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3= and the fees payable in respect of such appeal3: (i) any other (atter which is to be or (ay be prescribed0 %>4(3) 7'ery rule (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule0: 1"954o/er of Se'*ritie! % - E#'h% (e ;o%r- of I -i% to .%6e re(*l%tio !. )1. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 305(%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,%> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 <rior to its substitution, sub+section (3), as a(ended by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!", read as under , 1(3) 7'ery rule (ade under this section shall, as soon as (ay be, after its publication in the Cfficial &aFette, be laid before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e session aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule02 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0 7arlier it was repealed by the Repealing and A(ending Act, !#0, Sec % and 6irst Sch0 w0e0f0 %>+ %+ !#00 30 Substituted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec ", w0e0f0 %>+ 0"+%00/0 <rior to substitution it read as under , 1(%) In particular and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for the (anner in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section02
(a) the (anner, in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of
publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section3 (b) the eligibility criteria and other re*uire(ents under section /A0 < (3) 7'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the regulation or both Iouses agree that the regulation should not be (ade, the regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that regulation0:
DE4OSITORIES ACT, 1998 SECTIONS /@A81(0 : 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS ). Certificate of co((ence(ent of business by depositories /@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS 3. Agree(ent between depository and participant 5. Ser'ices of depository 8. Surrender of certificate of security 7. Registration of transfer of securities with depositories :. Cptions to recei'e security certificate or hold securities with depository 9. Securities in depositories to be in fungible for( 1=. Rights of depositories and beneficial owner 11. Register of beneficial owner 1". <ledge or hypothecation of securities held in a depository 1). 6urnishing of infor(ation and records by depository and issuer 13. Cption to opt out in respect of any security 15. Act > of >! to apply to depositories 18. 9epositories to inde(nify loss in certain cases 17. Rights and obligations of depositories, etc0 /@A81(0 :: EN9UIRM AND INS4ECTION 1:. <ower of 8oard to call for infor(ation and en*uiry 19. <ower of 8oard to gi'e directions in certain cases 19A. <enalty for failure to furnish infor(ation, return, etc0 19;. <enalty for failure to enter into an agree(ent 19C. <enalty for failure to redress in'estorsJ grie'ances
19D. <enalty for delay in de(aterialisation or issue of certificate of securities 19E. <enalty for failure to reconcile records 192. <enalty for failure to co(ply with directions issued by 8oard under section ! of the Act 19G. <enalty for contra'ention where no separate penalty has been pro'ided 19D. <ower to adDudicate 190I. 6actors to be ta)en into account by adDudicating officer 190IA. Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (! 190I;. Re'o+er> of %.o* t! 190E. Crediting su(s realised by way of penalties to Consolidated 6und of India /@A81(0 D 4ENALTM "=. Cffences "1. Cffences by co(panies /@A81(0 D: @ISCELLANEOUS "". CogniFance of offences by courts ""A. Co(position of certain offences "";. <ower to grant i((unity ""C. E!t%,li!h.e t of S$e'i%l Co*rt! ""D. Offe 'e! tri%,le ,> S$e'i%l Co*rt! ""E. A$$e%l % - re+i!io ""2. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""G. Tr% !itio %l 4ro+i!io ! "). Appeals ")A. Appeal to Securities Appellate .ribunal ")A. Appeal to Securities Appellate .ribunal ");. <rocedure and powers of Securities Appellate .ribunal ")C. Right to =egal Representation ")D. =i(itation ")E. Ci'il court not to ha'e Durisdiction ")2. Appeal to Supre(e Court "3. <ower of Central &o'ern(ent to (a)e rules "5. <ower of 8oard to (a)e regulations "8. <ower of depositories to (a)e bye+laws "7. Rules and regulations to be laid before <arlia(ent ":. Application of other laws not barred "9. Re(o'al of difficulties )=. A(end(ents to certain enact(ents )1. Repeal and sa'ing /@(5A9( A?7E9?7E. .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0: DE4OSITORIES ACT, 1998 5"" O2 1998< 51=th A*(*!t, 1998< An Act to provide $or reg lation o$ depositories in sec rities and $or matters connected there%ith or incidental thereto& B( it enacted bF 8arlia"ent in the E$rtF7#eventh ;ear $f the 0e%!blic $f :ndia a# f$ll$.# ,*
/@A81(0 : 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the 9epositories Act, !!#0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the %0th day of Septe(ber, !!"0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 1beneficial owner2 (eans a person whose na(e is recorded as such with a depository3 (b) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 3 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (c) 1bye+laws2 (eans bye+laws (ade by a depository under section %#3 (d) 1Co(pany =aw 8oard2 (eans the 8oard of Co(pany =aw Ad(inistration constituted under section 07 of the Co(panies Act, !"# ( of !"#)3 (e) 1depository2 (eans a co(pany for(ed and registered under the Co(panies Act, !"# ( of !"#), and which has been granted a certificate of registration under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (f) 1issuer2 (eans any person (a)ing an issue of securities3 (g) 1participant2 (eans a person registered as such under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (h) 1prescribed2 (eans prescribed by rules (ade under this Act3 (i) 1record2 includes the records (aintained in the for( of boo)s or stored in a co(puter or in such other for( as (ay be deter(ined by regulations3 (j) 1registered owner2 (eans a depository whose na(e is entered as such in the register of the issuer3 (k) 1regulations2 (eans the regulations (ade by the 8oard3 4(ka) 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (l) 1security2 (eans such security as (ay be specified by the 8oard3 (") 1ser'ice2 (eans any ser'ice connected with recording of allot(ent of securities or transfer of ownership of securities in the record of a depository0 (%) Kords and expressions used herein and not defined but defined in the Co(panies Act, !"# ( of !"#), or the Securities Contracts (Regulation) Act, !"# ($% of !"#), or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), shall ha'e the (eanings respecti'ely assigned to the( in those Acts0 /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS Certifi'%te of 'o..e 'e.e t of ,*!i e!! ,> -e$o!itorie!. ). ( ) Eo depository shall act as a depository unless it obtains a certificate of co((ence(ent of business fro( the 8oard0 (%) A certificate granted under sub+section ( ) shall be in such for( as (ay be specified by the regulations0 (3) .he 8oard shall not grant a certificate under sub+section ( ) unless it is satisfied that the depository has ade*uate syste(s and safeguards to pre'ent (anipulation of records and transactions , 4ro+i-e- that no certificate shall be refused under this section unless the depository concerned has been gi'en a reasonable opportunity of being heard0
Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
/@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS A(ree.e t ,et/ee -e$o!itor> % - $%rti'i$% t. 3. ( ) A depository shall enter into an agree(ent with one or (ore participants as its agent0 (%) 7'ery agree(ent under sub+section ( ) shall be in such for( as (ay be specified by the bye+laws0 Ser+i'e! of -e$o!itor>. 5. Any person, through a participant, (ay enter into an agree(ent, in such for( as (ay be specified by the bye+laws, with any depository for a'ailing its ser'ices0 S*rre -er of 'ertifi'%te of !e'*rit>. 8. ( ) Any person who has entered into an agree(ent under section " shall surrender the certificate of security, for which he see)s to a'ail the ser'ices of a depository, to the issuer in such (anner as (ay be specified by the regulations0 (%) .he issuer, on receipt of certificate of security under sub+section ( ), shall cancel the certificate of security and substitute in its records the na(e of the depository as a registered owner in respect of that security and infor( the depository accordingly0 (3) A depository shall, on receipt of infor(ation under sub+section (%), enter the na(e of the person referred to in sub+section ( ) in its records, as the beneficial owner0 Re(i!tr%tio of tr% !fer of !e'*ritie! /ith -e$o!itor>. 7. ( ) 7'ery depository shall, on receipt of inti(ation fro( a participant, register the transfer of security in the na(e of the transferee0 (%) If a beneficial owner or a transferee of any security see)s to ha'e custody of such security the depository shall infor( the issuer accordingly0 O$tio ! to re'ei+e !e'*rit> 'ertifi'%te or hol- !e'*ritie! /ith -e$o!itor>. :. ( ) 7'ery person subscribing to securities offered by an issuer shall ha'e the option either to recei'e the security certificates or hold securities with a depository0 (%) Khere a person opts to hold a security with a depository, the issuer shall inti(ate such depository the details of allot(ent of the security, and on receipt of such infor(ation the depository shall enter in its records the na(e of the allottee as the beneficial owner of that security0 Se'*ritie! i -e$o!itorie! to ,e i f* (i,le for.. 9. ( ) All securities held by a depository shall be de(aterialised and shall be in a fungible for(0 %4(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#), shall apply to a depository in respect of securities held by it on behalf of the beneficial owners&: Ri(ht! of -e$o!itorie! % - ,e efi'i%l o/ er. 1=. ( ) Eotwithstanding anything contained in any other law for the ti(e being in force, a depository shall be dee(ed to be the registered owner for the purposes of effecting transfer of ownership of security on behalf of a beneficial owner0 (%) Sa'e as otherwise pro'ided in sub+section ( ), the depository as a registered owner shall not ha'e any 'oting rights or any other rights in respect of securities held by it0 (3) .he beneficial owner shall be entitled to all the rights and benefits and be subDected to all the liabilities in respect of his securities held by a depository0 Re(i!ter of ,e efi'i%l o/ er. 11. 7'ery depository shall (aintain a register and an index of beneficial owners in the
(anner pro'ided in sections "0, " and "% of the Co(panies Act, !"# ( of !"#)0 4le-(e or h>$othe'%tio of !e'*ritie! hel- i % -e$o!itor>. 1". ( ) SubDect to such regulations and bye+laws, as (ay be (ade in this behalf, a beneficial owner (ay with the pre'ious appro'al of the depository create a pledge or hypothecation in respect of a security owned by hi( through a depository0 (%) 7'ery beneficial owner shall gi'e inti(ation of such pledge or hypothecation to the depository and such depository shall thereupon (a)e entries in its records accordingly0 (3) Any entry in the records of a depository under sub+section (%) shall be e'idence of a pledge or hypothecation0 2*r i!hi ( of i for.%tio % - re'or-! ,> -e$o!itor> % - i!!*er. 1). ( ) 7'ery depository shall furnish to the issuer infor(ation about the transfer of securities in the na(e of beneficial owners at such inter'als and in such (anner as (ay be specified by the bye+laws0 (%) 7'ery issuer shall (a)e a'ailable to the depository copies of the rele'ant records in respect of securities held by such depository0 O$tio to o$t o*t i re!$e't of % > !e'*rit>.
% Substituted
by the 9epositories Related =aws (A(end(ent) Act, !!/, Sec %%, w0e0f0 "+0 + !!/0 <rior to its substitution sub+section (%) read as under , 1(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#) shall apply to the securities held by a depository on behalf of the beneficial owners02
13. ( ) If a beneficial owner see)s to opt out of a depository in respect of any security he shall infor( the depository accordingly0 (%) .he depository shall on receipt of inti(ation under sub+section ( ) (a)e appropriate entries in its records and shall infor( the issuer0 (3) 7'ery issuer shall, within thirty days of the receipt of inti(ation fro( the depository and on fulfil(ent of such conditions and on pay(ent of such fees as (ay be specified by the regulations, issue the certificate of securities to the beneficial owner or the transferee, as the case (ay be0 A't 1: of 1:91 to %$$l> to -e$o!itorie!. 15. .he 8an)ersJ 8oo)s 7'idence Act, >! shall apply in relation to a depository as if it were a ban) as defined in section % of that Act0 De$o!itorie! to i -e. if> lo!! i 'ert%i '%!e!. 18. ( ) Kithout preDudice to the pro'isions of any other law for the ti(e being in force, any loss caused to the beneficial owner due to the negligence of the depository or the participant, the depository shall inde(nify such beneficial owner0 (%) Khere the loss due to the negligence of the participant under sub+section ( ) is inde(nified by the depository, the depository shall ha'e the right to reco'er the sa(e fro( such participant0 Ri(ht! % - o,li(%tio ! of -e$o!itorie!, et'. 17. ( ) SubDect to the pro'isions of this Act, the rights and obligations of the depositories, participants and the issuers whose securities are dealt with by a depository shall be specified by the regulations0 (%) .he eligibility criteria for ad(ission of securities into the depository shall be specified by the regulations0 /@A81(0 :D EN9UIRM AND INS4ECTION 4o/er of ;o%r- to '%ll for i for.%tio % - e 7*ir>. 1:. ( ) .he 8oard, on being satisfied that it is necessary in the public interest or in the interest of in'estors so to do, (ay, by order in writing,-
(a) call upon any issuer, depository, participant or beneficial owner to furnish in writing such infor(ation relating to the securities held in a depository as it (ay re*uire3 or (b) authorise any person to (a)e an en*uiry or inspection in relation to the affairs of the issuer, beneficial owner, depository or participant, who shall sub(it a report of such en*uiry or inspection to it within such period as (ay be specified in the order0 (%) 7'ery director, (anager, partner, secretary, officer or e(ployee of the depository or issuer or the participant or beneficial owner shall on de(and produce before the person (a)ing the en*uiry or inspection all infor(ation or such records and other docu(ents in his custody ha'ing a bearing on the subDect+(atter of such en*uiry or inspection0 4o/er of ;o%r- to (i+e -ire'tio ! i 'ert%i '%!e!. 19. Sa'e as pro'ided in this Act, if after (a)ing or causing to be (ade an en*uiry or inspection, the 8oard is satisfied that it is necessary(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any depository or participant being conducted in the (anner detri(ental to the interests of in'estors or securities (ar)et, it (ay issue such directions,(a) to any depository or participant or any person associated with the securities (ar)et3 or (b) to any issuer, as (ay be appropriate in the interest of in'estors or the securities (ar)et0 )5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< $44e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 19A. Any person, who is re*uired under this Act or any rules or regulations or bye+laws (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to the 8oard, fails to furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations or bye+laws, fails to file return or furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0
3I $ Inserted
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the Securities =aws (A(end(ent) Act, %00$, Sec0 /, w0r0e0f0 %+ 0+%00$0
4e %lt> for f%il*re to e ter i to % %(ree.e t. 19;. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and is re*uired under this Act or any rules or regulations (ade thereunder, to enter into an agree(ent, fails to enter into such agree(ent, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0
4e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 19C. If any depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such depository or participant or issuer or its agents or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for -el%> i -e.%teri%li!%tio or i!!*e of 'ertifi'%te of !e'*ritie!. 19D. If any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to de(aterialise or issue the certificate of securities on opting out of a depository by the in'estors, within the ti(e specified under this Act or regulations or bye+laws (ade thereunder or abets in delaying the process of de(aterialisation or issue the certificate of securities on opting out of a depository of securities, such issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to re'o 'ile re'or-!. 19E. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to reconcile the records of de(aterialised securities with all the securities issued by the issuer as specified in the regulations, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to 'o.$l> /ith -ire'tio ! i!!*e- ,> ;o%r- * -er !e'tio 19 of the A't. 192. If any person fails to co(ply with the directions issued by the 8oard under section !, within the ti(e specified by it, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 19G. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations or bye+laws (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0 4o/er to %-G*-i'%te. 19D. ( ) 6or the purpose of adDudging under sections !A, !8, !C, !9, !7, !6 and !&, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the
sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. 190I. Khile adDudging the *uantu( of penalty under section !I, the adDudicating officer shall ha'e due regard to the following factors, na(ely,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 55 Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (!. 190IA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 19, !e'tio 19D, %! the '%!e .%> ,e, .%> file % %$$li'%tio i /riti ( to the ;o%r$ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e-ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h
"I
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re !$e'ifie- ,> the ;o%r* -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")A %(%i !t % > or-er $%!!e- ,> the ;o%r- or the %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 85 Re'o+er> of %.o* t!. 190I;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 19 or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6
%''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hilor !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C!
#I
!erte- ,> The Se'*ritie! L%/! (A.e- .e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
.o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")A of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 19, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 19E. All su(s realiFed by way of penalties under this Act shall be credited to the Consolidated 6und of India0: /@A81(0 D 4ENALTM /4Offe 'e!. "=. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws (ade thereunder, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0
/ Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 >, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %0 read as under,1%00 <ffence#0- Khoe'er contran'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or any regulations or bye+laws (ade thereunder shall be punishable with i(prison(ent for a ter( which (ay extend to fi'e years, or with fine or with both02
(%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with
fine, which (ay extend to twenty+fi'e crore rupees, or with both0: Offe 'e! ,> 'o.$% ie!. "1. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n&-6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and (b) 1director2, in relation to a fir(, (eans a partner in the fir(0 /@A81(0 D: @ISCELLANEOUS >4Co( iL% 'e of offe 'e! ,> 'o*rt!. "". ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central
> Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 !, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %% read as under,1%%0 /$gniCance $f $ffence# bF c$!rt#&*( ) Eo Court shall ta)e cogniFance of any offence punishable under this Act or any regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the 8oard0 (%) Eo court inferior to that of a ?etropolitan ?agistrate or a Dudicial ?agistrate of the first class shall try any offence punishable under this Act02
&o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or by any person0 !5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < Co.$o!itio of 'ert%i offe 'e!. ""A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "";. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any
penalty under this Act with respect to the alleged 'iolation , 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity , 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0: 1=5 E!t%,li!h.e t of S$e'i%l Co*rt!. ""C. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>.
! <rior
to o(ission, Sub+section(%) read 1Eo court inferior to that of a Court of Session shall try any offence punishable under this Act02 0 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. ""D. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-. A$$e%l % - Re+i!io ""E. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""2. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197).
(") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erioof ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! ""G. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< A$$e%l!. "). ( ) Any person aggrie'ed by an order of the 8oard (ade 4before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!: under this Act, or the regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor , 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0 (3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed , 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 %4A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")A. ( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!, under this Act, or the regulations (ade thereunder, 34or by an order (ade by an adDudicating officer under this Act: (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 $5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 8oard is recei'ed by the person referred to in sub+section ( ) and it shall be in such for( and be acco(panied by such fee as (ay be prescribed ,
Substituted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 $, w0e0f0 #+ %+ !!! for ;an order of the 8oard (ade;0 % Sections %3A to %36 inserted by the Securities =aws (Second A(end(ent) Act, !!! , Sec0 ", w0e0f0 #+ %+ !!!& 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %0, w0r0e0f0 %+ 0+%00$0 $ 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JNo %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-e ,> the ;o%r- /ith the 'o !e t of the $%rtie!.K
4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0
($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 (") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. ");. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3 (e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte; (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 Ri(ht to le(%l re$re!e t%tio . ")C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or an attorney of any Iigh Court, and
includes a pleader in practice0 Li.it%tio . ")D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 Ci+il 'o*rt ot to h%+e G*ri!-i'tio . ")E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "4A$$e%l to S*$re.e Co*rt. ")2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order ,
" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 % , w0r0e0f0 %+ 0+%00$0 <rior to its substitution, Section %36, as inserted by Securities =aws (Second A(end(ent) Act, !!!, w0e0f0 #+ %+ !!!, read as under,1%360 A%%eal t$ @igh /$!rt&-Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0:: 4o/er of Ce tr%l Go+er .e t to .%6e r*le!. "3. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for carrying out the pro'isions of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,164(a) the (anner of in*uiry under sub+section ( ) of section !I3 (aa) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %33: (b) the for( in which an appeal (ay be preferred under sub+section (3) of section %3 and the fees payable in respect of such appeal 3 (c) the procedure for disposing of an appeal under sub+section ($) of section %33 /4(d) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3A and the fees payable in respect of such appeal0: 4o/er of ;o%r- to .%6e re(*l%tio !. "5. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the 8oard (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for(a) the for( in which record is to be (aintained under clause ( i) of sub+section ( ) of section %3 (b) the for( in which the certificate of co((ence(ent of business shall be issued under
sub+section (%) of section 33 (c) the (anner in which the certificate of security shall be surrendered under sub+section ( ) of section #3 (d) the (anner of creating a pledge or hypothecation in respect of security owned by a beneficial owner under sub+section ( ) of section %3 (e) the conditions and the fees payable with respect to the issue of certificate of securities under sub+section (3) of section $3
# Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %%, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (a) read as under,1(a) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %332 / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 #, w0e0f0 #+ %+ !!!0
(f) the rights and obligations of the depositories, participants and the issuers under subsection ( ) of section /3 (g) the eligibility criteria for ad(ission of securities into the depository under sub+section (%) of section /0 4o/er of -e$o!itorie! to .%6e ,>e0l%/!. "8. ( ) A depository shall, with the pre'ious appro'al of the 8oard, (a)e bye+laws consistent with the pro'isions of this Act and the regulations0 (%) In particular, and without preDudice to the generality of the foregoing power, such byelaws shall pro'ide for(a) the eligibility criteria for ad(ission and re(o'al of securities in the depository3 (b) the conditions subDect to which the securities shall be dealt with3 (c) the eligibility criteria for ad(ission of any person as a participant3 (d) the (anner and procedure for de(aterialisation of securities3 (e) the procedure for transactions within the depository3 (f) the (anner in which securities shall be dealt with or withdrawn fro( a depository3 (g) the procedure for ensuring safeguards to protect the interests of participants and beneficial owners3 (h) the conditions of ad(ission into and withdrawal fro( a participant by a beneficial owner3 (i) the procedure for con'eying infor(ation to the participants and beneficial owners on di'idend declaration, shareholder (eetings and other (atters of interest to the beneficial owners3 (j) the (anner of distribution of di'idends, interest and (onetary benefits recei'ed fro( the co(pany a(ong beneficial owners3 (k) the (anner of creating pledge or hypothecation in respect of securities held with a depository3 (l) inter #e rights and obligations a(ong the depository, issuer, participants, and beneficial owners3 (") the (anner and the periodicity of furnishing infor(ation to the 8oard, issuer and other persons3 (n) the procedure for resol'ing disputes in'ol'ing depository, issuer, co(pany or a beneficial owner3 ($) the procedure for proceeding against the participant co((itting breach of the regulations and pro'isions for suspension and expulsion of participants fro( the depository and cancellation of agree(ents entered with the depository3 (%) the internal control standards including procedure for auditing, re'iewing and (onitoring0
(3) Khere the 8oard considers it expedient so to do, it (ay, by order in writing, direct a depository to (a)e any bye+laws or to a(end or re'o)e any bye+laws already (ade within such period as it (ay specify in this behalf0 ($) If the depository fails or neglects to co(ply with such order within the specified period, the 8oard (ay (a)e the bye+laws or a(end or re'o)e the bye+laws (ade either in the for( specified in the order or with such (odifications thereof as the 8oard thin)s fit0 R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t. "7. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. ":. .he pro'isions of this Act shall be in addition to, and not in derogation of, any other law for the ti(e being in force relating to the holding and transfer of securities0 Re.o+%l of -iffi'*ltie!. "9. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as appear to it to be necessary or expedient for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of a period of two years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 A.e -.e t! to 'ert%i e %'t.e t!. )=. 40e%ealed bF 0e%ealing H A"ending Act' 20010: Re$e%l % - !%+i (. )1. ( ) .he 9epositories (.hird) Crdinance, !!# (Crd0 %> of !!#), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 /@(5A9( 4 ee section 30: A?7E9?7E.S .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0:
SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 SECTIONS !'APT"R I 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions !'APT"R II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA
). 7stablish(ent and incorporation of 8oard 3. ?anage(ent of the 8oard 5. .er( of office and conditions of ser'ice of Chair(an and (e(bers of the 8oard 8. Re(o'al of (e(ber fro( office 7. ?eetings 7A. ?e(ber not to participate in (eetings in certain cases :. Bacancies, etc0, not to in'alidate proceedings of 8oard 9. Cfficers and e(ployees of the 8oard !'APT"R III TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD 1=. .ransfer of assets, liabilities, etc0, of existing Securities and 7xchange 8oard to the 8oard !'APT"R IV 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 11. 6unctions of 8oard 11A. 8oard to regulate or prohibit issue of prospectus, offer docu(ent or ad'ertise(ent soliciting (oney for issue of securities 11AA. Collecti'e in'est(ent sche(e 11;. <ower to issue directions 11C. In'estigation 11D. Cease and desist proceedings !'APT"R V REGISTRATION CERTI2ICATE 1". Registration of stoc) bro)ers, sub+bro)ers, share transfer agents, etc0
%
!'APT"R VA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 1"A. <rohibition of (anipulati'e and decepti'e de'ices, insider trading and substantial ac*uisition of securities or control !'APT"R VI 2INANCE, ACCOUNTS AND AUDIT 1). &rants by the Central &o'ern(ent 13. 6und 15. Accounts and audit !'APT"R VIA 4ENALTIES AND ADEUDICATION 15A. <enalty for failure to furnish infor(ation, return, etc & 15;. <enalty for failure by any person to enter into agree(ent with clients 15C. <enalty for failure to redress in'estorsJ grie'ances 15D. <enalty for certain defaults in case of (utual funds 15E. <enalty for failure to obser'e rules and regulations by an asset (anage(ent co(pany 152. <enalty for default in case of stoc) bro)ers 15G. <enalty for insider trading 15D. <enalty for non+disclosure of ac*uisition of shares and ta)eo'ers 15DA. <enalty for fraudulent and unfair trade practices 15D;. <enalty for contra'ention where no separate penalty has been pro'ided
150I. <ower to adDudicate 15E. 6actors to be ta)en into account by the AdDudicating Cfficer 15EA. Crediting su(s realised by way of penalties to Consolidated 6und of India 15E;. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! !'APT"R VIB ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL 15F. 7stablish(ent of Securities Appellate .ribunals 15L. Co(position of Securities Appellate .ribunal 15@. Qualification for appoint(ent as <residing Cfficer or ?e(ber of Securities Appellate .ribunal
3
15N. .enure of office of <residing Cfficer and other (e(bers of Securities Appellate .ribunal 150O. Salary and allowances and other ter(s and conditions of ser'ice of <residing Cfficers 154. 6illing up of 'acancies 159. Resignation and re(o'al 15R. Crders constituting Appellate .ribunal to be final and not to in'alidate its proceedings 15S. Staff of the Securities Appellate .ribunal 15T. Appeal to the Securities Appellate .ribunal 15U. <rocedure and powers of the Securities Appellate .ribunal 15I. Right to legal representation 15?. =i(itation 15A. <residing Cfficer, (e(bers and staff of Securities Appellate .ribunals to be public ser'ants 15M. Ci'il Court not to ha'e Durisdiction 15N. Appeal to Supre(e Court !'APT"R VII @ISCELLANEOUS 18. <ower of Central &o'ern(ent to issue directions 17. <ower of Central &o'ern(ent to supersede the 8oard 1:. Returns and reports 19. 9elegation "=. Appeals "=A. 8ar of Durisdiction "1. Sa'ings "". ?e(bers, officers and e(ployees of the 8oard to be public ser'ants "). <rotection of action ta)en in good faith "3. Cffences "3A. Co(position of certain offences "3;. <ower to grant i((unity "5. 7xe(ption fro( tax on wealth and inco(e "8. CogniFance of offences by Courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! "7. Cffences by co(panies
":. 4C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!":
$
":A. Re'o+er> of %.o* t! "9. <ower to (a)e rules )=. <ower to (a)e regulations )1. Rules and regulations to be laid before <arlia(ent )". Application of other laws not barred )). 4Repealed by Repealing R A(ending Act, %00 : )3. <ower to re(o'e difficulties )5. Repeal and sa'ing .I7 SCI79H=7 4Repealed by Repealing R A(ending Act, %00 : SECURITIES AND EACDANGE ;OARD O2 INDIA ACT, 199" 515 O2 199"< 53th A$ril, 199"< A A't to $ro+i-e for the e!t%,li!h.e t of % ;o%r- to $rote't the i tere!t! of i +e!tor! i !e'*ritie! % - to $ro.ote the -e+elo$.e t of, % - to re(*l%te, the !e'*ritie! .%r6et % - for .%tter! 'o e'te- there/ith or i 'i-e t%l thereto B( it enacted bF 8arlia"ent in the E$rtF7third ;ear $f the 0e%!blic $f :ndia a# f$ll$.# , CDA4TER I 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities and 7xchange 8oard of India Act, !!%0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the 30th day of Manuary, !!%0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 33 (b) 1Chair(an2 (eans the Chair(an of the 8oard3 4(ba) 1collecti'e in'est(ent sche(e2 (eans any sche(e or arrange(ent which satisfies the conditions specified in section AA3: (c) 1existing Securities and 7xchange 8oard2 (eans the Securities and 7xchange 8oard of India constituted under the Resolution of the &o'ern(ent of India in the 9epart(ent of 7cono(ic Affairs Eo0 ($$) S7L>#, dated the %th day of April, !>>3 (d) 16und2 (eans the 6und constituted under section $3 (e) 1(e(ber2 (eans a (e(ber of the 8oard and includes the Chair(an3 (f) 1notification2 (eans a notification published in the Cfficial &aFette3 (g) 1prescribed2 (eans prescribed by rules (ade under this Act3
Inserted by the Securities =aws (A(end(ent) Act, !!!, w0e0f0 %%+%+%0000
"
(h) 1regulations2 (eans the regulations (ade by the 8oard under this Act3 4(ha) 1Reser'e 8an)2 (eans the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)3: (i) 1securities2 has the (eaning assigned to it in section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#)0 %4(%) Kords and expressions used and not defined in this Act but defined in the Securities Contracts (Regulation) Act, !"# ($% of !"#) 34or the 9epositories Act, !!#:, shall ha'e the (eanings respecti'ely assigned to the( in that Act:0 CDA4TER II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA E!t%,li!h.e t % - i 'or$or%tio of ;o%r-.
). ( ) Kith effect fro( such date as the Central &o'ern(ent (ay, by notification, appoint, there shall be established, for the purposes of this Act, a 8oard by the na(e of the Securities and 7xchange 8oard of India0 (%) .he 8oard shall be a body corporate by the na(e aforesaid, ha'ing perpetual succession and a co((on seal, with power subDect to the pro'isions of this Act, to ac*uire, hold and dispose of property, both (o'able and i((o'able, and to contract, and shall, by the said na(e, sue or be sued0 (3) .he head office of the 8oard shall be at 8o(bay0 ($) .he 8oard (ay establish offices at other places in India0 @% %(e.e t of the ;o%r-. 3. ( ) .he 8oard shall consist of the following (e(bers, na(ely,(a) a Chair(an3 (b) two (e(bers fro( a(ongst the officials of the $4?inistry: of the Central &o'ern(ent dealing with 6inance "4and ad(inistration of the Co(panies Act, !"# ( of !"#):3 (c) one (e(ber fro( a(ongst the officials of #4the Reser'e 8an):3 /4(d) fi'e other (e(bers of who( at least three shall be the whole+ti(e (e(bers,: to be appointed by the Central &o'ern(ent0
Inserted by the Securities =aws (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0 <rior to its substitution, sub+section (%) reads as under, 1(%) Kords and expressions used and not defined in this Act but defined in the Capital Issues (Control) Act, !$/ or the Securities Contracts Regulation Act, !"# shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts02 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 $ Substituted for 1?inistries2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1and law2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act !3$ (% of !3$)2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 / Substituted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, clause (d) read as, 1(d) two other (e(bers20
% Substituted
#
(%) .he general superintendence, direction and (anage(ent of the affairs of the 8oard shall 'est in a 8oard of (e(bers, which (ay exercise all powers and do all acts and things which (ay be exercised or done by the 8oard0 (3) Sa'e as otherwise deter(ined by regulations, the Chair(an shall also ha'e powers of general superintendence and direction of the affairs of the 8oard and (ay also exercise all powers and do all acts and things which (ay be exercised or done by that 8oard0 ($) .he Chair(an and (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be appointed by the Central &o'ern(ent and the (e(bers referred to in clauses ( b) and (c) of that sub+section shall be no(inated by the Central &o'ern(ent and the 4Reser'e 8an): respecti'ely0 (") .he Chair(an and the other (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be persons of ability, integrity and standing who ha'e shown capacity in dealing with proble(s relating to securities (ar)et or ha'e special )nowledge or experience of law, finance, econo(ics, accountancy, ad(inistration or in any other discipline which, in the opinion of the Central &o'ern(ent, shall be useful to the 8oard0 Ter. of offi'e % - 'o -itio ! of !er+i'e of Ch%ir.% % - .e.,er! of the ;o%r-. 5. ( ) .he ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers referred to in clause (d) of sub+section ( ) of section $ shall be such as (ay be prescribed0 (%) Eotwithstanding anything contained in sub+section ( ), the Central &o'ern(ent shall ha'e the right to ter(inate the ser'ices of the Chair(an or a (e(ber appointed under clause ( d) of
sub+section ( ) of section $, at any ti(e before the expiry of the period prescribed under subsection ( ), by gi'ing hi( notice of not less than three (onths in writing or three (onthsJ salary and allowances in lieu thereof, and the Chair(an or a (e(ber, as the case (ay be, shall also ha'e the right to relin*uish his office, at any ti(e before the expiry of the period prescribed under sub+section ( ), by gi'ing to the Central &o'ern(ent notice of not less than three (onths in writing0 Re.o+%l of .e.,er fro. offi'e. 8. %4G G G: .he Central &o'ern(ent shall re(o'e a (e(ber fro( office if he(a) is, or at any ti(e has been, adDudicated as insol'ent3 (b) is of unsound (ind and stands so declared by a co(petent court3 (c) has been con'icted of an offence which, in the opinion of the Central &o'ern(ent, in'ol'es a (oral turpitude3 (d) 34G G G: (e) has, in the opinion of the Central &o'ern(ent, so abused his position as to render his continuation in office detri(ental to the public interest , 4ro+i-e- that no (e(ber shall be re(o'ed under this clause unless he has been gi'en a reasonable opportunity of being heard in the (atter0
Substituted for 1Reser'e 8an) of India2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 )2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 C(itted, by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to o(ission clause (d) read read as, 1(d) is appointed as a director of a co(pany20
% 1(
/
@eeti (!. 7. ( ) .he 8oard shall (eet at such ti(es and places, and shall obser'e such rules of procedure in regard to the transaction of business at its (eetings (including *uoru( at such (eetings) as (ay be pro'ided by regulations0 (%) .he Chair(an or, if for any reason, he is unable to attend a (eeting of the 8oard, any other (e(ber chosen by the (e(bers present fro( a(ongst the(sel'es at the (eeting shall preside at the (eeting0 (3) All *uestions which co(e up before any (eeting of the 8oard shall be decided by a (aDority 'otes of the (e(bers present and 'oting, and, in the e'ent of an e*uality of 'otes, the Chair(an, or in his absence, the person presiding, shall ha'e a second or casting 'ote0 4@e.,er ot to $%rti'i$%te i .eeti (! i 'ert%i '%!e!. 7A. Any (e(ber, who is a director of a co(pany and who as such director has any direct or indirect pecuniary interest in any (atter co(ing up for consideration at a (eeting of the 8oard, shall, as soon as possible after rele'ant circu(stances ha'e co(e to his )nowledge, disclose the nature of his interest at such (eeting and such disclosure shall be recorded in the proceedings of the 8oard, and the (e(ber shall not ta)e any part in any deliberation or decision of the 8oard with respect to that (atter0: I%'% 'ie!, et'., ot to i +%li-%te $ro'ee-i (! of ;o%r-. :. Eo act or proceeding of the 8oard shall be in'alid (erely by reason of(a) any 'acancy in, or any defect in the constitution of, the 8oard3 or (b) any defect in the appoint(ent of a person acting as a (e(ber of the 8oard3 or (c) any irregularity in the procedure of the 8oard not affecting the (erits of the case0 Offi'er! % - e.$lo>ee! of the ;o%r-. 9. ( ) .he 8oard (ay appoint such other officers and e(ployees as it considers necessary for the efficient discharge of its functions under this Act0 (%) .he ter( and other conditions of ser'ice of officers and e(ployees of the 8oard appointed under sub+section ( ) shall be such as (ay be deter(ined by regulations0 CDA4TER III
TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD Tr% !fer of %!!et!, li%,ilitie!, et'., of e#i!ti ( Se'*ritie! % - E#'h% (e ;o%r- to the ;o%r-. 1=. ( ) Cn and fro( the date of establish(ent of the 8oard,(a) any reference to the existing Securities and 7xchange 8oard in any law other than this Act or in any contract or other instru(ent shall be dee(ed as a reference to the 8oard3 (b) all properties and assets, (o'able and i((o'able, of, or belonging to, the existing Securities and 7xchange 8oard, shall 'est in the 8oard3
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
>
(c) all rights and liabilities of the existing Securities and 7xchange 8oard shall be transferred to, and be the rights and liabilities of, the 8oard3 (d) without preDudice to the pro'isions of clause (c), all debts, obligations and liabilities incurred, all contracts entered into and all (atters and things engaged to be done by, with or for the existing Securities and 7xchange 8oard i((ediately before that date, for or in connection with the purpose of the said existing 8oard shall be dee(ed to ha'e been incurred, entered into, or engaged to be done by, with or for, the 8oard3 (e) all su(s of (oney due to the existing Securities and 7xchange 8oard i((ediately before that date shall be dee(ed to be due to the 8oard3 (f) all suits and other legal proceedings instituted or which could ha'e been instituted by or against the existing Securities and 7xchange 8oard i((ediately before that date (ay be continued or (ay be instituted by or against the 8oard3 and (g) e'ery e(ployee holding any office under the existing Securities and 7xchange 8oard i((ediately before that date shall hold his office in the 8oard by the sa(e tenure and upon the sa(e ter(s and conditions of ser'ice as respects re(uneration, lea'e, pro'ident fund, retire(ent and other ter(inal benefits as he would ha'e held such office if the 8oard had not been established and shall continue to do so as an e(ployee of the 8oard or until the expiry of the period of six (onths fro( that date if such e(ployee opts not to be the e(ployee of the 8oard within such period0 (%) Eotwithstanding anything contained in the Industrial 9isputes Act, !$/ ( $ of !$/), or in any other law for the ti(e being in force, absorption of any e(ployee by the 8oard in its regular ser'ice under this section shall not entitle such e(ployee to any co(pensation under that Act or other law and no such clai( shall be entertained by any court, tribunal or other authority0 CDA4TER II 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 2* 'tio ! of ;o%r-. 11. ( ) SubDect to the pro'isions of this Act, it shall be the duty of the 8oard to protect the interests of in'estors in securities and to pro(ote the de'elop(ent of, and to regulate the securities (ar)et, by such (easures as it thin)s fit0 (%) Kithout preDudice to the generality of the foregoing pro'isions, the (easures referred to therein (ay pro'ide for(a) regulating the business in stoc) exchanges and any other securities (ar)ets3 (b) registering and regulating the wor)ing of stoc) bro)ers, sub+bro)ers, share transfer agents, ban)ers to an issue, trustees of trust deeds, registrars to an issue, (erchant ban)ers, underwriters, portfolio (anagers, in'est(ent ad'isers and such other inter(ediaries who (ay be associated with securities (ar)ets in any (anner3 4(ba) registering and regulating the wor)ing of the depositories, %4participants:, custodians of securities, foreign institutional in'estors, credit rating agencies and such other inter(ediaries as the 8oard (ay, by notification, specify in this behalf3: (c) registering and regulating the wor)ing of 4'enture capital funds and collecti'e
in'est(ent sche(es:, including (utual funds3
% Inserted
Inserted by Securities =aws (A(end(ent) Act !!", w0r0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+!+ !!"0
!
(d) pro(oting and regulating self+regulatory organisations3 (e) prohibiting fraudulent and unfair trade practices relating to securities (ar)ets3 (f) pro(oting in'estorsJ education and training of inter(ediaries of securities (ar)ets3 (g) prohibiting insider trading in securities3 (h) regulating substantial ac*uisition of shares and ta)e o'er of co(panies3 (i) calling for infor(ation fro(, underta)ing inspection, conducting in*uiries and audits of the %4stoc) exchanges, (utual funds, other persons associated with the securities (ar)et:, inter(ediaries and self+regulatory organisations in the securities (ar)et3 34(ia) '%lli ( for i for.%tio % - re'or-! fro. % > $er!o i 'l*-i ( % > ,% 6 or % > other %*thorit> or ,o%r- or 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l or St%te A't /hi'h, i the o$i io of the ;o%r-, !h%ll ,e rele+% t to % > i +e!ti(%tio or i 7*ir> ,> the ;o%r- i re!$e't of % > tr% !%'tio i !e'*ritie! 3: $5(i,) '%lli ( for i for.%tio fro., or f*r i!hi ( i for.%tio to, other %*thoritie!, /hether i I -i% or o*t!i-e I -i%, h%+i ( f* 'tio ! !i.il%r to tho!e of the ;o%r-, i the .%tter! rel%ti ( to the $re+e tio or -ete'tio of +iol%tio ! i re!$e't of !e'*ritie! l%/!, !*,Ge't to the $ro+i!io ! of other l%/! for the ti.e ,ei ( i for'e i thi! re(%r-& 4ro+i-e- th%t the ;o%r-, for the $*r$o!e of f*r i!hi ( % > i for.%tio to % > %*thorit> o*t!i-e I -i%, .%> e ter i to % %rr% (e.e t or %(ree.e t or * -er!t% -i ( /ith !*'h %*thorit> /ith the $rior %$$ro+%l of the Ce tr%l Go+er .e tH< (j) perfor(ing such functions and exercising such powers under the pro'isions of "4G G G: the Securities Contracts (Regulation) Act, !"# ($% of !"#), as (ay be delegated to it by the Central &o'ern(ent3 (k) le'ying fees or other charges for carrying out the purposes of this section3 (l) conducting research for the abo'e purposes3 #4(la) calling fro( or furnishing to any such agencies, as (ay be specified by the 8oard, such infor(ation as (ay be considered necessary by it for the efficient discharge of its functions3: (") perfor(ing such other functions as (ay be prescribed0 /4(%A) Kithout preDudice to the pro'isions contained in sub+section (%), the 8oard (ay ta)e (easures to underta)e inspection of any boo), or register, or other docu(ent or record of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard
Substituted for 1collecti'e in'est(ent sche(es2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % Substituted for 1stoc) exchanges and2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 S*,!tit*te- for J'%lli ( for i for.%tio % - re'or- fro. % > ,% 6 or % > other %*thorit> or ,o%ror 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l, St%te or 4ro+i 'i%l A't i re!$e't of % > tr% !%'tio i !e'*ritie! /hi'h i! * -er i +e!ti(%tio or i 7*ir> ,> the ;o%r-K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). E%rlier Se'tio 11(")(i%) /%! i !erte- ,> the SE;I (A.e -.e t) A't, "==" /.e.f. "901=0"=="0 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. =80=)0 199:) " .he words 1the Capital Issues (Control) Act, !$/ (%! of !$/) and2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
0
has reasonable grounds to belie'e that such co(pany has been indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et0: 4(3) Eotwithstanding anything contained in any other law for the ti(e being in force while exercising the powers under %4clause (i) or clause (ia) of sub+section (%) or sub+ section (2A):, the 8oard shall ha'e the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(i) the disco'ery and production of boo)s of account and other docu(ents, at such place and such ti(e as (ay be specified by the 8oard3 (ii) su((oning and enforcing the attendance of persons and exa(ining the( on oath3 (iii) inspection of any boo)s, registers and other docu(ents of any person referred to in section %, at any place3: 34(iv) inspection of any boo), or register, or other docu(ent or record of the co(pany referred to in sub+section (%A)3 (v) issuing co((issions for the exa(ination of witnesses or docu(ents0: $4($) Kithout preDudice to the pro'isions contained in sub+sections ( ), (%), (%A) and (3) and section 8, the 8oard (ay, by an order, for reasons to be recorded in writing, in the interests of in'estors or securities (ar)et, ta)e any of the following (easures, either pending in'estigation or in*uiry or on co(pletion of such in'estigation or in*uiry, na(ely,(a) suspend the trading of any security in a recognised stoc) exchange3 (b) restrain persons fro( accessing the securities (ar)et and prohibit any person associated with securities (ar)et to buy, sell or deal in securities3 (c) suspend any office+bearer of any stoc) exchange or self+regulatory organisation fro( holding such position3 (d) i(pound and retain the proceeds or securities in respect of any transaction which is under in'estigation3 (e) attach, after passing of an order on an application (ade for appro'al by the Mudicial ?agistrate of the first class ha'ing Durisdiction, for a period not exceeding one (onth, one or (ore ban) account or accounts of any inter(ediary or any person associated with the securities (ar)et in any (anner in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder , 4ro+i-e- that only the ban) account or accounts or any transaction entered therein, so far as it relates to the proceeds actually in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder shall be allowed to be attached3 (f) direct any inter(ediary or any person associated with the securities (ar)et in any (anner not to dispose of or alienate an asset for(ing part of any transaction which is under in'estigation , 4ro+i-e- that the 8oard (ay, without preDudice to the pro'isions contained in sub+section (%) or sub+section (%A), ta)e any of the (easures specified in clause ( d) or clause (e) or clause (f), in respect of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard has reasonable grounds to belie'e that such co(pany has been
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1clause (i) of sub+section (%)2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 3 Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 $ Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
% Substituted
indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et , 4ro+i-e- f*rther that the 8oard shall, either before or after passing such orders, gi'e an
opportunity of hearing to such inter(ediaries or persons concerned0: 15(5) The %.o* t -i!(or(e-, $*r!*% t to % -ire'tio i!!*e- * -er !e'tio 11; or !e'tio 1"A of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 or !e'tio 19 of the De$o!itorie! A't, 1998, %! the '%!e .%> ,e, !h%ll ,e 're-ite- to the I +e!tor 4rote'tio % - E-*'%tio 2* e!t%,li!he- ,> the ;o%r- % - !*'h %.o* t !h%ll ,e *tiliLe- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< %4;o%r- to re(*l%te or $rohi,it i!!*e of $ro!$e't*!, offer -o'*.e t or %-+erti!e.e t !oli'iti ( .o e> for i!!*e of !e'*ritie!. 11A. ( ) Kithout preDudice to the pro'isions of the Co(panies Act, !"# ( of !"#), the 8oard (ay, for the protection of in'estors,(a) specify, by regulations(i) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (ii) the (anner in which such (atters shall be disclosed by the co(panies3 (b) by general or special orders(i) prohibit any co(pany fro( issuing prospectus, any offer docu(ent, or ad'ertise(ent soliciting (oney fro( the public for the issue of securities3 (ii) specify the conditions subDect to which the prospectus, such offer docu(ent or ad'ertise(ent, if not prohibited, (ay be issued0 (%) Kithout preDudice to the pro'isions of section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the 8oard (ay specify the re*uire(ents for listing and transfer of securities and other (atters incidental thereto0: 34Colle'ti+e i +e!t.e t !'he.e. 11AA. ( ) Any sche(e or arrange(ent which satisfies the conditions referred to in subsection (%) $5or !*,0!e'tio ("A)< shall be a collecti'e in'est(ent sche(e0 "44ro+i-e- th%t % > $ooli ( of f* -! * -er % > !'he.e or %rr% (e.e t, /hi'h i! ot re(i!tere- /ith the ;o%r- or i! ot 'o+ere- * -er !*,0!e'tio ()), i +ol+i ( %
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 7arlier S0 A was inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" for S0 A0 <rior to its substitution, S0 A read as under,+ 1 A0 ?atters to be disclosed by the co(panies0+ Kithout <reDudice to the <ro'isions of the Co(panies Act , !"# ( of !"#), the board (ay , for the protection of in'estors, specify, by regulations,+ (a) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (b) the (anner in which such (atters, shall be disclosed by the co(panies02 3 Inserted by S78I (A(end(ent) Act !!!, w0e0f0 %%+%+%0000 $I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% Substituted
%
'or$*! %.o* t of o e h* -re- 'rore r*$ee! or .ore !h%ll ,e -ee.e- to ,e % 'olle'ti+e i +e!t.e t !'he.e.< (%) Any sche(e or arrange(ent (ade or offered by any 5$er!o < under which,(i) the contributions, or pay(ents (ade by the in'estors, by whate'er na(e called, are pooled and utiliFed for the purposes of the sche(e or arrange(ent3 (ii) the contributions or pay(ents are (ade to such sche(e or arrange(ent by the in'estors with a 'iew to recei'e profits, inco(e, produce or property, whether (o'able or i((o'able, fro( such sche(e or arrange(ent3 (iii) the property, contribution or in'est(ent for(ing part of sche(e or arrange(ent, whether identifiable or not, is (anaged on behalf of the in'estors3
(iv) the in'estors do not ha'e day+to+day control o'er the (anage(ent and operation of the sche(e or arrange(ent0 "5("A)< A > !'he.e or %rr% (e.e t .%-e or offere- ,> % > $er!o !%ti!f>i ( the 'o -itio ! %! .%> ,e !$e'ifie- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< (3) Eotwithstanding anything contained in sub+section (%) 35or !*,0!e'tio ("A)<, any sche(e or arrange(ent(i) (ade or offered by a co+operati'e society registered under the Co+operati'e Societies Act, ! % (% of ! %) or a society being a society registered or dee(ed to be registered under any law relating to co+operati'e societies for the ti(e being in force in any State3 (ii) under which deposits are accepted by non+ban)ing financial co(panies as defined in clause (f) of section $"+I of the Reser'e 8an) of India Act, !3$ (% of !3$)3 (iii) being a contract of insurance to which the Insurance Act, !3> ($ of !3>), applies3 (iv) pro'iding for any Sche(e, <ension Sche(e or the Insurance Sche(e fra(ed under the 7(ployees <ro'ident 6und and ?iscellaneous <ro'isions Act, !"% ( ! of !"%)3 (v) under which deposits are accepted under section ">A of the Co(panies Act, !"# ( of !"#)3 (vi) under which deposits are accepted by a co(pany declared as a Eidhi or a (utual benefit society under section #%0A of the Co(panies Act, !"# ( of !"#)3 (vii) falling within the (eaning of Chit business as defined in clause ( d) of section % of the Chit 6und Act, !>% ($0 of !>%)3 (viii) under which contributions (ade are in the nature of subscription to a (utual fund3 35(i#) !*'h other !'he.e or %rr% (e.e t /hi'h the Ce tr%l Go+er .e t .%>, i 'o !*lt%tio /ith the ;o%r-, otif>H< shall not be a collecti'e in'est(ent sche(e0: "54o/er to i!!*e -ire'tio !. 11;. Sa'e as otherwise pro'ided in section , if after (a)ing or causing to be (ade an en*uiry, the 8oard is satisfied that it is necessary,S*,!tit*te- for J'o.$% >K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) 3I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
%I
3
(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any inter(ediary or other persons referred to in section % being conducted in a (anner detri(ental to the interest of in'estors or securities (ar)et3 or (iii) to secure the proper (anage(ent of any such inter(ediary or person, it (ay issue such directions,(a) to any person or class of persons referred to in section %, or associated with the securities (ar)et3 or (b) to any co(pany in respect of (atters specified in section A, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 15E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< %4I +e!ti(%tio . 11C. ( ) Khere the 8oard has reasonable ground to belie'e that-
(a) the transactions in securities are being dealt with in a (anner detri(ental to the in'estors or the securities (ar)et3 or (b) any inter(ediary or any person associated with the securities (ar)et has 'iolated any of the pro'isions of this Act or the rules or the regulations (ade or directions issued by the 8oard thereunder, it (ay, at any ti(e by order in writing, direct any person (hereafter in this section referred to as the In'estigating Authority) specified in the order to in'estigate the affairs of such inter(ediary or persons associated with the securities (ar)et and to report thereon to the 8oard0 (%) Kithout preDudice to the pro'isions of sections %3" to %$ of the Co(panies Act, !"# ( of !"#), it shall be the duty of e'ery (anager, (anaging director, officer and other e(ployee of the co(pany and e'ery inter(ediary referred to in section % or e'ery person associated with the securities (ar)et to preser'e and to produce to the In'estigating Authority or any person authorised by it in this behalf, all the boo)s, registers, other docu(ents and record of, or relating to, the co(pany or, as the case (ay be, of or relating to, the inter(ediary or such person, which are in their custody or power0 (3) .he In'estigating Authority (ay re*uire any inter(ediary or any person associated with securities (ar)et in any (anner to furnish such infor(ation to, or produce such boo)s, or registers, or other docu(ents, or record before hi( or any person authorised by it in this behalf as it (ay consider necessary if the furnishing of such infor(ation or the production of such boo)s, or registers, or other docu(ents, or record is rele'ant or necessary for the purposes of its in'estigation0 ($) .he In'estigating Authority (ay )eep in its custody any boo)s, registers, other docu(ents and record produced under sub+section (%) or sub+section (3) for six (onths and thereafter
% Inserted
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
$
shall return the sa(e to any inter(ediary or any person associated with securities (ar)et by who( or on whose behalf the boo)s, registers, other docu(ents and record are produced , 4ro+i-e- that the In'estigating Authority (ay call for any boo), register, other docu(ent and record if they are needed again , 4ro+i-e- f*rther that if the person on whose behalf the boo)s, registers, other docu(ents and record are produced re*uires certified copies of the boo)s, registers, other docu(ents and record produced before the In'estigating Authority, it shall gi'e certified copies of such boo)s, registers, other docu(ents and record to such person or on whose behalf the boo)s, registers, other docu(ents and record were produced0 (") Any person, directed to (a)e an in'estigation under sub+section ( ), (ay exa(ine on oath, any (anager, (anaging director, officer and other e(ployee of any inter(ediary or any person associated with securities (ar)et in any (anner, in relation to the affairs of his business and (ay ad(inister an oath accordingly and for that purpose (ay re*uire any of those persons to appear before it personally0 (#) If any person fails without reasonable cause or refuses(a) to produce to the In'estigating Authority or any person authorised by it in this behalf any boo), register, other docu(ent and record which is his duty under sub+section (%) or sub+section (3) to produce3 or (b) to furnish any infor(ation which is his duty under sub+section (3) to furnish3 or (c) to appear before the In'estigating Authority personally when re*uired to do so under sub+section (") or to answer any *uestion which is put to hi( by the In'estigating Authority in pursuance of that sub+section3 or (d) to sign the notes of any exa(ination referred to in sub+section (/), he shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with
fine, which (ay extend to one crore rupees, or with both, and also with a further fine which (ay extend to fi'e la)h rupees for e'ery day after the first during which the failure or refusal continues0 (/) Eotes of any exa(ination under sub+section (") shall be ta)en down in writing and shall be read o'er to, or by, and signed by, the person exa(ined, and (ay thereafter be used in e'idence against hi(0 4(:) ?here i the 'o*r!e of % i +e!ti(%tio , the I +e!ti(%ti ( A*thorit> h%! re%!o to ,elie+e th%t % > $er!o or e ter$ri!e, %! the '%!e .%> ,e, to /ho. % oti'e * -er !*,!e'tio ()) h%! ,ee i!!*e- or .i(ht ,e i!!*e-, 0 (%) h%! o.itte- or f%ile- to $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! %! re7*irei the oti'eH or (,) /o*l- ot $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! /hi'h !h%ll ,e *!ef*l for, or rele+% t to, the i +e!ti(%tio H or (') /o*l- -e!tro>, .*til%te, %lter, f%l!if> or !e'rete the i for.%tio or -o'*.e t! *!ef*l for, or rele+% t to, the i +e!ti(%tio ,
S*,!tit*te- for JKhere in the course of in'estigation, the In'estigating Authority has reasonable ground to belie'e that the boo)s, registers, other docu(ents and record of, or relating to, any inter(ediary or any person associated with securities (ar)et in any (anner, (ay be destroyed, (utilated, altered, falsified or secreted, the In'estigating Authority (ay (a)e an application to the Mudicial ?agistrate of the first class ha'ing Durisdiction for an order for the seiFure of such boo)s, registers, other docu(ents and record K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
"
the , the Ch%ir.% .%>, %fter ,ei ( !%ti!fie- th%t it i! e'e!!%r> to -o !o, %*thoriLe the I +e!ti(%ti ( A*thorit> or % > other offi'er of the ;o%r- (the offi'er !o %*thoriLe- i %ll '%!e! ,ei ( herei %fter referre- to %! the %*thori!e- offi'er), to0 (i) e ter % - !e%r'h, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft /here !*'h i for.%tio or -o'*.e t! %re e#$e'te- or ,elie+e- to ,e 6e$tH (ii) ,re%6 o$e the lo'6 of % > -oor, ,o#, lo'6er, !%fe, %l.ir%h or other re'e$t%'le for e#er'i!i ( the $o/er! 'o ferre- ,> !*,0'l%*!e (i), /here the 6e>! thereof %re ot %+%il%,leH (iii) !e%r'h % > $er!o /ho h%! (ot o*t of, or i! %,o*t to (et i to, or i! i , the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft, if the %*thoriLe- offi'er h%! re%!o to !*!$e't th%t !*'h $er!o h%! !e'rete- %,o*t hi! $er!o % > !*'h ,oo6! of %''o* t or other -o'*.e t!H (i+) re7*ire % > $er!o /ho i! fo* - to ,e i $o!!e!!io or 'o trol of % > ,oo6! of %''o* t or other -o'*.e t!, .%i t%i e- i the for. of ele'tro i' re'or-, to $ro+i-e the %*thori!e- offi'er the e'e!!%r> f%'ilit> to i !$e't !*'h ,oo6! of %''o* t or other -o'*.e t!. "#planation0 2or the $*r$o!e of thi! !*,0'l%*!e, the e#$re!!io Jele'tro i' re'or-K !h%ll h%+e the .e% i ( %!!i( e- to it i 'l%*!e (t) of !*,0!e'tio (1) of !e'tio " of the I for.%tio Te'h olo(> A't, "===. (+) !eiLe % > !*'h ,oo6! of %''o* t or other -o'*.e t! fo* - %! % re!*lt of !*'h !e%r'hH (+i) $l%'e .%r6! of i-e tifi'%tio o % > ,oo6! of %''o* t or other -o'*.e t! or .%6e or '%*!e to ,e .%-e e#tr%'t! or 'o$ie! therefro.H (+ii) re'or- o o%th the !t%te.e t of % > $er!o /ho i! fo* - to ,e i $o!!e!!io or i 'o trol of the i for.%tio or -o'*.e t! referre- to i !*,0'l%*!e! (i), (iii) % - (i+).< 4(9) The ;o%r- .%> .%6e re(*l%tio ! i rel%tio to % > !e%r'h or !eiL*re * -er thi! !e'tio H % - i $%rti'*l%r, /itho*t $reG*-i'e to the (e er%lit> of the fore(oi ( $o/er, !*'h re(*l%tio ! .%> $ro+i-e for the $ro'e-*re to ,e follo/e- ,> the %*thori!e- offi'er0
(%) for o,t%i i ( i (re!! i to % > ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft to ,e !e%r'he- /here free i (re!! thereto i! ot %+%il%,leH
1 S*,!tit*te-
,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) for the follo/i (& JAfter 'o !i-eri ( the %$$li'%tio % - he%ri ( the I +e!ti(%ti ( A*thorit>, if e'e!!%r>, the @%(i!tr%te .%>, ,> or-er, %*thori!e the I +e!ti(%ti ( A*thorit>O (a) to e ter, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the $l%'e or $l%'e! /here !*'h ,oo6!, re(i!ter!, other -o'*.e t! % - re'or- %re 6e$tH (b) to !e%r'h th%t $l%'e or tho!e $l%'e! i the .% er !$e'ifie- i the or-erH % (c) to !eiLe ,oo6!, re(i!ter!, other -o'*.e t! % - re'or-, it 'o !i-er! e'e!!%r> for the $*r$o!e! of the i +e!ti(%tio & 4ro+i-e- th%t the @%(i!tr%te !h%ll ot %*thori!e !eiL*re of ,oo6!, re(i!ter!, other -o'*.e t! % re'or-, of % > li!te- $*,li' 'o.$% > or % $*,li' 'o.$% > ( ot ,ei ( the i ter.e-i%rie! !$e'ifie* -er !e'tio 1") /hi'h i te -! to (et it! !e'*ritie! li!te- o % > re'o( i!e- !to'6 e#'h% (e * le!! !*'h 'o.$% > i -*l(e! i i !i-er tr%-i ( or .%r6et .% i$*l%tio .K
#
(,) for e !*ri ( !%fe '*!to-> of % > ,oo6! of %''o* t or other -o'*.e t! or %!!et! !eiLe-.< ( 0) .he In'estigating Authority shall )eep in its custody the boo)s, registers, other docu(ents and record seiFed under this section for such period not later than the conclusion of the in'estigation as it considers necessary and thereafter shall return the sa(e to the co(pany or the other body corporate, or, as the case (ay be, to the (anaging director or the (anager or any other person, fro( whose custody or power they were seiFed 5***<, 4ro+i-e- that the In'estigating Authority (ay, before returning such boo)s, registers, other docu(ents and record as aforesaid, place identification (ar)s on the( or any part thereof0 ( ) Sa'e as otherwise pro'ided in this section, e'ery search or seiFure (ade under this section shall be carried out in accordance with the pro'isions of the Code of Cri(inal <rocedure, !/3 (% of !/$) relating to searches or seiFures (ade under that Code0 Ce%!e % - -e!i!t $ro'ee-i (!. 11D. If the 8oard finds, after causing an in*uiry to be (ade, that any person has 'iolated, or is li)ely to 'iolate, any pro'isions of this Act, or any rules or regulations (ade thereunder, it (ay pass an order re*uiring such person to cease and desist fro( co((itting or causing such 'iolation, 4ro+i-e- that the 8oard shall not pass such order in respect of any listed public co(pany or a public co(pany (other than the inter(ediaries specified under section %) which intends to get its securities listed on any recognised stoc) exchange unless the 8oard has reasonable grounds to belie'e that such co(pany has indulged in insider trading or (ar)et (anipulation0: CDA4TER I REGISTRATION CERTI2ICATE Re(i!tr%tio of !to'6 ,ro6er!, !*,0,ro6er!, !h%re tr% !fer %(e t!, et'. 1". ( ) Eo stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et shall buy, sell or deal in securities except under, and in accordance with, the conditions of a certificate of registration obtained fro( the 8oard in accordance with the %4regulations: (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et i((ediately before the establish(ent of the 8oard for which no registration certificate was
necessary prior to such establish(ent, (ay continue to do so for a period of three (onths fro( such establish(ent or, if he has (ade an application for such registration within the said period of three (onths, till the disposal of such application,
The /or-! P% - i for. the @%(i!tr%te of !*'h ret*r P, o.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) % Substituted for 1rules2 by Securities =aw (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0
/
44ro+i-e- f*rther that any certificate of registration, obtained i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", shall be dee(ed to ha'e been obtained fro( the 8oard in accordance with the regulations pro'iding for such registration0 ( A) Eo depository, %4participant,: custodian of securities, foreign institutional in'estor, credit rating agency, or any other inter(ediary associated with the securities (ar)et as the 8oard (ay by notification in this behalf specify, shall buy or sell or deal in securities except under and in accordance with the conditions of a certificate of registration obtained fro( the 8oard in accordance with the regulations (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a depository, 34participant,: custodian of securities, foreign institutional in'estor or credit rating agency i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to buy or sell securities or otherwise deal with the securities (ar)et until such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300 ( 8) Eo person shall sponsor or cause to be sponsored or carry on or caused to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es including (utual funds, unless he obtains a certificate of registration fro( the 8oard in accordance with the regulations, 4ro+i-e- that any person sponsoring or causing to be sponsored, carrying or causing to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es operating in the securities (ar)et i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to operate till such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300:
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0
% Inserted
>
4()%lanati$n7 6or the re(o'al of doubts, it is hereby declared that, for purposes of this section, a collecti'e in'est(ent sche(e or (utual fund shall not be include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(ponent of in'est(ent besides the co(ponent of insurance issued by the insurer0: (%) 7'ery application for registration shall be in such (anner and on pay(ent of such fees as (ay be deter(ined by regulations0 (3) .he 8oard (ay, by order, suspend or cancel a certificate of registration in such (anner as (ay be deter(ined by regulations, 4ro+i-e- that no order under this sub+section shall be (ade unless the person concerned has been gi'en a reasonable opportunity of being heard0 %4CIA<.7R BA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 4rohi,itio of .% i$*l%ti+e % - -e'e$ti+e -e+i'e!, i !i-er tr%-i ( % - !*,!t% ti%l %'7*i!itio of !e'*ritie! or 'o trol.
1"A. Eo person shall directly or indirectly(a) use or e(ploy, in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recogniFed stoc) exchange, any (anipulati'e or decepti'e de'ice or contri'ance in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3
Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, w0r0e0f !+$+ %0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, reads as under, /@A81(0 D: ?ISC7==AE7CHS #0 Balidation+ Eotwithstanding anything contained in any Dudg(ent, decree or order of any court, tribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 Repeal and sa'ings + (1) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (2) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0 % Chapter BA inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
!
(b) e(ploy any de'ice, sche(e or artifice to defraud in connection with issue or dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange3 (c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange, in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (d) engage in insider trading3 (e) deal in securities while in possession of (aterial or non+public infor(ation or co((unicate such (aterial or non+public infor(ation to any other person, in a (anner which is in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (f) ac*uire control of any co(pany or securities (ore than the percentage of e*uity share capital of a co(pany whose securities are listed or proposed to be listed on a recognised stoc) exchange in contra'ention of the regulations (ade under this Act0: CDA4TER II 2INANCE, ACCOUNTS AND AUDIT Gr% t! ,> the Ce tr%l Go+er .e t. 1). .he Central &o'ern(ent (ay, after due appropriation (ade by <arlia(ent by law in this behalf, (a)e to the 8oard grants of such su(s of (oney as that &o'ern(ent (ay thin) fit for being utiliFed for the purposes of this Act0 2* -. 13. ( ) .here shall be constituted a 6und to be called the Securities and 7xchange 8oard of
India &eneral 6und and there shall be credited thereto(a) all grants, fees and charges recei'ed by the 8oard under this Act3 4G G G: (aa) %4G G G: (b) all su(s recei'ed by the 8oard fro( such other sources as (ay be decided upon by the Central &o'ern(ent0 (%) .he 6und shall be applied for (eeting(a) the salaries, allowances and other re(uneration of the (e(bers, officers and other e(ployees of the 8oard3 (b) the expenses of the 8oard in the discharge of its functions under section 3 (c) the expenses on obDects and for purposes authorised by this Act0
.he word 1and2 o(itted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 (aa) o(itted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 It was inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Clause (aa) reads as under,+ 1(aa) all su(s realiFed by way of <enalties under this Act3 and20
% Clause
%0
A''o* t! % - %*-it. 15. ( ) .he 8oard shall (aintain proper accounts and other rele'ant records and prepare an annual state(ent of accounts in such for( as (ay be prescribed by the Central &o'ern(ent in consultation with the Co(ptroller and Auditor+&eneral of India0 (%) .he accounts of the 8oard shall be audited by the Co(ptroller and Auditor+&eneral of India at such inter'als as (ay be specified by hi( and any expenditure incurred in connection with such audit shall be payable by the 8oard to the Co(ptroller and Auditor+&eneral of India0 (3) .he Co(ptroller and Auditor+&eneral of India and any other person appointed by hi( in connection with the audit of the accounts of the 8oard shall ha'e the sa(e rights and pri'ileges and authority in connection with such audit as the Co(ptroller and Auditor+ &eneral generally has in connection with the audit of the &o'ern(ent accounts and, in particular, shall ha'e the right to de(and the production of boo)s, accounts, connected 'ouchers and other docu(ents and papers and to inspect any of the offices of the 8oard0 ($) .he accounts of the 8oard as certified by the Co(ptroller and Auditor+&eneral of India or any other person appointed by hi( in this behalf together with the audit report thereon shall be forwarded annually to the Central &o'ern(ent and that &o'ern(ent shall cause the sa(e to be laid before each Iouse of <arlia(ent0 5CDA4TER IIA 4ENALTIES AND ADEUDICATION 4e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 15A. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder,(a) to furnish any docu(ent, return or report to the 8oard, fails to furnish the sa(e, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations, fails to file return or furnish the sa(e within the ti(e specified therefor in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0
Chapters BI A and BI 8 containing Ss0 "A to "M and "@ to "S respecti'ely, inserted by Securities =aws (A(end(ent) Act, !!" w0e0f0 %"+ + !!"0 % Substituted for 1a penalty not exceeding one la)h and fifty thousand rupees for each such failure2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding fi'e thousand rupees for e'ery day during which such failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for e'ery day during which the failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%
4e %lt> for f%il*re ,> % > $er!o to e ter i to %(ree.e t /ith 'lie t!. 15;. If any person, who is registered as an inter(ediary and is re*uired under this Act or any rules or regulations (ade thereunder to enter into an agree(ent with his client, fails to enter into such agree(ent, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 %54e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 15C. If any listed co(pany or any person who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such co(pany or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 4e %lt> for 'ert%i -ef%*lt! i '%!e of .*t*%l f* -!. 15D. If any person, who is(a) re*uired under this Act or any rules or regulations (ade thereunder to obtain a certificate of registration fro( the 8oard for sponsoring or carrying on any collecti'e in'est(ent sche(e, including (utual funds, sponsors or carries on any collecti'e in'est(ent sche(e, including (utual funds, without obtaining such certificate of registration, he shall be liable to 34a penalty of one la)h rupees for each day during which he sponsors or carries on any such collecti'e in'est(ent sche(e including (utual funds, or one crore rupees, whiche'er is less:3 (b) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, for sponsoring or carrying on any in'est(ent sche(e, fails to co(ply with the ter(s and conditions of certificate of registration, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, fails to (a)e an application for listing of its sche(es as pro'ided for in the regulations
Substituted for 1a penalty not exceeding fi'e la)h rupees for e'ery such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1If any person, who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing to redress the grie'ances of in'estors, fails to redress such grie'ances, he shall be liable to a penalty not exceeding ten thousand rupees for each such failure2, by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding ten thousand rupees for each day during which he carries on any such collecti'e in'est(ent sche(e including (utual funds, or ten la)h rupees whiche'er is higher02 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for each day during which such failure continues or ten la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0
%%
go'erning such listing, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (d) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to despatch
unit certificates of any sche(e in the (anner pro'ided in the regulation go'erning such despatch, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (e) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to refund the application (onies paid by the in'estors within the period specified in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (f) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to in'est (oney collected by such collecti'e in'est(ent sche(es in the (anner or within the period specified in the regulations, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for f%il*re to o,!er+e r*le! % - re(*l%tio ! ,> % %!!et .% %(e.e t 'o.$% >. 15E. Khere any asset (anage(ent co(pany of a (utual fund registered under this Act, fails to co(ply with any of the regulations pro'iding for restrictions on the acti'ities of the asset (anage(ent co(panies, such asset (anage(ent co(pany shall be liable to "4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for -ef%*lt i '%!e of !to'6 ,ro6er!. 152. If any person, who is registered as a stoc) bro)er under this Act,(a) fails to issue contract notes in the for( and (anner specified by the stoc) exchange of which such bro)er is a (e(ber, he shall be liable to a penalty not exceeding fi'e ti(es the a(ount for which the contract note was re*uired to be issued by that bro)er3 (b) fails to deli'er any security or fails to (a)e pay(ent of the a(ount due to the in'estor in the (anner within the period specified in the regulations, he shall be liable to #4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3
Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues or fi'e la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding one thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%3
(c) charges an a(ount of bro)erage which is in excess of the bro)erage specified in the regulations, he shall be liable to 4a penalty of one la)h rupees: or fi'e ti(es the a(ount of bro)erage charged in excess of the specified bro)erage, whiche'er is higher0 4e %lt> for i !i-er tr%-i (. 15G. If any insider who,(i) either on his own behalf or on behalf of any other person, deals in securities of a body corporate listed on any stoc) exchange on the basis of any unpublished price+sensiti'e infor(ation3 or (ii) co((unicates any unpublished price+sensiti'e infor(ation to any person, with or without his re*uest for such infor(ation except as re*uired in the ordinary course of business or under any law3 or
(iii) counsels, or procures for any other person to deal in any securities of any body corporate on the basis of unpublished price+sensiti'e infor(ation, shall be liable to a penalty %4of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of insider trading, whiche'er is higher:0 4e %lt> for o 0-i!'lo!*re of %'7*i!itio of !h%re! % - t%6eo+er!. 15D. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder, fails to,(i) disclose the aggregate of his shareholding in the body corporate before he ac*uires any shares of that body corporate3 or (ii) (a)e a public announce(ent to ac*uire shares at a (ini(u( price3 or 34(iii) (a)e a public offer by sending letter of offer to the shareholders of the concerned co(pany3 or (iv) (a)e pay(ent of consideration to the shareholders who sold their shares pursuant to letter of offer,: he shall be liable to a penalty $4of twenty+fi'e crore rupees or three ti(es the a(ount of profits profits (ade out of such failure, whiche'er is higher:0 554e %lt> for fr%*-*le t % - * f%ir tr%-e $r%'ti'e!. 15DA. If any person indulges in fraudulent and unfair trade practices relating to securities, he shall be liable to a penalty of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of such practices, whiche'er is higher0
Substituted for 1a penalty not exceeding fi'e thousand rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00% 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00% %00% " Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00%0
%$
4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 15D;. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 4o/er to %-G*-i'%te. 150I. ( ) 6or the purpose of adDudging under sections "A, "8, "C, "9, "7, "6, "& 4, "I, "IA and "I8:, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in subsection ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> the %-G*-i'%ti ( offi'er. 15E. Khile adDudging *uantu( of penalty under section "+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade
as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 "5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 15EA. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: )5Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!. 15E;. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 11, !e'tio 11;, !e'tio 11D, !*,0!e'tio ()) of !e'tio 1" or !e'tio 150I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e- -ef%*lt!.
Substituted for 1and "I2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the S78I (A(end(ent) Act, %00%, S0 ! w0e0f0 %!+ 0+%00%0 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
% Inserted
%"
(") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't. ()) The !ettle.e t $ro'ee-i (! * -er thi! !e'tio !h%ll ,e 'o -*'te- i %''or-% 'e /ith the $ro'e-*re !$e'ifie- i the re(*l%tio ! .%-e * -er thi! A't. (3) No %$$e%l !h%ll lie * -er !e'tio 15T %(%i !t % > or-er $%!!e- ,> the ;o%r- or %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio . < CDA4TER II; ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL E!t%,li!h.e t of Se'*ritie! A$$ell%te Tri,* %l!. 15F. ( ) .he Central &o'ern(ent shall by notification, establish one or (ore Appellate .ribunals to be )nown as the Securities Appellate .ribunal to exercise the Durisdiction, powers and authority conferred on such .ribunal by or under this Act 4or any other law for the ti(e being in force:0 (%) .he Central &o'ern(ent shall also specify in the notification referred to in sub+section ( ) the (atters and places in relation to which the Securities Appellate .ribunal (ay exercise Durisdiction0 "5Co.$o!itio of Se'*ritie! A$$ell%te Tri,* %l. 15L. A Securities Appellate .ribunal shall consist of a <residing Cfficer and two other (e(bers, to be appointed, by notification, by the Central &o'ern(ent, 4ro+i-e- that the Securities Appellate .ribunal, consisting of one person only, established before the co((ence(ent of the Securities and 7xchange 8oard of India (A(end(ent) Act, %00%, shall continue to exercise the Durisdiction, powers and authority conferred on it by or under this Act or any other law for the ti(e being in force till two other ?e(bers are appointed under this section0 9*%lifi'%tio for %$$oi t.e t %! 4re!i-i ( Offi'er or @e.,er of Se'*ritie! A$$ell%te Tri,* %l.
Inserted by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for Sections "= and "? by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "= and "? read as under,+ 1 "+=0 Co(position of securities Appellate .ribunal0 5 A Securities Appellate .ribunal shall consist of
% Substituted
one person only (hereinafter referred to as the <residing Cfficer of the Securities Appellate .ribunal) to be appointed, by notification, by the central &o'ern(ent0 "?0 Qualifications for appoint(ent as <residing Cfficer of the Securities Appellate .ribunal0 5 A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he + (a) is, or has been, or is *ualified to be, a Mudge of a Iigh Court3 or (b) has been a (e(ber of the Indian =egal Ser'ice and has held a post in &rade I of that ser'ice for at least three years3 or (c) has held office as the <residing Cfficer of a tribunal for at least three years02
%#
15@. 15( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of the Securities Appellate .ribunal unless he + (a) is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court3 or (b) is a sitting or retired Mudge of a Iigh Court who has co(pleted not less than se'en years of ser'ice as a Mudge in a Iigh Court0 ( A) .he <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0: (%) A person shall not be *ualified for appoint(ent as (e(ber of a Securities Appellate .ribunal unless he is a person of ability, integrity and standing who has shown capacity in dealing with proble(s relating to securities (ar)et and has *ualification and experience of corporate law, securities laws, finance, econo(ics or accountancy, 4ro+i-e- that a (e(ber of the 8oard or any person holding a post at senior (anage(ent le'el e*ui'alent to 7xecuti'e 9irector in the 8oard shall not be appointed as <residing Cfficer or ?e(ber of a Securities Appellate .ribunal during his ser'ice or tenure as such with the 8oard or within two years fro( the date on which he ceases to hold office as such in the 8oard0: %4Te *re of offi'e of 4re!i-i ( Offi'er % - other @e.,er! of Se'*ritie! A$$ell%te Tri,* %l. 15N. .he <residing Cfficer and e'ery other ?e(ber of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office and shall be eligible for re+appoint(ent, 4ro+i-e- that no person shall hold office as the <residing Cfficer of the Securities Appellate .ribunal after he has attained the age of sixty+eight years, 4ro+i-e- f*rther that no person shall hold office as a ?e(ber of the Securities Appellate .ribunal after he has attained the age of sixty+two years0: S%l%r> % - %llo/% 'e! % - other ter.! % - 'o -itio ! of !er+i'e of 4re!i-i ( Offi'er!. 150O. .he salary and allowances payable to and the other ter(s and conditions of ser'ice including pension, gratuity and other retire(ent benefits of the 4<residing Cfficer and other ?e(bers: of a Securities Appellate .ribunal shall be such as (ay be prescribed,
Substituted for sub+section ( ) of Section "? by the S78I (A(end(ent) Crdinance, %0 3 w0e0f0 % 00 0%0 30 <rior to substitution, it read as under,+ ;( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court , 4ro+i-e- that the <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0; % Substituted for Section "E, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "E read as under,+ 1 "E0 .er( of office0+ .he <residing officer of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office or until he attains the age of sixtyfi'e years, whiche'er is earlier02
%/
4ro+i-e- that neither the salary and allowances nor the other ter(s and conditions of ser'ice of the %4<residing Cfficer and other ?e(bers of a Securities Appellate .ribunal: shall be 'aried to their disad'antage after appoint(ent0 2illi ( *$ of +%'% 'ie!. 154. If, for reason other than te(porary absence, any 'acancy occurs in the 34office of the <residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal, then the Central &o'ern(ent shall appoint another person in accordance with the pro'isions of this Act to fill the 'acancy and the proceedings (ay be continued before the Securities Appellate .ribunal fro( the stage at which the 'acancy is filled0 Re!i( %tio % - re.o+%l. 159. ( ) .he $4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal (ay, by notice in writing under his hand addressed to the Central &o'ern(ent, resign his office, 4ro+i-e- that "4the <residing Cfficer or any other ?e(ber: shall, unless he is per(itted by the Central &o'ern(ent to relin*uish his office sooner, continue to hold office, until the expiry of three (onths fro( the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his ter( of office, whiche'er is the earliest0 (%) .he #4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal shall not be re(o'ed fro( his office except by an order by the Central &o'ern(ent on the ground of pro'ed (isbeha'iour or incapacity after an in*uiry (ade by a Mudge of the Supre(e Court, in which the /4<residing Cfficer or any other ?e(ber: concerned has been infor(ed of the charges against hi( and gi'en a reasonable opportunity of being heard in respect of these charges0 (3) .he Central &o'ern(ent (ay, by rules, regulate the procedure for the in'estigation of (isbeha'iour or incapacity of the >4<residing Cfficer or any other ?e(ber:0 Or-er! 'o !tit*ti ( A$$ell%te Tri,* %l to ,e fi %l % - ot to i +%li-%te it! $ro'ee-i (!. 15R. Eo order of the Central &o'ern(ent appointing any person as the !4<residing Cfficer or a ?e(ber: of a Securities Appellate .ribunal shall be called in *uestion in any (anner, and no act or proceeding before a Securities Appellate .ribunal shall be called in *uestion in any (anner on the ground (erely of any defect in the constitution of a Securities Appellate .ribunal0
Substituted for 1<residing Cfficer of a Securities Appellate .ribunal2 by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 / Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 > Substituted for 1aforesaid <residing Cfficer2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 ! Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0
%>
St%ff of the Se'*ritie! A$$ell%te Tri,* %l. 15S. ( ) .he Central &o'ern(ent shall pro'ide the Securities Appellate .ribunal with such officers and e(ployees as that &o'ern(ent (ay thin) fit0 (%) .he officers and e(ployees of the Securities Appellate .ribunal shall discharge their functions under general superintendence of the <residing Cfficer0 (3) .he salaries and allowances and other conditions of ser'ice of the officers and e(ployees of the Securities Appellate .ribunal shall be such as (ay be prescribed0 A$$e%l to the Se'*ritie! A$$ell%te Tri,* %l. 15T. 4( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed,(a) by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws
(Second A(end(ent) Act, !!!, under this Act, or the rules or regulations (ade thereunder3 or (b) by an order (ade by an adDudicating officer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 "5(") ********< (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 348oard or the AdDudicating Cfficer, as the case case (ay be,: is recei'ed by hi( and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 ($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0
Substituted for Sub+sec ( ) R (%) by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, Sub+sections ( ) R (%) were read as under, 1( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by any order (ade by any AdDudicating Cfficer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 (%) Eo appeal shall lie to the Securities Appellate .ribunal fro( an order (ade by an AdDudicating Cfficer with the consent of the parties02 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , o.i!!io , S*,0!e'tio (") re%- %! * -er& J(") No %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-eO (a) ,> the ;o%r- o % - %fter the 'o..e 'e.e t of the Se'*ritie! L%/! (Se'o - A.e -.e t) A't, 1999H (b) ,> % %-G*-i'%ti ( offi'er, /ith the 'o !e t of the $%rtie!.2 3 Substituted for 1a copy of the order (ade by the adDudicating officer2 by S78I (A(end(ent) Act !!!, !!!, w0e0f0 #+ %+ !!!0
%!
(") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 48oard, the: parties to the appeal and to the concerned AdDudicating Cfficer0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of the Se'*ritie! A$$ell%te Tri,* %l. 15U. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act, and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purposes of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3
(e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte 3 (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0), and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 %4Ri(ht to le(%l re$re!e t%tio . 15I. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,Substituted for 1parties2, S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for S0 "B by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, S0 "B read as under,+ 1 "B0 .he appellant (ay either appear in person or authorise one or (ore legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal02
% Substituted
30
(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of subsection ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or any attorney of any Iigh Court, and includes a pleader in practice0: Li.it%tio . 15?. .he pro'isions of the =i(itation Act, !#3 (3# of !#3), shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 54re!i-i ( Offi'er, @e.,er! % - !t%ff of Se'*ritie! A$$ell%te Tri,* %l! to ,e $*,li' !er+% t!. 15A. .he <residing Cfficer, ?e(bers and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0: Ci+il Co*rt ot to h%+e G*ri!-i'tio . 15M. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which an adDudicating officer appointed under this Act or a Securities Appellate .ribunal constituted under this Act is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "5A$$e%l to S*$re.e Co*rt.
Substituted for S0 "A by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, it read as under, + 1 "A0 .he <residing Cfficer and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian penal Code( $" of >#0)20 % Substituted for S0 "S by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution , it
was read as under,+ 1 "S0 Appeal to Iigh Court0+ Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, <ro'ided that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
3
15N. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order , 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the applicant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: CDA4TER III @ISCELLANEOUS 4o/er of Ce tr%l Go+er .e t to i!!*e -ire'tio !. 18. ( ) Kithout preDudice to the foregoing pro'isions of this Act 4or the 9epositories Act, !!#:, the 8oard shall, in exercise of its powers or the perfor(ance of its functions under this Act, be bound by such directions on *uestions of policy as the Central &o'ern(ent (ay gi'e in writing to it fro( ti(e to ti(e , 4ro+i-e- that the 8oard shall, as far as practicable, be gi'en an opportunity to express its 'iews before any direction is gi'en under this sub+section0 (%) .he decision of the Central &o'ern(ent whether a *uestion is one of policy or not shall be final0 4o/er of Ce tr%l Go+er .e t to !*$er!e-e the ;o%r-. 17. ( ) If at any ti(e the Central &o'ern(ent is of opinion(a) that on account of gra'e e(ergency, the 8oard is unable to discharge the functions and duties i(posed on it by or under the pro'isions of this Act3 or (b) that the 8oard has persistently (ade default in co(plying with any direction issued by the Central &o'ern(ent under this Act or in the discharge of the functions and duties i(posed on it by or under the pro'isions of this Act and as a result of such default the financial position of the 8oard or the ad(inistration of the 8oard has deteriorated3 or (c) that circu(stances exist which render it necessary in the public interest so to do, the Central &o'ern(ent (ay, by notification, supersede the 8oard for such period, not exceeding six (onths, as (ay be specified in the notification0 (%) Hpon the publication of a notification under sub+section ( ) superseding the 8oard,(a) all the (e(bers shall, as fro( the date of supersession, 'acate their offices as such3 (b) all the powers, functions and duties which (ay, by or under the pro'isions of this Act, be exercised or discharged by or on behalf of the 8oard, shall until the 8oard is reconstituted under sub+section (3), be exercised and discharged by such person or persons as the Central &o'ern(ent (ay direct3 and (c) all property owned or controlled by the 8oard shall, until the 8oard is reconstituted under sub+section (3), 'est in the Central &o'ern(ent0
Substituted for 1this Act2 by the 9epositories Act !!#, w0r0e0f0 %0+!+ !!"0
3%
(3) Cn the expiration of the period of supersession specified in the notification issued under sub+section ( ), the Central &o'ern(ent (ay reconstitute the 8oard by a fresh appoint(ent
and in such case any person or persons who 'acated their offices under clause ( a) of subsection (%), shall not be dee(ed dis*ualified for appoint(ent , 4ro+i-e- that the Central &o'ern(ent (ay, at any ti(e, before the expiration of the period of supersession, ta)e action under this sub+section0 ($) .he Central &o'ern(ent shall cause a notification issued under sub+section ( ) and a full report of any action ta)en under this section and the circu(stances leading to such action to be laid before each Iouse of <arlia(ent at the earliest0 Ret*r ! % - re$ort!. 1:. ( ) .he 8oard shall furnish to the Central &o'ern(ent at such ti(e and in such for( and (anner as (ay be prescribed or as the Central &o'ern(ent (ay direct, such returns and state(ents and such particulars in regard to any proposed or existing progra((e for the pro(otion and de'elop(ent of the securities (ar)et, as the Central &o'ern(ent (ay, fro( ti(e to ti(e, re*uire0 (%) Kithout preDudice to the pro'isions of sub+section ( ), the 8oard shall, within 4ninety: days after the end of each financial year, sub(it to the Central &o'ern(ent a report in such for(, as (ay be prescribed, gi'ing a true and full account of its acti'ities, policy and progra((es during the pre'ious financial year0 (3) A copy of the report recei'ed under sub+section (%) shall be laid, as soon as (ay be after it is recei'ed, before each Iouse of <arlia(ent0 Dele(%tio . 19. .he 8oard (ay, by general or special order in writing delegate to any (e(ber, officer of the 8oard or any other person subDect to such conditions, if any, as (ay be specified in the order, such of its powers and functions under this Act (except the powers under section %!) as it (ay dee( necessary0 A$$e%l!. "=. ( ) Any person aggrie'ed by an order of the 8oard (ade %4, before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!,: under this Act, or the rules or regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor, 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0
Substituted for 1sixty days2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1an order of the 8oard (ade2 by Securities =aws (Second A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0
% Substituted
33
(3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed, 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 4;%r of G*ri!-i'tio . "=A. Eo order passed by the 8oard %4or the AdDudicating Cfficer: under this Act shall be appealable except as pro'ided in 34section ". or: section %0 and no ci'il court shall ha'e Durisdiction in respect of any (atter which the 8oard $4or the AdDudicating Cfficer: is e(powered by, or under, this Act to pass any order and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any order passed by the 8oard "4or the AdDudicating Cfficer: by, or under, this Act0: S%+i (!.
"1. Eothing in this Act shall exe(pt any person fro( any suit or other proceedings which (ight, apart fro( this Act, be brought against hi(0 @e.,er!, offi'er! % - e.$lo>ee! of the ;o%r- to ,e $*,li' !er+% t!. "". All (e(bers, officers and other e(ployees of the 8oard shall be dee(ed, when acting or purporting to act in pursuance of any of the pro'isions of this Act, to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0 4rote'tio of %'tio t%6e i (oo- f%ith. "). Eo suit, prosecution or other legal proceedings shall lie against the Central &o'ern(ent #4or 8oard: or any officer of the Central &o'ern(ent or any (e(ber, officer or other e(ployee of the 8oard for anything which is in good faith done or intended to be done under this Act or the rules or regulations (ade thereunder0 /4Offe 'e!. "3. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, he shall be punishable with
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 18oard2 by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 3 Substituted for 1Section %02, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 $ Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 " Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Substituted by for S0 %$, Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" && <rior to its substitution S0%$ read as under, 1%$0 <enalty0+ Khoe'er contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both02
% Substituted
3$
i(prison(ent for a ter( which (ay extend to 4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to %4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 34Co.$o!itio of 'ert%i offe 'e!. "3A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "3;. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of the alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation, 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0
(%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0:
Substituted for 1one year, or with fine, or with both2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%, for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both20 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3"
E#e.$tio fro. t%# o /e%lth % - i 'o.e. "5. Eotwithstanding anything contained in the Kealth+tax Act, !"/ (%/ of !"/), the Inco(etax Act, !# ($3 of !# ) or any other enact(ent for the ti(e being in force relating to tax on wealth, inco(e, profits or gains(a) the 8oard3 (b) the existing Securities and 7xchange 8oard fro( the date of its constitution to the date of establish(ent of the 8oard, shall not be liable to pay wealth+tax, inco(e+tax or any other tax in respect of their wealth, inco(e, profits or gains deri'ed0 Co( iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations (ade thereunder, sa'e on a co(plaint (ade by the 8oard 4G G G:0 "5(") *****< )5 E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
.he words 1with the pre'ious sanction of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to the o.i!!io , S*,0!e'tio (") re%- %! * -er& 1(") No 'o*rt i ferior to th%t of "5% Co*rt of Se!!io < !h%ll tr> % > offe 'e $* i!h%,le * -er thi!
A't.2 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3#
A$$e%l % - re+i!io "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e of Cri.i %l 4ro'e-*re, 197) to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< Offe 'e! ,> 'o.$% ie!. "7. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly, 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n , 6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and
3/
(b) 1director2, in relation to a fir(, (eans a partner in the fir(0 4o/er to e#e.$t. ":. 4GGGGGG: "5 Re'o+er> of %.o* t! ":A. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith %
-ire'tio of -i!(or(e.e t or-er i!!*e- * -er !e'tio 11; or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifiefor. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.et%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't.
C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Section %> read as under, 1%>0 8$.er t$ e)e"%t+ If the central go'ern(ent if of the opinion that it is necessary or expedient so to do in public interest, it (ay, by order published in the Cfficial gaFette, exe(pt any person or class of persons buying or selling securities or otherwise dealing with the securities (ar)et fro( the operation of sub+section ! ) of Section %02 % I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3>
"#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio 15T of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 11;, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% !
% > offi'er of the ;o%r- /ho .%> ,e %*thoriLe-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 4o/er to .%6e r*le!. "9. ( ) .he Central &o'ern(ent (ay, by notification, (a)e rules for carrying out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers under sub+section ( ) of section "3 (b) the additional functions that (ay be perfor(ed by the 8oard under section 3 (c) 4G G G: (d) the (anner in which the accounts of the 8oard shall be (aintained under section "3 %4(da) the (anner of in*uiry under sub+section ( ) of section "+I3 (db) the salaries and allowances and other ter(s and conditions of ser'ice of the 34<residing Cfficers, ?e(bers: and other officers and e(ployees of the Securities Appellate .ribunal under section "+C and sub+section (3) of section "S3 (dc) the procedure for the in'estigation of (isbeha'iour or incapacity of the 4<residing Cfficers, or other ?e(bers: of the Securities Appellate .ribunal under sub+section (3) of section "Q3
Clause (c) o(itted by Securities laws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, clause (c) it read as under, 1(c) the conditions subDect to which registration certificate is to be issued under sub+section ( ) of section %20 % Inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 3 Substituted for 1<residing Cfficers2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3!
(dd) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section ". and the fees payable in respect of such appeal3: (e) the for( and the (anner in which returns and report to be (ade to the Central &o'ern(ent under section >3 (f) any other (atter which is to be, or (ay be, prescribed, or in respect of which pro'ision is to be, or (ay be, (ade by rules0 4o/er to .%6e re(*l%tio !. )=. ( ) .he 8oard (ay, %4GGG: by notification, (a)e regulations consistent with this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ti(es and places of (eetings of the 8oard and the procedure to be followed at such (eetings under sub+section ( ) of section / including *uoru( necessary for the transaction of business3 (b) the ter(s and other conditions of ser'ice of officers and e(ployees of the 8oard under sub+section (%) of section !3 34(c) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto and the (anner in which such (atters shall be disclosed by the co(panies under section A3 35('%) the *tiliL%tio of the %.o* t 're-ite- * -er !*,0!e'tio (5) of !e'tio 11H (',) the f*lfill.e t of other 'o -itio ! rel%ti ( to 'olle'ti+e i +e!t.e t !'he.e * -er !*,0!e'tio ("A) of !e'tio 11AAH ('') the $ro'e-*re to ,e follo/e- ,> the %*thoriLe- offi'er for !e%r'h or !eiL*re * -er !*,0!e'tio (9) of !e'tio 11CH < (d) the conditions subDect to which certificate of registration is to be issued, the a(ount of
fee to be paid for certificate of registration and the (anner of suspension or cancellation of certificate of registration under section %0: 55(-%) the ter.! -eter.i e- ,> the ;o%r- for !ettle.e t of $ro'ee-i (! * -er !*,!e'tio (") % - the $ro'e-*re for 'o -*'ti ( of !ettle.e t $ro'ee-i (! * -er !*,!e'tio ()) of !e'tio 15E;H (-,) % > other .%tter /hi'h i! re7*ire- to ,e, or .%> ,e, !$e'ifie- ,> re(*l%tio ! or i re!$e't of /hi'h $ro+i!io i! to ,e .%-e ,> re(*l%tio !.< R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t.
Substituted for 1<residing Cfficers2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 words 1with the pre'ious appro'al of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 3 Substituted for the existing clause (c) by the Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 <rior to substitution this clause read as under, 1(c) the a(ount of fee to be paid for registration certificate and (anner of suspension or cancellation of registration certificate under sub+section (%) and (3) of section %02 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% .he
$0
)1. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. )". .he pro'isions of this Act shall be in addition to, and not in derogation of, the pro'isions of any other law for the ti(e being in force0 A.e -.e t of 'ert%i e %'t.e t!. )). 40e%ealed bF 0e%ealing H A"ending Act' 2001&: 4o/er to re.o+e -iffi'*ltie!. )3. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order, published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as (ay appear to be necessary for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of fi'e years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 Re$e%l % - !%+i (. )5. ( ) .he Securities and 7xchange 8oard of India Crdinance, !!% (Crd0 " of !!%), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 1@( /@(5A9( 4 ee section 33: A@END@ENT O2 CERTAIN ENACT@ENTS 40e%ealed bF 0e%ealing H A"ending Act' 2001:
*SECURITIES CONTRACTS (REGULATION) RULES, 1957
In exercise of the powers conferred by section 30 of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the Central &o'ern(ent hereby (a)es the following rules, the sa(e ha'ing been pre'iously published as re*uired by sub+section (3) of the said section, na(ely ,Short title. 1. .hese rules (ay be called the Securities Contracts (Regulation) Rules, !"/0 Defi itio !. ". In these rules, unless the context otherwise re*uires,(a) 1for(2 (eans a for( appended to these rules3 (b) 1the Act2 (eans the Securities Contracts (Regulation) Act, !"# ($% of !"#)3 (c) 1&o'ern(ent co(pany2 (eans a co(pany in which not less than fifty+one per cent of the share capital is held by the Central &o'ern(ent or by any State &o'ern(ent or &o'ern(ents or partly by the Central &o'ern(ent and partly by one or (ore State &o'ern(ents ; 4(d) 1public2 (eans persons other than 5 (i) the pro(oter and pro(oter group3 (ii) subsidiaries and associates of the co(pany0 E#$l% %tio & 6or the purpose of this clause the words 1pro(oter2 and 1pro(oter group2 shall ha'e the sa(e (eaning as assigned to the( under the Securities and 7xchange 8oard of India (Issue of Capital and 9isclosure Re*uire(ents) Regulations, %00!3: %4(da) ;public sector co(pany; (eans a body corporate constituted by an Act of <arlia(ent or any State =egislature and includes a go'ern(ent co(pany,: 4(e) 1public shareholding2 (eans e*uity shares of the co(pany held by public and shall exclude shares which are held by custodian against depository receipts issued o'erseas0: A$$li'%tio for re'o( itio . ). An application under section 3 of the Act for recognition of a stoc) exchange shall be (ade to the 34Securities and 7xchange 8oard of India: in 6or( A0
* The!e R*le! h%+e ,ee *$-%te- ,%!e- o the R*le! % - A.e -.e t! %+%il%,le o the /e,!ite of the De$%rt.e t of E'o o.i' Aff%ir!0 htt$&11fi .i . i'.i 1l%/1i -e#.%!$ % - %+%il%,le %.e -.e t otifi'%tio !. Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 % Inserted by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3 Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
2ee! for %$$li'%tio . 3. ( ) .here shall be paid in respect of e'ery application under rule 3 a fee of rupees fi'e hundred0 (%) .he a(ount of the fee shall be deposited in the nearest &o'ern(ent treasury or the nearest branch of the State 8an) of India, 4ro+i-e- that at 8o(bay, Calcutta, ?adras, 9elhi and @anpur, the a(ount shall be deposited in the Reser'e 8an) of India0 (3) .he a(ount of the fee so deposited shall be credited to the receipt head 1A=BI?iscellaneous-Cther fees, fines and forfeitures20 Do'*.e t! to ,e file- %lo ( /ith the %$$li'%tio % - $%rti'*l%r! it !ho*l- 'o t%i . 5. 7'ery application shall be acco(panied by four copies of the rules (including the (e(orandu( and articles of association where the applicant stoc) exchange is an
incorporated body) and bye+laws of the stoc) exchange applying for recognition as specified in section 3 of the Act and the receipt granted by the &o'ern(ent treasury, or as the case (ay be, the State 8an) of India or the Reser'e 8an) of India, in respect of the a(ount of the fee deposited and shall contain clear particulars as to the (atters specified in the Annexure to 6or( A0 $54o/er to .%6e i 7*irie! % - '%ll for i for.%tio . 5A. 8efore granting recognition to a stoc) exchange under section $ of the Act, the "4Securities and 7xchange 8oard of India: (ay (a)e such in*uiries and re*uire such further infor(ation to be furnished, as it dee(s necessary, relating to the infor(ation furnished by the stoc) exchange in the Annexure to its application in 6or( A0: 2or. of re'o( itio . 8. .he recognition granted to a stoc) exchange shall be in 6or( 8 and be subDect to the following conditions, na(ely ,(a) that the recognition unless granted on a per(anent basis, shall be for such period not less than one year as (ay be specified in the recognition3 (b) that the stoc) exchange shall co(ply with such conditions as are or (ay be prescribed or i(posed under the pro'isions of the Act and these rules fro( ti(e to ti(e0
$ Inserted
by &SR 0!# dated $00/0 !#/, w0e0f0 %%00/0 !#/ for 1Central &o'ern(ent2 by the Securities Contracts (Regulation)(A(end(ent )Rules, !!#, w0e0f0 %30 %0 !!#0
" Substituted
Re e/%l of re'o( itio . 7. ( ) .hree (onths before the expiry of the period of recognition, a recognised stoc) exchange desirous of renewal of such recognition (ay (a)e an application to the #4Securities and 7xchange 8oard of India: in 6or( A0 (%) .he pro'isions of rule 3, rule $, rule ", rule "A and rule # shall apply in relation to renewal of recognition as they apply in relation to grant of recognition except that the fee payable in respect of an application for renewal of recognition shall be rupees two hundred0 9*%lifi'%tio ! for .e.,er!hi$ of % re'o( i!e- !to'6 e#'h% (e. :. .he rules relating to ad(ission of (e(bers of a stoc) exchange see)ing recognition shall inter alia pro'ide that , (1) Eo person shall be eligible to be elected as a (e(ber if(a) he is less than twenty+one years of age3 (b) he is not a citiFen of India3 pro'ided that the go'erning body (ay in suitable cases relax this condition with the prior appro'al of the !4Securities and 7xchange 8oard of India:3 (c) he has been adDudged ban)rupt or a recei'ing order in ban)ruptcy has been (ade against hi( or he has been pro'ed to be insol'ent e'en though he has obtained his final discharge3 (d) he has co(pounded with his creditors unless he has paid sixteen annas in the rupee3 (e) he has been con'icted of an offence in'ol'ing fraud or dishonesty3 (f) he is engaged as principal or e(ployee in any business other than that of securities /4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability unless he underta)es on ad(ission to se'er his connection with such business ,
>44ro+i-e-
that no (e(ber (ay conduct business in co((odity deri'ati'es, except by setting up a separate co(pany which shall co(ply with the regulatory re*uire(ents, such as, networth, capital ade*uacy, (argins and exposure nor(s as (ay be specified by the 6orward ?ar)et Co((ission, fro( ti(e to ti(e ,
# Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, w0e0f0 %30 %0 !!#0 / Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 > Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 <rior to its substitution, the pro'iso as a(ended by Securities Contracts (Regulation) (A(end(ent) Rules, !!# w0e0f0 %30 %0 !!#, read as under, 1<ro'ided that the Securities and 7xchange 8oard of India (ay, for reasons sufficient in the opinion of the said 8oard, per(it a recogniFed stoc) exchange to suspend the enforce(ent of this clause for a specified period on condition that the applicant is not associated with or is a (e(ber of or subscriber to or shareholder or debenture holder in or connected through a partner or e(ployee with any other organisation, institution, association, co(pany or corporation in India where forward business of any )ind whether in goods or co((odities or otherwise is carried on or is not engaged as a principal or e(ployee ion any such business02
4ro+i-e- f*rther that nothing herein shall be applicable to any corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to ()) of the pro'iso to sub+rule ($)0:3 (g) !4GGG: (h) he has been at any ti(e expelled or declared a defaulter by any other stoc) exchange3 (i) he has been pre'iously refused ad(ission to (e(bership unless a period of one year has elapsed since the date of such reDection0 (2) Eo person eligible for ad(ission as a (e(ber under sub+rule ( ) shall be ad(itted as a (e(ber unless ,(a) he has wor)ed for not less than two years as a partner with, or an authorised assistant or authorised cler) or re(isier or apprentice to, a (e(ber3 or (b) he agrees to wor) for a (ini(u( period of two years as a partner or representati'e (e(ber with another (e(ber and to enter into bargains on the floor of the stoc) exchange and not in his own na(e but in the na(e of such other (e(ber 3 or (c) he succeeds to the established business of a deceased or retiring (e(ber who is his father, uncle, brother or any other person who is, in the opinion of the go'erning body, a close relati'e , 4ro+i-e- that the rules of the stoc) exchange (ay authorise the go'erning body to wai'e co(pliance with any of the foregoing conditions if the person see)ing ad(ission is in respect of (eans, position, integrity, )nowledge and experience of business in securities, considered by the go'erning body to be otherwise *ualified for (e(bership0 (3) Eo person who is a (e(ber at the ti(e of application for recognition or subse*uently ad(itted as a (e(ber shall continue as such if(a) he ceases to be a citiFen of India , 4ro+i-e- that nothing herein shall affect those who are not citiFens of India but who were (e(bers at the ti(e of such application or were ad(itted subse*uently under the pro'isions of clause (b) of sub+rule ( ) of this rule, subDect to their co(plying with all other re*uire(ents of this rule3
(b) he is adDudged ban)rupt or a recei'ing order in ban)ruptcy is (ade against hi( or he is pro'ed to be insol'ent3 (c) he is con'icted of an offence in'ol'ing fraud or dishonesty3 (d) 04G G G: (e) 4G G G: (f) he engages either as principal or e(ployee in any business other than that of securities %4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability, pro'ided that! C(itted 0 Ibid0
by &SR 0/0(7) dated "0
0 !>>
Ibid0
% Inserted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(i) the go'erning body (ay, for reasons, to be recorded in writing, per(it a (e(ber to engage hi(self as principal or e(ployee in any such business, if the (e(ber in *uestion ceases to carry on business on the stoc) exchange either as an indi'idual or as a partner in a fir(, (ii) in the case of those (e(bers who were under the rules in force at the ti(e of such application per(itted to engage in any such business and were actually so engaged on the date of such application, a period of three years fro( the date of the grant of recognition shall be allowed for se'ering their connection with any such business, 34(iii) nothing herein shall affect (e(bers of a recognised stoc) exchange which are corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to (k) of the pro'iso to sub+rule ($)0: (4) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section 3%% of the said Act3 (ii) a (aDority of the directors of such co(pany are shareholders of such co(pany and also (e(bers of that stoc) exchange3 and (iii) the directors of such co(pany, who are (e(bers of that stoc) exchange, ha'e ulti(ate liability in such co(pany , 4ro+i-e- that where the $4Securities and 7xchange 8oard of India: (a)es a reco((endation in this regard, the go'erning body of a stoc) exchange shall, in relaxation of the re*uire(ents of this clause, ad(it as (e(ber the following corporations "4,bodies corporate:, co(panies or institutions, na(ely ,(a) the Industrial 6inance Corporation, established under the Industrial 6inance Corporation Act, !$> ( " of !$>)3 (b) the Industrial 9e'elop(ent 8an) of India, established under the Industrial 9e'elop(ent 8an) Act, !#$ ( > of !#$)3 (c) the =ife Insurance Corporation of India, established under the =ife Insurance Corporation Act, !"# (3 of !"#)3 (d) the &eneral Insurance Corporation of India constituted under the &eneral Insurance Corporation (Eationalisation) Act, !/% ("/ of !/%)3 (e) the Hnit .rust of India, established under the Hnit .rust of India Act, !#3 ("% of !#3)3
3 Substituted, ibid0 <rior to its substitution, sub+clause (iii) read as under, 1(iii) nothing herein shall affect (e(bers of a recogniFed stoc) exchange per(itted under the pro'iso to clause (f) of sub+rule( ) to suspend the enforce(ent of the aforesaid clause, for so long as such suspension is effecti'e, except that no (e(ber of such exchange shall engage in forward business of any )ind whether in goods or co((odities or otherwise and , if actually so engaged on the date of such application , he shall se'er his connection with any such business within a period of three years fro( the date of the grant of recognition02 $ Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# " Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(f) the Industrial Credit and In'est(ent Corporation of India, a co(pany registered under the Co(panies Act, !"# ( of !"#)3 (g) the subsidiaries of any of the corporations or co(panies specified in (a) to (f) and any subsidiary of the State 8an) of India or any nationalised ban) set up for pro'iding (erchant ban)ing ser'ices, buying and selling securities and other si(ilar acti'ities0 #4(h) any ban) included in the Second Schedule to the Reser'e 8an) of India Act, !3$ (% of !3$)3 (i) the 7xport I(port 8an) of India, established under the 7xport I(port 8an) of India Act, !> (%> of !> )3 (j) the Eational 8an) for Agriculture and Rural 9e'elop(ent, established under the Eational 8an) for Agriculture and Rural 9e'elop(ent Act, !> (# of !> )3 and (k) the Eational Iousing 8an), established under the Eational Iousing 8an) Act, !>/ ("3 of !>/)0: (4A) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall also be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section % of the said Act3 (ii) such co(pany underta)es to co(ply with such financial re*uire(ents and nor(s as (ay be specified by the Securities and 7xchange 8oard of India for the registration of such co(pany under sub+section ( ) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (iii) /4G G G: (iv) the directors of the co(pany are not dis*ualified fro( being (e(bers of a stoc) exchange under >4clause ( ) 4except sub+clause (b) and sub+clause (f) thereof: or clause (3) 4except sub+clause (a) and sub+clause (f) thereof:: and the 9irectors of the co(pany had not held the offices of the 9irectors in any co(pany which had been a (e(ber of the stoc) exchange and had been declared defaulter or expelled by the stoc) exchange3 and (v) not less than two directors of the co(pany are persons who possess a (ini(u( two yearsJ experience , (a) in dealing in securities3 or (b) as portfolio (anagers3 or (c) as in'est(ent consultants0 (5) Khere any (e(ber of a stoc) exchange is a fir(, the pro'isions of sub+rules ( ), (3) and ($), shall, so far as they can, apply to the ad(ission or continuation of any partner in such fir(0
# Inserted, / C(itted
ibid0 by &SR /$! (7), dated %0 00 !!$ > Substituted by &SR /!0(7), dated 0/0 0 !!$
Co tr%'t! ,et/ee .e.,er! of re'o( i!e- !to'6 e#'h% (e. 9. All contracts between the (e(bers of a recognised stoc) exchange shall be confir(ed in writing and shall be enforced in accordance with the rules and bye+laws of the stoc) exchange of which they are (e(bers0 !5No.i ee! of the Se'*ritie! % - E#'h% (e ;o%r- of I -i%< o the (o+er i ( ,o-ie! of re'o( i!e- !to'6 e#'h% (e!. 1=. .he %04Securities and 7xchange 8oard of India: (ay no(inate one or (ore persons not exceeding three in nu(ber, as (e(ber or (e(bers of the go'erning body of e'ery recognised stoc) exchange0 Such (e(ber or (e(bers shall enDoy the sa(e status and powers as other (e(bers of the go'erning body0 O,li(%tio of the (o+er i ( ,o-> to t%6e -i!'i$li %r> %'tio %(%i !t % .e.,er if !o -ire'te- ,> the % 5Se'*ritie! % - E#'h% (e ;o%r- of I -i%<. 11. After recei'ing the report of the result of an en*uiry (ade under clause (b) of subsection (3) of section # of the Act, the % 4Securities and 7xchange 8oard of India: (ay ta)e such action as they dee( proper and, in particular, (ay direct the go'erning body of the stoc) exchange to ta)e such disciplinary action against the offending (e(ber, including fine, expulsion, suspension or any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney, as (ay be specified by the % 4Securities and 7xchange 8oard of India:3 notwithstanding anything to the contrary contained in the rules or bye+laws of the stoc) exchange concerned, the go'erning body shall gi'e effect to the directions of the % 4Securities and 7xchange 8oard of India: in this behalf and shall not in any (anner co((ute, re'o)e or (odify the action ta)en in pursuance of such directions, without the prior appro'al of the % 4Securities and 7xchange 8oard of India:0 .he % 4Securities and 7xchange 8oard of India: (ay, howe'er, either of its own (otion or on the representation of the (e(ber concerned, (odify or withdraw its direction to the go'erning body0 A*-it of %''o* t! of .e.,er!. 1". 7'ery (e(ber shall get his accounts audited by a chartered accountant whene'er such audit is re*uired by the % 4Securities and 7xchange 8oard of India:0 ?ith-r%/%l of re'o( itio . 1). .he written notice referred to in section " of the Act shall be in 6or( C0
! Substituted %0 Ibid0 %
by 60 Eo0 L3/LS7L!$, dated %#0 00 !!$0
Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> re'o( i!e- !to'6 e#'h% (e. 13. 7'ery recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years, (1) ?inute boo)s of the (eetings of(a) (e(bers3 (b) go'erning body3 (c) any standing co((ittee or co((ittees of the go'erning body or of the general body of (e(bers0
(2) Register of (e(bers showing their full na(es and addresses0 Khere any (e(ber of the stoc) exchange is a fir(, full na(es and addresses of all partners shall be shown0 (3) Register of authorised cler)s0 (4) Register of re(isiers of authorised assistants0 (5) Record of security deposits0 (6) ?argin deposits boo)0 (7) =edgers0 (8) Mournals0 (9) Cash boo)0 (10) 8an) pass+boo)0 ;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> .e.,er of % re'o( i!e- !to'6 e#'h% (e. 15. ( ) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years , (a) Register of transactions ( a!da boo))0 (b) ClientsJ ledger0 (c) &eneral ledger0 (d) Mournals0 (e) Cash boo)0 (f) 8an) pass+boo)0 (g) 9ocu(ents register showing full particulars of shares and securities recei'ed and deli'ered0 (2) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following docu(ents for a period of two years, (a) ?e(berJs contract boo)s showing details of all contracts entered into by hi( with other (e(bers of the sa(e exchange or counterfoils or duplicates of (e(os of confir(ation issued to such other (e(bers0 (b) Counterfoils or duplicates of contract notes issued to clients0 (c) Kritten consent of clients in respect of contracts entered into as principals0 @% er of i 7*ir> i rel%tio to the %ff%ir! of the (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e or the %ff%ir! of % > .e.,er of the !to'6 e#'h% (e i rel%tio to the !to'6 e#'h% (e. 18. ( )(a) .he person or persons appointed by the %%4Securities and 7xchange 8oard of India: to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act shall hereafter in this rule be referred to as the Nin*uiring authorityJ3 (b) where the in*uiring authority consists of two or (ore persons, one of the( shall be appointed as the chair(an or senior (e(ber thereof3 (c) the in*uiring authority shall hand o'er a state(ent of issues to be in*uired into to the go'erning body or the (e(ber concerned, as the case (ay be, who will be gi'en a reasonable opportunity to state their or his side of the case3 (d) if any witness is called for exa(ination, an opportunity shall be pro'ided to the go'erning body or the (e(ber whose affairs are being in*uired into, as the case (ay be, to cross+exa(ine such witness3 (e) where the in*uiring authority consists of (ore than one person, the 'iews of the (aDority shall be dee(ed to represent the findings of such authority and, in the e'ent of
an e*uality of 'otes, the chair(an or senior (e(ber shall ha'e a casting 'ote3 (f) the in*uiring authority shall sub(it its report in writing to the %%4Securities and 7xchange 8oard of India: within the period specified in the order of appoint(ent3 (g) te(porary absence fro( any hearing or hearings of any (e(ber of the in*uiring authority shall not 'itiate its proceedings0 (%) Khere the %%4Securities and 7xchange 8oard of India: has directed the go'erning body of a stoc) exchange to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act, the go'erning body concerned shall appoint one or (ore (e(bers thereof to (a)e the in*uiry and the pro'isions of sub+rule ( ) shall apply "!tati# "!tandi# to such in*uiry0 S*,.i!!io of % *%l re$ort. 17. ( ) 7'ery recognised stoc) exchange shall before the 3 st day of Manuary in each year or within such extended ti(e as the %34Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, allow, furnish the %34Securities and 7xchange 8oard of India: annually with a report about its acti'ities during the preceding calendar year, which shall inter alia contain detailed infor(ation about the following (atters , (a) changes in rules and bye+laws, if any3 (b) changes in the co(position of the go'erning body3 (c) any new sub+co((ittees set up and changes in the co(position of existing ones3
%% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# %3 Ibid0
(d) ad(issions, re+ad(issions, deaths or resignations of (e(bers3 (e) disciplinary action against (e(bers3 (f) arbitration of disputes (nature and nu(ber) between (e(bers and non+(e(bers3 (g) defaults3 (h) action ta)en to co(bat any e(ergency in trade3 (i) securities listed and de+listed3 and (j) securities brought on or re(o'ed fro( the forward list0 (%) 7'ery recognised stoc) exchange shall within one (onth of the date of the holding of its annual general (eeting, furnish the %$4Securities and 7xchange 8oard of India: with a copy of its audited balance+sheet and profit and loss account for its preceding financial year0 S*,.i!!io of $erio-i'%l ret*r !. 17A. 7'ery recognised stoc) exchange shall furnish the %$4Securities and 7xchange 8oard of India: periodical returns relating to(i) the official rates for the securities enlisted thereon3 (ii) the nu(ber of shares deli'ered through the clearing house3 (iii) the (a)ing+up prices3 (iv) the clearing house progra((es3 (v) the nu(ber of securities listed and de+listed during the pre'ious three (onths3 (vi) the nu(ber of securities brought on or re(o'ed fro( the forward list during the pre'ious three (onths3 and (vii) any other (atter as (ay be specified by the %$4Securities and 7xchange 8oard of India:0 @% er of $*,li'%tio of ,>e0l%/! for 'riti'i!.. 1:. .he bye+laws to be (ade, a(ended or re'ised under the Act shall be published for
criticis( in accordance with the pro'isions of section %3 of the &eneral Clauses Act, >!/ both in the &aFette of India and Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate0 Re7*ire.e t! /ith re!$e't to the li!ti ( of !e'*ritie! o % re'o( i!e- !to'6 e#'h% (e. 19. ( ) A public co(pany as defined under the Co(panies Act, !"#, desirous of getting its securities listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars ,
%$ Ibid0
(a) ?e(orandu( and articles of association and, in the case of a debenture issue, a copy of the trust deed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any securities for subscription or sale during the last fi'e years0 (d) Copies of balance+sheets and audited accounts for the last fi'e years, or in the case of new co(panies, for such shorter period for which accounts ha'e been (ade up0 (e) A state(ent showing(i) di'idends and cash bonuses, if any, paid during the last ten years (or such shorter period as the co(pany has been in existence, whether as a pri'ate or public co(pany), (ii) di'idends or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents with or between ,(i) 'endors andLor pro(oters, (ii) underwriters and sub+underwriters, (iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents with(i) (anaging agents and secretaries and treasurers, (ii) selling agents, (iii) (anaging directors and technical directors, (iv) general (anager, sales (anager, (anager or secretary0 (h) Certified copy of e'ery letter, report, balance+sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering securities for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents0 (j) A brief history of the co(pany since its incorporation gi'ing details of its acti'ities including any reorganisation, reconstruction or a(alga(ation, changes in its capital structure, (authorised, issued and subscribed) and debenture borrowings, if any0
(k) <articulars of shares and debentures issued-(i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s including an option for the issue of any )ind of the securities granted to any person0 (") Certified copies of%"4(i) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3: (ii) agree(ents, if any, with the Industrial 6inance Corporation, Industrial Credit and In'est(ent Corporation and si(ilar bodies0 (n) <articulars of shares forfeited0 ($) A list of highest ten holders of each class or )ind of securities of the co(pany as on the date of application along with particulars as to the nu(ber of shares or debentures held by and the address of each such holder0 (%) <articulars of shares or debentures for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0 (%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant co(pany shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer, (ii) that the fully paid shares will be free fro( all lien, while in the case of partly paid shares, the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such shares, (iii) that any a(ount paid+up in ad'ance of calls on any share (ay carry interest but shall not entitle the holder of the share to participate in respect thereof, in a di'idend subse*uently declared, (iv) there will be no forfeiture of unclai(ed di'idends before the clai( beco(es barred by law, (v) that option or right to call of shares shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the securities of a co(pany which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0
%" Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 <rior to its substitution, sub+clause (i), read as under, 1(i) letters of consent of the Controller of Capital Issues02
%#4(b)
(i) At least twenty fi'e per cent0 of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent3 or (ii) At least ten per cent of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent if the post issue capital of the
co(pany calculated at offer price is (ore than four thousand crore rupees, <ro'ided that the re*uire(ent of post issue capital being (ore than four thousand crore rupees shall not apply to a co(pany whose draft offer docu(ent is pending with the Securities and 7xchange 8oard of India on or before the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, if it satisfies the conditions prescribed in clause (b) of sub+rule % of rule ! of the Securities Contracts (Regulation) Rules, !"# as existed prior to the date of such co((ence(ent, %/4<ro'ided further that the co(pany, referred to in sub clause (ii), shall increase its public shareholding to at least twenty fi'e per cent, within a
%# Substituted
by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, clause (b) as a(ended by the A(end(ent Rules, %00 , w0e0f0 0/00#0%00 , read as under, 1(b) At least 0 per cent of each class or )ind of securities issued by a co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted subDect to the following conditions, (a) (ini(u( %0 la)h securities (excluding reser'ations, fir( allot(ent and pro(otersJ contribution) was offered to the public3 (b) the siFe of the offer to the public, i&e&' the offer price (ultiplied by the nu(ber of securities offered to the public was (ini(u( Rs0 00 crores3 and (c) the issue was (ade only through boo) building (ethod with allocation of #0 per cent of the issue siFe to the *ualified institutional buyers as specified by the Securities and 7xchange 8oard of India, 4ro+i-e- that if a co(pany does not fulfil the conditions, it shall offer at least %" per cent of each class or )ind of securities to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted, 4ro+i-e- f*rther that a recognised stoc) exchange (ay relax any of the conditions with the pre'ious appro'al of the Securities and 7xchange 8oard of India, in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#), and subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*6or the purpose of this clause, it is hereby clarified that where any part of the securities sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental 6ire and &eneral Insurance Co(pany =i(ited and the Hnited 6ire and &eneral Insurance Co(pany =i(ited or Hnit .rust of India, the total subscription to the securities, whether by one or (ore of such bodies, shall not for( part of the 0 per cent or %" per cent of the securities, as the case (ay be, to be offered to the public02 %/ Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 <rior to its substitution, second pro'iso, read as under, 1<ro'ided further that the co(pany, referred in sub+clause (ii), shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of atleast fi'e per
period of three years fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India0: %>4GGG:: %!4(c) Eotwithstanding anything contained in clause (b), a public sector co(pany, shall offer and allot at least ten per cent, of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares to public in ter(s of an offer docu(ent0: (3) A co(pany applying for listing shall, as a condition precedent, underta)e inter alia(a) (i) that letters of allot(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to
that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been posted, (ii) that letters of right will be issued si(ultaneously, (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the securities to which they relate, (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right, (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or di'idend on the securities will be calculated, (b) to issue, when so re*uired, receipts for all securities deposited with it whether for registration, sub+di'ision, exchange or for other purposes 3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of certificates and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (bb) to issue, when so re*uired, consolidation and renewal certificates in deno(inations of the (ar)et unit of trading to split certificates, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3
cent per annu( beginning fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India,2 %> C(itted, ibid <rior to its o(ission, third pro'iso, read as under, 1<ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase beings its public shareholding to the le'el of twenty fi'e per cent in that year02 %! Inserted, ibid0
(c) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders, and (ii) to 'erify when the co(pany is unable to issue certificates or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (d) on production of the necessary docu(ents by shareholders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or certificate of the Controller of 7state 9uty or si(ilar other docu(ent has been duly exhibited to
and registered by the co(pany3 (e) to issue certificates in respect of shares or debentures lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance certificates within the sa(e period where the transfer is acco(panied by a larger certificate3 (f) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a di'idend or the issue of right or bonus share will be considered3 (g) to reco((end or declare all di'idends andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all di'idends andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (h) to notify the stoc) exchange of any (aterial change in the general character or nature of the co(panyJs business3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (anaging agent or secretaries and treasurers, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued, copies of all other notices and circulars sent to the shareholders including proceedings of ordinary and extraordinary general (eetings of the co(pany and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the shareholders of any new issue of securities whether by way of right, pri'ilege bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited securities or the issue of securities held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of di'idend or issue of right or bonus shares or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s (or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its shareholders or debentureholders) and specifying the purpose or purposes for which the transfer boo)s are to be closed (or the record is to be ta)en)3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority subDect to which the issue is proposed to be (ade ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after each annual general (eeting of at least ten principal holders of each class of security of the co(pany along with particulars as to the nu(ber of shares or debentures held by,
and address of, each such holder3 (+) to grant to shareholders the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e not being less than four wee)s within which to record, exercise, or renounce such rights, pri'ileges and benefits and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3 (r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any securities listed on the exchange, (ii) of the intention to (a)e a drawing of such securities, inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing of the balance) for the drawing, (iii) of the a(ount of securities outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the shareholders to apprise the position of the co(pany and to a'oid the establish(ent of a false (ar)et in the shares of the co(pany3 (t) (t)that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 304($) An application for listing shall be necessary in respect of the following, (a) all new issues of any class or )ind of securities of a co(pany to be offered to the public3 (b) all further issues of any class or )ind of securities of a co(pany if such class or )ind of securities of the co(pany are already listed on a recognised stoc) exchange0: (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the securities of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 3 44ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any security, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and its orders shall be carried out by the stoc) exchange0: 3%4(#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore
or re+ad(it to dealings any securities suspended or withdrawn fro( the list0: 334(#A) 7xcept as otherwise pro'ided in these rules or per(itted by the Securities and 7xchange 8oard of India under sub+rule (/), all re*uire(ents with respect to listing
30 Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, sub+rule ($), read as under, 1($) A fresh application for listing will be necessary in respect of all new issues desired to be dealt in, pro'ided that, where such new securities are identical in all respects with those already listed, ad(ission to dealings will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new issues0 7xplanation, Shares are identical in all respects only if(a) they are of the sa(e no(inal 'alue and the sa(e a(ount per share has been called up3 (b) they are entitled to di'idend at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the di'idend payable on each share will a(ount to exactly the sa(e su(, net and gross3 and (c) they carry the sa(e rights in all other respects02 3 Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%0000 7arlier, the second pro'iso was a(ended by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 3% Substituted by the Securities Contracts (Regulation) (A(end(ent), %000, w0e0f0 0>00>0%0000 7arlier, subrule (#) was a(ended by the Securities Contracts (Regulation) (A(end(ent), !!#, w0e0f0 %30 %0 !!#0 33 Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!0>0%0 00 <rior to its substitution, sub+rule (#A) as a(ended by the Securities Contracts
prescribed by these rules shall, so far as they (ay be, also apply to a public sector co(pany0: 3$4GGG: (/) .he 3"4Securities and 7xchange 8oard of India: (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect to listing prescribed by these rules0 3#4Co ti *o*! Li!ti ( Re7*ire.e t. 19A. ( ) 7'ery listed co(pany 3/4other than public sector co(pany: shall (aintain public shareholding of at least twenty fi'e per cent0, 3>4<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent, on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall increase its public shareholding to at least twenty fi'e per cent, within a period of three years fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India0 7xplanation, 6or the purposes of this sub+rule, a co(pany whose securities has been listed pursuant to an offer and allot(ent (ade to public in ter(s of sub+clause (ii) of clause (b) of sub+rule (%) of rule !, shall (aintain (ini(u( twenty fi'e per cent, public shareholding fro( the date on which the public shareholding in the co(pany reaches the le'el of twenty fi'e percent in ter(s of said sub+clause0: (%) Khere the public shareholding in a listed co(pany falls below twenty fi'e per cent0 at any ti(e, such co(pany shall bring the public shareholding to twenty fi'e per cent0
(Regulations)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 and &SR % (7) w0e0f0 0!0030 !!", read as under, 1(#A) All the re*uire(ents with respect to listing and continuous listing prescribed by these rules, shall so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature ,2 3$ C(itted by the Securities Contracts (Regulation)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its o(ission, pro'iso, as substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# and inserted by &SR %! (7) dated %/0030 !!", read as under,
1<ro'ided that a recognised stoc) exchange (ay relax the re*uire(ent of offer to public for subscription of atleast twenty+fi'e percent of the each class or )ind of securities issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e02 3" Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent), Rules, !!#, w0e0f0 %30 %0 !!#0 3# Inserted by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 3/ Inserted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3> Substituted, ibid0 <rior to substitution, pro'isos, read as under, 1<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of at least fi'e per cent per annu( beginning fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India, <ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase brings its public shareholding to the le'el of twenty fi'e per cent in that year02
within a (axi(u( period of twel'e (onths fro( the date of such fall in the (anner specified by the Securities and 7xchange 8oard of India0: 3!4(3) Eotwithstanding anything contained in this rule, e'ery listed public sector co(pany shall (aintain public shareholding of at least ten per cent0, <ro'ided that a listed public sector co(pany+ (a) which has public shareholding below ten per cent, on the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of three years fro( the date of such co((ence(ent3 (b) whose public shareholding reduces below ten per cent, after the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of twel'e (onths fro( the date of such reduction,0: $04Re7*ire.e t! /ith re!$e't to the li!ti ( of * it! or % > other i !tr*.e t of % Colle'ti+e I +e!t.e t S'he.e o % re'o( i!e- !to'6 e#'h% (e. "=. ( ) A Collecti'e In'est(ent ?anage(ent Co(pany (CI?C) which is desirous of getting its any collecti'e in'est(ent sche(e listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars , (a) Certificate of incorporation, (e(orandu( and articles of association of the co(pany and the copy of the trust deed of the sche(e intended to be listed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any unit or other instru(ent for subscription or sale during the last fi'e years, or in the case of a new co(pany, such shorter period during which the co(pany has been in existence0 (d) Copies of balance sheets and audited accounts for the last fi'e years, or in the case of a new co(pany, for such co(pleted financial year for which accounts ha'e been (ade up0 (e) A state(ent showing,(i) returns and cash bonuses, if any, paid during the last ten years (or such
shorter period as the co(pany has been in existence whether as a pri'ate or public co(pany)3 (ii) returns or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents pertaining to each sche(e of the co(pany with or between,(i) 'endors andLor pro(oters3 (ii) underwriters and sub+underwriters3
3! Inserted $0 Inserted
by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 0 by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%000
(iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents pertaining to each sche(e of a co(pany with(i) selling agents and other ser'ice pro'iders3 (ii) (anaging directors and technical directors3 (iii) general (anager, sales (anager, (anager or secretary0 (h) Certified copies of e'ery letter, report, balance sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering units or any other instru(ents of the sche(e for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents pertaining to such sche(e0 (j) A brief history of the Co(pany since its incorporation gi'ing details of its acti'ities including any re+organisation, reconstruction or a(alga(ation, changes in its capital structure (authorised, issued and subscribed) and debenture borrowings, if any, and the perfor(ance of other collecti'e in'est(ent sche(es of the co(pany0 (k) <articulars of units of the sche(e andLor shares, debentures of the co(pany issued (i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s granted to any person pertaining to such sche(e0 (") Certified copies of(i) certificate of registration granted by the Securities and 7xchange 8oard of India3 (ii) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3 (iii) agree(ents, if any, with any public financial institution as specified in section $A of the Co(panies Act, !"# ( of !"#)0 (n) A list of the highest ten holders of units of each sche(e of the co(pany as on the date of application along with particulars as to the nu(ber of units held by and the address of each such holder0 ($) <articulars of units of the sche(e for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0
(%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer of units of a particular sche(e3 (ii) that the fully paid units issued under the sche(e will be free fro( all lien, while in the case of partly paid units the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such units3 (iii) that any a(ount paid+up in ad'ance of calls on any units (ay carry interest but shall not entitle the holder of the unit to participate in respect thereof, in a return subse*uently declared3 (iv) there will be no forfeiture of unclai(ed returns before the clai( beco(es barred by law3 (v) that option or right to call of units shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the units of a sche(e which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0 (b) At least twenty+fi'e per cent of the units or any other instru(ent of a sche(e issued by the co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and not (ore than ninety days, and that applications recei'ed in pursuance of such offer were allotted fairly and unconditionally , 4ro+i-e- that a recognised stoc) exchange (ay relax this re*uire(ent, with the pre'ious appro'al of the Securities and 7xchange 8oard of India in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#) and subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*Khere any part of the units or any other instru(ents sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely, the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental Insurance Co(pany =i(ited and the Hnited Insurance Co(pany =i(ited, or Hnit .rust of India, the total subscription to the units or any other instru(ent, whether by one or (ore of such bodies, shall not for( part of the twenty+fi'e per cent of the units or any other instru(ent to be offered to the public0 (3) A co(pany applying for listing of a sche(e shall, as a condition precedent, underta)e, inter alia,(a) (i) that letters of allot(ent of units or any other instru(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been
posted3 (ii) that letters of right will be issued si(ultaneously3 (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and, exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the units or any other instru(ent to which they relate3 (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right3 (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or return on the units or any other instru(ent will be calculated3 (b) to issue, when so re*uired, receipts for all units and any other instru(ent deposited with it whether for registration, sub+di'ision, exchange or for other purposes3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of units and any other instru(ent and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (c) to issue, when so re*uired, consolidation and renewal units or any other instru(ent in deno(inations of the (ar)et unit of trading, to split units or any other instru(ent, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3 (d) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders3 and (ii) to 'erify when the co(pany is unable to issue units or any other instru(ents or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (e) on production of the necessary docu(ents by unit holders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or si(ilar other docu(ent has been duly exhibited to and registered by the co(pany3 (f) to issue certificates in respect of units or any other instru(ent lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance units or any other instru(ent within the sa(e period where the transfer is acco(panied by a larger unit or any other instru(ent certificate3 (g) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a return or the issue or right or bonus units or
any other instru(ent will be considered3 (h) to reco((end or declare all returns andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all returns andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts of such sche(e as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued copies of all other notices and circulars sent to the unitLother instru(ent holders regarding any i(portant de'elop(ent or resolutions passed by the co(pany affecting the perfor(ance of the sche(e and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the unitLany other instru(ent holders, of any new issue of unitsLother instru(ents whether by way of right, pri'ilege, bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited unitsLother instru(ents or the issue of unitsLother instru(ents held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of unit capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of returns or issue of right or bonus unitsLany other instru(ents in the sche(e or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its unitLother instru(ent holders and specifying the purpose or purposes for which the transfer boo)s are to be closed or the record is to be ta)en3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority, subDect to which the issue is proposed to be (ade, ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after the preparation of annual accounts of at least ten principal holders of each class of unitsLany other instru(ents of the co(pany along with particulars as to the nu(ber of unitsLany other instru(ent held by, and address of, each such holder3 (+) to grant to unitLany other instru(ent holders of the sche(e the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e, not being less than four wee)s, within which to record, exercise, or renounce such rights, pri'ileges and benefits, and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3
(r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any unitLother instru(ent listed on the exchange3 (ii) of the intention to (a)e a drawing of such unitLother instru(ent inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing off the balance) for the drawing3 (iii) of the a(ount of unitsLother instru(ents outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the unitLany other instru(ent holders to appraise the position of the sche(e and to a'oid the establish(ent of a false (ar)et in the unitsLany other instru(ents of the co(pany3 (t) that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 ($) A fresh application for listing will be necessary in respect of all new sche(es desired to be dealt in , 4ro+i-e- that, where such new unitsLother instru(ents are identical in all respects with those already listed, ad(ission to dealing will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new sche(es0 ()%lanati$n0-HnitsLany other instru(ents are identical in all respects only if(a) they are issued under the sa(e sche(e3 (b) they are of the sa(e no(inal 'alue and the sa(e a(ount per unitLother instru(ents has been called up3 (c) they are entitled to returns at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the return payable on each unitLother issue will a(ount to exactly the sa(e su(, net and gross3 and (d) they carry the sa(e rights in all other respects0 (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the unitsLother instru(ents of a sche(e of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 4ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any unitLother instru(ent of a collecti'e in'est(ent sche(e, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an
opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and thereupon the orders of the Securities Appellate .ribunal shall be carried out by the stoc) exchange0 (#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore or read(it to dealings any unitsLother instru(ents suspended or withdrawn fro( the list0 (/) All the re*uire(ents with respect to listing prescribed by these rules, shall, so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature , 4ro+i-e- that a recognised stoc) exchange (ay relax the re*uire(ent of offer to the public for subscription of at least twenty+fi'e per cent of the units or any other instru(ent of a collecti'e in'est(ent sche(e issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 (>) .he Securities and 7xchange 8oard of India (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect of listing prescribed by these rules0: $ 4Deli!ti ( of !e'*ritie!. "1. A recogniFed stoc) exchange (ay, without preDudice to any other action that (ay be ta)en under the Act or under any other law for the ti(e being in force, delist any securities listed thereon on any of the following grounds in accordance with the regulations (ade by the Securities and 7xchange 8oard of India, na(ely,(a) the co(pany has incurred losses during the preceding three consecuti'e years and it has negati'e networth3 (b) trading in the securities of the co(pany has re(ained suspended for a period of (ore than six (onths3 (c) the securities of the co(pany ha'e re(ained infre*uently traded during the preceding three years3 (d) the co(pany or any of its pro(oters or any of its director has been con'icted for failure to co(ply with any of the pro'isions of the Act or the Securities and 7xchange 8oard of India Act, !!% or the 9epositories Act, !!# (%% of !!#) or rules, regulations, agree(ents (ade thereunder, as the case (ay be and awarded a penalty of not less than rupees one crore or i(prison(ent of not less than three years3 (e) the addresses of the co(pany or any of its pro(oter or any of its directors, are not )nown or false addresses ha'e been furnished or the co(pany has changed its registered office in contra'ention of the pro'isions of the Co(panies Act, !"# ( of !"#)3 or
$
Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %00>, w0e0f0 000#0%00!
(f) shareholding of the co(pany held by the public has co(e below the (ini(u( le'el applicable to the co(pany as per the listing agree(ent under the Act and the co(pany has failed to raise public holding to the re*uired le'el within the ti(e specified by the recogniFed stoc) exchange , 4ro+i-e- that no securities shall be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) If the securities is delisted under clause ( ),
(a) the co(pany, pro(oter and director of the co(pany shall be Dointly and se'erally liable to purchase the outstanding securities fro( those holders who wish to sell the( at a fair price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India, under the Act3 and (b) the said securities shall be delisted fro( all recogniFed stoc) exchanges0 (3) A recogniFed stoc) exchange (ay, on the re*uest of the co(pany, delist any securities listed thereon in accordance with the regulations (ade under the Act by Securities and 7xchange 8oard of India, subDect to the following conditions, na(ely ,(a) the securities of the co(pany ha'e been listed for a (ini(u( period of three years on the recogniFed stoc) exchange3 (b) the delisting of such securities has been appro'ed by the two+third of public shareholders3 and (c) the co(pany, pro(oter andLor the director of the co(pany purchase the outstanding securities fro( those holders who wish to sell the( at a price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India under the Act, 4ro+i-e- that the condition at (c) (ay be dispensed with by Securities and 7xchange 8oard of India if the securities re(ain listed at least on the Eational Stoc) 7xchange of India =i(ited or the 8o(bay Stoc) 7xchange =i(ited0: FORM A ( ee Rules 3 and /) A$$li'%tio for re'o( itio 1re e/%l of re'o( itio of % !to'6 e#'h% (e * -er !e'tio ) of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 .o 00000000000000000000000000000000000000 00000000000000000000000000000000000000 !bject,*A%%licati$n f$r rec$gniti$n-rene.al $f rec$gniti$n $f a #t$ck e)change !nder #ecti$n 3 $f the ec!ritie# /$ntract# (0eg!lati$n) Act' 1956& Sir, <ursuant to the $%4Securities and 7xchange 8oard of India: Eotification Eo0 00000000000000000000000000 00000000000000000 dated 000000000000000000000000000000000LCertificate of recognition dated0000000000000000000000000000000KeLI on behalf of 000000000000000000 (na(e and address of stoc) exchange) being a stoc) exchange as defined in section % of the Securities Contracts
$% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
(Regulation) Act, !"# hereby apply for recognitionLrenewal of recognition for the purposes of the said Act in respect of contracts in securities0 ". 6our copies of the rules, (e(orandu( and articles of association relating in general to the constitution and (anage(ent of the stoc) exchange and four copies of the bye+laws for the regulation and control contracts in securities are enclosed0 ). All the necessary infor(ation re*uired in the Annexure to this 6or( is enclosed0 Any additional infor(ation will be furnished as and when called for by the $34Securities and 7xchange 8oard of India:0 3. KeLI on behalf of the said stoc) exchange hereby underta)e to co(ply with the re*uire(ents of section $ of the said Act and such other conditions and ter(s as (ay be contained in the certificate of recognition or be prescribed or i(posed subse*uently0 5. .reasury Receipt Eo0 000000dated000000for Rs000000000000is attached0
Oours faithfully, Signature of applicant ANNEAURE TO 2OR@ BAC Part I - General 0 Ea(e of the applicant stoc) exchange0 %0 Address0 30 9ate of establish(ent0 $0 Is your exchange a Doint stoc) co(pany (state whether public or pri'ate) registered under the Indian Co(panies Act or an association for profit or otherwise P If it is organised on so(e other basis, this (ay be stated0 "0 &i'e details of your capital structure and attach three copies of the audited balance sheets and profit and loss account of the 7xchange for the preceding three years0 Part II - Membership #0 State the nu(ber of (e(bers at the ti(e of application0 Also specify how (any are inacti'e0 /0 State whether there is any pro'ision, resolution or con'ention for li(iting the nu(ber of (e(bers and whether in pursuance thereof you ha'e fixed a ceiling on the nu(ber of (e(bers that you would ta)e0 >0 9o you insist on any (ini(u( *ualifications and experience before enrolling new (e(bers P If so gi'e details0 !0 State the different classes of (e(bers, if any, the nu(ber thereof and the pri'ileges enDoyed by each class0 Khat is the procedure followed by your exchange for the ad(ission of different classes of new (e(bers P 00 Khat are the rates of your annual subscription in respect of the different classes of (e(bers P 0 9o you collect any security deposit fro( your (e(bers P If so, gi'e details and also state the (anner in which such deposits are utilised and the rate of interest allowed, if any0
$3 Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
%0 9o you collect any ad(ission or entrance fees fro( your (e(bers or fro( partners of fir(s who are (e(bers P If so, how (uch P 30 9o you insist on your (e(bers and partners of fir(s who are (e(bers di'esting the(sel'es of other acti'ities either as principal or as e(ployee P $0 9o your rules per(it fir(s to beco(e (e(bers P If so, is it incu(bent on (e(bers to see) the appro'al of the go'erning body before ad(itting new partners P State the conditions, if any, laid down in your rules for the ad(ission of such partners0 "0 If your rules do not per(it of fir(s being enrolled as (e(bers, do you per(it indi'idual (e(bers to for( a partnership P State the procedure followed for the recognition of such partnership0 #0 9o you per(it (e(bers to wor) in partnership with non+(e(bers P If so, how far such non+(e(bers subDect to the control of the stoc) exchange P Part III - Governing Body /0 Khat is the present strength of your go'erning body P &i'e details of the constitution, powers of (anage(ent, election and tenure of office of (e(bers of the go'erning body, and the (anner in which its business is transacted0 >0 Are any trade or co((ercial interest represented on your go'erning body P If so,
gi'e details of interests represented0 !0 9o you associate shareholders of in'estors associations with the (anage(ent of your exchange P If so, state the (anner in which it is done0 %00 Are there any &o'ern(ent representati'es on your go'erning body P If so, furnish their na(es0 % 0 9o your rules pro'ide for the direct election by (e(bers of any other bodies or co((ittees, apart fro( the go'erning body P If so, gi'e details of their constitution, tenure, powers and functions0 %%0 9o you ha'e any pro'ision for the appoint(ent of standing or ad h$c subco((ittees of the go'erning body P If so, furnish details of the (ethod of their appoint(ent, ter(s of office, powers and functions0 %30 &i'e the designations, powers and duties of principal office+bearers of your exchange0 Are any of these office+bearers in the pay of the stoc) exchange P If so, gi'e details as to the (ode of their appoint(ent, tenure of office and re(uneration0 Part IV - Trading %$0 9o you ha'e a trading ring P If not, how do you carry on the business P &i'e details0 %"0 State the different )inds of contracts in use on your exchange e&g&' spot, ready and forward0 State the period of deli'ery and pay(ent in each case0 %#0 &i'e details of business hours for each type of contract0 %/0 &i'e details of the scale of bro)erage and other charges, if any, prescribed by your exchange0 %>0 9o you prescribe standard for(s of contract for the use of your (e(bers P Attach three copies of each such contract for(0 %!0 9o you classify your (e(bers into bro)ers and Dobbers P If so, specify the bye+law under which this is done0 300 9o you ha'e a syste( of registration of re(isiers andLor authorised cler)s P If so, gi'e details as to their *ualifications, obligations and rights, etc0 3 0 9o you ha'e any regulations regarding dealings by (e(bers on their own account whether in the nature of 1aravani (day+to+day) or otherwise P 3%0 9o you ha'e any pro'isions for regulating the 'olu(e of business done by any indi'idual (e(ber other than through a syste( of (argins P If so, gi'e details0 330 Khat pro'isions ha'e you (ade for periodical settle(ent of contracts and differences thereunder, the deli'ery of, and pay(ent for securities and the passing of deli'ery orders P 3$0 9o you ha'e a clearing house for the settle(ent of contracts P If so, gi'e details of its organisation and (anage(ent0 3"0 If you ha'e clearing house, what returns do the (e(bers of your exchange sub(it regarding the transactions cleared through such clearing house P 9oes the exchange as) for any regular returns in respect of transactions settled outside the clearing house P Sub(it three copies of for(s used in this connection0 3#0 Iow do you fix, alter or postpone the dates of settle(ent P 3/0 Iow do you deter(ine and declare (a)ing+up prices P 3>0 9o you ha'e any arrange(ents for (a)ing or recording of bargains P 3!0 Ia'e you any arrange(ents for recording and publishing (ar)et rates including opening, closing, highest and lowest rates P $00 Khat pro'isions ha'e you (ade for regulating-(a) the entering into contracts, their
perfor(ance and rescission, including contracts , (i) between (e(bers, (ii) between a (e(ber and his constituent, and (iii) between a (e(ber and a non+(e(ber3 (b) the conse*uences of breach, default or insol'ency on the part of (e(bers whether acting as buyers, sellers or inter(ediaries 3 and (c) 2havala#3 and other (atters relating to conduct of business of (e(bers in the exchange P $ 0 9o you prescribe (argin re*uire(ents P If yes, gi'e details0 $%0 9o you prescribe (axi(u( and (ini(u( prices for securities P If so, how and under what conditions0 $30 9o you pro'ide any safeguards for the pre'ention of Nbulls*ueeFesJ and 3 NbearraidsJ and for (eeting e(ergencies in trade P &i'e details0 $$0 Khat are the (easures adopted by you to regulate or prohibit ad'ertising or issue of circulars by your (e(bers P $"0 Khat are the disciplinary power with the go'erning body to enforce due co(pliance by (e(bers of the rules and bye+laws of the exchange and generally to ensure proper standard of business conduct P $#0 9o you re*uire (e(bers to supply such infor(ation or explanation and to produce such boo)s relating to their business as your go'erning body (ay re*uire P $/0 9o you publish any statistics in regard to business done on the exchange including the transactions settled through the clearing house, if (aintained P In particular, ha'e you e'ol'ed any (achinery for co(puting the 'olu(e of transactions in the different )inds of contracts per(itted on your exchange P &i'e details0 $>0 9o you ha'e any bye+laws contra'ention of which (a)es a contract 'oid P Part V - Miscellaneo s $!0 9o you ha'e any (achinery for arbitration of disputes between (e(bers andLor between (e(bers and their constituents P &i'e details0 "00 Khat are the conditions subDect to which securities are listed for dealings on your exchange P " 0 Khat are your re*uire(ents for ad(itting securities to forward+trading P "%0 9o you ha'e the right to prohibit, withdraw or suspend dealings in a listed security P If so, under what circu(stances is this right exercised P "30 Khat pro'isions ha'e you (ade for the le'y and reco'ery of fees, fines and penalties P FORM B ( ee rules # and /) $$5The Se'*ritie! % - E#'h% (e ;o%r- of I -i%< 4e. 5elhi' the 20&&&&&&&&&&&&& Eo0 000000000000000000000000000000000000.he $"4Securities and 7xchange 8oard of India:, ha'ing considered the application for recognitionLrenewal of recognition (ade under section 3 of the Securities Contracts (Regulation) Act, !"# by000000000000000000000000000000 (na(e and address of exchange) and being satisfied that it would be in the interest of the trade and also in the public interest so to do, hereby grants, in exercise of the powers conferred by section $ of the Securities Contracts (Regulation) Act, !"# recognition to the said exchange under section $ of the said Act for 0000000000000000000 yearLyears ending 0000000000000000000000%0 0000000on a per(anent basis in respect of contracts in securities subDect to the conditions stated herein below or as (ay be prescribed or i(posed hereafter0 Seal of the $#48oard: Signature of Cfficer
Note&-Application for renewal of recognition shall be (ade so as to reach the Central &o'ern(ent not less than three (onths before the expiry of the period0 (.his certificate, will also ha'e to be published as a Eotification in the &aFette of India and also in the Cfficial &aFette of the State in which principal office of the recognised stoc) exchange is situate)0 $/5FORM ! ( ee rule 3) Noti'e to !ho/ '%*!e %(%i !t the /ith-r%/%l of re'o( itio .I7 S7CHRI.I7S AE9 7ACIAE&7 8CAR9 C6 IE9IA 6!"bai' the&&&&&&&&&&& .o 0000000000000000000000000000000000000000000000000000000000000000000000000000000000
$$ Substituted
for 1&o'ern(ent of India, ?inistry of 6inance2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 $" Substituted for 1Central &o'ern(ent2, ibid0 $# Substituted for 1?inistry2, ibid0 $/ Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#
0000000000000000000000000000000000000000000000000000000000000000000000000000000000 (na(e and address of the exchange) Oou are hereby called upon to show cause on or before 0000000000000000000000000000000000000 at the office of 0000000000000000000000000000000000000000000000000000 ( designation of the officer) why the recognition granted to you under the ?inistry of 6inanceLthe Securities and 7xchange 8oard of India, Eotification Eo0 0000000000000000000000000000 dated 000000000000000000000000000000000000000 and Certificate Eo0 00000000000000000000000000000 dated 000000000000000000000000000000 should not be withdrawn for the reasons gi'en in the annexure to this notice0 8y order and in the na(e of the Securities and 7xchange 8oard of India0 Seal of the Securities and 7xchange 8oard of India0 Notifi'%tio & 4$& 576' dated 217271957&
SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< SECTIONS
80(9:6:4A0; 1. Short title, extent and co((ence(ent ". 9efinitions 0(/<=4: (5 1</> (?/@A4=( ). Application for recognition of stoc) exchanges 3. &rant of recognition to stoc) exchanges0 3A. Corporatisation and de(utualisation of stoc) exchanges 3;. <rocedure for corporatisation and de(utualisation 5. Kithdrawal of recognition 8. <ower of Central &o'ern(ent to call for periodical returns or direct in*uiries to be (ade 7. Annual reports to be furnished to Central &o'ern(ent by stoc) exchanges 7A. <ower of recognised stoc) exchange to (a)e rules restricting 'oting rights, etc :. <ower of Central &o'ern(ent to direct rules to be (ade or to (a)e rules :A. Clearing corporation 9. <ower of recognised stoc) exchanges to (a)e bye+laws 1=. <ower of Securities and 7xchange 8oard of India to (a)e or a(end byelaws of recognised stoc) exchanges 11. <ower of Central &o'ern(ent to supersede go'erning body of a recognised stoc) exchange 1". <ower to suspend business of recognised stoc) exchanges0 1"A. <ower to issue directions 1). Contracts in notified areas illegal in certain circu(stances 1)A. Additional trading floor 13. Contracts in notified areas to be 'oid in certain circu(stances 15. ?e(bers (ay not act as principals in certain circu(stances 18. <ower to prohibit contracts in certain cases 17. =icensing of dealers in securities in certain areas 17A. <ublic issue and listing of securities referred to in sub+clause ( ie) of clause (h) of section % 1:. 7xclusion of spot deli'ery contracts fro( sections 3, $, " and / 1:A. Contracts in deri'ati'e 19. Stoc) exchanges other than recognised stoc) exchanges prohibited "=. <rohibition of options in securities "1. Conditions for listing "1A. 9elisting of securities "". Right of appeal against refusal of stoc) exchanges to list securities of public co(panies ""A. Right of appeal to Securities Appellate .ribunal against refusal of stoc) exchange to list securities of public co(panies "";. <rocedure and powers of Securities Appellate .ribunal ""C. Right to legal representation ""D. =i(itation ""E. Ci'il court not to ha'e Durisdiction
""2. Appeal to Supre(e Court 8(4A91:( A45 80</(5A0( "). <enalties ")A. <enalty for failure to furnish infor(ation, return, etc0 ");. <enalty for failure by any person to enter into an agree(ent with clients ")C. <enalty for failure to redress in'estorsJ grie'ances ")D. <enalty for failure to segregate securities or (oneys of client or clients ")E. <enalty for failure to co(ply with pro'ision of listing conditions or delisting conditions or grounds ")2. <enalty for excess de(aterialisation or deli'ery of unlisted securities ")G. <enalty for failure to furnish periodical returns, etc0 ")D. <enalty for contra'ention where no separate penalty has been pro'ided ")0I. <ower to adDudicate ")E. 6actors to be ta)en into account by adDudicating officer ")EA. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! ")E;. Re'o+er> of %.o* t! ")F. Crediting su(s realised by way of penalties to Consolidated 6und of India ")L. Appeal to Securities Appellate .ribunal ")@. Cffences ")N. Co(position of certain offences ")0O. <ower to grant i((unity "3. Cffences by co(panies "5. Certain offences to be cogniFable "8. CogniFance of offences by courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! 6: /(99A4(<A "7. .itle to di'idends "7A. Right to recei'e inco(e fro( collecti'e in'est(ent sche(e "7;. Right to recei'e inco(e fro( (utual fund ":. Act not to apply in certain cases "9. <rotection of action ta)en in good faith "9A. <ower to delegate )=. <ower to (a)e rules )1. <ower of Securities and 7xchange 8oard of India to (a)e regulations SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< 53th Se$te.,er, 1958< A A't to $re+e t * -e!ir%,le tr% !%'tio ! i !e'*ritie! ,> re(*l%ti ( the ,*!i e!! of -e%li ( therei , 14***: ,> $ro+i-i ( for 'ert%i other .%tter! 'o e'te- there/ith. 87 it enacted by <arlia(ent in the Se'enth Oear of the Republic of India as follows ,
80(9:6:4A0; Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities Contracts (Regulation) Act, !"#0 (%) It extends to the whole of India0
Kords 1by prohibiting options and2 o(itted by the Securities =aws (A(end(ent) Act, !!", Sec0 >, w0e0f0 %"+0 + !!".
(3) It shall co(e into force on such date% as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 Defi itio !. ". In this Act, unless the context otherwise re*uires,(a) 1contract2 (eans a contract for or relating to the purchase or sale of securities3 3 4(aa) 1corporatisation2 (eans the succession of a recognised stoc) exchange, being a body of indi'iduals or a society registered under the Societies Registration Act, >#0 (% of >#0), by another stoc) exchange, being a co(pany incorporated for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities carried on by such indi'iduals or society3 (ab) 1de(utualisation2 (eans the segregation of ownership and (anage(ent fro( the trading rights of the (e(bers of a recognised stoc) exchange in accordance with a sche(e appro'ed by the Securities and 7xchange 8oard of India3: $4"4(ac): 1deri'ati'e2 includes(A) a security deri'ed fro( a debt instru(ent, share, loan, whether secured or unsecured, ris) instru(ent or contract for differences or any other for( of security3 (B) a contract which deri'es its 'alue fro( the prices, or index of prices, of underlying securities3: (b) 1&o'ern(ent security2 (eans a security created and issued, whether before or after the co((ence(ent of this Act, by the Central &o'ern(ent or a State &o'ern(ent for the purpose of raising a public loan and ha'ing one of the for(s specified in clause (2) of section % of the <ublic 9ebt Act, !$$ ( > of !$$)3 (c) 1(e(ber2 (eans a (e(ber of a recognised stoc) exchange3 (d) 1option in securities2 (eans a contract for the purchase or sale of a right to buy or sell, or a right to buy and sell, securities in future, and includes a teji' a "andi' a teji "andi' a galli' a put, a call or a put and call in securities3 (e) 1prescribed2 (eans prescribed by rules (ade under this Act3
% %0+%+
!"/ vide SRC "%>, dated #+0%+ !"/, published in the &aFette of India, 7xtra0, <t0 II, Sec0 3, p0 "$!, dated #+0%+ !"/0 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 $ Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000 " Clause (aa) renu(bered as clause (ac) by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0
(f) 1recognised stoc) exchange2 (eans a stoc) exchange which is for the ti(e
being recognised by the Central &o'ern(ent under section $3 (g) 1rules2, with reference to the rules relating in general to the constitution and (anage(ent of a stoc) exchange, includes, in the case of a stoc) exchange which is an incorporated association, its (e(orandu( and articles of association3 64(ga) 1sche(e2 (eans a sche(e for corporatisation or de(utualisation of a recognised stoc) exchange which (ay pro'ide for(i) the issue of shares for a lawful consideration and pro'ision of trading rights in lieu of (e(bership cards of (e(bers of a recognised stoc) exchange3 (ii) the restrictions on 'oting rights3 (iii) the transfer of property, business, assets, rights, liabilities, recognitions, contracts of the recognised stoc) exchange, legal proceedings by, or against, the recognised stoc) exchange, whether in the na(e of the recognised stoc) exchange or any trustee or otherwise and any per(ission gi'en to, or by, the recognised stoc) exchange3 (iv) the transfer of e(ployees of a recognised stoc) exchange to another recognised stoc) exchange3 (v) any other (atter re*uired for the purpose of, or in connection with, the corporatisation or de(utualisation, as the case (ay be, of the recognised stoc) exchange3: /4>4(gb): 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (h) 1securities2 include(i) shares, scrips, stoc)s, bonds, debentures, debenture stoc) or other (ar)etable securities of a li)e nature in or of any incorporated co(pany or other body corporate3 !4(ia) deri'ati'e3 (ib) units or any other instru(ent issued by any collecti'e in'est(ent sche(e to the in'estors in such sche(es3:
# Inserted / Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (Second A(end(ent) Act, !!!, Sec %, w0e0f0 #+ %+ !!!0 > Clause (ga) renu(bered as clause (gb) by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 ! Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000
04(ic) security receipt as defined in clause ( Cg) of section % of the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%3: 114(id) units or any other such instru(ent issued to the in'estors under any (utual fund sche(e3: %47xplanation0-6or the re(o'al of doubts, it is hereby declared that ;securities; shall not include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(bined benefit ris) on the life of the persons and in'est(ent by such
persons and issued by an insurer referred to in clause (!) of section % of the Insurance Act, !3> ($ of !3>)3: 35(ie) any certificate or instru(ent (by whate'er na(e called), issued to an in'estor by any issuer being a special purpose distinct entity which possesses any debt or recei'able, including (ortgage debt, assigned to such entity, and ac)nowledging beneficial interest of such in'estor in such debt or recei'able, including (ortgage debt, as the case (ay be3 <
0 Inserted by the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%, Sec0 $ and Schedule, w0r0e0f0 % +#+%00%0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0e0f0 %+ 0+%00$0 % Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, Sec $, w0r0e0f0 0!+0$+%0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, read as under , ;CIA<.7R BI ?ISC7==AE7CHS #0 Dalidati$n&-Eotwithstanding anything contained in any Dudg(ent, decree or order of any Court, .ribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly, any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 0e%eal and #aving#&*( ) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0; 3 Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec %, w0e0f0 %>+"+ %00/0
$4(ii) &o'ern(ent securities3 (iia) such other instru(ents as (ay be declared by the Central &o'ern(ent to be securities3 and: (iii) rights or interest in securities3 "4(i) 1spot deli'ery contract2 (eans a contract which pro'ides for,(a) actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e
town or locality3 (b) transfer of the securities by the depository fro( the account of a beneficial owner to the account of another beneficial owner when such securities are dealt with by a depository3: #4(j) 1stoc) exchange2 (eans(a) any body of indi'iduals, whether incorporated or not, constituted before corporatisation and de(utualisation under sections $A and $8, or (b) a body corporate incorporated under the Co(panies Act, !"# ( of !"#) whether under a sche(e of corporatisation and de(utualisation or otherwise, for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0: /4I ter$ret%tio of 'ert%i /or-! % - e#$re!!io !. "A. Kords and expressions used herein and not defined in this Act but defined in the Co(panies Act, !"# ( of !"#) or the Securities and 7xchange 8oard of India
$ Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, for sub+clause (ii), w0r0e0f0 30+0 + !!%0 " Substituted by the 9epositories Act, !!#, Sec 30 and Schedule, <t0 III, w0r0e0f0 %0+0!+ !!" . <rior to its substitution, clause (i) read as under , N(i) 1spot deli'ery contract2 (eans a contract which pro'ides for the actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e town or locality3J # Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (j) read as under ,N(j) 1stoc) exchange2 (eans any body of indi'iduals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0J / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
Act, !!% ( " of !!%) or the 9epositories Act, !!# (%% of !!#) shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts0: 0(/<=4: (5 1</> (?/@A4=( A$$li'%tio for re'o( itio of !to'6 e#'h% (e!. ). ( ) Any stoc) exchange, which is desirous of being recognised for the purposes of this Act, (ay (a)e an application in the prescribed (anner to the Central &o'ern(ent01: (%) 7'ery application under sub+section ( ) shall contain such particulars as (ay be prescribed, and shall be acco(panied by a copy of the bye+laws of the stoc) exchange for the regulation and control of contracts and also a copy of the rules relating in general to the constitution of the stoc) exchange and in particular, to(a) the go'erning body of such stoc) exchange, its constitution and powers of (anage(ent and the (anner in which its business is to be transacted3 (b) the powers and duties of the office bearers of the stoc) exchange3 (c) the ad(ission into the stoc) exchange of 'arious classes of (e(bers, the *ualifications for (e(bership, and the exclusion, suspension, expulsion and
re+ad(ission of (e(bers therefro( or thereinto3 (d) the procedure for the registration of partnerships as (e(bers of the stoc) exchange in cases where the rules pro'ide for such (e(bership3 and the no(ination and appoint(ent of authorised representati'es and cler)s0 Gr% t of re'o( itio to !to'6 e#'h% (e!. 3. ( ) If the Central &o'ern(ent ! is satisfied, after (a)ing such in*uiry as (ay be necessary in this behalf and after obtaining such further infor(ation, if any, as it (ay re*uire,(a) that the rules and bye+laws of a stoc) exchange applying for registration are in confor(ity with such conditions as (ay be prescribed with a 'iew to ensure fair dealing and to protect in'estors3 (b) that the stoc) exchange is willing to co(ply with any other conditions (including conditions as to the nu(ber of (e(bers) which the Central &o'ern(ent, after consultation with the go'erning body of the stoc) exchange and ha'ing regard to the area ser'ed by the stoc) exchange and its standing and the nature of the securities dealt with by it, (ay i(pose for the purpose of carrying out the obDects of this Act3 and
> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 ! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
(c) that it would be in the interest of the trade and also in the public interest to grant recognition to the stoc) exchange3 it (ay grant recognition to the stoc) exchange subDect to the conditions i(posed upon it as aforesaid and in such for( as (ay be prescribed0 (%) .he conditions which the Central &o'ern(ent %0 (ay prescribe under clause (a) of sub+section ( ) for the grant of recognition to the stoc) exchanges (ay include, a(ong other (atters, conditions relating to,(i) the *ualifications for (e(bership of stoc) exchanges3 (ii) the (anner in which contracts shall be entered into and enforced as between (e(bers3 (iii) the representation of the Central &o'ern(ent on each of the stoc) exchange by such nu(ber of persons not exceeding three as the Central &o'ern(ent (ay no(inate in this behalf3 and (iv) the (aintenance of accounts of (e(bers and their audit by chartered accountants whene'er such audit is re*uired by the Central &o'ern(ent0 (3) 7'ery grant of recognition to a stoc) exchange under this section shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office as of the stoc) exchange is situate, and such recognition shall ha'e effect as fro( the date of its publication in the &aFette of India0 % ($) Eo application for the grant of recognition shall be refused except after gi'ing an opportunity to the stoc) exchange concerned to be heard in the (atter3 and the reasons for such refusal shall be co((unicated to the stoc) exchange in writing0 %% (") Eo rules of a recognised stoc) exchange relating to any of the (atters specified in sub+section (%) of section 3 shall be a(ended except with the appro'al of the
Central &o'ern(ent0%3 "35Cor$or%ti!%tio % - -e.*t*%li!%tio of !to'6 e#'h% (e!. 3A. Cn and fro( the appointed date, all recognised stoc) exchanges (if not corporatised and de(utualised before the appointed date) shall be corporatised and de(utualised in accordance with the pro'isions contained in section $8 ,
%0 <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 % <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %% <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %3 <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 %$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
4ro+i-e- that the Securities and 7xchange 8oard of India (ay, if it is satisfied that any recognised stoc) exchange was pre'ented by sufficient cause fro( being corporatised and de(utualised on or after the appointed date, specify another appointed date in respect of that recognised stoc) exchange and such recognised stoc) exchange (ay continue as such before such appointed date0 ()%lanati$n&*6or the purposes of this section, 1appointed date2 (eans the date which the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, appoint and different appointed dates (ay be appointed for different recognised stoc) exchanges0: "554ro'e-*re for 'or$or%ti!%tio % - -e.*t*%li!%tio . 3;. ( ) All recognised stoc) exchanges referred to in section $A shall, within such ti(e as (ay be specified by the Securities and 7xchange 8oard of India, sub(it a sche(e for corporatisation and de(utualisation for its appro'al , 4ro+i-e- that the Securities and 7xchange 8oard of India, (ay, by notification in the Cfficial &aFette, specify na(e of the recognised stoc) exchange, which had already been corporatised and de(utualised, and such stoc) exchange shall not be re*uired to sub(it the sche(e under this section0 (%) Cn receipt of the sche(e referred to in sub+section ( ), the Securities and 7xchange 8oard of India (ay, after (a)ing such en*uiry as (ay be necessary in this behalf and obtaining such further infor(ation, if any, as it (ay re*uire and if it is satisfied that it would be in the interest of the trade and also in the public interest, appro'e the sche(e with or without (odification0 (3) Eo sche(e under sub+section (%) shall be appro'ed by the Securities and 7xchange 8oard of India if the issue of shares for a lawful consideration or pro'ision of trading rights in lieu of (e(bership card of the (e(bers of a recognised stoc) exchange or pay(ent of di'idends to (e(bers ha'e been proposed out of any reser'es or assets of that stoc) exchange0 ($) Khere the sche(e is appro'ed under sub+section (%), the sche(e so appro'ed shall be published i((ediately by(a) the Securities and 7xchange 8oard of India in the Cfficial &aFette3 (b) the recognised stoc) exchange in such two daily newspapers circulating in India, as (ay be specified by the Securities and 7xchange 8oard of India,
and upon such publication, notwithstanding anything to the contrary contained in this Act or any other law for the ti(e being in force or any agree(ent, award, Dudg(ent, decree or other instru(ent for the ti(e being in force, the sche(e shall ha'e effect and be binding on all persons and authorities including all (e(bers, creditors, depositors and e(ployees of the recognised stoc) exchange and on all
%" Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
persons ha'ing any contract, right, power, obligation or liability with, against, o'er, to, or in connection with, the recognised stoc) exchange or its (e(bers0 (") Khere the Securities and 7xchange 8oard of India is satisfied that it would not be in the interest of the trade and also in the public interest to appro'e the sche(e under sub+section (%), it (ay, by an order, reDect the sche(e and such order of reDection shall be published by it in the Cfficial &aFette , 4ro+i-e- that the Securities and 7xchange 8oard of India shall gi'e a reasonable opportunity of being heard to all the persons concerned and the recognised stoc) exchange concerned before passing an order reDecting the sche(e0 (#) .he Securities and 7xchange 8oard of India (ay, while appro'ing the sche(e under sub+section (%), by an order in writing, restrict(a) the 'oting rights of the shareholders who are also stoc) bro)ers of the reognised stoc) exchange3 (b) the right of shareholders or a stoc) bro)er of the recognised stoc) exchange to appoint the representati'es on the go'erning board of the stoc) exchange3 (c) the (axi(u( nu(ber of representati'es of the stoc) bro)ers of the recognised stoc) exchange to be appointed on the go'erning board of the recognised stoc) exchange, which shall not exceed one+fourth of the total strength of the go'erning board0 (/) .he order (ade under sub+section (#) shall be published in the Cfficial &aFette and on the publication thereof, the order shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#), or any other law for the ti(e being in force, ha'e full effect0 (>) 7'ery recognised stoc) exchange, in respect of which the sche(e for corporatisation or de(utualisation has been appro'ed under sub+section (%), shall, either by fresh issue of e*uity shares to the public or in any other (anner as (ay be specified by the regulations (ade by the Securities and 7xchange 8oard of India %#, ensure that at least fifty+one per cent of its e*uity share capital is held, within twel'e (onths fro( the date of publication of the order under sub+section (/), by the public other than shareholders ha'ing trading rights , 4ro+i-e- that the Securities and 7xchange 8oard of India (ay, on sufficient cause being shown to it and in the public interest, extend the said period by another twel'e (onths0:
ee Securities Contracts (Regulation) (Stoc) 7xchanges and Clearing Corporations) Regulations, %0 %, w0e0f0 %0+0#+%0 % notified vide &aFette Eotification Eo0 =A9+ ERCL&EL%0 %+ 3L0/L 3"$#, 7xtra0, <t0 III, Section $, dtd %0+0#+%0 %0
%#
?ith-r%/%l of re'o( itio .
5. %/4( ): If the Central &o'ern(ent%> is of opinion that the recognition granted to a stoc) exchange under the pro'isions of this Act should, in the interest of the trade or in the public interest, be withdrawn, the Central &o'ern(ent (ay ser'e on the go'erning body of the stoc) exchange a written notice that the Central &o'ern(ent is considering the withdrawal of the recognition for the reasons stated in the notice and after gi'ing an opportunity to the go'erning body to be heard in the (atter, the Central &o'ern(ent (ay withdraw, by notification in the Cfficial &aFette, the recognition granted to the stoc) exchange , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Central &o'ern(ent (ay, after consultation with the stoc) exchange, (a)e such pro'ision as it dee(s fit in the notification of withdrawal or in any subse*uent notification si(ilarly published for the due perfor(ance of any contracts outstanding on that date0 %!4(%) Khere the recognised stoc) exchange has not been corporatised or de(utualised or it fails to sub(it the sche(e referred to in sub+section ( ) of section $8 within the specified ti(e therefor or the sche(e has been reDected by the Securities and 7xchange 8oard of India under sub+section (") of section $8, the recognition granted to such stoc) exchange under section $, shall, notwithstanding anything to the contrary contained in this Act, stand withdrawn and the Central &o'ern(ent shall publish, by notification in the Cfficial &aFette, such withdrawal of recognition , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Securities and 7xchange 8oard of India (ay, after consultation with the stoc) exchange, (a)e such pro'isions as it dee(s fit in the order reDecting the sche(e published in the Cfficial &aFette under sub+section (") of section $80: 4o/er of Ce tr%l Go+er .e t to '%ll for $erio-i'%l ret*r ! or -ire't i 7*irie! to ,e .%-e. 8. ( ) 7'ery recognised stoc) exchange shall furnish to the 304Securities and 7xchange 8oard of India: such periodical returns relating to its affairs as (ay be prescribed0
%/ Section
" renu(bered as sub+section ( ) by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 %> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 30 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(%) 7'ery recognised stoc) exchange and e'ery (e(ber thereof shall (aintain and preser'e for such periods not exceeding fi'e years such boo)s of account, and other docu(ents as the Central &o'ern(ent, after consultation with the stoc) exchange concerned, (ay prescribe in the interest of the trade or in the public interest, and such boo)s of account, and other docu(ents shall be subDect to inspection at all reasonable ti(es 3 4by the Securities and 7xchange 8oard of India:0 (3) Kithout preDudice to the pro'isions contained in sub+sections ( ) and (%), the
3%4Securities
and 7xchange 8oard of India:, if it is satisfied that it is in the interest of the trade or in the public interest so to do, (ay, by order in writing,(a) call upon a recognised stoc) exchange or any (e(ber thereof to furnish in writing such infor(ation or explanation relating to the affairs of the stoc) exchange or of the (e(ber in relation to the stoc) exchange as the 334Securities and 7xchange 8oard of India: (ay re*uire3 or (b) appoint one or (ore persons to (a)e an in*uiry in the prescribed (anner in relation to the affairs of the go'erning body of a stoc) exchange or the affairs of any of the (e(bers of the stoc) exchange in relation to the stoc) exchange and sub(it a report of the result of such in*uiry to the 3$4Securities and 7xchange 8oard of India: within such ti(e as (ay be specified in the order or, in the case of an in*uiry in relation to the affairs of any of the (e(bers of a stoc) exchange, direct the go'erning body to (a)e the in*uiry and sub(it its report to the 3"4Securities and 7xchange 8oard of India:0 ($) Khere an in*uiry in relation to the affairs of a recognised stoc) exchange or the affairs of any of its (e(bers in relation to the stoc) exchange has been underta)en under sub+section (3),(a) e'ery director, (anager, secretary or other officer of such stoc) exchange3 (b) e'ery (e(ber of such stoc) exchange3 (c) if the (e(ber of the stoc) exchange is a fir(, e'ery partner, (anager, secretary or other officer of the fir(3 and (d) e'ery other person or body of persons who has had dealings in the course of business with any of the persons (entioned in clauses ( a), (b) and (c), whether directly or indirectly3
Substituted for ;by the Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3% Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 33 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3" Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
3
shall be bound to produce before the authority (a)ing the in*uiry all such boo)s of account, and other docu(ents in his custody or power relating to or ha'ing a bearing on the subDect+(atter of such in*uiry and also to furnish the authorities within such ti(e as (ay be specified with any such state(ent or infor(ation relating thereto as (ay be re*uired of hi(0 )8A *%l re$ort! to ,e f*r i!he- to Ce tr%l Go+er .e t ,> !to'6 e#'h% (e!. 7. 7'ery recognised stoc) exchange shall furnish the Central &o'ern(ent with a copy of the annual report, and such annual report shall contain such particulars as (ay be prescribed0 )754o/er of re'o( i!e- !to'6 e#'h% (e to .%6e r*le! re!tri'ti ( +oti ( ri(ht!, et'. 7A. ( ) A recognised stoc) exchange (ay (a)e rules or a(end any rules (ade by it
to pro'ide for all or any of the following (atters, na(ely ,(a) the restriction of 'oting rights to (e(bers only in respect of any (atter placed before the stoc) exchange at any (eeting3 (b) the regulation of 'oting rights in respect of any (atter placed before the stoc) exchange at any (eeting so that each (e(ber (ay be entitled to ha'e one 'ote only, irrespecti'e of his share of the paid+up e*uity capital of the stoc) exchange3 (c) the restriction on the right of a (e(ber to appoint another person as his proxy to attend and 'ote at a (eeting of the stoc) exchange3 (d) such incidental, conse*uential and supple(entary (atters as (ay be necessary to gi'e effect to any of the (atters specified in clauses ( a), (b) and (c)0 (%) Eo rules of a recognised stoc) exchange (ade or a(ended in relation to any (atter referred to in clauses (a) to (d) of sub+section ( ) shall ha'e effect until they ha'e been appro'ed by the Central &o'ern(ent 3> and published by that &o'ern(ent in the Cfficial &aFette and, in appro'ing the rules so (ade or a(ended, the Central &o'ern(ent (ay (a)e such (odifications therein as it thin)s fit, and on such publication, the rules as appro'ed by the Central &o'ern(ent shall be dee(ed to ha'e been 'alidly (ade, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#)0:
3# <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 3/ Inserted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec %, w0e0f0 0>+ %+ !"!0 3> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
4o/er of Ce tr%l Go+er .e t )9 to -ire't r*le! to ,e .%-e or to .%6e r*le!. :. ( ) Khere, after consultation with the go'erning bodies of stoc) exchanges generally or with the go'erning body of any stoc) exchange in particular, the Central &o'ern(ent is of opinion that it is necessary or expedient so to do, it (ay, by order in writing together with a state(ent of the reasons therefor, direct recognised stoc) exchanges generally or any recognised stoc) exchange in particular, as the case (ay be, to (a)e any rules or to a(end any rules already (ade in respect of all or any of the (atters specified in sub+section (%) of section 3 within a period of $04two (onths: fro( the date of the order0 (%) If any recognised stoc) exchange fails or neglects to co(ply with any order (ade under sub+section ( ) within the period specified therein, the Central &o'ern(ent (ay (a)e the rules for, or a(end the rules (ade by, the recognised stoc) exchange, either in the for( proposed in the order or with such (odifications thereof as (ay be agreed to between the stoc) exchange and the Central &o'ern(ent0 (3) Khere in pursuance of this section any rules ha'e been (ade or a(ended, the rules so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette or &aFettes of the State or States in which the principal office or offices of the recognised stoc) exchange or exchanges is or are situate, and, on the publication thereof in the &aFette of India, the rules so (ade or a(ended shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# (
of !"#), or in any other law for the ti(e being in force, ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange or stoc) exchanges, as the case (ay be0 315Cle%ri ( 'or$or%tio . :A. ( ) A recognised stoc) exchange (ay, with the prior appro'al of the Securities and 7xchange 8oard of India, transfer the duties and functions of a clearing house to a clearing corporation, being a co(pany incorporated under the Co(panies Act, !"# ( of !"#), for the purpose of(a) the periodical settle(ent of contracts and differences thereunder3 (b) the deli'ery of, and pay(ent for, securities3 (c) any other (atter incidental to, or connected with, such transfer0 (%) 7'ery clearing corporation shall, for the purpose of transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( ),
3! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 $0 Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec !, w0e0f0 %"+ 0 + !!"0 $ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0
(a)e bye+laws and sub(it the sa(e to the Securities and 7xchange 8oard of India for its appro'al0 (3) .he Securities and 7xchange 8oard of India (ay, on being satisfied that it is in the interest of the trade and also in the public interest to transfer the duties and functions of a clearing house to a clearing corporation, grant appro'al to the byelaws sub(itted to it under sub+section (%) and appro'e the transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( )0 ($) .he pro'isions of sections $, ", #, /, >, !, 0, and % shall, as far as (ay be, apply to a clearing corporation referred to in sub+section ( ) as they apply in relation to a recognised stoc) exchange0: 4o/er of re'o( i!e- !to'6 e#'h% (e! to .%6e ,>e0l%/!. 9. ( ) Any recognised stoc) exchange (ay, subDect to the pre'ious appro'al of the $%4Securities and 7xchange 8oard of India:, (a)e bye+laws for the regulation and control of contracts0 (%) In particular, and without preDudice to the generality of the foregoing power, such bye+laws (ay pro'ide for , (a) the opening and closing of (ar)ets and the regulation of the hours of trade3 (b) a clearing house for the periodical settle(ent of contracts and differences thereunder, the deli'ery of and pay(ent for securities, the passing on of deli'ery orders and the regulation and (aintenance of such clearing house3 (c) the sub(ission to the $34Securities and 7xchange 8oard of India: by the clearing house as soon as (ay be after each periodical settle(ent of all or any of the following particulars as the $$4Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, re*uire, na(ely ,(i) the total nu(ber of each category of security carried o'er fro( one settle(ent period to another3 (ii) the total nu(ber of each category of security, contracts in respect of
which ha'e been s*uared up during the course of each settle(ent period3 (iii) the total nu(ber of each category of security actually deli'ered at each clearing3
$% Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(d) the publication by the clearing house of all or any of the particulars sub(itted to the $"4Securities and 7xchange 8oard of India: under clause ( c) subDect to the directions, if any, issued by the $#4Securities and 7xchange 8oard of India: in this behalf3 (e) the regulation or prohibition of blan) transfers3 (f) the nu(ber and classes of contracts in respect of which settle(ents shall be (ade or differences paid through the clearing house3 (g) the regulation, or prohibition of b!dla# or carry+o'er facilities3 (h) the fixing, altering or postponing of days for settle(ents3 (i) the deter(ination and declaration of (ar)et rates, including the opening, closing highest and lowest rates for securities3 (j) the ter(s, conditions and incidents of contracts, including the prescription of (argin re*uire(ents, if any, and conditions relating thereto, and the for(s of contracts in writing3 (k) the regulation of the entering into, (a)ing, perfor(ance, recession and ter(ination, of contracts, including contracts between (e(bers or between a (e(ber and his constituent or between a (e(ber and a person who is not a (e(ber, and the conse*uences of default or insol'ency on the part of a seller or buyer or inter(ediary, the conse*uences of a breach or o(ission by a seller or buyer, and the responsibility of (e(bers who are not parties to such contracts3 (l) the regulation of taravani business including the placing of li(itations thereon3 (") the listing of securities on the stoc) exchange, the inclusion of any security for the purpose of dealings and the suspension or withdrawal of any such securities, and the suspension or prohibition of trading in any specified securities3 (n) the (ethod and procedure for the settle(ent of clai(s or disputes, including settle(ent by arbitration3 ($) the le'y and reco'ery of fees, fines and penalties3 (%) the regulation of the course of business between parties to contracts in any capacity3 (+) the fixing of a scale of bro)erage and other charges3 (r) the (a)ing, co(paring, settling and closing of bargains3 (#) the e(ergencies in trade which (ay arise, whether as a result of pool or syndicated operations or cornering or otherwise, and the exercise of powers in
$" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%,
Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $# Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
such e(ergencies, including the power to fix (axi(u( and (ini(u( prices for securities3 (t) the regulation of dealings by (e(bers for their own account3 (!) the separation of the functions of Dobbers and bro)ers3 (v) the li(itations on the 'olu(e of trade done by any indi'idual (e(ber in exceptional circu(stances3 (.) the obligation of (e(bers to supply such infor(ation or explanation and to produce such docu(ents relating to the business as the go'erning body (ay re*uire0 (3) .he bye+laws (ade under this section (ay(a) specify the bye+laws the contra'ention of which shall (a)e a contract entered into otherwise than in accordance with the bye+laws 'oid under sub+section ( ) of section $3 (b) pro'ide that the contra'ention of any of the bye+laws shall render the (e(ber concerned liable to one or (ore of the following punish(ents, na(ely ,(i) fine, (ii) expulsion fro( (e(bership, (iii) suspension fro( (e(bership for a specified period, (iv) any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney0 ($) Any bye+laws (ade under this section shall be subDect to such conditions in regard to pre'ious publication as (ay be prescribed, and, when appro'ed by the $/4Securities and 7xchange 8oard of India:, shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and shall ha'e effect as fro( the date of its publication in the &aFette of India , 4ro+i-e- that if the $>4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+law should be (ade i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0
$/ Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $> Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4o/er of 395Se'*ritie! % - E#'h% (e ;o%r- of I -i%< to .%6e or %.e - ,>e0l%/! of re'o( i!e- !to'6 e#'h% (e!. 1=. ( ) .he "04Securities and 7xchange 8oard of India: (ay, either on a re*uest in writing recei'ed by it in this behalf fro( the go'erning body of a recognised stoc) exchange or on its own (otion, if it is satisfied after consultation with the go'erning body of the stoc) exchange that it is necessary or expedient so to do and after recording its reasons for so doing, (a)e bye+laws for all or any of the (atters specified in section ! or a(end any bye+laws (ade by such stoc) exchange under that section0
(%) Khere in pursuance of this section any bye+laws ha'e been (ade or a(ended the bye+laws so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and on the publication thereof in the &aFette of India, the bye+laws so (ade or a(ended shall ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange concerned0 (3) Eotwithstanding anything contained in this section, where the go'erning body of a recognised stoc) exchange obDects to any bye+laws (ade or a(ended under this section by the " 4Securities and 7xchange 8oard of India: on its own (otion, it (ay, within "%4two (onths: of the publication thereof in the &aFette of India under subsection (%), apply to the "34Securities and 7xchange 8oard of India: for re'ision thereof, and the "$4Securities and 7xchange 8oard of India: (ay, after gi'ing an opportunity to the go'erning body of the stoc) exchange to be heard in the (atter, re'ise the bye+laws so (ade or a(ended, anywhere any bye+laws so (ade or a(ended are re'ised as a result of any action ta)en under this sub+section, the byelaws so re'ised shall be published and shall beco(e effecti'e as pro'ided in subsection (%)0 ($) .he (a)ing or the a(end(ent or re'ision of any bye+laws under this section shall in all cases be subDect to the condition of pre'ious publication ,
$! Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "0 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 " Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "% Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec %0, w0e0f0 %"+ 0 + !!"0 "3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4ro+i-e- that if the ""4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+laws should be (ade, a(ended or re'ised i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0 4o/er of Ce tr%l Go+er .e t 58 to !*$er!e-e (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e. 11. ( ) Kithout preDudice to any other powers 'ested in the Central &o'ern(ent under this Act, where the Central &o'ern(ent is of opinion that the go'erning body of any recognised stoc) exchange should be superseded, then, notwithstanding anything contained in any other law for the ti(e being in force, in the Central &o'ern(ent (ay ser'e on the go'erning body a written notice that the Central &o'ern(ent is considering the supersession of the go'erning body for the reasons specified in the notice and after gi'ing an opportunity to the go'erning body to be
heard in the (atter, it (ay, by notification in the Cfficial &aFette, declare the go'erning body of such stoc) exchange to be superseded, and (ay appoint any person or persons to exercise and perfor( all the powers and duties of the go'erning body, and, where (ore persons than one are appointed, (ay appoint one of such persons to be the chair(an and another to be the 'ice+chair(an thereof0 (%) Cn the publication of a notification in the Cfficial &aFette under sub+section ( ), the following conse*uences shall ensue, na(ely,(a) the (e(bers of the go'erning body which has been superseded shall, as fro( the date of the notification of supersession, cease to hold office as such (e(bers3 (b) the person or persons appointed under sub+section ( ) (ay exercise and perfor( all the powers and duties of the go'erning body which has been superseded3 (c) all such property of the recognised stoc) exchange as the person or persons appointed under sub+section ( ) (ay, by order in writing, specify in this behalf as being necessary for the purpose of enabling hi( or the( to carry on the business of the stoc) exchange, shall 'est in such person or persons0 (3) Eotwithstanding anything to the contrary contained in any law or the rules or bye+laws of the recognised stoc) exchange the go'erning body of which is superseded under sub+section ( ), the person or persons appointed under that subsection shall hold office for such period as (ay be specified in the notification published under that sub+section and the Central &o'ern(ent (ay fro( ti(e to ti(e, by li)e notification, 'ary such period0
"" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "# <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0
($) .he Central &o'ern(ent (ay at any ti(e before the deter(ination of the period of office of any person or persons appointed under this section call upon the recognised stoc) exchange to re+constitute the go'erning body in accordance with its rules and on such re+constitution all the property of the recognised stoc) exchange which has 'ested in, or was in the possession of, the person or persons appointed under sub+section ( ), shall re+'est or 'est, as the case (ay be, in the go'erning body so re+constituted , 4ro+i-e- that until a go'erning body is so re+constituted, the person or persons appointed under sub+section ( ) shall continue to exercise and perfor( their powers and duties0 4o/er57 to !*!$e - ,*!i e!! of re'o( i!e- !to'6 e#'h% (e!. 1". If in the opinion of the Central &o'ern(ent an e(ergency has arisen and for the purpose of (eeting the e(ergency the Central &o'ern(ent considers it expedient so to do, it (ay, by notification in the Cfficial &aFette, for reasons to be set out therein, direct a recognised stoc) exchange to suspend such of its business for such period not exceeding se'en days and subDect to such conditions as (ay be specified in the notification, and, if, in the opinion of the Central &o'ern(ent, the interest of
the trade or the public interest re*uires that the period should be extended, (ay, by li)e notification extend the said period fro( ti(e to ti(e , 4ro+i-e- that where the period of suspension is to be extended beyond the first period, no notification extending the period of suspension shall be issued unless the go'erning body of the ">4recognised stoc) exchange: has been gi'en an opportunity of being heard in the (atter0 "!54o/er to i!!*e -ire'tio !. 1"A. If, after (a)ing or causing to be (ade an in*uiry, the Securities and 7xchange 8oard of India is satisfied that it is necessary(a) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (b) to pre'ent the affairs of any recognised stoc) exchange or clearing corporation, or such other agency or person, pro'iding trading or clearing or settle(ent facility in respect of securities, being conducted in a (anner detri(ental to the interests of in'estors or securities (ar)et3 or (c) to secure the proper (anage(ent of any such stoc) exchange or clearing corporation or agency or person, referred to in clause ( b),
"/ <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 "> Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 "! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0
it (ay issue such directions,(i) to any stoc) exchange or clearing corporation or agency or person referred to in clause (b) or any person or class of persons associated with the securities (ar)et3 or (ii) to any co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 8=5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< /<410A/1 A45 <81:<4 :4 (/A0:1:( Co tr%'t! i otifie- %re%! ille(%l i 'ert%i 'ir'*.!t% 'e!. 1). If the Central &o'ern(ent# is satisfied, ha'ing regard to the nature or the 'olu(e of transactions in securities in any #%4State or States or area: that it is necessary so to do, it (ay, by notification in the Cfficial &aFette, declared this section to apply to such #34State or States or area:, and thereupon e'ery contract in such #$4State or States or area: which is entered into after the date of the notification otherwise than #"4between (e(bers of a recognised stoc) exchange or recognised stoc) exchanges: in such ##4State or States or area: or through or with such (e(ber shall be illegal ,
#0 I #
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 #% Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #3 Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #$ Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$ for ;between (e(bers of a recognised stoc) exchange; & ## Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0
#/54ro+i-e-
that any contract entered into between (e(bers of two or (ore recognised stoc) exchanges in such State or States or area, shall(i) be subDect to such ter(s and conditions as (ay be stipulated by the respecti'e stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India3 (ii) re*uire prior per(ission fro( the respecti'e stoc) exchanges if so stipulated by the stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India0: #>4A--itio %l tr%-i ( floor. 1)A. A stoc) exchange (ay establish additional trading floor with the prior appro'al of the Securities and 7xchange 8oard of India in accordance with the ter(s and conditions stipulated by the said 8oard0 ()%lanati$n , 6or the purposes of this section, 1additional trading floor2 (eans a trading ring or trading facility offered by a recognised stoc) exchange outside its area of operation to enable the in'estors to buy and sell securities through such trading floor under the regulatory fra(ewor) of that stoc) exchange0: Co tr%'t! i otifie- %re%! to ,e +oi- i 'ert%i 'ir'*.!t% 'e!. 13. ( ) Any contract entered into in any State or area specified in the notification under section 3 which is in contra'ention of any of the bye+laws specified in that behalf under clause (a) of sub+section (3) of section ! shall be 'oid , (i) as respects the rights of any (e(ber of the recognised stoc) exchange who has entered into such contract in contra'ention of any such bye+law, and also (ii) as respects the rights of any other person who has )nowingly participated in the transaction entailing such contra'ention0 (%) Eothing in sub+section ( ) shall be construed to affect the right of any person other than a (e(ber of the recognised stoc) exchange to enforce any such contract or to reco'er any su( under or in respect of such contract if such person had no )nowledge that the transaction was in contra'ention of any of the bye+laws specified in clause (a) of sub+section (3) of section !0 @e.,er! .%> ot %'t %! $ri 'i$%l! i 'ert%i 'ir'*.!t% 'e!. 15. Eo (e(ber of a recognised stoc) exchange shall in respect of any securities enter into any contract as a principal with any person other than a (e(ber of a recognised stoc) exchange, unless he has secured the consent or authority of such
#/ Inserted #> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (A(end(ent) Act, !!", Sec % , w0e0f0 %"+0 + !!"0
person and discloses in the note, (e(orandu( or agree(ent of sale or purchase that he is acting as a principal , 4ro+i-e- that where the (e(ber has secured the consent or authority of such person otherwise than in writing he shall secure written confir(ation by such person or such consent or authority within three days fro( the date of the contract , 4ro+i-e- f*rther that no such written consent or authority of such person shall be necessary for closing out any outstanding contract entered into by such person in accordance with the bye+laws, if the (e(ber discloses in the note, (e(orandu( or agree(ent of sale or purchase in respect of such closing out that he is acting as a principal0 4o/er89 to $rohi,it 'o tr%'t! i 'ert%i '%!e!. 18. ( ) If the Central &o'ern(ent is of opinion that it is necessary to pre'ent undesirable speculation in specified securities in any State or area, it (ay, by notification in the Cfficial &aFette, declare that no person in the State or area specified in the notification shall, sa'e with the per(ission of the Central &o'ern(ent, enter into any contract for the sale or purchase of any security specified in the notification except to the extent and in the (anner, if any, specified therein0 (%) All contracts in contra'ention of the pro'isions of sub+section ( ) entered into after the date of notification issued thereunder shall be illegal0 Li'e !i ( of -e%ler! i !e'*ritie! i 'ert%i %re%!. 17. ( ) SubDect to the pro'isions of sub+section (3) and to the other pro'isions contained in this Act, no person shall carry on or purport to carry on, whether on his own behalf or on behalf of any other person, the business of dealing in securities in any State or area to which section 3 has not been declared to apply and to which the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, declare this section to apply, except under the authority of a /04licence granted by the Securities and 7xchange 8oard of India: in this behalf0 (%) Eo notification under sub+section ( ) shall be issued with respect to any State or area unless the Central &o'ern(ent is satisfied, ha'ing regard to the (anner in which securities are being dealt with in such State or area, that it is desirable or
#! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 <owers are exercisable by R8I also 'ide &o'ern(ent of India Eotification Eo0 >3 (7), 9ated 0 +03+%000 in relation to any contracts in go'ern(ent securities, (oney (ar)et securities etc0 /0 Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% for ;licence granted by the Central &o'ern(ent;0
expedient in the interest of the trade or in the public interest that such dealings should be regulated by a syste( of licensing0 (3) .he restrictions i(posed by sub+section ( ) in relation to dealings in securities shall not apply to the doing of anything by or on behalf of a (e(ber of any recognised stoc) exchange0
7154*,li'
i!!*e % - li!ti ( of !e'*ritie! referre- to i !*,0'l%*!e ( ie) of 'l%*!e (h)
of !e'tio ". 17A. ( ) Kithout preDudice to the pro'isions contained in this Act or any other law for the ti(e being in force, no securities of the nature referred to in sub+clause (ie) of clause (h) of section % shall be offered to the public or listed on any recognised stoc) exchange unless the issuer fulfils such eligibility criteria and co(plies with such other re*uire(ents as (ay be specified by regulations (ade by the Securities and 7xchange 8oard of India0 (%) 7'ery issuer referred to in sub+clause (ie) of clause (h) of section % intending to offer the certificates or instru(ents referred therein to the public shall (a)e an application, before issuing the offer docu(ent to the public, to one or (ore recognised stoc) exchanges for per(ission for such certificates or instru(ents to be listed on the stoc) exchange or each such stoc) exchange0 (3) Khere the per(ission applied for under sub+section (%) for listing has not been granted or refused by the recognised stoc) exchanges or any of the(, the issuer shall forthwith repay all (oneys, if any, recei'ed fro( applicants in pursuance of the offer docu(ent, and if any such (oney is not repaid within eight days after the issuer beco(es liable to repay it, the issuer and e'ery director or trustee thereof, as the case (ay be, who is in default shall, on and fro( the expiry of the eighth day, be Dointly and se'erally liable to repay that (oney with interest at the rate of fifteen per cent per annu(0 7xplanation0-In rec)oning the eighth day after another day, any inter'ening day which is a public holiday under the Eegotiable Instru(ents Act, >> (%# of >> ), shall be disregarded, and if the eighth day (as so rec)oned) is itself such a public holiday, there shall for the said purposes be substituted the first day thereafter which is not a holiday0 ($) All the pro'isions of this Act relating to listing of securities of a public co(pany on a recognised stoc) exchange shall, (utatis (utandis, apply to the listing of the securities of the nature referred to in sub+clause (ie) of clause (h) of section % by the issuer, being a special purpose distinct entity0 <
Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec 3, w0e0f0 %>+0"+ %00/0
/
E#'l*!io of !$ot -eli+er> 'o tr%'t! fro. !e'tio ! 1), 13, 15 % - 17. 1:. ( ) Eothing contained in sections 3, $, " and / shall apply to spot deli'ery contracts0 (%) Eotwithstanding anything contained in sub+section ( ), if the Central &o'ern(ent/% is of opinion that in the interest of the trade or in the public interest it is expedient to regulate and control the business of dealing in spot deli'ery contracts also in any State or area (whether section 3 has been declared to apply to that State or area or not), it (ay, by notification in the Cfficial &aFette, declare that the pro'isions of section / shall also apply to such State or area in respect of spot deli'ery contracts generally or in respect of spot deli'ery contracts for the sale or purchase of such securities as (ay be specified in the notification, and (ay also specify the (anner in which, and the extent to which, the pro'isions of that section
shall so apply0 /34Co tr%'t! i -eri+%ti+e. 1:A. Eotwithstanding anything contained in any other law for the ti(e being in force, contracts in deri'ati'e shall be legal and 'alid if such contracts are(a) traded on a recognised stoc) exchange3 (b) settled on the clearing house of the recognised stoc) exchange, in accordance with the rules and bye+laws of such stoc) exchange0: Sto'6 e#'h% (e! other th% re'o( i!e- !to'6 e#'h% (e! $rohi,ite-. 19. ( ) Eo person shall, except with the per(ission of the Central &o'ern(ent, organise or assist in organising or be a (e(ber of any stoc) exchange (other than a recognised stoc) exchange) for the purpose of assisting in, entering into or perfor(ing any contracts in securities0 (%) .his section shall co(e into force in any State or area on such date as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 4rohi,itio of o$tio ! i !e'*ritie!. "=. 734GGGGG:
/% <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 /3 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec 3, w0e0f0 %%+%+%0000 /$ C(itted by the Securities =aws (A(end(ent) Act, !!", Sec %%, w0e0f0 %"+0 + !!"0 <rior to o(ission, section %0 read as under , 1%00 8r$hibiti$n $f $%ti$n# in #ec!ritie#&-( ) Eotwithstanding anything contained in this Act or in any other law for the ti(e being in force, all options in securities entered into after the co((ence(ent of this Act shall be illegal0
9: 1:4= <E (/A0:1:( 754GGG: /#4Co -itio ! for li!ti (. "1. Khere securities are listed on the application of any person in any recognised stoc) exchange, such person shall co(ply with the conditions of the listing agree(ent with that stoc) exchange&: 775Deli!ti ( of !e'*ritie!. "1A. ( ) A recognised stoc) exchange (ay delist the securities, after recording the reasons therefor, fro( any recognised stoc) exchange on any of the ground or grounds as (ay be prescribed under this Act , 4ro+i-e- that the securities of a co(pany shall not be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) A listed co(pany or an aggrie'ed in'estor (ay file an appeal before the Securities Appellate .ribunal against the decision of the recognised stoc) exchange delisting the securities within fifteen days fro( the date of the decision of the recognised stoc) exchange delisting the securities and the pro'isions of sections %%8 to %%7 of this Act, shall apply, as far as (ay be, to such appeals , 4ro+i-e- that the Securities Appellate .ribunal (ay, if it is satisfied that the co(pany was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding one (onth0:
(%) Any option in securities which has been entered into before such co((ence(ent and which re(ains to be perfor(ed, whether wholly or in part, after such co((ence(ent shall, to that
extent, beco(e 'oid02 /" Kords 18O <H8=IC CC?<AEI7S2 o(itted by the Securities =aws (A(end(ent) Act, !!!, Sec $, w0e0f0 %%+0%+%0000 /# Substituted by the Securities =aws (A(end(ent) Act, !!", Sec 33, w0e0f0 %"+0 + !!" . <rior to substitution, section % read as under , 1% 0 8$.er t$ c$"%el li#ting $f #ec!ritie# bF %!blic c$"%anie#& -Eotwithstanding anything contained in any other law for the ti(e being in force, if the Securities and 7xchange 8oard of India is of opinion, ha'ing regard to the nature of the securities issued by any public co(pany as defined in the Co(panies Act, !"# ( of !"#), or to the dealings in the(, that it is necessary or expedient in the interest of the trade or in the public interest so to do, it (ay re*uire the co(pany, after gi'ing it an opportunity of being heard in the (atter, to co(ply with such re*uire(ents as (ay be prescribed with respect to the listing of its securities on any recognised stoc) exchange02 // Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec >, w0r0e0f0 %+ 0+%00$0
7:5Ri(ht
of %$$e%l %(%i !t ref*!%l of !to'6 e#'h% (e! to li!t !e'*ritie! of $*,li' 'o.$% ie!. 79"". Khere a recognised stoc) exchange acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any public co(pany >04or collecti'e in'est(ent sche(e:, the co(pany > 4or sche(e: shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( ) of section /3 of the Co(panies Act, !"# ( of !"#) (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Central &o'ern(ent (ay, on sufficient cause being shown, allow, appeal to the Central &o'ern(ent against such refusal, o(ission or failure, as the case (ay be, and thereupon the Central &o'ern(ent (ay, after gi'ing the stoc) exchange an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange, or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Central &o'ern(ent sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Central &o'ern(ent: , >%44ro+i-e- that no appeal shall be preferred against refusal, o(ission or failure, as the case (ay be, under this section on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!0: :)5Ri(ht of %$$e%l to Se'*ritie! A$$ell%te Tri,* %l %(%i !t ref*!%l of !to'6 e#'h% (e to li!t !e'*ritie! of $*,li' 'o.$% ie!.
/> Substituted
by .he Co(panies (A(end(ent) Act, !/$ (Act Eo0 $ of !/$), Sec $%, w0e0f0 0 + 0%+ !/"0 /! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the
&aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 >0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%00003 Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 > Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%0000 >% Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec $, w0e0f0 #+ %+ !!!0 >3 Sections %%A, %%8, %%C, %%9, %%7 and %%6 inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!!& 7arlier section %%A was inserted by .he
""A. ( ) Khere a recognised stoc) exchange, acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any co(pany, the co(pany shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( A) of section /3 of the Co(panies Act, !"# ( of !"#), (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Securities Appellate .ribunal (ay, on sufficient cause being shown, allow, appeal to the Securities Appellate .ribunal ha'ing Durisdiction in the (atter against such refusal, o(ission or failure, as the case (ay be, and thereupon the Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange, an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange3 or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Securities Appellate .ribunal sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Securities Appellate .ribunal0 (%) 7'ery appeal under sub+section ( ) shall be in such for( and be acco(panied by such fee as (ay be prescribed0 (3) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 ($) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: :354ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. "";. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of
Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec %, w0e0f0 /+ 0 + !>#, and o(itted by the 9epositories Act, !!#, Sec 30 and Sch0, <t0III, w0r0e0f0 %0+0!+ !!"0 >$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath 3 (b) re*uiring the disco'ery and production of docu(ents 3 (c) recei'ing e'idence on affida'its 3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents 3 (e) re'iewing its decisions 3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte ; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0: :55Ri(ht to le(%l re$re!e t%tio . ""C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of sub+section ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of subsection ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of
>" Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
!"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, vakil or an attorney of any Iigh Court, and includes a pleader in practice0: :85Li.it%tio . ""D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0: :75Ci+il 'o*rt ot to h%+e G*ri!-i'tio .
""E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0: ::5A$$e%l to S*$re.e Co*rt. ""2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order, 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: 8(4A91:( A45 80</(5A0( 4e %ltie!. "). ( ) Any person who+
># Inserted >/ Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & >> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec !, w0r0e0f0 %+ 0+%00$0 7arlier section %%6 as inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", read as under,+ 1""2. A$$e%l to Di(h Co*rt.+Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order , 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
(a) without reasonable excuse (the burden of pro'ing which shall be on hi() fails to co(ply with any re*uisition (ade under sub+section ($) of section #3 or (b) enters into any contract in contra'ention of any of the pro'isions contained in section 3 or section #3 or (c) contra'enes the pro'isions contained in >!5section / or section /A<, or section !3 or 90 4(d) enters into any contract in deri'ati'e in contra'ention of section >A or the rules (ade under section 303: (e) owns or )eeps a place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act and )nowingly per(its such place to be used for such purposes3 or (f) (anages, controls, or assists in )eeping any place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act or at which contracts are recorded or adDusted or rights or liabilities arising out of contracts are adDusted, regulated or enforced in any (anner whatsoe'er3 or (g) not being a (e(ber of a recognised stoc) exchange or his agent authorised as
such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section / wilfully represents to or induces any person to belie'e that contracts can be entered into or perfor(ed under this Act through hi(3 or (h) not being a (e(ber of a recognised stoc) exchange or his agent authorised as such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section /, can'asses, ad'ertises or touts in any (anner either for hi(self or on behalf of any other persons for any business connected with contracts in contra'ention of any of the pro'isions of this Act3 or (i) Doins, gathers or assists in gathering at any place other than the place of business specified in the bye+laws of a recognised stoc) exchange any person or persons for (a)ing bids or offers or for entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act3 ! 4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which
>! Inserted
by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec $, w0e0f0 %>+0"+ %00/ for ;section /;0 !0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec #, w0e0f0 %%+0%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 ! Substituted for 1shall, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0
(ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: (%) Any person who enters into any contract in contra'ention of the pro'isions contained in section " !%4or who fails to co(ply with the pro'isions of !34section % or section % A: or with the orders of: or section %% !$4or with the orders of the Securities Appellate .ribunal: !"4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 9854e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. ")A. Any person, who is re*uired under this Act or any rules (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to a recognised stoc) exchange, fails to furnish the sa(e within the ti(e specified therefor in the listing agree(ent or conditions or bye+laws of the recognised stoc) exchange, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to (aintain boo)s of account or records, as per the listing agree(ent or conditions, or bye+laws of a recognised stoc) exchange, fails to (aintain the sa(e, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0:
9754e
%lt> for f%il*re ,> % > $er!o to e ter i to % %(ree.e t /ith 'lie t!. ");. If any person, who is re*uired under this Act or any bye+laws of a recognised stoc) exchange (ade thereunder, to enter into an agree(ent with his client, fails to enter into such an agree(ent, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0:
!% Substituted
for 1or who fails to co(ply with the orders of the Securities and 7xchange 8oard of India under section % 2 by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 <rior to !!", ;Securities and 7xchange 8oard of India under section % or Central &o'ern(ent under section %%; were substituted for ;Central &o'ern(ent under section % or section %%; vide .he Schedule, <art II of Securities and 7xchange 8oard of India Act, !!%, w0e0f0 30+0 + !!%0 !3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec #, w0e0f0 #+ %+ !!!0 !" Substituted for 1shall, on con'iction, be punishable with fine which (ay extend to one thousand rupees2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !# Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$ & !/ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$0
9:54e
%lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. ")C. If any stoc) bro)er or sub+bro)er or a co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, after ha'ing been called upon by the Securities and 7xchange 8oard of India or a recognised stoc) exchange in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e stipulated by the Securities and 7xchange 8oard of India or a recognised stoc) exchange, he or it shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 9954e %lt> for f%il*re to !e(re(%te !e'*ritie! or .o e>! of 'lie t or 'lie t!. ")D. If any person, who is registered under section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%) as a stoc) bro)er or sub+bro)er, fails to segregate securities or (oneys of the client or clients or uses the securities or (oneys of a client or clients for self or for any other client, he shall be liable to a penalty not exceeding one crore rupees0: 1==54e %lt> for f%il*re to 'o.$l> /ith $ro+i!io of li!ti ( 'o -itio ! or -eli!ti ( 'o -itio ! or (ro* -!. ")E. If a co(pany or any person (anaging collecti'e in'est(ent sche(e or (utual fund, fails to co(ply with the listing conditions or delisting conditions or grounds or co((its a breach thereof, it or he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0: 1=154e %lt> for e#'e!! -e.%teri%li!%tio or -eli+er> of * li!te- !e'*ritie!. ")2. If any issuer de(aterialises securities (ore than the issued securities of a co(pany or deli'ers in the stoc) exchanges the securities which are not listed in the recognised stoc) exchange or deli'ers securities where no trading per(ission has been gi'en by the recognised stoc) exchange, he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0:
!> Inserted !! Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 00 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0
%+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0
1="54e
%lt> for f%il*re to f*r i!h $erio-i'%l ret*r !, et'. ")G. If a recognised stoc) exchange fails or neglects to furnish periodical returns to the Securities and 7xchange 8oard of India or fails or neglects to (a)e or a(end its rules or bye+laws as directed by the Securities and 7xchange 8oard of India or fails to co(ply with directions issued by the Securities and 7xchange 8oard of India, such recognised stoc) exchange shall be liable to a penalty which (ay extend to twenty+fi'e crore rupees0: 1=)54e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. ")D. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or articles or bye+ laws or the regulations of the recognised stoc) exchange or directions issued by the Securities and 7xchange 8oard of India for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 1=354o/er to %-G*-i'%te. ")0I. ( ) 6or the purpose of adDudging under sections %3A, %38, %3C, %39, %37, %36, %3& and %3I, the Securities and 7xchange 8oard of India shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0: 1=552%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. ")E. Khile adDudging the *uantu( of penalty under section %3+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3
0% Inserted 03 Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec 0$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0" Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 , w0r0e0f0 , w0r0e0f0 , w0r0e0f0
%+ %+ %+ %+
0+%00$0 0+%00$0 0+%00$0 0+%00$0
(b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0: 1=85 Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!.
")EA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 1"A or !e'tio ")0I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%tefor the %lle(e- -ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re %! !$e'ifie,> the ;o%r- * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")L %(%i !t % > or-er $%!!e- ,> the ;o%ror %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 1=75Re'o+er> of %.o* t!. ")E;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 1"A or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H
0# I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30"==7) 0/ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %!
.%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - ThirS'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")L of thi! A't. (") The re'o+er> offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ())Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 0'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 1"A, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1),(") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 1=:5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. ")F. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: 1=95A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")L. ( ) Any person aggrie'ed, by the order or decision of the recogniFed stoc) exchange or the adDudicating officer or any order (ade by the Securities and 7xchange 8oard of India under section $8, (ay prefer an appeal before the Securities Appellate .ribunal and the pro'isions of sections %%8, %%C, %%9 and %%7 of this Act, shall apply, as far as (ay be, to such appeals0 (%) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order or decision is recei'ed by the
appellant and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 (3) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 ($) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the parties to the appeal and to the concerned adDudicating officer0 (") .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: 11=5Offe 'e!. ")@. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws
0> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 0! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
(ade thereunder, for which no punish(ent is pro'ided elsewhere in this Act, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 1115Co.$o!itio of 'ert%i offe 'e!. ")N. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0: 11"54o/er to (r% t i..* it>. ")0O. ( ) .he Central &o'ern(ent (ay, on reco((endation by the Securities and 7xchange 8oard of India, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation,
4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that the reco((endation of the Securities and 7xchange 8oard of India under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under
% Inserted
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
this Act to which such person would ha'e been liable, had not such i((unity been granted0: Offe 'e! ,> 'o.$% ie!. "3. ( ) Khere an offence has been co((itted by a co(pany, e'ery person who, at the ti(e when the offence was co((itted, was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence, and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any gross negligence on the part of any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer of the co(pany, shall also be dee(ed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n0-6or the purpose of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals, and 34(b) 1director2, in relation to(i) a fir(, (eans a partner in the fir(3 (ii) any association of persons or a body of indi'iduals, (eans any (e(ber controlling the affairs thereof0: $4(3) .he pro'isions of this section shall be in addition to, and not in derogation of, the pro'isions of section %%A0: Cert%i offe 'e! to ,e 'o( iL%,le. "5. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, >!> (" of >!>) ", any offence punishable under #4GGG: section %3 shall be dee(ed to be a
cogniFable offence within the (eaning of that Code0
3 Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec /, w0e0f0 %%+%+%0000 <rior to its substitution, sub+clause (b) read as under, N(b) 1director2, in relation to a fir(, (eans a partner in the fir(0J $ Inserted by .he Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec 3, w0e0f0 /+0 + !>#0
iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central &o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or a recognised stoc) exchange or by any person0 >5(")********< 1195E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
ee now the Code of Cri(inal <rocedure, !/3 (% of !/$) 1sub+section ( ) of2 o(itted by the Securities =aws (A(end(ent) Act, %00$, w0e0f0 %+ 0+%00$0 / Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$ & <rior to its substitution section %# read as under ,1%#0 G!ri#dicti$n t$ trF $ffence# !nder thi# Act&-Eo court inferior to that of a presidency (agistrate or a (agistrate of the first class shall ta)e cogniFance of or try any offence punishable under this Act02 > O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JEo court inferior to that of a Court of Session shall try any offence punishable under this Act .K ! I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
" # Kords
/4Co(
A$$e%l % - Re+i!io . "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt. "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel% $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io !. "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< 6: /(99A4(<A Title to -i+i-e -!. "7. ( ) It shall be lawful for the holder of any security whose na(e appears on the boo)s of the co(pany issuing the said security to recei'e and retain any di'idend declared by the co(pany in respect thereof for any year, notwithstanding that the said security has already been transferred by hi( for consideration, unless the transferee who clai(s the di'idend fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the co(pany with the co(pany for being registered in his na(e within fifteen days of the date on which the di'idend beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the di'idend3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security and other docu(ents relating to
the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a co(pany to pay any di'idend which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the co(pany as the holder of the security in respect of which the di'idend has beco(e due3 or (b) the right of the transferee of any security to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security in the na(e of the transferee0 %04Ri(ht to re'ei+e i 'o.e fro. 'olle'ti+e i +e!t.e t !'he.e. "7A. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, whose na(e appears on the boo)s of the collecti'e in'est(ent sche(e issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e declared by the collecti'e in'est(ent sche(e in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e fro( the transfer or has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the collecti'e in'est(ent sche(e with the collecti'e in'est(ent sche(e for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec >, w0e0f0 %%+%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the collecti'e in'est(ent sche(e3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a collecti'e in'est(ent sche(e to pay any inco(e fro( units or other instru(ents issued by the collecti'e in'est(ent sche(e which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the collecti'e in'est(ent sche(e as the holder of the security being
units or other instru(ents issued by the collecti'e in'est(ent sche(e in respect of which the inco(e in respect of units or other instru(ents issued by the collecti'e sche(e has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security being units or other instru(ents issued by the collecti'e in'est(ent sche(e in the na(e of the transferee0: % 4Ri(ht to re'ei+e i 'o.e fro. .*t*%l f* -. "7;. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by any (utual fund, whose na(e appears on the boo)s of the (utual fund issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the (utual fund declared by the (utual fund in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the (utual fund, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the (utual fund fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the (utual fund with the (utual fund for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the (utual fund beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the (utual fund3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the (utual fund, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a (utual fund to pay any inco(e fro( units or other instru(ents issued by the (utual fund which has beco(e due to any person, whose na(e is for the ti(e being registered in the boo)s of the (utual fund as the holder of the security being units or other instru(ents issued by the (utual fund in respect of which the inco(e in respect of units or other instru(ents issued by the (utual fund has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the (utual fund, to enforce against the transferor or any other person, his rights, if any, in relation to the transfer in any case where the (utual fund has refused to register the transfer of the security being units or other instru(ents issued by the (utual fund in the na(e of the transferee0:
1""5A't
ot to %$$l> i 'ert%i '%!e!. ":. ( ) .he pro'isions of this Act shall not apply to(a) the &o'ern(ent, the Reser'e 8an) of India, any local authority or any corporation set up by a special law or any person who has effected any transaction with or through the agency of any such authority as is referred to in this clause3 (b) any con'ertible bond or share warrant or any option or right in relation thereto, in so far as it entitles the person in whose fa'our any of the foregoing has been issued to obtain at his option fro( the co(pany or other body corporate, issuing the sa(e or fro( any of its shareholders or duly appointed agentsJ shares of the co(pany or other body corporate, whether by con'ersion of the bond or warrant or otherwise, on the basis of the price agreed upon when the sa(e was issued0 (%) Kithout preDudice to the pro'isions contained in sub+section ( ), if the Central &o'ern(ent %3 is satisfied that in the interests of trade and co((erce or the
%% Substituted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec 3, w0e0f0 0>+ %+ !"!0
econo(ic de'elop(ent of the country it is necessary or expedient so to do, it (ay, by notification in the Cfficial &aFette, specify any class of contracts as contracts to which this Act or any pro'ision contained therein shall not apply, and also the conditions, li(itations or restrictions, if any, subDect to which it shall not so apply0: 4rote'tio of %'tio t%6e i (oo- f%ith. "9. Eo suit, prosecution or other legal proceeding whatsoe'er shall lie in any court against the go'erning body or any (e(ber, office bearer or ser'ant of any recognised stoc) exchange or against any person or persons appointed under subsection ( ) of section for anything which is in good faith done or intended to be done in pursuance of this Act or of any rules or bye+laws (ade thereunder0 %$44o/er to -ele(%te. "9A. .he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers (except the power under section 30) exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India or the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)0: 4o/er to .%6e r*le!. )=. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for the purpose of carrying into effect the obDects of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for,(a) the (anner in which applications (ay be (ade, the particulars which they should contain and the le'y of a fee in respect of such applications 3 (b) the (anner in which any in*uiry for the purpose of recognising any stoc) exchange (ay be (ade, the conditions which (ay be i(posed for the grant of such recognition, including conditions as to the ad(ission of (e(bers if the
%3 <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %$ Inserted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% and Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec !, w0e0f0 %%+0%+%0000 <rior to its substitution, section %!A read as under , 1%!A0 8$.er t$ delegate&*.he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India02
stoc) exchange concerned is to be the only recognised stoc) exchange in the area3 and the for( in which such recognition shall be granted3 (c) the particulars which should be contained in the periodical returns and annual reports to be furnished to the Central &o'ern(ent3 (d) the docu(ents which should be (aintained and preser'ed under section # and the periods for which they should be preser'ed3 (e) the (anner in which any in*uiry by the go'erning body of a stoc) exchange shall be (ade under section #3 (f) the (anner in which the bye+laws to be (ade or a(ended under this Act shall before being so (ade or a(ended be published for criticis(3 (g) the (anner in which applications (ay be (ade by dealers in securities for licences under section /, the fee payable in respect thereof and the period of such licences, the conditions subDect to which licences (ay be granted, including conditions relating to the for(s which (ay be used in (a)ing contracts, the docu(ents to be (aintained by licensed dealers and the furnishing of periodical infor(ation to such authority as (ay be specified and the re'ocation of licences for breach of conditions3 %"4(h) the re*uire(ents which shall be co(plied with(A) by public co(panies for the purpose of getting their securities listed on any stoc) exchange3 (B) by collecti'e in'est(ent sche(e for the purpose of getting their units listed on any stoc) exchange3: %#4GGG: %/4(ha) the grounds on which the securities of a co(pany (ay be delisted fro( any recognised stoc) exchange under sub+section ( ) of section % A3 (hb) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under sub+section (%) of section % A and the fees payable in respect of such appeal3 (hc) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3
%" Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec 0, w0e0f0 %%+0%+%0000 <rior to its substitution, clause (h) read as under , 1(h) the re*uire(ents which shall be co(plied with by public co(panies for the purpose of getting their securities listed on any stoc) exchange32 %# .he word ;and; o(itted by .he Securities Contracts (Regulation) A(end(ent Act, !>", Sec $, w0e0f0 /+0 + !>#0 %/ Substituted for clause (ha) by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 7arlier clause (ha), as a(ended by the Securities =aws (A(end(ent) Act, !!!, read as
under ,1(ha) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3 and2
(hd) the (anner of in*uiry under sub+section ( ) of section %3+I3 (he) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3= and the fees payable in respect of such appeal3: (i) any other (atter which is to be or (ay be prescribed0 %>4(3) 7'ery rule (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule0: 1"954o/er of Se'*ritie! % - E#'h% (e ;o%r- of I -i% to .%6e re(*l%tio !. )1. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 305(%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,%> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 <rior to its substitution, sub+section (3), as a(ended by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!", read as under , 1(3) 7'ery rule (ade under this section shall, as soon as (ay be, after its publication in the Cfficial &aFette, be laid before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e session aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule02 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0 7arlier it was repealed by the Repealing and A(ending Act, !#0, Sec % and 6irst Sch0 w0e0f0 %>+ %+ !#00 30 Substituted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec ", w0e0f0 %>+ 0"+%00/0 <rior to substitution it read as under , 1(%) In particular and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for the (anner in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section02
(a) the (anner, in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of
publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section3 (b) the eligibility criteria and other re*uire(ents under section /A0 < (3) 7'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the regulation or both Iouses agree that the regulation should not be (ade, the regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that regulation0:
DE4OSITORIES ACT, 1998 SECTIONS /@A81(0 : 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS ). Certificate of co((ence(ent of business by depositories /@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS 3. Agree(ent between depository and participant 5. Ser'ices of depository 8. Surrender of certificate of security 7. Registration of transfer of securities with depositories :. Cptions to recei'e security certificate or hold securities with depository 9. Securities in depositories to be in fungible for( 1=. Rights of depositories and beneficial owner 11. Register of beneficial owner 1". <ledge or hypothecation of securities held in a depository 1). 6urnishing of infor(ation and records by depository and issuer 13. Cption to opt out in respect of any security 15. Act > of >! to apply to depositories 18. 9epositories to inde(nify loss in certain cases 17. Rights and obligations of depositories, etc0 /@A81(0 :: EN9UIRM AND INS4ECTION 1:. <ower of 8oard to call for infor(ation and en*uiry 19. <ower of 8oard to gi'e directions in certain cases 19A. <enalty for failure to furnish infor(ation, return, etc0 19;. <enalty for failure to enter into an agree(ent 19C. <enalty for failure to redress in'estorsJ grie'ances
19D. <enalty for delay in de(aterialisation or issue of certificate of securities 19E. <enalty for failure to reconcile records 192. <enalty for failure to co(ply with directions issued by 8oard under section ! of the Act 19G. <enalty for contra'ention where no separate penalty has been pro'ided 19D. <ower to adDudicate 190I. 6actors to be ta)en into account by adDudicating officer 190IA. Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (! 190I;. Re'o+er> of %.o* t! 190E. Crediting su(s realised by way of penalties to Consolidated 6und of India /@A81(0 D 4ENALTM "=. Cffences "1. Cffences by co(panies /@A81(0 D: @ISCELLANEOUS "". CogniFance of offences by courts ""A. Co(position of certain offences "";. <ower to grant i((unity ""C. E!t%,li!h.e t of S$e'i%l Co*rt! ""D. Offe 'e! tri%,le ,> S$e'i%l Co*rt! ""E. A$$e%l % - re+i!io ""2. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""G. Tr% !itio %l 4ro+i!io ! "). Appeals ")A. Appeal to Securities Appellate .ribunal ")A. Appeal to Securities Appellate .ribunal ");. <rocedure and powers of Securities Appellate .ribunal ")C. Right to =egal Representation ")D. =i(itation ")E. Ci'il court not to ha'e Durisdiction ")2. Appeal to Supre(e Court "3. <ower of Central &o'ern(ent to (a)e rules "5. <ower of 8oard to (a)e regulations "8. <ower of depositories to (a)e bye+laws "7. Rules and regulations to be laid before <arlia(ent ":. Application of other laws not barred "9. Re(o'al of difficulties )=. A(end(ents to certain enact(ents )1. Repeal and sa'ing /@(5A9( A?7E9?7E. .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0: DE4OSITORIES ACT, 1998 5"" O2 1998< 51=th A*(*!t, 1998< An Act to provide $or reg lation o$ depositories in sec rities and $or matters connected there%ith or incidental thereto& B( it enacted bF 8arlia"ent in the E$rtF7#eventh ;ear $f the 0e%!blic $f :ndia a# f$ll$.# ,*
/@A81(0 : 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the 9epositories Act, !!#0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the %0th day of Septe(ber, !!"0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 1beneficial owner2 (eans a person whose na(e is recorded as such with a depository3 (b) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 3 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (c) 1bye+laws2 (eans bye+laws (ade by a depository under section %#3 (d) 1Co(pany =aw 8oard2 (eans the 8oard of Co(pany =aw Ad(inistration constituted under section 07 of the Co(panies Act, !"# ( of !"#)3 (e) 1depository2 (eans a co(pany for(ed and registered under the Co(panies Act, !"# ( of !"#), and which has been granted a certificate of registration under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (f) 1issuer2 (eans any person (a)ing an issue of securities3 (g) 1participant2 (eans a person registered as such under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (h) 1prescribed2 (eans prescribed by rules (ade under this Act3 (i) 1record2 includes the records (aintained in the for( of boo)s or stored in a co(puter or in such other for( as (ay be deter(ined by regulations3 (j) 1registered owner2 (eans a depository whose na(e is entered as such in the register of the issuer3 (k) 1regulations2 (eans the regulations (ade by the 8oard3 4(ka) 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (l) 1security2 (eans such security as (ay be specified by the 8oard3 (") 1ser'ice2 (eans any ser'ice connected with recording of allot(ent of securities or transfer of ownership of securities in the record of a depository0 (%) Kords and expressions used herein and not defined but defined in the Co(panies Act, !"# ( of !"#), or the Securities Contracts (Regulation) Act, !"# ($% of !"#), or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), shall ha'e the (eanings respecti'ely assigned to the( in those Acts0 /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS Certifi'%te of 'o..e 'e.e t of ,*!i e!! ,> -e$o!itorie!. ). ( ) Eo depository shall act as a depository unless it obtains a certificate of co((ence(ent of business fro( the 8oard0 (%) A certificate granted under sub+section ( ) shall be in such for( as (ay be specified by the regulations0 (3) .he 8oard shall not grant a certificate under sub+section ( ) unless it is satisfied that the depository has ade*uate syste(s and safeguards to pre'ent (anipulation of records and transactions , 4ro+i-e- that no certificate shall be refused under this section unless the depository concerned has been gi'en a reasonable opportunity of being heard0
Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
/@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS A(ree.e t ,et/ee -e$o!itor> % - $%rti'i$% t. 3. ( ) A depository shall enter into an agree(ent with one or (ore participants as its agent0 (%) 7'ery agree(ent under sub+section ( ) shall be in such for( as (ay be specified by the bye+laws0 Ser+i'e! of -e$o!itor>. 5. Any person, through a participant, (ay enter into an agree(ent, in such for( as (ay be specified by the bye+laws, with any depository for a'ailing its ser'ices0 S*rre -er of 'ertifi'%te of !e'*rit>. 8. ( ) Any person who has entered into an agree(ent under section " shall surrender the certificate of security, for which he see)s to a'ail the ser'ices of a depository, to the issuer in such (anner as (ay be specified by the regulations0 (%) .he issuer, on receipt of certificate of security under sub+section ( ), shall cancel the certificate of security and substitute in its records the na(e of the depository as a registered owner in respect of that security and infor( the depository accordingly0 (3) A depository shall, on receipt of infor(ation under sub+section (%), enter the na(e of the person referred to in sub+section ( ) in its records, as the beneficial owner0 Re(i!tr%tio of tr% !fer of !e'*ritie! /ith -e$o!itor>. 7. ( ) 7'ery depository shall, on receipt of inti(ation fro( a participant, register the transfer of security in the na(e of the transferee0 (%) If a beneficial owner or a transferee of any security see)s to ha'e custody of such security the depository shall infor( the issuer accordingly0 O$tio ! to re'ei+e !e'*rit> 'ertifi'%te or hol- !e'*ritie! /ith -e$o!itor>. :. ( ) 7'ery person subscribing to securities offered by an issuer shall ha'e the option either to recei'e the security certificates or hold securities with a depository0 (%) Khere a person opts to hold a security with a depository, the issuer shall inti(ate such depository the details of allot(ent of the security, and on receipt of such infor(ation the depository shall enter in its records the na(e of the allottee as the beneficial owner of that security0 Se'*ritie! i -e$o!itorie! to ,e i f* (i,le for.. 9. ( ) All securities held by a depository shall be de(aterialised and shall be in a fungible for(0 %4(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#), shall apply to a depository in respect of securities held by it on behalf of the beneficial owners&: Ri(ht! of -e$o!itorie! % - ,e efi'i%l o/ er. 1=. ( ) Eotwithstanding anything contained in any other law for the ti(e being in force, a depository shall be dee(ed to be the registered owner for the purposes of effecting transfer of ownership of security on behalf of a beneficial owner0 (%) Sa'e as otherwise pro'ided in sub+section ( ), the depository as a registered owner shall not ha'e any 'oting rights or any other rights in respect of securities held by it0 (3) .he beneficial owner shall be entitled to all the rights and benefits and be subDected to all the liabilities in respect of his securities held by a depository0 Re(i!ter of ,e efi'i%l o/ er. 11. 7'ery depository shall (aintain a register and an index of beneficial owners in the
(anner pro'ided in sections "0, " and "% of the Co(panies Act, !"# ( of !"#)0 4le-(e or h>$othe'%tio of !e'*ritie! hel- i % -e$o!itor>. 1". ( ) SubDect to such regulations and bye+laws, as (ay be (ade in this behalf, a beneficial owner (ay with the pre'ious appro'al of the depository create a pledge or hypothecation in respect of a security owned by hi( through a depository0 (%) 7'ery beneficial owner shall gi'e inti(ation of such pledge or hypothecation to the depository and such depository shall thereupon (a)e entries in its records accordingly0 (3) Any entry in the records of a depository under sub+section (%) shall be e'idence of a pledge or hypothecation0 2*r i!hi ( of i for.%tio % - re'or-! ,> -e$o!itor> % - i!!*er. 1). ( ) 7'ery depository shall furnish to the issuer infor(ation about the transfer of securities in the na(e of beneficial owners at such inter'als and in such (anner as (ay be specified by the bye+laws0 (%) 7'ery issuer shall (a)e a'ailable to the depository copies of the rele'ant records in respect of securities held by such depository0 O$tio to o$t o*t i re!$e't of % > !e'*rit>.
% Substituted
by the 9epositories Related =aws (A(end(ent) Act, !!/, Sec %%, w0e0f0 "+0 + !!/0 <rior to its substitution sub+section (%) read as under , 1(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#) shall apply to the securities held by a depository on behalf of the beneficial owners02
13. ( ) If a beneficial owner see)s to opt out of a depository in respect of any security he shall infor( the depository accordingly0 (%) .he depository shall on receipt of inti(ation under sub+section ( ) (a)e appropriate entries in its records and shall infor( the issuer0 (3) 7'ery issuer shall, within thirty days of the receipt of inti(ation fro( the depository and on fulfil(ent of such conditions and on pay(ent of such fees as (ay be specified by the regulations, issue the certificate of securities to the beneficial owner or the transferee, as the case (ay be0 A't 1: of 1:91 to %$$l> to -e$o!itorie!. 15. .he 8an)ersJ 8oo)s 7'idence Act, >! shall apply in relation to a depository as if it were a ban) as defined in section % of that Act0 De$o!itorie! to i -e. if> lo!! i 'ert%i '%!e!. 18. ( ) Kithout preDudice to the pro'isions of any other law for the ti(e being in force, any loss caused to the beneficial owner due to the negligence of the depository or the participant, the depository shall inde(nify such beneficial owner0 (%) Khere the loss due to the negligence of the participant under sub+section ( ) is inde(nified by the depository, the depository shall ha'e the right to reco'er the sa(e fro( such participant0 Ri(ht! % - o,li(%tio ! of -e$o!itorie!, et'. 17. ( ) SubDect to the pro'isions of this Act, the rights and obligations of the depositories, participants and the issuers whose securities are dealt with by a depository shall be specified by the regulations0 (%) .he eligibility criteria for ad(ission of securities into the depository shall be specified by the regulations0 /@A81(0 :D EN9UIRM AND INS4ECTION 4o/er of ;o%r- to '%ll for i for.%tio % - e 7*ir>. 1:. ( ) .he 8oard, on being satisfied that it is necessary in the public interest or in the interest of in'estors so to do, (ay, by order in writing,-
(a) call upon any issuer, depository, participant or beneficial owner to furnish in writing such infor(ation relating to the securities held in a depository as it (ay re*uire3 or (b) authorise any person to (a)e an en*uiry or inspection in relation to the affairs of the issuer, beneficial owner, depository or participant, who shall sub(it a report of such en*uiry or inspection to it within such period as (ay be specified in the order0 (%) 7'ery director, (anager, partner, secretary, officer or e(ployee of the depository or issuer or the participant or beneficial owner shall on de(and produce before the person (a)ing the en*uiry or inspection all infor(ation or such records and other docu(ents in his custody ha'ing a bearing on the subDect+(atter of such en*uiry or inspection0 4o/er of ;o%r- to (i+e -ire'tio ! i 'ert%i '%!e!. 19. Sa'e as pro'ided in this Act, if after (a)ing or causing to be (ade an en*uiry or inspection, the 8oard is satisfied that it is necessary(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any depository or participant being conducted in the (anner detri(ental to the interests of in'estors or securities (ar)et, it (ay issue such directions,(a) to any depository or participant or any person associated with the securities (ar)et3 or (b) to any issuer, as (ay be appropriate in the interest of in'estors or the securities (ar)et0 )5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< $44e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 19A. Any person, who is re*uired under this Act or any rules or regulations or bye+laws (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to the 8oard, fails to furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations or bye+laws, fails to file return or furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0
3I $ Inserted
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the Securities =aws (A(end(ent) Act, %00$, Sec0 /, w0r0e0f0 %+ 0+%00$0
4e %lt> for f%il*re to e ter i to % %(ree.e t. 19;. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and is re*uired under this Act or any rules or regulations (ade thereunder, to enter into an agree(ent, fails to enter into such agree(ent, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0
4e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 19C. If any depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such depository or participant or issuer or its agents or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for -el%> i -e.%teri%li!%tio or i!!*e of 'ertifi'%te of !e'*ritie!. 19D. If any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to de(aterialise or issue the certificate of securities on opting out of a depository by the in'estors, within the ti(e specified under this Act or regulations or bye+laws (ade thereunder or abets in delaying the process of de(aterialisation or issue the certificate of securities on opting out of a depository of securities, such issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to re'o 'ile re'or-!. 19E. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to reconcile the records of de(aterialised securities with all the securities issued by the issuer as specified in the regulations, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to 'o.$l> /ith -ire'tio ! i!!*e- ,> ;o%r- * -er !e'tio 19 of the A't. 192. If any person fails to co(ply with the directions issued by the 8oard under section !, within the ti(e specified by it, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 19G. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations or bye+laws (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0 4o/er to %-G*-i'%te. 19D. ( ) 6or the purpose of adDudging under sections !A, !8, !C, !9, !7, !6 and !&, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the
sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. 190I. Khile adDudging the *uantu( of penalty under section !I, the adDudicating officer shall ha'e due regard to the following factors, na(ely,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 55 Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (!. 190IA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 19, !e'tio 19D, %! the '%!e .%> ,e, .%> file % %$$li'%tio i /riti ( to the ;o%r$ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e-ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h
"I
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re !$e'ifie- ,> the ;o%r* -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")A %(%i !t % > or-er $%!!e- ,> the ;o%r- or the %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 85 Re'o+er> of %.o* t!. 190I;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 19 or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6
%''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hilor !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C!
#I
!erte- ,> The Se'*ritie! L%/! (A.e- .e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
.o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")A of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 19, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 19E. All su(s realiFed by way of penalties under this Act shall be credited to the Consolidated 6und of India0: /@A81(0 D 4ENALTM /4Offe 'e!. "=. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws (ade thereunder, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0
/ Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 >, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %0 read as under,1%00 <ffence#0- Khoe'er contran'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or any regulations or bye+laws (ade thereunder shall be punishable with i(prison(ent for a ter( which (ay extend to fi'e years, or with fine or with both02
(%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with
fine, which (ay extend to twenty+fi'e crore rupees, or with both0: Offe 'e! ,> 'o.$% ie!. "1. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n&-6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and (b) 1director2, in relation to a fir(, (eans a partner in the fir(0 /@A81(0 D: @ISCELLANEOUS >4Co( iL% 'e of offe 'e! ,> 'o*rt!. "". ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central
> Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 !, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %% read as under,1%%0 /$gniCance $f $ffence# bF c$!rt#&*( ) Eo Court shall ta)e cogniFance of any offence punishable under this Act or any regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the 8oard0 (%) Eo court inferior to that of a ?etropolitan ?agistrate or a Dudicial ?agistrate of the first class shall try any offence punishable under this Act02
&o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or by any person0 !5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < Co.$o!itio of 'ert%i offe 'e!. ""A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "";. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any
penalty under this Act with respect to the alleged 'iolation , 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity , 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0: 1=5 E!t%,li!h.e t of S$e'i%l Co*rt!. ""C. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>.
! <rior
to o(ission, Sub+section(%) read 1Eo court inferior to that of a Court of Session shall try any offence punishable under this Act02 0 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. ""D. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-. A$$e%l % - Re+i!io ""E. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""2. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197).
(") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erioof ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! ""G. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< A$$e%l!. "). ( ) Any person aggrie'ed by an order of the 8oard (ade 4before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!: under this Act, or the regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor , 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0 (3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed , 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 %4A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")A. ( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!, under this Act, or the regulations (ade thereunder, 34or by an order (ade by an adDudicating officer under this Act: (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 $5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 8oard is recei'ed by the person referred to in sub+section ( ) and it shall be in such for( and be acco(panied by such fee as (ay be prescribed ,
Substituted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 $, w0e0f0 #+ %+ !!! for ;an order of the 8oard (ade;0 % Sections %3A to %36 inserted by the Securities =aws (Second A(end(ent) Act, !!! , Sec0 ", w0e0f0 #+ %+ !!!& 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %0, w0r0e0f0 %+ 0+%00$0 $ 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JNo %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-e ,> the ;o%r- /ith the 'o !e t of the $%rtie!.K
4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0
($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 (") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. ");. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3 (e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte; (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 Ri(ht to le(%l re$re!e t%tio . ")C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or an attorney of any Iigh Court, and
includes a pleader in practice0 Li.it%tio . ")D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 Ci+il 'o*rt ot to h%+e G*ri!-i'tio . ")E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "4A$$e%l to S*$re.e Co*rt. ")2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order ,
" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 % , w0r0e0f0 %+ 0+%00$0 <rior to its substitution, Section %36, as inserted by Securities =aws (Second A(end(ent) Act, !!!, w0e0f0 #+ %+ !!!, read as under,1%360 A%%eal t$ @igh /$!rt&-Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0:: 4o/er of Ce tr%l Go+er .e t to .%6e r*le!. "3. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for carrying out the pro'isions of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,164(a) the (anner of in*uiry under sub+section ( ) of section !I3 (aa) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %33: (b) the for( in which an appeal (ay be preferred under sub+section (3) of section %3 and the fees payable in respect of such appeal 3 (c) the procedure for disposing of an appeal under sub+section ($) of section %33 /4(d) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3A and the fees payable in respect of such appeal0: 4o/er of ;o%r- to .%6e re(*l%tio !. "5. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the 8oard (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for(a) the for( in which record is to be (aintained under clause ( i) of sub+section ( ) of section %3 (b) the for( in which the certificate of co((ence(ent of business shall be issued under
sub+section (%) of section 33 (c) the (anner in which the certificate of security shall be surrendered under sub+section ( ) of section #3 (d) the (anner of creating a pledge or hypothecation in respect of security owned by a beneficial owner under sub+section ( ) of section %3 (e) the conditions and the fees payable with respect to the issue of certificate of securities under sub+section (3) of section $3
# Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %%, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (a) read as under,1(a) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %332 / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 #, w0e0f0 #+ %+ !!!0
(f) the rights and obligations of the depositories, participants and the issuers under subsection ( ) of section /3 (g) the eligibility criteria for ad(ission of securities into the depository under sub+section (%) of section /0 4o/er of -e$o!itorie! to .%6e ,>e0l%/!. "8. ( ) A depository shall, with the pre'ious appro'al of the 8oard, (a)e bye+laws consistent with the pro'isions of this Act and the regulations0 (%) In particular, and without preDudice to the generality of the foregoing power, such byelaws shall pro'ide for(a) the eligibility criteria for ad(ission and re(o'al of securities in the depository3 (b) the conditions subDect to which the securities shall be dealt with3 (c) the eligibility criteria for ad(ission of any person as a participant3 (d) the (anner and procedure for de(aterialisation of securities3 (e) the procedure for transactions within the depository3 (f) the (anner in which securities shall be dealt with or withdrawn fro( a depository3 (g) the procedure for ensuring safeguards to protect the interests of participants and beneficial owners3 (h) the conditions of ad(ission into and withdrawal fro( a participant by a beneficial owner3 (i) the procedure for con'eying infor(ation to the participants and beneficial owners on di'idend declaration, shareholder (eetings and other (atters of interest to the beneficial owners3 (j) the (anner of distribution of di'idends, interest and (onetary benefits recei'ed fro( the co(pany a(ong beneficial owners3 (k) the (anner of creating pledge or hypothecation in respect of securities held with a depository3 (l) inter #e rights and obligations a(ong the depository, issuer, participants, and beneficial owners3 (") the (anner and the periodicity of furnishing infor(ation to the 8oard, issuer and other persons3 (n) the procedure for resol'ing disputes in'ol'ing depository, issuer, co(pany or a beneficial owner3 ($) the procedure for proceeding against the participant co((itting breach of the regulations and pro'isions for suspension and expulsion of participants fro( the depository and cancellation of agree(ents entered with the depository3 (%) the internal control standards including procedure for auditing, re'iewing and (onitoring0
(3) Khere the 8oard considers it expedient so to do, it (ay, by order in writing, direct a depository to (a)e any bye+laws or to a(end or re'o)e any bye+laws already (ade within such period as it (ay specify in this behalf0 ($) If the depository fails or neglects to co(ply with such order within the specified period, the 8oard (ay (a)e the bye+laws or a(end or re'o)e the bye+laws (ade either in the for( specified in the order or with such (odifications thereof as the 8oard thin)s fit0 R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t. "7. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. ":. .he pro'isions of this Act shall be in addition to, and not in derogation of, any other law for the ti(e being in force relating to the holding and transfer of securities0 Re.o+%l of -iffi'*ltie!. "9. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as appear to it to be necessary or expedient for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of a period of two years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 A.e -.e t! to 'ert%i e %'t.e t!. )=. 40e%ealed bF 0e%ealing H A"ending Act' 20010: Re$e%l % - !%+i (. )1. ( ) .he 9epositories (.hird) Crdinance, !!# (Crd0 %> of !!#), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 /@(5A9( 4 ee section 30: A?7E9?7E.S .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0:
SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 SECTIONS !'APT"R I 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions !'APT"R II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA
). 7stablish(ent and incorporation of 8oard 3. ?anage(ent of the 8oard 5. .er( of office and conditions of ser'ice of Chair(an and (e(bers of the 8oard 8. Re(o'al of (e(ber fro( office 7. ?eetings 7A. ?e(ber not to participate in (eetings in certain cases :. Bacancies, etc0, not to in'alidate proceedings of 8oard 9. Cfficers and e(ployees of the 8oard !'APT"R III TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD 1=. .ransfer of assets, liabilities, etc0, of existing Securities and 7xchange 8oard to the 8oard !'APT"R IV 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 11. 6unctions of 8oard 11A. 8oard to regulate or prohibit issue of prospectus, offer docu(ent or ad'ertise(ent soliciting (oney for issue of securities 11AA. Collecti'e in'est(ent sche(e 11;. <ower to issue directions 11C. In'estigation 11D. Cease and desist proceedings !'APT"R V REGISTRATION CERTI2ICATE 1". Registration of stoc) bro)ers, sub+bro)ers, share transfer agents, etc0
%
!'APT"R VA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 1"A. <rohibition of (anipulati'e and decepti'e de'ices, insider trading and substantial ac*uisition of securities or control !'APT"R VI 2INANCE, ACCOUNTS AND AUDIT 1). &rants by the Central &o'ern(ent 13. 6und 15. Accounts and audit !'APT"R VIA 4ENALTIES AND ADEUDICATION 15A. <enalty for failure to furnish infor(ation, return, etc & 15;. <enalty for failure by any person to enter into agree(ent with clients 15C. <enalty for failure to redress in'estorsJ grie'ances 15D. <enalty for certain defaults in case of (utual funds 15E. <enalty for failure to obser'e rules and regulations by an asset (anage(ent co(pany 152. <enalty for default in case of stoc) bro)ers 15G. <enalty for insider trading 15D. <enalty for non+disclosure of ac*uisition of shares and ta)eo'ers 15DA. <enalty for fraudulent and unfair trade practices 15D;. <enalty for contra'ention where no separate penalty has been pro'ided
150I. <ower to adDudicate 15E. 6actors to be ta)en into account by the AdDudicating Cfficer 15EA. Crediting su(s realised by way of penalties to Consolidated 6und of India 15E;. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! !'APT"R VIB ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL 15F. 7stablish(ent of Securities Appellate .ribunals 15L. Co(position of Securities Appellate .ribunal 15@. Qualification for appoint(ent as <residing Cfficer or ?e(ber of Securities Appellate .ribunal
3
15N. .enure of office of <residing Cfficer and other (e(bers of Securities Appellate .ribunal 150O. Salary and allowances and other ter(s and conditions of ser'ice of <residing Cfficers 154. 6illing up of 'acancies 159. Resignation and re(o'al 15R. Crders constituting Appellate .ribunal to be final and not to in'alidate its proceedings 15S. Staff of the Securities Appellate .ribunal 15T. Appeal to the Securities Appellate .ribunal 15U. <rocedure and powers of the Securities Appellate .ribunal 15I. Right to legal representation 15?. =i(itation 15A. <residing Cfficer, (e(bers and staff of Securities Appellate .ribunals to be public ser'ants 15M. Ci'il Court not to ha'e Durisdiction 15N. Appeal to Supre(e Court !'APT"R VII @ISCELLANEOUS 18. <ower of Central &o'ern(ent to issue directions 17. <ower of Central &o'ern(ent to supersede the 8oard 1:. Returns and reports 19. 9elegation "=. Appeals "=A. 8ar of Durisdiction "1. Sa'ings "". ?e(bers, officers and e(ployees of the 8oard to be public ser'ants "). <rotection of action ta)en in good faith "3. Cffences "3A. Co(position of certain offences "3;. <ower to grant i((unity "5. 7xe(ption fro( tax on wealth and inco(e "8. CogniFance of offences by Courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! "7. Cffences by co(panies
":. 4C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!":
$
":A. Re'o+er> of %.o* t! "9. <ower to (a)e rules )=. <ower to (a)e regulations )1. Rules and regulations to be laid before <arlia(ent )". Application of other laws not barred )). 4Repealed by Repealing R A(ending Act, %00 : )3. <ower to re(o'e difficulties )5. Repeal and sa'ing .I7 SCI79H=7 4Repealed by Repealing R A(ending Act, %00 : SECURITIES AND EACDANGE ;OARD O2 INDIA ACT, 199" 515 O2 199"< 53th A$ril, 199"< A A't to $ro+i-e for the e!t%,li!h.e t of % ;o%r- to $rote't the i tere!t! of i +e!tor! i !e'*ritie! % - to $ro.ote the -e+elo$.e t of, % - to re(*l%te, the !e'*ritie! .%r6et % - for .%tter! 'o e'te- there/ith or i 'i-e t%l thereto B( it enacted bF 8arlia"ent in the E$rtF7third ;ear $f the 0e%!blic $f :ndia a# f$ll$.# , CDA4TER I 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities and 7xchange 8oard of India Act, !!%0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the 30th day of Manuary, !!%0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 33 (b) 1Chair(an2 (eans the Chair(an of the 8oard3 4(ba) 1collecti'e in'est(ent sche(e2 (eans any sche(e or arrange(ent which satisfies the conditions specified in section AA3: (c) 1existing Securities and 7xchange 8oard2 (eans the Securities and 7xchange 8oard of India constituted under the Resolution of the &o'ern(ent of India in the 9epart(ent of 7cono(ic Affairs Eo0 ($$) S7L>#, dated the %th day of April, !>>3 (d) 16und2 (eans the 6und constituted under section $3 (e) 1(e(ber2 (eans a (e(ber of the 8oard and includes the Chair(an3 (f) 1notification2 (eans a notification published in the Cfficial &aFette3 (g) 1prescribed2 (eans prescribed by rules (ade under this Act3
Inserted by the Securities =aws (A(end(ent) Act, !!!, w0e0f0 %%+%+%0000
"
(h) 1regulations2 (eans the regulations (ade by the 8oard under this Act3 4(ha) 1Reser'e 8an)2 (eans the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)3: (i) 1securities2 has the (eaning assigned to it in section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#)0 %4(%) Kords and expressions used and not defined in this Act but defined in the Securities Contracts (Regulation) Act, !"# ($% of !"#) 34or the 9epositories Act, !!#:, shall ha'e the (eanings respecti'ely assigned to the( in that Act:0 CDA4TER II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA E!t%,li!h.e t % - i 'or$or%tio of ;o%r-.
). ( ) Kith effect fro( such date as the Central &o'ern(ent (ay, by notification, appoint, there shall be established, for the purposes of this Act, a 8oard by the na(e of the Securities and 7xchange 8oard of India0 (%) .he 8oard shall be a body corporate by the na(e aforesaid, ha'ing perpetual succession and a co((on seal, with power subDect to the pro'isions of this Act, to ac*uire, hold and dispose of property, both (o'able and i((o'able, and to contract, and shall, by the said na(e, sue or be sued0 (3) .he head office of the 8oard shall be at 8o(bay0 ($) .he 8oard (ay establish offices at other places in India0 @% %(e.e t of the ;o%r-. 3. ( ) .he 8oard shall consist of the following (e(bers, na(ely,(a) a Chair(an3 (b) two (e(bers fro( a(ongst the officials of the $4?inistry: of the Central &o'ern(ent dealing with 6inance "4and ad(inistration of the Co(panies Act, !"# ( of !"#):3 (c) one (e(ber fro( a(ongst the officials of #4the Reser'e 8an):3 /4(d) fi'e other (e(bers of who( at least three shall be the whole+ti(e (e(bers,: to be appointed by the Central &o'ern(ent0
Inserted by the Securities =aws (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0 <rior to its substitution, sub+section (%) reads as under, 1(%) Kords and expressions used and not defined in this Act but defined in the Capital Issues (Control) Act, !$/ or the Securities Contracts Regulation Act, !"# shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts02 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 $ Substituted for 1?inistries2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1and law2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act !3$ (% of !3$)2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 / Substituted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, clause (d) read as, 1(d) two other (e(bers20
% Substituted
#
(%) .he general superintendence, direction and (anage(ent of the affairs of the 8oard shall 'est in a 8oard of (e(bers, which (ay exercise all powers and do all acts and things which (ay be exercised or done by the 8oard0 (3) Sa'e as otherwise deter(ined by regulations, the Chair(an shall also ha'e powers of general superintendence and direction of the affairs of the 8oard and (ay also exercise all powers and do all acts and things which (ay be exercised or done by that 8oard0 ($) .he Chair(an and (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be appointed by the Central &o'ern(ent and the (e(bers referred to in clauses ( b) and (c) of that sub+section shall be no(inated by the Central &o'ern(ent and the 4Reser'e 8an): respecti'ely0 (") .he Chair(an and the other (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be persons of ability, integrity and standing who ha'e shown capacity in dealing with proble(s relating to securities (ar)et or ha'e special )nowledge or experience of law, finance, econo(ics, accountancy, ad(inistration or in any other discipline which, in the opinion of the Central &o'ern(ent, shall be useful to the 8oard0 Ter. of offi'e % - 'o -itio ! of !er+i'e of Ch%ir.% % - .e.,er! of the ;o%r-. 5. ( ) .he ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers referred to in clause (d) of sub+section ( ) of section $ shall be such as (ay be prescribed0 (%) Eotwithstanding anything contained in sub+section ( ), the Central &o'ern(ent shall ha'e the right to ter(inate the ser'ices of the Chair(an or a (e(ber appointed under clause ( d) of
sub+section ( ) of section $, at any ti(e before the expiry of the period prescribed under subsection ( ), by gi'ing hi( notice of not less than three (onths in writing or three (onthsJ salary and allowances in lieu thereof, and the Chair(an or a (e(ber, as the case (ay be, shall also ha'e the right to relin*uish his office, at any ti(e before the expiry of the period prescribed under sub+section ( ), by gi'ing to the Central &o'ern(ent notice of not less than three (onths in writing0 Re.o+%l of .e.,er fro. offi'e. 8. %4G G G: .he Central &o'ern(ent shall re(o'e a (e(ber fro( office if he(a) is, or at any ti(e has been, adDudicated as insol'ent3 (b) is of unsound (ind and stands so declared by a co(petent court3 (c) has been con'icted of an offence which, in the opinion of the Central &o'ern(ent, in'ol'es a (oral turpitude3 (d) 34G G G: (e) has, in the opinion of the Central &o'ern(ent, so abused his position as to render his continuation in office detri(ental to the public interest , 4ro+i-e- that no (e(ber shall be re(o'ed under this clause unless he has been gi'en a reasonable opportunity of being heard in the (atter0
Substituted for 1Reser'e 8an) of India2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 )2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 C(itted, by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to o(ission clause (d) read read as, 1(d) is appointed as a director of a co(pany20
% 1(
/
@eeti (!. 7. ( ) .he 8oard shall (eet at such ti(es and places, and shall obser'e such rules of procedure in regard to the transaction of business at its (eetings (including *uoru( at such (eetings) as (ay be pro'ided by regulations0 (%) .he Chair(an or, if for any reason, he is unable to attend a (eeting of the 8oard, any other (e(ber chosen by the (e(bers present fro( a(ongst the(sel'es at the (eeting shall preside at the (eeting0 (3) All *uestions which co(e up before any (eeting of the 8oard shall be decided by a (aDority 'otes of the (e(bers present and 'oting, and, in the e'ent of an e*uality of 'otes, the Chair(an, or in his absence, the person presiding, shall ha'e a second or casting 'ote0 4@e.,er ot to $%rti'i$%te i .eeti (! i 'ert%i '%!e!. 7A. Any (e(ber, who is a director of a co(pany and who as such director has any direct or indirect pecuniary interest in any (atter co(ing up for consideration at a (eeting of the 8oard, shall, as soon as possible after rele'ant circu(stances ha'e co(e to his )nowledge, disclose the nature of his interest at such (eeting and such disclosure shall be recorded in the proceedings of the 8oard, and the (e(ber shall not ta)e any part in any deliberation or decision of the 8oard with respect to that (atter0: I%'% 'ie!, et'., ot to i +%li-%te $ro'ee-i (! of ;o%r-. :. Eo act or proceeding of the 8oard shall be in'alid (erely by reason of(a) any 'acancy in, or any defect in the constitution of, the 8oard3 or (b) any defect in the appoint(ent of a person acting as a (e(ber of the 8oard3 or (c) any irregularity in the procedure of the 8oard not affecting the (erits of the case0 Offi'er! % - e.$lo>ee! of the ;o%r-. 9. ( ) .he 8oard (ay appoint such other officers and e(ployees as it considers necessary for the efficient discharge of its functions under this Act0 (%) .he ter( and other conditions of ser'ice of officers and e(ployees of the 8oard appointed under sub+section ( ) shall be such as (ay be deter(ined by regulations0 CDA4TER III
TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD Tr% !fer of %!!et!, li%,ilitie!, et'., of e#i!ti ( Se'*ritie! % - E#'h% (e ;o%r- to the ;o%r-. 1=. ( ) Cn and fro( the date of establish(ent of the 8oard,(a) any reference to the existing Securities and 7xchange 8oard in any law other than this Act or in any contract or other instru(ent shall be dee(ed as a reference to the 8oard3 (b) all properties and assets, (o'able and i((o'able, of, or belonging to, the existing Securities and 7xchange 8oard, shall 'est in the 8oard3
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
>
(c) all rights and liabilities of the existing Securities and 7xchange 8oard shall be transferred to, and be the rights and liabilities of, the 8oard3 (d) without preDudice to the pro'isions of clause (c), all debts, obligations and liabilities incurred, all contracts entered into and all (atters and things engaged to be done by, with or for the existing Securities and 7xchange 8oard i((ediately before that date, for or in connection with the purpose of the said existing 8oard shall be dee(ed to ha'e been incurred, entered into, or engaged to be done by, with or for, the 8oard3 (e) all su(s of (oney due to the existing Securities and 7xchange 8oard i((ediately before that date shall be dee(ed to be due to the 8oard3 (f) all suits and other legal proceedings instituted or which could ha'e been instituted by or against the existing Securities and 7xchange 8oard i((ediately before that date (ay be continued or (ay be instituted by or against the 8oard3 and (g) e'ery e(ployee holding any office under the existing Securities and 7xchange 8oard i((ediately before that date shall hold his office in the 8oard by the sa(e tenure and upon the sa(e ter(s and conditions of ser'ice as respects re(uneration, lea'e, pro'ident fund, retire(ent and other ter(inal benefits as he would ha'e held such office if the 8oard had not been established and shall continue to do so as an e(ployee of the 8oard or until the expiry of the period of six (onths fro( that date if such e(ployee opts not to be the e(ployee of the 8oard within such period0 (%) Eotwithstanding anything contained in the Industrial 9isputes Act, !$/ ( $ of !$/), or in any other law for the ti(e being in force, absorption of any e(ployee by the 8oard in its regular ser'ice under this section shall not entitle such e(ployee to any co(pensation under that Act or other law and no such clai( shall be entertained by any court, tribunal or other authority0 CDA4TER II 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 2* 'tio ! of ;o%r-. 11. ( ) SubDect to the pro'isions of this Act, it shall be the duty of the 8oard to protect the interests of in'estors in securities and to pro(ote the de'elop(ent of, and to regulate the securities (ar)et, by such (easures as it thin)s fit0 (%) Kithout preDudice to the generality of the foregoing pro'isions, the (easures referred to therein (ay pro'ide for(a) regulating the business in stoc) exchanges and any other securities (ar)ets3 (b) registering and regulating the wor)ing of stoc) bro)ers, sub+bro)ers, share transfer agents, ban)ers to an issue, trustees of trust deeds, registrars to an issue, (erchant ban)ers, underwriters, portfolio (anagers, in'est(ent ad'isers and such other inter(ediaries who (ay be associated with securities (ar)ets in any (anner3 4(ba) registering and regulating the wor)ing of the depositories, %4participants:, custodians of securities, foreign institutional in'estors, credit rating agencies and such other inter(ediaries as the 8oard (ay, by notification, specify in this behalf3: (c) registering and regulating the wor)ing of 4'enture capital funds and collecti'e
in'est(ent sche(es:, including (utual funds3
% Inserted
Inserted by Securities =aws (A(end(ent) Act !!", w0r0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+!+ !!"0
!
(d) pro(oting and regulating self+regulatory organisations3 (e) prohibiting fraudulent and unfair trade practices relating to securities (ar)ets3 (f) pro(oting in'estorsJ education and training of inter(ediaries of securities (ar)ets3 (g) prohibiting insider trading in securities3 (h) regulating substantial ac*uisition of shares and ta)e o'er of co(panies3 (i) calling for infor(ation fro(, underta)ing inspection, conducting in*uiries and audits of the %4stoc) exchanges, (utual funds, other persons associated with the securities (ar)et:, inter(ediaries and self+regulatory organisations in the securities (ar)et3 34(ia) '%lli ( for i for.%tio % - re'or-! fro. % > $er!o i 'l*-i ( % > ,% 6 or % > other %*thorit> or ,o%r- or 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l or St%te A't /hi'h, i the o$i io of the ;o%r-, !h%ll ,e rele+% t to % > i +e!ti(%tio or i 7*ir> ,> the ;o%r- i re!$e't of % > tr% !%'tio i !e'*ritie! 3: $5(i,) '%lli ( for i for.%tio fro., or f*r i!hi ( i for.%tio to, other %*thoritie!, /hether i I -i% or o*t!i-e I -i%, h%+i ( f* 'tio ! !i.il%r to tho!e of the ;o%r-, i the .%tter! rel%ti ( to the $re+e tio or -ete'tio of +iol%tio ! i re!$e't of !e'*ritie! l%/!, !*,Ge't to the $ro+i!io ! of other l%/! for the ti.e ,ei ( i for'e i thi! re(%r-& 4ro+i-e- th%t the ;o%r-, for the $*r$o!e of f*r i!hi ( % > i for.%tio to % > %*thorit> o*t!i-e I -i%, .%> e ter i to % %rr% (e.e t or %(ree.e t or * -er!t% -i ( /ith !*'h %*thorit> /ith the $rior %$$ro+%l of the Ce tr%l Go+er .e tH< (j) perfor(ing such functions and exercising such powers under the pro'isions of "4G G G: the Securities Contracts (Regulation) Act, !"# ($% of !"#), as (ay be delegated to it by the Central &o'ern(ent3 (k) le'ying fees or other charges for carrying out the purposes of this section3 (l) conducting research for the abo'e purposes3 #4(la) calling fro( or furnishing to any such agencies, as (ay be specified by the 8oard, such infor(ation as (ay be considered necessary by it for the efficient discharge of its functions3: (") perfor(ing such other functions as (ay be prescribed0 /4(%A) Kithout preDudice to the pro'isions contained in sub+section (%), the 8oard (ay ta)e (easures to underta)e inspection of any boo), or register, or other docu(ent or record of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard
Substituted for 1collecti'e in'est(ent sche(es2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % Substituted for 1stoc) exchanges and2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 S*,!tit*te- for J'%lli ( for i for.%tio % - re'or- fro. % > ,% 6 or % > other %*thorit> or ,o%ror 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l, St%te or 4ro+i 'i%l A't i re!$e't of % > tr% !%'tio i !e'*ritie! /hi'h i! * -er i +e!ti(%tio or i 7*ir> ,> the ;o%r-K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). E%rlier Se'tio 11(")(i%) /%! i !erte- ,> the SE;I (A.e -.e t) A't, "==" /.e.f. "901=0"=="0 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. =80=)0 199:) " .he words 1the Capital Issues (Control) Act, !$/ (%! of !$/) and2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
0
has reasonable grounds to belie'e that such co(pany has been indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et0: 4(3) Eotwithstanding anything contained in any other law for the ti(e being in force while exercising the powers under %4clause (i) or clause (ia) of sub+section (%) or sub+ section (2A):, the 8oard shall ha'e the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(i) the disco'ery and production of boo)s of account and other docu(ents, at such place and such ti(e as (ay be specified by the 8oard3 (ii) su((oning and enforcing the attendance of persons and exa(ining the( on oath3 (iii) inspection of any boo)s, registers and other docu(ents of any person referred to in section %, at any place3: 34(iv) inspection of any boo), or register, or other docu(ent or record of the co(pany referred to in sub+section (%A)3 (v) issuing co((issions for the exa(ination of witnesses or docu(ents0: $4($) Kithout preDudice to the pro'isions contained in sub+sections ( ), (%), (%A) and (3) and section 8, the 8oard (ay, by an order, for reasons to be recorded in writing, in the interests of in'estors or securities (ar)et, ta)e any of the following (easures, either pending in'estigation or in*uiry or on co(pletion of such in'estigation or in*uiry, na(ely,(a) suspend the trading of any security in a recognised stoc) exchange3 (b) restrain persons fro( accessing the securities (ar)et and prohibit any person associated with securities (ar)et to buy, sell or deal in securities3 (c) suspend any office+bearer of any stoc) exchange or self+regulatory organisation fro( holding such position3 (d) i(pound and retain the proceeds or securities in respect of any transaction which is under in'estigation3 (e) attach, after passing of an order on an application (ade for appro'al by the Mudicial ?agistrate of the first class ha'ing Durisdiction, for a period not exceeding one (onth, one or (ore ban) account or accounts of any inter(ediary or any person associated with the securities (ar)et in any (anner in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder , 4ro+i-e- that only the ban) account or accounts or any transaction entered therein, so far as it relates to the proceeds actually in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder shall be allowed to be attached3 (f) direct any inter(ediary or any person associated with the securities (ar)et in any (anner not to dispose of or alienate an asset for(ing part of any transaction which is under in'estigation , 4ro+i-e- that the 8oard (ay, without preDudice to the pro'isions contained in sub+section (%) or sub+section (%A), ta)e any of the (easures specified in clause ( d) or clause (e) or clause (f), in respect of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard has reasonable grounds to belie'e that such co(pany has been
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1clause (i) of sub+section (%)2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 3 Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 $ Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
% Substituted
indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et , 4ro+i-e- f*rther that the 8oard shall, either before or after passing such orders, gi'e an
opportunity of hearing to such inter(ediaries or persons concerned0: 15(5) The %.o* t -i!(or(e-, $*r!*% t to % -ire'tio i!!*e- * -er !e'tio 11; or !e'tio 1"A of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 or !e'tio 19 of the De$o!itorie! A't, 1998, %! the '%!e .%> ,e, !h%ll ,e 're-ite- to the I +e!tor 4rote'tio % - E-*'%tio 2* e!t%,li!he- ,> the ;o%r- % - !*'h %.o* t !h%ll ,e *tiliLe- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< %4;o%r- to re(*l%te or $rohi,it i!!*e of $ro!$e't*!, offer -o'*.e t or %-+erti!e.e t !oli'iti ( .o e> for i!!*e of !e'*ritie!. 11A. ( ) Kithout preDudice to the pro'isions of the Co(panies Act, !"# ( of !"#), the 8oard (ay, for the protection of in'estors,(a) specify, by regulations(i) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (ii) the (anner in which such (atters shall be disclosed by the co(panies3 (b) by general or special orders(i) prohibit any co(pany fro( issuing prospectus, any offer docu(ent, or ad'ertise(ent soliciting (oney fro( the public for the issue of securities3 (ii) specify the conditions subDect to which the prospectus, such offer docu(ent or ad'ertise(ent, if not prohibited, (ay be issued0 (%) Kithout preDudice to the pro'isions of section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the 8oard (ay specify the re*uire(ents for listing and transfer of securities and other (atters incidental thereto0: 34Colle'ti+e i +e!t.e t !'he.e. 11AA. ( ) Any sche(e or arrange(ent which satisfies the conditions referred to in subsection (%) $5or !*,0!e'tio ("A)< shall be a collecti'e in'est(ent sche(e0 "44ro+i-e- th%t % > $ooli ( of f* -! * -er % > !'he.e or %rr% (e.e t, /hi'h i! ot re(i!tere- /ith the ;o%r- or i! ot 'o+ere- * -er !*,0!e'tio ()), i +ol+i ( %
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 7arlier S0 A was inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" for S0 A0 <rior to its substitution, S0 A read as under,+ 1 A0 ?atters to be disclosed by the co(panies0+ Kithout <reDudice to the <ro'isions of the Co(panies Act , !"# ( of !"#), the board (ay , for the protection of in'estors, specify, by regulations,+ (a) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (b) the (anner in which such (atters, shall be disclosed by the co(panies02 3 Inserted by S78I (A(end(ent) Act !!!, w0e0f0 %%+%+%0000 $I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% Substituted
%
'or$*! %.o* t of o e h* -re- 'rore r*$ee! or .ore !h%ll ,e -ee.e- to ,e % 'olle'ti+e i +e!t.e t !'he.e.< (%) Any sche(e or arrange(ent (ade or offered by any 5$er!o < under which,(i) the contributions, or pay(ents (ade by the in'estors, by whate'er na(e called, are pooled and utiliFed for the purposes of the sche(e or arrange(ent3 (ii) the contributions or pay(ents are (ade to such sche(e or arrange(ent by the in'estors with a 'iew to recei'e profits, inco(e, produce or property, whether (o'able or i((o'able, fro( such sche(e or arrange(ent3 (iii) the property, contribution or in'est(ent for(ing part of sche(e or arrange(ent, whether identifiable or not, is (anaged on behalf of the in'estors3
(iv) the in'estors do not ha'e day+to+day control o'er the (anage(ent and operation of the sche(e or arrange(ent0 "5("A)< A > !'he.e or %rr% (e.e t .%-e or offere- ,> % > $er!o !%ti!f>i ( the 'o -itio ! %! .%> ,e !$e'ifie- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< (3) Eotwithstanding anything contained in sub+section (%) 35or !*,0!e'tio ("A)<, any sche(e or arrange(ent(i) (ade or offered by a co+operati'e society registered under the Co+operati'e Societies Act, ! % (% of ! %) or a society being a society registered or dee(ed to be registered under any law relating to co+operati'e societies for the ti(e being in force in any State3 (ii) under which deposits are accepted by non+ban)ing financial co(panies as defined in clause (f) of section $"+I of the Reser'e 8an) of India Act, !3$ (% of !3$)3 (iii) being a contract of insurance to which the Insurance Act, !3> ($ of !3>), applies3 (iv) pro'iding for any Sche(e, <ension Sche(e or the Insurance Sche(e fra(ed under the 7(ployees <ro'ident 6und and ?iscellaneous <ro'isions Act, !"% ( ! of !"%)3 (v) under which deposits are accepted under section ">A of the Co(panies Act, !"# ( of !"#)3 (vi) under which deposits are accepted by a co(pany declared as a Eidhi or a (utual benefit society under section #%0A of the Co(panies Act, !"# ( of !"#)3 (vii) falling within the (eaning of Chit business as defined in clause ( d) of section % of the Chit 6und Act, !>% ($0 of !>%)3 (viii) under which contributions (ade are in the nature of subscription to a (utual fund3 35(i#) !*'h other !'he.e or %rr% (e.e t /hi'h the Ce tr%l Go+er .e t .%>, i 'o !*lt%tio /ith the ;o%r-, otif>H< shall not be a collecti'e in'est(ent sche(e0: "54o/er to i!!*e -ire'tio !. 11;. Sa'e as otherwise pro'ided in section , if after (a)ing or causing to be (ade an en*uiry, the 8oard is satisfied that it is necessary,S*,!tit*te- for J'o.$% >K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) 3I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
%I
3
(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any inter(ediary or other persons referred to in section % being conducted in a (anner detri(ental to the interest of in'estors or securities (ar)et3 or (iii) to secure the proper (anage(ent of any such inter(ediary or person, it (ay issue such directions,(a) to any person or class of persons referred to in section %, or associated with the securities (ar)et3 or (b) to any co(pany in respect of (atters specified in section A, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 15E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< %4I +e!ti(%tio . 11C. ( ) Khere the 8oard has reasonable ground to belie'e that-
(a) the transactions in securities are being dealt with in a (anner detri(ental to the in'estors or the securities (ar)et3 or (b) any inter(ediary or any person associated with the securities (ar)et has 'iolated any of the pro'isions of this Act or the rules or the regulations (ade or directions issued by the 8oard thereunder, it (ay, at any ti(e by order in writing, direct any person (hereafter in this section referred to as the In'estigating Authority) specified in the order to in'estigate the affairs of such inter(ediary or persons associated with the securities (ar)et and to report thereon to the 8oard0 (%) Kithout preDudice to the pro'isions of sections %3" to %$ of the Co(panies Act, !"# ( of !"#), it shall be the duty of e'ery (anager, (anaging director, officer and other e(ployee of the co(pany and e'ery inter(ediary referred to in section % or e'ery person associated with the securities (ar)et to preser'e and to produce to the In'estigating Authority or any person authorised by it in this behalf, all the boo)s, registers, other docu(ents and record of, or relating to, the co(pany or, as the case (ay be, of or relating to, the inter(ediary or such person, which are in their custody or power0 (3) .he In'estigating Authority (ay re*uire any inter(ediary or any person associated with securities (ar)et in any (anner to furnish such infor(ation to, or produce such boo)s, or registers, or other docu(ents, or record before hi( or any person authorised by it in this behalf as it (ay consider necessary if the furnishing of such infor(ation or the production of such boo)s, or registers, or other docu(ents, or record is rele'ant or necessary for the purposes of its in'estigation0 ($) .he In'estigating Authority (ay )eep in its custody any boo)s, registers, other docu(ents and record produced under sub+section (%) or sub+section (3) for six (onths and thereafter
% Inserted
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
$
shall return the sa(e to any inter(ediary or any person associated with securities (ar)et by who( or on whose behalf the boo)s, registers, other docu(ents and record are produced , 4ro+i-e- that the In'estigating Authority (ay call for any boo), register, other docu(ent and record if they are needed again , 4ro+i-e- f*rther that if the person on whose behalf the boo)s, registers, other docu(ents and record are produced re*uires certified copies of the boo)s, registers, other docu(ents and record produced before the In'estigating Authority, it shall gi'e certified copies of such boo)s, registers, other docu(ents and record to such person or on whose behalf the boo)s, registers, other docu(ents and record were produced0 (") Any person, directed to (a)e an in'estigation under sub+section ( ), (ay exa(ine on oath, any (anager, (anaging director, officer and other e(ployee of any inter(ediary or any person associated with securities (ar)et in any (anner, in relation to the affairs of his business and (ay ad(inister an oath accordingly and for that purpose (ay re*uire any of those persons to appear before it personally0 (#) If any person fails without reasonable cause or refuses(a) to produce to the In'estigating Authority or any person authorised by it in this behalf any boo), register, other docu(ent and record which is his duty under sub+section (%) or sub+section (3) to produce3 or (b) to furnish any infor(ation which is his duty under sub+section (3) to furnish3 or (c) to appear before the In'estigating Authority personally when re*uired to do so under sub+section (") or to answer any *uestion which is put to hi( by the In'estigating Authority in pursuance of that sub+section3 or (d) to sign the notes of any exa(ination referred to in sub+section (/), he shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with
fine, which (ay extend to one crore rupees, or with both, and also with a further fine which (ay extend to fi'e la)h rupees for e'ery day after the first during which the failure or refusal continues0 (/) Eotes of any exa(ination under sub+section (") shall be ta)en down in writing and shall be read o'er to, or by, and signed by, the person exa(ined, and (ay thereafter be used in e'idence against hi(0 4(:) ?here i the 'o*r!e of % i +e!ti(%tio , the I +e!ti(%ti ( A*thorit> h%! re%!o to ,elie+e th%t % > $er!o or e ter$ri!e, %! the '%!e .%> ,e, to /ho. % oti'e * -er !*,!e'tio ()) h%! ,ee i!!*e- or .i(ht ,e i!!*e-, 0 (%) h%! o.itte- or f%ile- to $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! %! re7*irei the oti'eH or (,) /o*l- ot $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! /hi'h !h%ll ,e *!ef*l for, or rele+% t to, the i +e!ti(%tio H or (') /o*l- -e!tro>, .*til%te, %lter, f%l!if> or !e'rete the i for.%tio or -o'*.e t! *!ef*l for, or rele+% t to, the i +e!ti(%tio ,
S*,!tit*te- for JKhere in the course of in'estigation, the In'estigating Authority has reasonable ground to belie'e that the boo)s, registers, other docu(ents and record of, or relating to, any inter(ediary or any person associated with securities (ar)et in any (anner, (ay be destroyed, (utilated, altered, falsified or secreted, the In'estigating Authority (ay (a)e an application to the Mudicial ?agistrate of the first class ha'ing Durisdiction for an order for the seiFure of such boo)s, registers, other docu(ents and record K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
"
the , the Ch%ir.% .%>, %fter ,ei ( !%ti!fie- th%t it i! e'e!!%r> to -o !o, %*thoriLe the I +e!ti(%ti ( A*thorit> or % > other offi'er of the ;o%r- (the offi'er !o %*thoriLe- i %ll '%!e! ,ei ( herei %fter referre- to %! the %*thori!e- offi'er), to0 (i) e ter % - !e%r'h, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft /here !*'h i for.%tio or -o'*.e t! %re e#$e'te- or ,elie+e- to ,e 6e$tH (ii) ,re%6 o$e the lo'6 of % > -oor, ,o#, lo'6er, !%fe, %l.ir%h or other re'e$t%'le for e#er'i!i ( the $o/er! 'o ferre- ,> !*,0'l%*!e (i), /here the 6e>! thereof %re ot %+%il%,leH (iii) !e%r'h % > $er!o /ho h%! (ot o*t of, or i! %,o*t to (et i to, or i! i , the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft, if the %*thoriLe- offi'er h%! re%!o to !*!$e't th%t !*'h $er!o h%! !e'rete- %,o*t hi! $er!o % > !*'h ,oo6! of %''o* t or other -o'*.e t!H (i+) re7*ire % > $er!o /ho i! fo* - to ,e i $o!!e!!io or 'o trol of % > ,oo6! of %''o* t or other -o'*.e t!, .%i t%i e- i the for. of ele'tro i' re'or-, to $ro+i-e the %*thori!e- offi'er the e'e!!%r> f%'ilit> to i !$e't !*'h ,oo6! of %''o* t or other -o'*.e t!. "#planation0 2or the $*r$o!e of thi! !*,0'l%*!e, the e#$re!!io Jele'tro i' re'or-K !h%ll h%+e the .e% i ( %!!i( e- to it i 'l%*!e (t) of !*,0!e'tio (1) of !e'tio " of the I for.%tio Te'h olo(> A't, "===. (+) !eiLe % > !*'h ,oo6! of %''o* t or other -o'*.e t! fo* - %! % re!*lt of !*'h !e%r'hH (+i) $l%'e .%r6! of i-e tifi'%tio o % > ,oo6! of %''o* t or other -o'*.e t! or .%6e or '%*!e to ,e .%-e e#tr%'t! or 'o$ie! therefro.H (+ii) re'or- o o%th the !t%te.e t of % > $er!o /ho i! fo* - to ,e i $o!!e!!io or i 'o trol of the i for.%tio or -o'*.e t! referre- to i !*,0'l%*!e! (i), (iii) % - (i+).< 4(9) The ;o%r- .%> .%6e re(*l%tio ! i rel%tio to % > !e%r'h or !eiL*re * -er thi! !e'tio H % - i $%rti'*l%r, /itho*t $reG*-i'e to the (e er%lit> of the fore(oi ( $o/er, !*'h re(*l%tio ! .%> $ro+i-e for the $ro'e-*re to ,e follo/e- ,> the %*thori!e- offi'er0
(%) for o,t%i i ( i (re!! i to % > ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft to ,e !e%r'he- /here free i (re!! thereto i! ot %+%il%,leH
1 S*,!tit*te-
,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) for the follo/i (& JAfter 'o !i-eri ( the %$$li'%tio % - he%ri ( the I +e!ti(%ti ( A*thorit>, if e'e!!%r>, the @%(i!tr%te .%>, ,> or-er, %*thori!e the I +e!ti(%ti ( A*thorit>O (a) to e ter, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the $l%'e or $l%'e! /here !*'h ,oo6!, re(i!ter!, other -o'*.e t! % - re'or- %re 6e$tH (b) to !e%r'h th%t $l%'e or tho!e $l%'e! i the .% er !$e'ifie- i the or-erH % (c) to !eiLe ,oo6!, re(i!ter!, other -o'*.e t! % - re'or-, it 'o !i-er! e'e!!%r> for the $*r$o!e! of the i +e!ti(%tio & 4ro+i-e- th%t the @%(i!tr%te !h%ll ot %*thori!e !eiL*re of ,oo6!, re(i!ter!, other -o'*.e t! % re'or-, of % > li!te- $*,li' 'o.$% > or % $*,li' 'o.$% > ( ot ,ei ( the i ter.e-i%rie! !$e'ifie* -er !e'tio 1") /hi'h i te -! to (et it! !e'*ritie! li!te- o % > re'o( i!e- !to'6 e#'h% (e * le!! !*'h 'o.$% > i -*l(e! i i !i-er tr%-i ( or .%r6et .% i$*l%tio .K
#
(,) for e !*ri ( !%fe '*!to-> of % > ,oo6! of %''o* t or other -o'*.e t! or %!!et! !eiLe-.< ( 0) .he In'estigating Authority shall )eep in its custody the boo)s, registers, other docu(ents and record seiFed under this section for such period not later than the conclusion of the in'estigation as it considers necessary and thereafter shall return the sa(e to the co(pany or the other body corporate, or, as the case (ay be, to the (anaging director or the (anager or any other person, fro( whose custody or power they were seiFed 5***<, 4ro+i-e- that the In'estigating Authority (ay, before returning such boo)s, registers, other docu(ents and record as aforesaid, place identification (ar)s on the( or any part thereof0 ( ) Sa'e as otherwise pro'ided in this section, e'ery search or seiFure (ade under this section shall be carried out in accordance with the pro'isions of the Code of Cri(inal <rocedure, !/3 (% of !/$) relating to searches or seiFures (ade under that Code0 Ce%!e % - -e!i!t $ro'ee-i (!. 11D. If the 8oard finds, after causing an in*uiry to be (ade, that any person has 'iolated, or is li)ely to 'iolate, any pro'isions of this Act, or any rules or regulations (ade thereunder, it (ay pass an order re*uiring such person to cease and desist fro( co((itting or causing such 'iolation, 4ro+i-e- that the 8oard shall not pass such order in respect of any listed public co(pany or a public co(pany (other than the inter(ediaries specified under section %) which intends to get its securities listed on any recognised stoc) exchange unless the 8oard has reasonable grounds to belie'e that such co(pany has indulged in insider trading or (ar)et (anipulation0: CDA4TER I REGISTRATION CERTI2ICATE Re(i!tr%tio of !to'6 ,ro6er!, !*,0,ro6er!, !h%re tr% !fer %(e t!, et'. 1". ( ) Eo stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et shall buy, sell or deal in securities except under, and in accordance with, the conditions of a certificate of registration obtained fro( the 8oard in accordance with the %4regulations: (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et i((ediately before the establish(ent of the 8oard for which no registration certificate was
necessary prior to such establish(ent, (ay continue to do so for a period of three (onths fro( such establish(ent or, if he has (ade an application for such registration within the said period of three (onths, till the disposal of such application,
The /or-! P% - i for. the @%(i!tr%te of !*'h ret*r P, o.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) % Substituted for 1rules2 by Securities =aw (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0
/
44ro+i-e- f*rther that any certificate of registration, obtained i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", shall be dee(ed to ha'e been obtained fro( the 8oard in accordance with the regulations pro'iding for such registration0 ( A) Eo depository, %4participant,: custodian of securities, foreign institutional in'estor, credit rating agency, or any other inter(ediary associated with the securities (ar)et as the 8oard (ay by notification in this behalf specify, shall buy or sell or deal in securities except under and in accordance with the conditions of a certificate of registration obtained fro( the 8oard in accordance with the regulations (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a depository, 34participant,: custodian of securities, foreign institutional in'estor or credit rating agency i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to buy or sell securities or otherwise deal with the securities (ar)et until such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300 ( 8) Eo person shall sponsor or cause to be sponsored or carry on or caused to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es including (utual funds, unless he obtains a certificate of registration fro( the 8oard in accordance with the regulations, 4ro+i-e- that any person sponsoring or causing to be sponsored, carrying or causing to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es operating in the securities (ar)et i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to operate till such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300:
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0
% Inserted
>
4()%lanati$n7 6or the re(o'al of doubts, it is hereby declared that, for purposes of this section, a collecti'e in'est(ent sche(e or (utual fund shall not be include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(ponent of in'est(ent besides the co(ponent of insurance issued by the insurer0: (%) 7'ery application for registration shall be in such (anner and on pay(ent of such fees as (ay be deter(ined by regulations0 (3) .he 8oard (ay, by order, suspend or cancel a certificate of registration in such (anner as (ay be deter(ined by regulations, 4ro+i-e- that no order under this sub+section shall be (ade unless the person concerned has been gi'en a reasonable opportunity of being heard0 %4CIA<.7R BA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 4rohi,itio of .% i$*l%ti+e % - -e'e$ti+e -e+i'e!, i !i-er tr%-i ( % - !*,!t% ti%l %'7*i!itio of !e'*ritie! or 'o trol.
1"A. Eo person shall directly or indirectly(a) use or e(ploy, in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recogniFed stoc) exchange, any (anipulati'e or decepti'e de'ice or contri'ance in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3
Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, w0r0e0f !+$+ %0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, reads as under, /@A81(0 D: ?ISC7==AE7CHS #0 Balidation+ Eotwithstanding anything contained in any Dudg(ent, decree or order of any court, tribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 Repeal and sa'ings + (1) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (2) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0 % Chapter BA inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
!
(b) e(ploy any de'ice, sche(e or artifice to defraud in connection with issue or dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange3 (c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange, in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (d) engage in insider trading3 (e) deal in securities while in possession of (aterial or non+public infor(ation or co((unicate such (aterial or non+public infor(ation to any other person, in a (anner which is in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (f) ac*uire control of any co(pany or securities (ore than the percentage of e*uity share capital of a co(pany whose securities are listed or proposed to be listed on a recognised stoc) exchange in contra'ention of the regulations (ade under this Act0: CDA4TER II 2INANCE, ACCOUNTS AND AUDIT Gr% t! ,> the Ce tr%l Go+er .e t. 1). .he Central &o'ern(ent (ay, after due appropriation (ade by <arlia(ent by law in this behalf, (a)e to the 8oard grants of such su(s of (oney as that &o'ern(ent (ay thin) fit for being utiliFed for the purposes of this Act0 2* -. 13. ( ) .here shall be constituted a 6und to be called the Securities and 7xchange 8oard of
India &eneral 6und and there shall be credited thereto(a) all grants, fees and charges recei'ed by the 8oard under this Act3 4G G G: (aa) %4G G G: (b) all su(s recei'ed by the 8oard fro( such other sources as (ay be decided upon by the Central &o'ern(ent0 (%) .he 6und shall be applied for (eeting(a) the salaries, allowances and other re(uneration of the (e(bers, officers and other e(ployees of the 8oard3 (b) the expenses of the 8oard in the discharge of its functions under section 3 (c) the expenses on obDects and for purposes authorised by this Act0
.he word 1and2 o(itted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 (aa) o(itted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 It was inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Clause (aa) reads as under,+ 1(aa) all su(s realiFed by way of <enalties under this Act3 and20
% Clause
%0
A''o* t! % - %*-it. 15. ( ) .he 8oard shall (aintain proper accounts and other rele'ant records and prepare an annual state(ent of accounts in such for( as (ay be prescribed by the Central &o'ern(ent in consultation with the Co(ptroller and Auditor+&eneral of India0 (%) .he accounts of the 8oard shall be audited by the Co(ptroller and Auditor+&eneral of India at such inter'als as (ay be specified by hi( and any expenditure incurred in connection with such audit shall be payable by the 8oard to the Co(ptroller and Auditor+&eneral of India0 (3) .he Co(ptroller and Auditor+&eneral of India and any other person appointed by hi( in connection with the audit of the accounts of the 8oard shall ha'e the sa(e rights and pri'ileges and authority in connection with such audit as the Co(ptroller and Auditor+ &eneral generally has in connection with the audit of the &o'ern(ent accounts and, in particular, shall ha'e the right to de(and the production of boo)s, accounts, connected 'ouchers and other docu(ents and papers and to inspect any of the offices of the 8oard0 ($) .he accounts of the 8oard as certified by the Co(ptroller and Auditor+&eneral of India or any other person appointed by hi( in this behalf together with the audit report thereon shall be forwarded annually to the Central &o'ern(ent and that &o'ern(ent shall cause the sa(e to be laid before each Iouse of <arlia(ent0 5CDA4TER IIA 4ENALTIES AND ADEUDICATION 4e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 15A. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder,(a) to furnish any docu(ent, return or report to the 8oard, fails to furnish the sa(e, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations, fails to file return or furnish the sa(e within the ti(e specified therefor in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0
Chapters BI A and BI 8 containing Ss0 "A to "M and "@ to "S respecti'ely, inserted by Securities =aws (A(end(ent) Act, !!" w0e0f0 %"+ + !!"0 % Substituted for 1a penalty not exceeding one la)h and fifty thousand rupees for each such failure2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding fi'e thousand rupees for e'ery day during which such failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for e'ery day during which the failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%
4e %lt> for f%il*re ,> % > $er!o to e ter i to %(ree.e t /ith 'lie t!. 15;. If any person, who is registered as an inter(ediary and is re*uired under this Act or any rules or regulations (ade thereunder to enter into an agree(ent with his client, fails to enter into such agree(ent, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 %54e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 15C. If any listed co(pany or any person who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such co(pany or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 4e %lt> for 'ert%i -ef%*lt! i '%!e of .*t*%l f* -!. 15D. If any person, who is(a) re*uired under this Act or any rules or regulations (ade thereunder to obtain a certificate of registration fro( the 8oard for sponsoring or carrying on any collecti'e in'est(ent sche(e, including (utual funds, sponsors or carries on any collecti'e in'est(ent sche(e, including (utual funds, without obtaining such certificate of registration, he shall be liable to 34a penalty of one la)h rupees for each day during which he sponsors or carries on any such collecti'e in'est(ent sche(e including (utual funds, or one crore rupees, whiche'er is less:3 (b) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, for sponsoring or carrying on any in'est(ent sche(e, fails to co(ply with the ter(s and conditions of certificate of registration, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, fails to (a)e an application for listing of its sche(es as pro'ided for in the regulations
Substituted for 1a penalty not exceeding fi'e la)h rupees for e'ery such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1If any person, who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing to redress the grie'ances of in'estors, fails to redress such grie'ances, he shall be liable to a penalty not exceeding ten thousand rupees for each such failure2, by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding ten thousand rupees for each day during which he carries on any such collecti'e in'est(ent sche(e including (utual funds, or ten la)h rupees whiche'er is higher02 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for each day during which such failure continues or ten la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0
%%
go'erning such listing, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (d) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to despatch
unit certificates of any sche(e in the (anner pro'ided in the regulation go'erning such despatch, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (e) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to refund the application (onies paid by the in'estors within the period specified in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (f) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to in'est (oney collected by such collecti'e in'est(ent sche(es in the (anner or within the period specified in the regulations, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for f%il*re to o,!er+e r*le! % - re(*l%tio ! ,> % %!!et .% %(e.e t 'o.$% >. 15E. Khere any asset (anage(ent co(pany of a (utual fund registered under this Act, fails to co(ply with any of the regulations pro'iding for restrictions on the acti'ities of the asset (anage(ent co(panies, such asset (anage(ent co(pany shall be liable to "4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for -ef%*lt i '%!e of !to'6 ,ro6er!. 152. If any person, who is registered as a stoc) bro)er under this Act,(a) fails to issue contract notes in the for( and (anner specified by the stoc) exchange of which such bro)er is a (e(ber, he shall be liable to a penalty not exceeding fi'e ti(es the a(ount for which the contract note was re*uired to be issued by that bro)er3 (b) fails to deli'er any security or fails to (a)e pay(ent of the a(ount due to the in'estor in the (anner within the period specified in the regulations, he shall be liable to #4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3
Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues or fi'e la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding one thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%3
(c) charges an a(ount of bro)erage which is in excess of the bro)erage specified in the regulations, he shall be liable to 4a penalty of one la)h rupees: or fi'e ti(es the a(ount of bro)erage charged in excess of the specified bro)erage, whiche'er is higher0 4e %lt> for i !i-er tr%-i (. 15G. If any insider who,(i) either on his own behalf or on behalf of any other person, deals in securities of a body corporate listed on any stoc) exchange on the basis of any unpublished price+sensiti'e infor(ation3 or (ii) co((unicates any unpublished price+sensiti'e infor(ation to any person, with or without his re*uest for such infor(ation except as re*uired in the ordinary course of business or under any law3 or
(iii) counsels, or procures for any other person to deal in any securities of any body corporate on the basis of unpublished price+sensiti'e infor(ation, shall be liable to a penalty %4of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of insider trading, whiche'er is higher:0 4e %lt> for o 0-i!'lo!*re of %'7*i!itio of !h%re! % - t%6eo+er!. 15D. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder, fails to,(i) disclose the aggregate of his shareholding in the body corporate before he ac*uires any shares of that body corporate3 or (ii) (a)e a public announce(ent to ac*uire shares at a (ini(u( price3 or 34(iii) (a)e a public offer by sending letter of offer to the shareholders of the concerned co(pany3 or (iv) (a)e pay(ent of consideration to the shareholders who sold their shares pursuant to letter of offer,: he shall be liable to a penalty $4of twenty+fi'e crore rupees or three ti(es the a(ount of profits profits (ade out of such failure, whiche'er is higher:0 554e %lt> for fr%*-*le t % - * f%ir tr%-e $r%'ti'e!. 15DA. If any person indulges in fraudulent and unfair trade practices relating to securities, he shall be liable to a penalty of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of such practices, whiche'er is higher0
Substituted for 1a penalty not exceeding fi'e thousand rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00% 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00% %00% " Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00%0
%$
4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 15D;. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 4o/er to %-G*-i'%te. 150I. ( ) 6or the purpose of adDudging under sections "A, "8, "C, "9, "7, "6, "& 4, "I, "IA and "I8:, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in subsection ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> the %-G*-i'%ti ( offi'er. 15E. Khile adDudging *uantu( of penalty under section "+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade
as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 "5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 15EA. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: )5Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!. 15E;. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 11, !e'tio 11;, !e'tio 11D, !*,0!e'tio ()) of !e'tio 1" or !e'tio 150I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e- -ef%*lt!.
Substituted for 1and "I2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the S78I (A(end(ent) Act, %00%, S0 ! w0e0f0 %!+ 0+%00%0 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
% Inserted
%"
(") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't. ()) The !ettle.e t $ro'ee-i (! * -er thi! !e'tio !h%ll ,e 'o -*'te- i %''or-% 'e /ith the $ro'e-*re !$e'ifie- i the re(*l%tio ! .%-e * -er thi! A't. (3) No %$$e%l !h%ll lie * -er !e'tio 15T %(%i !t % > or-er $%!!e- ,> the ;o%r- or %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio . < CDA4TER II; ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL E!t%,li!h.e t of Se'*ritie! A$$ell%te Tri,* %l!. 15F. ( ) .he Central &o'ern(ent shall by notification, establish one or (ore Appellate .ribunals to be )nown as the Securities Appellate .ribunal to exercise the Durisdiction, powers and authority conferred on such .ribunal by or under this Act 4or any other law for the ti(e being in force:0 (%) .he Central &o'ern(ent shall also specify in the notification referred to in sub+section ( ) the (atters and places in relation to which the Securities Appellate .ribunal (ay exercise Durisdiction0 "5Co.$o!itio of Se'*ritie! A$$ell%te Tri,* %l. 15L. A Securities Appellate .ribunal shall consist of a <residing Cfficer and two other (e(bers, to be appointed, by notification, by the Central &o'ern(ent, 4ro+i-e- that the Securities Appellate .ribunal, consisting of one person only, established before the co((ence(ent of the Securities and 7xchange 8oard of India (A(end(ent) Act, %00%, shall continue to exercise the Durisdiction, powers and authority conferred on it by or under this Act or any other law for the ti(e being in force till two other ?e(bers are appointed under this section0 9*%lifi'%tio for %$$oi t.e t %! 4re!i-i ( Offi'er or @e.,er of Se'*ritie! A$$ell%te Tri,* %l.
Inserted by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for Sections "= and "? by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "= and "? read as under,+ 1 "+=0 Co(position of securities Appellate .ribunal0 5 A Securities Appellate .ribunal shall consist of
% Substituted
one person only (hereinafter referred to as the <residing Cfficer of the Securities Appellate .ribunal) to be appointed, by notification, by the central &o'ern(ent0 "?0 Qualifications for appoint(ent as <residing Cfficer of the Securities Appellate .ribunal0 5 A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he + (a) is, or has been, or is *ualified to be, a Mudge of a Iigh Court3 or (b) has been a (e(ber of the Indian =egal Ser'ice and has held a post in &rade I of that ser'ice for at least three years3 or (c) has held office as the <residing Cfficer of a tribunal for at least three years02
%#
15@. 15( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of the Securities Appellate .ribunal unless he + (a) is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court3 or (b) is a sitting or retired Mudge of a Iigh Court who has co(pleted not less than se'en years of ser'ice as a Mudge in a Iigh Court0 ( A) .he <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0: (%) A person shall not be *ualified for appoint(ent as (e(ber of a Securities Appellate .ribunal unless he is a person of ability, integrity and standing who has shown capacity in dealing with proble(s relating to securities (ar)et and has *ualification and experience of corporate law, securities laws, finance, econo(ics or accountancy, 4ro+i-e- that a (e(ber of the 8oard or any person holding a post at senior (anage(ent le'el e*ui'alent to 7xecuti'e 9irector in the 8oard shall not be appointed as <residing Cfficer or ?e(ber of a Securities Appellate .ribunal during his ser'ice or tenure as such with the 8oard or within two years fro( the date on which he ceases to hold office as such in the 8oard0: %4Te *re of offi'e of 4re!i-i ( Offi'er % - other @e.,er! of Se'*ritie! A$$ell%te Tri,* %l. 15N. .he <residing Cfficer and e'ery other ?e(ber of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office and shall be eligible for re+appoint(ent, 4ro+i-e- that no person shall hold office as the <residing Cfficer of the Securities Appellate .ribunal after he has attained the age of sixty+eight years, 4ro+i-e- f*rther that no person shall hold office as a ?e(ber of the Securities Appellate .ribunal after he has attained the age of sixty+two years0: S%l%r> % - %llo/% 'e! % - other ter.! % - 'o -itio ! of !er+i'e of 4re!i-i ( Offi'er!. 150O. .he salary and allowances payable to and the other ter(s and conditions of ser'ice including pension, gratuity and other retire(ent benefits of the 4<residing Cfficer and other ?e(bers: of a Securities Appellate .ribunal shall be such as (ay be prescribed,
Substituted for sub+section ( ) of Section "? by the S78I (A(end(ent) Crdinance, %0 3 w0e0f0 % 00 0%0 30 <rior to substitution, it read as under,+ ;( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court , 4ro+i-e- that the <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0; % Substituted for Section "E, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "E read as under,+ 1 "E0 .er( of office0+ .he <residing officer of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office or until he attains the age of sixtyfi'e years, whiche'er is earlier02
%/
4ro+i-e- that neither the salary and allowances nor the other ter(s and conditions of ser'ice of the %4<residing Cfficer and other ?e(bers of a Securities Appellate .ribunal: shall be 'aried to their disad'antage after appoint(ent0 2illi ( *$ of +%'% 'ie!. 154. If, for reason other than te(porary absence, any 'acancy occurs in the 34office of the <residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal, then the Central &o'ern(ent shall appoint another person in accordance with the pro'isions of this Act to fill the 'acancy and the proceedings (ay be continued before the Securities Appellate .ribunal fro( the stage at which the 'acancy is filled0 Re!i( %tio % - re.o+%l. 159. ( ) .he $4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal (ay, by notice in writing under his hand addressed to the Central &o'ern(ent, resign his office, 4ro+i-e- that "4the <residing Cfficer or any other ?e(ber: shall, unless he is per(itted by the Central &o'ern(ent to relin*uish his office sooner, continue to hold office, until the expiry of three (onths fro( the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his ter( of office, whiche'er is the earliest0 (%) .he #4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal shall not be re(o'ed fro( his office except by an order by the Central &o'ern(ent on the ground of pro'ed (isbeha'iour or incapacity after an in*uiry (ade by a Mudge of the Supre(e Court, in which the /4<residing Cfficer or any other ?e(ber: concerned has been infor(ed of the charges against hi( and gi'en a reasonable opportunity of being heard in respect of these charges0 (3) .he Central &o'ern(ent (ay, by rules, regulate the procedure for the in'estigation of (isbeha'iour or incapacity of the >4<residing Cfficer or any other ?e(ber:0 Or-er! 'o !tit*ti ( A$$ell%te Tri,* %l to ,e fi %l % - ot to i +%li-%te it! $ro'ee-i (!. 15R. Eo order of the Central &o'ern(ent appointing any person as the !4<residing Cfficer or a ?e(ber: of a Securities Appellate .ribunal shall be called in *uestion in any (anner, and no act or proceeding before a Securities Appellate .ribunal shall be called in *uestion in any (anner on the ground (erely of any defect in the constitution of a Securities Appellate .ribunal0
Substituted for 1<residing Cfficer of a Securities Appellate .ribunal2 by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 / Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 > Substituted for 1aforesaid <residing Cfficer2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 ! Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0
%>
St%ff of the Se'*ritie! A$$ell%te Tri,* %l. 15S. ( ) .he Central &o'ern(ent shall pro'ide the Securities Appellate .ribunal with such officers and e(ployees as that &o'ern(ent (ay thin) fit0 (%) .he officers and e(ployees of the Securities Appellate .ribunal shall discharge their functions under general superintendence of the <residing Cfficer0 (3) .he salaries and allowances and other conditions of ser'ice of the officers and e(ployees of the Securities Appellate .ribunal shall be such as (ay be prescribed0 A$$e%l to the Se'*ritie! A$$ell%te Tri,* %l. 15T. 4( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed,(a) by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws
(Second A(end(ent) Act, !!!, under this Act, or the rules or regulations (ade thereunder3 or (b) by an order (ade by an adDudicating officer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 "5(") ********< (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 348oard or the AdDudicating Cfficer, as the case case (ay be,: is recei'ed by hi( and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 ($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0
Substituted for Sub+sec ( ) R (%) by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, Sub+sections ( ) R (%) were read as under, 1( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by any order (ade by any AdDudicating Cfficer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 (%) Eo appeal shall lie to the Securities Appellate .ribunal fro( an order (ade by an AdDudicating Cfficer with the consent of the parties02 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , o.i!!io , S*,0!e'tio (") re%- %! * -er& J(") No %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-eO (a) ,> the ;o%r- o % - %fter the 'o..e 'e.e t of the Se'*ritie! L%/! (Se'o - A.e -.e t) A't, 1999H (b) ,> % %-G*-i'%ti ( offi'er, /ith the 'o !e t of the $%rtie!.2 3 Substituted for 1a copy of the order (ade by the adDudicating officer2 by S78I (A(end(ent) Act !!!, !!!, w0e0f0 #+ %+ !!!0
%!
(") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 48oard, the: parties to the appeal and to the concerned AdDudicating Cfficer0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of the Se'*ritie! A$$ell%te Tri,* %l. 15U. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act, and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purposes of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3
(e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte 3 (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0), and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 %4Ri(ht to le(%l re$re!e t%tio . 15I. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,Substituted for 1parties2, S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for S0 "B by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, S0 "B read as under,+ 1 "B0 .he appellant (ay either appear in person or authorise one or (ore legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal02
% Substituted
30
(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of subsection ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or any attorney of any Iigh Court, and includes a pleader in practice0: Li.it%tio . 15?. .he pro'isions of the =i(itation Act, !#3 (3# of !#3), shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 54re!i-i ( Offi'er, @e.,er! % - !t%ff of Se'*ritie! A$$ell%te Tri,* %l! to ,e $*,li' !er+% t!. 15A. .he <residing Cfficer, ?e(bers and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0: Ci+il Co*rt ot to h%+e G*ri!-i'tio . 15M. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which an adDudicating officer appointed under this Act or a Securities Appellate .ribunal constituted under this Act is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "5A$$e%l to S*$re.e Co*rt.
Substituted for S0 "A by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, it read as under, + 1 "A0 .he <residing Cfficer and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian penal Code( $" of >#0)20 % Substituted for S0 "S by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution , it
was read as under,+ 1 "S0 Appeal to Iigh Court0+ Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, <ro'ided that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
3
15N. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order , 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the applicant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: CDA4TER III @ISCELLANEOUS 4o/er of Ce tr%l Go+er .e t to i!!*e -ire'tio !. 18. ( ) Kithout preDudice to the foregoing pro'isions of this Act 4or the 9epositories Act, !!#:, the 8oard shall, in exercise of its powers or the perfor(ance of its functions under this Act, be bound by such directions on *uestions of policy as the Central &o'ern(ent (ay gi'e in writing to it fro( ti(e to ti(e , 4ro+i-e- that the 8oard shall, as far as practicable, be gi'en an opportunity to express its 'iews before any direction is gi'en under this sub+section0 (%) .he decision of the Central &o'ern(ent whether a *uestion is one of policy or not shall be final0 4o/er of Ce tr%l Go+er .e t to !*$er!e-e the ;o%r-. 17. ( ) If at any ti(e the Central &o'ern(ent is of opinion(a) that on account of gra'e e(ergency, the 8oard is unable to discharge the functions and duties i(posed on it by or under the pro'isions of this Act3 or (b) that the 8oard has persistently (ade default in co(plying with any direction issued by the Central &o'ern(ent under this Act or in the discharge of the functions and duties i(posed on it by or under the pro'isions of this Act and as a result of such default the financial position of the 8oard or the ad(inistration of the 8oard has deteriorated3 or (c) that circu(stances exist which render it necessary in the public interest so to do, the Central &o'ern(ent (ay, by notification, supersede the 8oard for such period, not exceeding six (onths, as (ay be specified in the notification0 (%) Hpon the publication of a notification under sub+section ( ) superseding the 8oard,(a) all the (e(bers shall, as fro( the date of supersession, 'acate their offices as such3 (b) all the powers, functions and duties which (ay, by or under the pro'isions of this Act, be exercised or discharged by or on behalf of the 8oard, shall until the 8oard is reconstituted under sub+section (3), be exercised and discharged by such person or persons as the Central &o'ern(ent (ay direct3 and (c) all property owned or controlled by the 8oard shall, until the 8oard is reconstituted under sub+section (3), 'est in the Central &o'ern(ent0
Substituted for 1this Act2 by the 9epositories Act !!#, w0r0e0f0 %0+!+ !!"0
3%
(3) Cn the expiration of the period of supersession specified in the notification issued under sub+section ( ), the Central &o'ern(ent (ay reconstitute the 8oard by a fresh appoint(ent
and in such case any person or persons who 'acated their offices under clause ( a) of subsection (%), shall not be dee(ed dis*ualified for appoint(ent , 4ro+i-e- that the Central &o'ern(ent (ay, at any ti(e, before the expiration of the period of supersession, ta)e action under this sub+section0 ($) .he Central &o'ern(ent shall cause a notification issued under sub+section ( ) and a full report of any action ta)en under this section and the circu(stances leading to such action to be laid before each Iouse of <arlia(ent at the earliest0 Ret*r ! % - re$ort!. 1:. ( ) .he 8oard shall furnish to the Central &o'ern(ent at such ti(e and in such for( and (anner as (ay be prescribed or as the Central &o'ern(ent (ay direct, such returns and state(ents and such particulars in regard to any proposed or existing progra((e for the pro(otion and de'elop(ent of the securities (ar)et, as the Central &o'ern(ent (ay, fro( ti(e to ti(e, re*uire0 (%) Kithout preDudice to the pro'isions of sub+section ( ), the 8oard shall, within 4ninety: days after the end of each financial year, sub(it to the Central &o'ern(ent a report in such for(, as (ay be prescribed, gi'ing a true and full account of its acti'ities, policy and progra((es during the pre'ious financial year0 (3) A copy of the report recei'ed under sub+section (%) shall be laid, as soon as (ay be after it is recei'ed, before each Iouse of <arlia(ent0 Dele(%tio . 19. .he 8oard (ay, by general or special order in writing delegate to any (e(ber, officer of the 8oard or any other person subDect to such conditions, if any, as (ay be specified in the order, such of its powers and functions under this Act (except the powers under section %!) as it (ay dee( necessary0 A$$e%l!. "=. ( ) Any person aggrie'ed by an order of the 8oard (ade %4, before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!,: under this Act, or the rules or regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor, 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0
Substituted for 1sixty days2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1an order of the 8oard (ade2 by Securities =aws (Second A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0
% Substituted
33
(3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed, 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 4;%r of G*ri!-i'tio . "=A. Eo order passed by the 8oard %4or the AdDudicating Cfficer: under this Act shall be appealable except as pro'ided in 34section ". or: section %0 and no ci'il court shall ha'e Durisdiction in respect of any (atter which the 8oard $4or the AdDudicating Cfficer: is e(powered by, or under, this Act to pass any order and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any order passed by the 8oard "4or the AdDudicating Cfficer: by, or under, this Act0: S%+i (!.
"1. Eothing in this Act shall exe(pt any person fro( any suit or other proceedings which (ight, apart fro( this Act, be brought against hi(0 @e.,er!, offi'er! % - e.$lo>ee! of the ;o%r- to ,e $*,li' !er+% t!. "". All (e(bers, officers and other e(ployees of the 8oard shall be dee(ed, when acting or purporting to act in pursuance of any of the pro'isions of this Act, to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0 4rote'tio of %'tio t%6e i (oo- f%ith. "). Eo suit, prosecution or other legal proceedings shall lie against the Central &o'ern(ent #4or 8oard: or any officer of the Central &o'ern(ent or any (e(ber, officer or other e(ployee of the 8oard for anything which is in good faith done or intended to be done under this Act or the rules or regulations (ade thereunder0 /4Offe 'e!. "3. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, he shall be punishable with
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 18oard2 by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 3 Substituted for 1Section %02, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 $ Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 " Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Substituted by for S0 %$, Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" && <rior to its substitution S0%$ read as under, 1%$0 <enalty0+ Khoe'er contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both02
% Substituted
3$
i(prison(ent for a ter( which (ay extend to 4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to %4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 34Co.$o!itio of 'ert%i offe 'e!. "3A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "3;. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of the alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation, 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0
(%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0:
Substituted for 1one year, or with fine, or with both2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%, for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both20 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3"
E#e.$tio fro. t%# o /e%lth % - i 'o.e. "5. Eotwithstanding anything contained in the Kealth+tax Act, !"/ (%/ of !"/), the Inco(etax Act, !# ($3 of !# ) or any other enact(ent for the ti(e being in force relating to tax on wealth, inco(e, profits or gains(a) the 8oard3 (b) the existing Securities and 7xchange 8oard fro( the date of its constitution to the date of establish(ent of the 8oard, shall not be liable to pay wealth+tax, inco(e+tax or any other tax in respect of their wealth, inco(e, profits or gains deri'ed0 Co( iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations (ade thereunder, sa'e on a co(plaint (ade by the 8oard 4G G G:0 "5(") *****< )5 E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
.he words 1with the pre'ious sanction of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to the o.i!!io , S*,0!e'tio (") re%- %! * -er& 1(") No 'o*rt i ferior to th%t of "5% Co*rt of Se!!io < !h%ll tr> % > offe 'e $* i!h%,le * -er thi!
A't.2 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3#
A$$e%l % - re+i!io "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e of Cri.i %l 4ro'e-*re, 197) to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< Offe 'e! ,> 'o.$% ie!. "7. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly, 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n , 6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and
3/
(b) 1director2, in relation to a fir(, (eans a partner in the fir(0 4o/er to e#e.$t. ":. 4GGGGGG: "5 Re'o+er> of %.o* t! ":A. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith %
-ire'tio of -i!(or(e.e t or-er i!!*e- * -er !e'tio 11; or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifiefor. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.et%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't.
C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Section %> read as under, 1%>0 8$.er t$ e)e"%t+ If the central go'ern(ent if of the opinion that it is necessary or expedient so to do in public interest, it (ay, by order published in the Cfficial gaFette, exe(pt any person or class of persons buying or selling securities or otherwise dealing with the securities (ar)et fro( the operation of sub+section ! ) of Section %02 % I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3>
"#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio 15T of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 11;, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% !
% > offi'er of the ;o%r- /ho .%> ,e %*thoriLe-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 4o/er to .%6e r*le!. "9. ( ) .he Central &o'ern(ent (ay, by notification, (a)e rules for carrying out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers under sub+section ( ) of section "3 (b) the additional functions that (ay be perfor(ed by the 8oard under section 3 (c) 4G G G: (d) the (anner in which the accounts of the 8oard shall be (aintained under section "3 %4(da) the (anner of in*uiry under sub+section ( ) of section "+I3 (db) the salaries and allowances and other ter(s and conditions of ser'ice of the 34<residing Cfficers, ?e(bers: and other officers and e(ployees of the Securities Appellate .ribunal under section "+C and sub+section (3) of section "S3 (dc) the procedure for the in'estigation of (isbeha'iour or incapacity of the 4<residing Cfficers, or other ?e(bers: of the Securities Appellate .ribunal under sub+section (3) of section "Q3
Clause (c) o(itted by Securities laws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, clause (c) it read as under, 1(c) the conditions subDect to which registration certificate is to be issued under sub+section ( ) of section %20 % Inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 3 Substituted for 1<residing Cfficers2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3!
(dd) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section ". and the fees payable in respect of such appeal3: (e) the for( and the (anner in which returns and report to be (ade to the Central &o'ern(ent under section >3 (f) any other (atter which is to be, or (ay be, prescribed, or in respect of which pro'ision is to be, or (ay be, (ade by rules0 4o/er to .%6e re(*l%tio !. )=. ( ) .he 8oard (ay, %4GGG: by notification, (a)e regulations consistent with this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ti(es and places of (eetings of the 8oard and the procedure to be followed at such (eetings under sub+section ( ) of section / including *uoru( necessary for the transaction of business3 (b) the ter(s and other conditions of ser'ice of officers and e(ployees of the 8oard under sub+section (%) of section !3 34(c) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto and the (anner in which such (atters shall be disclosed by the co(panies under section A3 35('%) the *tiliL%tio of the %.o* t 're-ite- * -er !*,0!e'tio (5) of !e'tio 11H (',) the f*lfill.e t of other 'o -itio ! rel%ti ( to 'olle'ti+e i +e!t.e t !'he.e * -er !*,0!e'tio ("A) of !e'tio 11AAH ('') the $ro'e-*re to ,e follo/e- ,> the %*thoriLe- offi'er for !e%r'h or !eiL*re * -er !*,0!e'tio (9) of !e'tio 11CH < (d) the conditions subDect to which certificate of registration is to be issued, the a(ount of
fee to be paid for certificate of registration and the (anner of suspension or cancellation of certificate of registration under section %0: 55(-%) the ter.! -eter.i e- ,> the ;o%r- for !ettle.e t of $ro'ee-i (! * -er !*,!e'tio (") % - the $ro'e-*re for 'o -*'ti ( of !ettle.e t $ro'ee-i (! * -er !*,!e'tio ()) of !e'tio 15E;H (-,) % > other .%tter /hi'h i! re7*ire- to ,e, or .%> ,e, !$e'ifie- ,> re(*l%tio ! or i re!$e't of /hi'h $ro+i!io i! to ,e .%-e ,> re(*l%tio !.< R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t.
Substituted for 1<residing Cfficers2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 words 1with the pre'ious appro'al of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 3 Substituted for the existing clause (c) by the Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 <rior to substitution this clause read as under, 1(c) the a(ount of fee to be paid for registration certificate and (anner of suspension or cancellation of registration certificate under sub+section (%) and (3) of section %02 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% .he
$0
)1. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. )". .he pro'isions of this Act shall be in addition to, and not in derogation of, the pro'isions of any other law for the ti(e being in force0 A.e -.e t of 'ert%i e %'t.e t!. )). 40e%ealed bF 0e%ealing H A"ending Act' 2001&: 4o/er to re.o+e -iffi'*ltie!. )3. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order, published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as (ay appear to be necessary for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of fi'e years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 Re$e%l % - !%+i (. )5. ( ) .he Securities and 7xchange 8oard of India Crdinance, !!% (Crd0 " of !!%), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 1@( /@(5A9( 4 ee section 33: A@END@ENT O2 CERTAIN ENACT@ENTS 40e%ealed bF 0e%ealing H A"ending Act' 2001:
*SECURITIES CONTRACTS (REGULATION) RULES, 1957
In exercise of the powers conferred by section 30 of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the Central &o'ern(ent hereby (a)es the following rules, the sa(e ha'ing been pre'iously published as re*uired by sub+section (3) of the said section, na(ely ,Short title. 1. .hese rules (ay be called the Securities Contracts (Regulation) Rules, !"/0 Defi itio !. ". In these rules, unless the context otherwise re*uires,(a) 1for(2 (eans a for( appended to these rules3 (b) 1the Act2 (eans the Securities Contracts (Regulation) Act, !"# ($% of !"#)3 (c) 1&o'ern(ent co(pany2 (eans a co(pany in which not less than fifty+one per cent of the share capital is held by the Central &o'ern(ent or by any State &o'ern(ent or &o'ern(ents or partly by the Central &o'ern(ent and partly by one or (ore State &o'ern(ents ; 4(d) 1public2 (eans persons other than 5 (i) the pro(oter and pro(oter group3 (ii) subsidiaries and associates of the co(pany0 E#$l% %tio & 6or the purpose of this clause the words 1pro(oter2 and 1pro(oter group2 shall ha'e the sa(e (eaning as assigned to the( under the Securities and 7xchange 8oard of India (Issue of Capital and 9isclosure Re*uire(ents) Regulations, %00!3: %4(da) ;public sector co(pany; (eans a body corporate constituted by an Act of <arlia(ent or any State =egislature and includes a go'ern(ent co(pany,: 4(e) 1public shareholding2 (eans e*uity shares of the co(pany held by public and shall exclude shares which are held by custodian against depository receipts issued o'erseas0: A$$li'%tio for re'o( itio . ). An application under section 3 of the Act for recognition of a stoc) exchange shall be (ade to the 34Securities and 7xchange 8oard of India: in 6or( A0
* The!e R*le! h%+e ,ee *$-%te- ,%!e- o the R*le! % - A.e -.e t! %+%il%,le o the /e,!ite of the De$%rt.e t of E'o o.i' Aff%ir!0 htt$&11fi .i . i'.i 1l%/1i -e#.%!$ % - %+%il%,le %.e -.e t otifi'%tio !. Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 % Inserted by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3 Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
2ee! for %$$li'%tio . 3. ( ) .here shall be paid in respect of e'ery application under rule 3 a fee of rupees fi'e hundred0 (%) .he a(ount of the fee shall be deposited in the nearest &o'ern(ent treasury or the nearest branch of the State 8an) of India, 4ro+i-e- that at 8o(bay, Calcutta, ?adras, 9elhi and @anpur, the a(ount shall be deposited in the Reser'e 8an) of India0 (3) .he a(ount of the fee so deposited shall be credited to the receipt head 1A=BI?iscellaneous-Cther fees, fines and forfeitures20 Do'*.e t! to ,e file- %lo ( /ith the %$$li'%tio % - $%rti'*l%r! it !ho*l- 'o t%i . 5. 7'ery application shall be acco(panied by four copies of the rules (including the (e(orandu( and articles of association where the applicant stoc) exchange is an
incorporated body) and bye+laws of the stoc) exchange applying for recognition as specified in section 3 of the Act and the receipt granted by the &o'ern(ent treasury, or as the case (ay be, the State 8an) of India or the Reser'e 8an) of India, in respect of the a(ount of the fee deposited and shall contain clear particulars as to the (atters specified in the Annexure to 6or( A0 $54o/er to .%6e i 7*irie! % - '%ll for i for.%tio . 5A. 8efore granting recognition to a stoc) exchange under section $ of the Act, the "4Securities and 7xchange 8oard of India: (ay (a)e such in*uiries and re*uire such further infor(ation to be furnished, as it dee(s necessary, relating to the infor(ation furnished by the stoc) exchange in the Annexure to its application in 6or( A0: 2or. of re'o( itio . 8. .he recognition granted to a stoc) exchange shall be in 6or( 8 and be subDect to the following conditions, na(ely ,(a) that the recognition unless granted on a per(anent basis, shall be for such period not less than one year as (ay be specified in the recognition3 (b) that the stoc) exchange shall co(ply with such conditions as are or (ay be prescribed or i(posed under the pro'isions of the Act and these rules fro( ti(e to ti(e0
$ Inserted
by &SR 0!# dated $00/0 !#/, w0e0f0 %%00/0 !#/ for 1Central &o'ern(ent2 by the Securities Contracts (Regulation)(A(end(ent )Rules, !!#, w0e0f0 %30 %0 !!#0
" Substituted
Re e/%l of re'o( itio . 7. ( ) .hree (onths before the expiry of the period of recognition, a recognised stoc) exchange desirous of renewal of such recognition (ay (a)e an application to the #4Securities and 7xchange 8oard of India: in 6or( A0 (%) .he pro'isions of rule 3, rule $, rule ", rule "A and rule # shall apply in relation to renewal of recognition as they apply in relation to grant of recognition except that the fee payable in respect of an application for renewal of recognition shall be rupees two hundred0 9*%lifi'%tio ! for .e.,er!hi$ of % re'o( i!e- !to'6 e#'h% (e. :. .he rules relating to ad(ission of (e(bers of a stoc) exchange see)ing recognition shall inter alia pro'ide that , (1) Eo person shall be eligible to be elected as a (e(ber if(a) he is less than twenty+one years of age3 (b) he is not a citiFen of India3 pro'ided that the go'erning body (ay in suitable cases relax this condition with the prior appro'al of the !4Securities and 7xchange 8oard of India:3 (c) he has been adDudged ban)rupt or a recei'ing order in ban)ruptcy has been (ade against hi( or he has been pro'ed to be insol'ent e'en though he has obtained his final discharge3 (d) he has co(pounded with his creditors unless he has paid sixteen annas in the rupee3 (e) he has been con'icted of an offence in'ol'ing fraud or dishonesty3 (f) he is engaged as principal or e(ployee in any business other than that of securities /4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability unless he underta)es on ad(ission to se'er his connection with such business ,
>44ro+i-e-
that no (e(ber (ay conduct business in co((odity deri'ati'es, except by setting up a separate co(pany which shall co(ply with the regulatory re*uire(ents, such as, networth, capital ade*uacy, (argins and exposure nor(s as (ay be specified by the 6orward ?ar)et Co((ission, fro( ti(e to ti(e ,
# Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, w0e0f0 %30 %0 !!#0 / Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 > Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 <rior to its substitution, the pro'iso as a(ended by Securities Contracts (Regulation) (A(end(ent) Rules, !!# w0e0f0 %30 %0 !!#, read as under, 1<ro'ided that the Securities and 7xchange 8oard of India (ay, for reasons sufficient in the opinion of the said 8oard, per(it a recogniFed stoc) exchange to suspend the enforce(ent of this clause for a specified period on condition that the applicant is not associated with or is a (e(ber of or subscriber to or shareholder or debenture holder in or connected through a partner or e(ployee with any other organisation, institution, association, co(pany or corporation in India where forward business of any )ind whether in goods or co((odities or otherwise is carried on or is not engaged as a principal or e(ployee ion any such business02
4ro+i-e- f*rther that nothing herein shall be applicable to any corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to ()) of the pro'iso to sub+rule ($)0:3 (g) !4GGG: (h) he has been at any ti(e expelled or declared a defaulter by any other stoc) exchange3 (i) he has been pre'iously refused ad(ission to (e(bership unless a period of one year has elapsed since the date of such reDection0 (2) Eo person eligible for ad(ission as a (e(ber under sub+rule ( ) shall be ad(itted as a (e(ber unless ,(a) he has wor)ed for not less than two years as a partner with, or an authorised assistant or authorised cler) or re(isier or apprentice to, a (e(ber3 or (b) he agrees to wor) for a (ini(u( period of two years as a partner or representati'e (e(ber with another (e(ber and to enter into bargains on the floor of the stoc) exchange and not in his own na(e but in the na(e of such other (e(ber 3 or (c) he succeeds to the established business of a deceased or retiring (e(ber who is his father, uncle, brother or any other person who is, in the opinion of the go'erning body, a close relati'e , 4ro+i-e- that the rules of the stoc) exchange (ay authorise the go'erning body to wai'e co(pliance with any of the foregoing conditions if the person see)ing ad(ission is in respect of (eans, position, integrity, )nowledge and experience of business in securities, considered by the go'erning body to be otherwise *ualified for (e(bership0 (3) Eo person who is a (e(ber at the ti(e of application for recognition or subse*uently ad(itted as a (e(ber shall continue as such if(a) he ceases to be a citiFen of India , 4ro+i-e- that nothing herein shall affect those who are not citiFens of India but who were (e(bers at the ti(e of such application or were ad(itted subse*uently under the pro'isions of clause (b) of sub+rule ( ) of this rule, subDect to their co(plying with all other re*uire(ents of this rule3
(b) he is adDudged ban)rupt or a recei'ing order in ban)ruptcy is (ade against hi( or he is pro'ed to be insol'ent3 (c) he is con'icted of an offence in'ol'ing fraud or dishonesty3 (d) 04G G G: (e) 4G G G: (f) he engages either as principal or e(ployee in any business other than that of securities %4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability, pro'ided that! C(itted 0 Ibid0
by &SR 0/0(7) dated "0
0 !>>
Ibid0
% Inserted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(i) the go'erning body (ay, for reasons, to be recorded in writing, per(it a (e(ber to engage hi(self as principal or e(ployee in any such business, if the (e(ber in *uestion ceases to carry on business on the stoc) exchange either as an indi'idual or as a partner in a fir(, (ii) in the case of those (e(bers who were under the rules in force at the ti(e of such application per(itted to engage in any such business and were actually so engaged on the date of such application, a period of three years fro( the date of the grant of recognition shall be allowed for se'ering their connection with any such business, 34(iii) nothing herein shall affect (e(bers of a recognised stoc) exchange which are corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to (k) of the pro'iso to sub+rule ($)0: (4) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section 3%% of the said Act3 (ii) a (aDority of the directors of such co(pany are shareholders of such co(pany and also (e(bers of that stoc) exchange3 and (iii) the directors of such co(pany, who are (e(bers of that stoc) exchange, ha'e ulti(ate liability in such co(pany , 4ro+i-e- that where the $4Securities and 7xchange 8oard of India: (a)es a reco((endation in this regard, the go'erning body of a stoc) exchange shall, in relaxation of the re*uire(ents of this clause, ad(it as (e(ber the following corporations "4,bodies corporate:, co(panies or institutions, na(ely ,(a) the Industrial 6inance Corporation, established under the Industrial 6inance Corporation Act, !$> ( " of !$>)3 (b) the Industrial 9e'elop(ent 8an) of India, established under the Industrial 9e'elop(ent 8an) Act, !#$ ( > of !#$)3 (c) the =ife Insurance Corporation of India, established under the =ife Insurance Corporation Act, !"# (3 of !"#)3 (d) the &eneral Insurance Corporation of India constituted under the &eneral Insurance Corporation (Eationalisation) Act, !/% ("/ of !/%)3 (e) the Hnit .rust of India, established under the Hnit .rust of India Act, !#3 ("% of !#3)3
3 Substituted, ibid0 <rior to its substitution, sub+clause (iii) read as under, 1(iii) nothing herein shall affect (e(bers of a recogniFed stoc) exchange per(itted under the pro'iso to clause (f) of sub+rule( ) to suspend the enforce(ent of the aforesaid clause, for so long as such suspension is effecti'e, except that no (e(ber of such exchange shall engage in forward business of any )ind whether in goods or co((odities or otherwise and , if actually so engaged on the date of such application , he shall se'er his connection with any such business within a period of three years fro( the date of the grant of recognition02 $ Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# " Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(f) the Industrial Credit and In'est(ent Corporation of India, a co(pany registered under the Co(panies Act, !"# ( of !"#)3 (g) the subsidiaries of any of the corporations or co(panies specified in (a) to (f) and any subsidiary of the State 8an) of India or any nationalised ban) set up for pro'iding (erchant ban)ing ser'ices, buying and selling securities and other si(ilar acti'ities0 #4(h) any ban) included in the Second Schedule to the Reser'e 8an) of India Act, !3$ (% of !3$)3 (i) the 7xport I(port 8an) of India, established under the 7xport I(port 8an) of India Act, !> (%> of !> )3 (j) the Eational 8an) for Agriculture and Rural 9e'elop(ent, established under the Eational 8an) for Agriculture and Rural 9e'elop(ent Act, !> (# of !> )3 and (k) the Eational Iousing 8an), established under the Eational Iousing 8an) Act, !>/ ("3 of !>/)0: (4A) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall also be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section % of the said Act3 (ii) such co(pany underta)es to co(ply with such financial re*uire(ents and nor(s as (ay be specified by the Securities and 7xchange 8oard of India for the registration of such co(pany under sub+section ( ) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (iii) /4G G G: (iv) the directors of the co(pany are not dis*ualified fro( being (e(bers of a stoc) exchange under >4clause ( ) 4except sub+clause (b) and sub+clause (f) thereof: or clause (3) 4except sub+clause (a) and sub+clause (f) thereof:: and the 9irectors of the co(pany had not held the offices of the 9irectors in any co(pany which had been a (e(ber of the stoc) exchange and had been declared defaulter or expelled by the stoc) exchange3 and (v) not less than two directors of the co(pany are persons who possess a (ini(u( two yearsJ experience , (a) in dealing in securities3 or (b) as portfolio (anagers3 or (c) as in'est(ent consultants0 (5) Khere any (e(ber of a stoc) exchange is a fir(, the pro'isions of sub+rules ( ), (3) and ($), shall, so far as they can, apply to the ad(ission or continuation of any partner in such fir(0
# Inserted, / C(itted
ibid0 by &SR /$! (7), dated %0 00 !!$ > Substituted by &SR /!0(7), dated 0/0 0 !!$
Co tr%'t! ,et/ee .e.,er! of re'o( i!e- !to'6 e#'h% (e. 9. All contracts between the (e(bers of a recognised stoc) exchange shall be confir(ed in writing and shall be enforced in accordance with the rules and bye+laws of the stoc) exchange of which they are (e(bers0 !5No.i ee! of the Se'*ritie! % - E#'h% (e ;o%r- of I -i%< o the (o+er i ( ,o-ie! of re'o( i!e- !to'6 e#'h% (e!. 1=. .he %04Securities and 7xchange 8oard of India: (ay no(inate one or (ore persons not exceeding three in nu(ber, as (e(ber or (e(bers of the go'erning body of e'ery recognised stoc) exchange0 Such (e(ber or (e(bers shall enDoy the sa(e status and powers as other (e(bers of the go'erning body0 O,li(%tio of the (o+er i ( ,o-> to t%6e -i!'i$li %r> %'tio %(%i !t % .e.,er if !o -ire'te- ,> the % 5Se'*ritie! % - E#'h% (e ;o%r- of I -i%<. 11. After recei'ing the report of the result of an en*uiry (ade under clause (b) of subsection (3) of section # of the Act, the % 4Securities and 7xchange 8oard of India: (ay ta)e such action as they dee( proper and, in particular, (ay direct the go'erning body of the stoc) exchange to ta)e such disciplinary action against the offending (e(ber, including fine, expulsion, suspension or any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney, as (ay be specified by the % 4Securities and 7xchange 8oard of India:3 notwithstanding anything to the contrary contained in the rules or bye+laws of the stoc) exchange concerned, the go'erning body shall gi'e effect to the directions of the % 4Securities and 7xchange 8oard of India: in this behalf and shall not in any (anner co((ute, re'o)e or (odify the action ta)en in pursuance of such directions, without the prior appro'al of the % 4Securities and 7xchange 8oard of India:0 .he % 4Securities and 7xchange 8oard of India: (ay, howe'er, either of its own (otion or on the representation of the (e(ber concerned, (odify or withdraw its direction to the go'erning body0 A*-it of %''o* t! of .e.,er!. 1". 7'ery (e(ber shall get his accounts audited by a chartered accountant whene'er such audit is re*uired by the % 4Securities and 7xchange 8oard of India:0 ?ith-r%/%l of re'o( itio . 1). .he written notice referred to in section " of the Act shall be in 6or( C0
! Substituted %0 Ibid0 %
by 60 Eo0 L3/LS7L!$, dated %#0 00 !!$0
Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> re'o( i!e- !to'6 e#'h% (e. 13. 7'ery recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years, (1) ?inute boo)s of the (eetings of(a) (e(bers3 (b) go'erning body3 (c) any standing co((ittee or co((ittees of the go'erning body or of the general body of (e(bers0
(2) Register of (e(bers showing their full na(es and addresses0 Khere any (e(ber of the stoc) exchange is a fir(, full na(es and addresses of all partners shall be shown0 (3) Register of authorised cler)s0 (4) Register of re(isiers of authorised assistants0 (5) Record of security deposits0 (6) ?argin deposits boo)0 (7) =edgers0 (8) Mournals0 (9) Cash boo)0 (10) 8an) pass+boo)0 ;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> .e.,er of % re'o( i!e- !to'6 e#'h% (e. 15. ( ) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years , (a) Register of transactions ( a!da boo))0 (b) ClientsJ ledger0 (c) &eneral ledger0 (d) Mournals0 (e) Cash boo)0 (f) 8an) pass+boo)0 (g) 9ocu(ents register showing full particulars of shares and securities recei'ed and deli'ered0 (2) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following docu(ents for a period of two years, (a) ?e(berJs contract boo)s showing details of all contracts entered into by hi( with other (e(bers of the sa(e exchange or counterfoils or duplicates of (e(os of confir(ation issued to such other (e(bers0 (b) Counterfoils or duplicates of contract notes issued to clients0 (c) Kritten consent of clients in respect of contracts entered into as principals0 @% er of i 7*ir> i rel%tio to the %ff%ir! of the (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e or the %ff%ir! of % > .e.,er of the !to'6 e#'h% (e i rel%tio to the !to'6 e#'h% (e. 18. ( )(a) .he person or persons appointed by the %%4Securities and 7xchange 8oard of India: to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act shall hereafter in this rule be referred to as the Nin*uiring authorityJ3 (b) where the in*uiring authority consists of two or (ore persons, one of the( shall be appointed as the chair(an or senior (e(ber thereof3 (c) the in*uiring authority shall hand o'er a state(ent of issues to be in*uired into to the go'erning body or the (e(ber concerned, as the case (ay be, who will be gi'en a reasonable opportunity to state their or his side of the case3 (d) if any witness is called for exa(ination, an opportunity shall be pro'ided to the go'erning body or the (e(ber whose affairs are being in*uired into, as the case (ay be, to cross+exa(ine such witness3 (e) where the in*uiring authority consists of (ore than one person, the 'iews of the (aDority shall be dee(ed to represent the findings of such authority and, in the e'ent of
an e*uality of 'otes, the chair(an or senior (e(ber shall ha'e a casting 'ote3 (f) the in*uiring authority shall sub(it its report in writing to the %%4Securities and 7xchange 8oard of India: within the period specified in the order of appoint(ent3 (g) te(porary absence fro( any hearing or hearings of any (e(ber of the in*uiring authority shall not 'itiate its proceedings0 (%) Khere the %%4Securities and 7xchange 8oard of India: has directed the go'erning body of a stoc) exchange to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act, the go'erning body concerned shall appoint one or (ore (e(bers thereof to (a)e the in*uiry and the pro'isions of sub+rule ( ) shall apply "!tati# "!tandi# to such in*uiry0 S*,.i!!io of % *%l re$ort. 17. ( ) 7'ery recognised stoc) exchange shall before the 3 st day of Manuary in each year or within such extended ti(e as the %34Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, allow, furnish the %34Securities and 7xchange 8oard of India: annually with a report about its acti'ities during the preceding calendar year, which shall inter alia contain detailed infor(ation about the following (atters , (a) changes in rules and bye+laws, if any3 (b) changes in the co(position of the go'erning body3 (c) any new sub+co((ittees set up and changes in the co(position of existing ones3
%% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# %3 Ibid0
(d) ad(issions, re+ad(issions, deaths or resignations of (e(bers3 (e) disciplinary action against (e(bers3 (f) arbitration of disputes (nature and nu(ber) between (e(bers and non+(e(bers3 (g) defaults3 (h) action ta)en to co(bat any e(ergency in trade3 (i) securities listed and de+listed3 and (j) securities brought on or re(o'ed fro( the forward list0 (%) 7'ery recognised stoc) exchange shall within one (onth of the date of the holding of its annual general (eeting, furnish the %$4Securities and 7xchange 8oard of India: with a copy of its audited balance+sheet and profit and loss account for its preceding financial year0 S*,.i!!io of $erio-i'%l ret*r !. 17A. 7'ery recognised stoc) exchange shall furnish the %$4Securities and 7xchange 8oard of India: periodical returns relating to(i) the official rates for the securities enlisted thereon3 (ii) the nu(ber of shares deli'ered through the clearing house3 (iii) the (a)ing+up prices3 (iv) the clearing house progra((es3 (v) the nu(ber of securities listed and de+listed during the pre'ious three (onths3 (vi) the nu(ber of securities brought on or re(o'ed fro( the forward list during the pre'ious three (onths3 and (vii) any other (atter as (ay be specified by the %$4Securities and 7xchange 8oard of India:0 @% er of $*,li'%tio of ,>e0l%/! for 'riti'i!.. 1:. .he bye+laws to be (ade, a(ended or re'ised under the Act shall be published for
criticis( in accordance with the pro'isions of section %3 of the &eneral Clauses Act, >!/ both in the &aFette of India and Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate0 Re7*ire.e t! /ith re!$e't to the li!ti ( of !e'*ritie! o % re'o( i!e- !to'6 e#'h% (e. 19. ( ) A public co(pany as defined under the Co(panies Act, !"#, desirous of getting its securities listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars ,
%$ Ibid0
(a) ?e(orandu( and articles of association and, in the case of a debenture issue, a copy of the trust deed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any securities for subscription or sale during the last fi'e years0 (d) Copies of balance+sheets and audited accounts for the last fi'e years, or in the case of new co(panies, for such shorter period for which accounts ha'e been (ade up0 (e) A state(ent showing(i) di'idends and cash bonuses, if any, paid during the last ten years (or such shorter period as the co(pany has been in existence, whether as a pri'ate or public co(pany), (ii) di'idends or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents with or between ,(i) 'endors andLor pro(oters, (ii) underwriters and sub+underwriters, (iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents with(i) (anaging agents and secretaries and treasurers, (ii) selling agents, (iii) (anaging directors and technical directors, (iv) general (anager, sales (anager, (anager or secretary0 (h) Certified copy of e'ery letter, report, balance+sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering securities for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents0 (j) A brief history of the co(pany since its incorporation gi'ing details of its acti'ities including any reorganisation, reconstruction or a(alga(ation, changes in its capital structure, (authorised, issued and subscribed) and debenture borrowings, if any0
(k) <articulars of shares and debentures issued-(i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s including an option for the issue of any )ind of the securities granted to any person0 (") Certified copies of%"4(i) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3: (ii) agree(ents, if any, with the Industrial 6inance Corporation, Industrial Credit and In'est(ent Corporation and si(ilar bodies0 (n) <articulars of shares forfeited0 ($) A list of highest ten holders of each class or )ind of securities of the co(pany as on the date of application along with particulars as to the nu(ber of shares or debentures held by and the address of each such holder0 (%) <articulars of shares or debentures for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0 (%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant co(pany shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer, (ii) that the fully paid shares will be free fro( all lien, while in the case of partly paid shares, the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such shares, (iii) that any a(ount paid+up in ad'ance of calls on any share (ay carry interest but shall not entitle the holder of the share to participate in respect thereof, in a di'idend subse*uently declared, (iv) there will be no forfeiture of unclai(ed di'idends before the clai( beco(es barred by law, (v) that option or right to call of shares shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the securities of a co(pany which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0
%" Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 <rior to its substitution, sub+clause (i), read as under, 1(i) letters of consent of the Controller of Capital Issues02
%#4(b)
(i) At least twenty fi'e per cent0 of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent3 or (ii) At least ten per cent of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent if the post issue capital of the
co(pany calculated at offer price is (ore than four thousand crore rupees, <ro'ided that the re*uire(ent of post issue capital being (ore than four thousand crore rupees shall not apply to a co(pany whose draft offer docu(ent is pending with the Securities and 7xchange 8oard of India on or before the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, if it satisfies the conditions prescribed in clause (b) of sub+rule % of rule ! of the Securities Contracts (Regulation) Rules, !"# as existed prior to the date of such co((ence(ent, %/4<ro'ided further that the co(pany, referred to in sub clause (ii), shall increase its public shareholding to at least twenty fi'e per cent, within a
%# Substituted
by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, clause (b) as a(ended by the A(end(ent Rules, %00 , w0e0f0 0/00#0%00 , read as under, 1(b) At least 0 per cent of each class or )ind of securities issued by a co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted subDect to the following conditions, (a) (ini(u( %0 la)h securities (excluding reser'ations, fir( allot(ent and pro(otersJ contribution) was offered to the public3 (b) the siFe of the offer to the public, i&e&' the offer price (ultiplied by the nu(ber of securities offered to the public was (ini(u( Rs0 00 crores3 and (c) the issue was (ade only through boo) building (ethod with allocation of #0 per cent of the issue siFe to the *ualified institutional buyers as specified by the Securities and 7xchange 8oard of India, 4ro+i-e- that if a co(pany does not fulfil the conditions, it shall offer at least %" per cent of each class or )ind of securities to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted, 4ro+i-e- f*rther that a recognised stoc) exchange (ay relax any of the conditions with the pre'ious appro'al of the Securities and 7xchange 8oard of India, in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#), and subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*6or the purpose of this clause, it is hereby clarified that where any part of the securities sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental 6ire and &eneral Insurance Co(pany =i(ited and the Hnited 6ire and &eneral Insurance Co(pany =i(ited or Hnit .rust of India, the total subscription to the securities, whether by one or (ore of such bodies, shall not for( part of the 0 per cent or %" per cent of the securities, as the case (ay be, to be offered to the public02 %/ Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 <rior to its substitution, second pro'iso, read as under, 1<ro'ided further that the co(pany, referred in sub+clause (ii), shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of atleast fi'e per
period of three years fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India0: %>4GGG:: %!4(c) Eotwithstanding anything contained in clause (b), a public sector co(pany, shall offer and allot at least ten per cent, of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares to public in ter(s of an offer docu(ent0: (3) A co(pany applying for listing shall, as a condition precedent, underta)e inter alia(a) (i) that letters of allot(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to
that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been posted, (ii) that letters of right will be issued si(ultaneously, (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the securities to which they relate, (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right, (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or di'idend on the securities will be calculated, (b) to issue, when so re*uired, receipts for all securities deposited with it whether for registration, sub+di'ision, exchange or for other purposes 3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of certificates and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (bb) to issue, when so re*uired, consolidation and renewal certificates in deno(inations of the (ar)et unit of trading to split certificates, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3
cent per annu( beginning fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India,2 %> C(itted, ibid <rior to its o(ission, third pro'iso, read as under, 1<ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase beings its public shareholding to the le'el of twenty fi'e per cent in that year02 %! Inserted, ibid0
(c) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders, and (ii) to 'erify when the co(pany is unable to issue certificates or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (d) on production of the necessary docu(ents by shareholders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or certificate of the Controller of 7state 9uty or si(ilar other docu(ent has been duly exhibited to
and registered by the co(pany3 (e) to issue certificates in respect of shares or debentures lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance certificates within the sa(e period where the transfer is acco(panied by a larger certificate3 (f) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a di'idend or the issue of right or bonus share will be considered3 (g) to reco((end or declare all di'idends andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all di'idends andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (h) to notify the stoc) exchange of any (aterial change in the general character or nature of the co(panyJs business3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (anaging agent or secretaries and treasurers, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued, copies of all other notices and circulars sent to the shareholders including proceedings of ordinary and extraordinary general (eetings of the co(pany and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the shareholders of any new issue of securities whether by way of right, pri'ilege bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited securities or the issue of securities held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of di'idend or issue of right or bonus shares or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s (or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its shareholders or debentureholders) and specifying the purpose or purposes for which the transfer boo)s are to be closed (or the record is to be ta)en)3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority subDect to which the issue is proposed to be (ade ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after each annual general (eeting of at least ten principal holders of each class of security of the co(pany along with particulars as to the nu(ber of shares or debentures held by,
and address of, each such holder3 (+) to grant to shareholders the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e not being less than four wee)s within which to record, exercise, or renounce such rights, pri'ileges and benefits and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3 (r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any securities listed on the exchange, (ii) of the intention to (a)e a drawing of such securities, inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing of the balance) for the drawing, (iii) of the a(ount of securities outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the shareholders to apprise the position of the co(pany and to a'oid the establish(ent of a false (ar)et in the shares of the co(pany3 (t) (t)that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 304($) An application for listing shall be necessary in respect of the following, (a) all new issues of any class or )ind of securities of a co(pany to be offered to the public3 (b) all further issues of any class or )ind of securities of a co(pany if such class or )ind of securities of the co(pany are already listed on a recognised stoc) exchange0: (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the securities of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 3 44ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any security, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and its orders shall be carried out by the stoc) exchange0: 3%4(#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore
or re+ad(it to dealings any securities suspended or withdrawn fro( the list0: 334(#A) 7xcept as otherwise pro'ided in these rules or per(itted by the Securities and 7xchange 8oard of India under sub+rule (/), all re*uire(ents with respect to listing
30 Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, sub+rule ($), read as under, 1($) A fresh application for listing will be necessary in respect of all new issues desired to be dealt in, pro'ided that, where such new securities are identical in all respects with those already listed, ad(ission to dealings will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new issues0 7xplanation, Shares are identical in all respects only if(a) they are of the sa(e no(inal 'alue and the sa(e a(ount per share has been called up3 (b) they are entitled to di'idend at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the di'idend payable on each share will a(ount to exactly the sa(e su(, net and gross3 and (c) they carry the sa(e rights in all other respects02 3 Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%0000 7arlier, the second pro'iso was a(ended by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 3% Substituted by the Securities Contracts (Regulation) (A(end(ent), %000, w0e0f0 0>00>0%0000 7arlier, subrule (#) was a(ended by the Securities Contracts (Regulation) (A(end(ent), !!#, w0e0f0 %30 %0 !!#0 33 Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!0>0%0 00 <rior to its substitution, sub+rule (#A) as a(ended by the Securities Contracts
prescribed by these rules shall, so far as they (ay be, also apply to a public sector co(pany0: 3$4GGG: (/) .he 3"4Securities and 7xchange 8oard of India: (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect to listing prescribed by these rules0 3#4Co ti *o*! Li!ti ( Re7*ire.e t. 19A. ( ) 7'ery listed co(pany 3/4other than public sector co(pany: shall (aintain public shareholding of at least twenty fi'e per cent0, 3>4<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent, on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall increase its public shareholding to at least twenty fi'e per cent, within a period of three years fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India0 7xplanation, 6or the purposes of this sub+rule, a co(pany whose securities has been listed pursuant to an offer and allot(ent (ade to public in ter(s of sub+clause (ii) of clause (b) of sub+rule (%) of rule !, shall (aintain (ini(u( twenty fi'e per cent, public shareholding fro( the date on which the public shareholding in the co(pany reaches the le'el of twenty fi'e percent in ter(s of said sub+clause0: (%) Khere the public shareholding in a listed co(pany falls below twenty fi'e per cent0 at any ti(e, such co(pany shall bring the public shareholding to twenty fi'e per cent0
(Regulations)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 and &SR % (7) w0e0f0 0!0030 !!", read as under, 1(#A) All the re*uire(ents with respect to listing and continuous listing prescribed by these rules, shall so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature ,2 3$ C(itted by the Securities Contracts (Regulation)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its o(ission, pro'iso, as substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# and inserted by &SR %! (7) dated %/0030 !!", read as under,
1<ro'ided that a recognised stoc) exchange (ay relax the re*uire(ent of offer to public for subscription of atleast twenty+fi'e percent of the each class or )ind of securities issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e02 3" Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent), Rules, !!#, w0e0f0 %30 %0 !!#0 3# Inserted by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 3/ Inserted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3> Substituted, ibid0 <rior to substitution, pro'isos, read as under, 1<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of at least fi'e per cent per annu( beginning fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India, <ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase brings its public shareholding to the le'el of twenty fi'e per cent in that year02
within a (axi(u( period of twel'e (onths fro( the date of such fall in the (anner specified by the Securities and 7xchange 8oard of India0: 3!4(3) Eotwithstanding anything contained in this rule, e'ery listed public sector co(pany shall (aintain public shareholding of at least ten per cent0, <ro'ided that a listed public sector co(pany+ (a) which has public shareholding below ten per cent, on the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of three years fro( the date of such co((ence(ent3 (b) whose public shareholding reduces below ten per cent, after the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of twel'e (onths fro( the date of such reduction,0: $04Re7*ire.e t! /ith re!$e't to the li!ti ( of * it! or % > other i !tr*.e t of % Colle'ti+e I +e!t.e t S'he.e o % re'o( i!e- !to'6 e#'h% (e. "=. ( ) A Collecti'e In'est(ent ?anage(ent Co(pany (CI?C) which is desirous of getting its any collecti'e in'est(ent sche(e listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars , (a) Certificate of incorporation, (e(orandu( and articles of association of the co(pany and the copy of the trust deed of the sche(e intended to be listed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any unit or other instru(ent for subscription or sale during the last fi'e years, or in the case of a new co(pany, such shorter period during which the co(pany has been in existence0 (d) Copies of balance sheets and audited accounts for the last fi'e years, or in the case of a new co(pany, for such co(pleted financial year for which accounts ha'e been (ade up0 (e) A state(ent showing,(i) returns and cash bonuses, if any, paid during the last ten years (or such
shorter period as the co(pany has been in existence whether as a pri'ate or public co(pany)3 (ii) returns or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents pertaining to each sche(e of the co(pany with or between,(i) 'endors andLor pro(oters3 (ii) underwriters and sub+underwriters3
3! Inserted $0 Inserted
by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 0 by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%000
(iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents pertaining to each sche(e of a co(pany with(i) selling agents and other ser'ice pro'iders3 (ii) (anaging directors and technical directors3 (iii) general (anager, sales (anager, (anager or secretary0 (h) Certified copies of e'ery letter, report, balance sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering units or any other instru(ents of the sche(e for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents pertaining to such sche(e0 (j) A brief history of the Co(pany since its incorporation gi'ing details of its acti'ities including any re+organisation, reconstruction or a(alga(ation, changes in its capital structure (authorised, issued and subscribed) and debenture borrowings, if any, and the perfor(ance of other collecti'e in'est(ent sche(es of the co(pany0 (k) <articulars of units of the sche(e andLor shares, debentures of the co(pany issued (i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s granted to any person pertaining to such sche(e0 (") Certified copies of(i) certificate of registration granted by the Securities and 7xchange 8oard of India3 (ii) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3 (iii) agree(ents, if any, with any public financial institution as specified in section $A of the Co(panies Act, !"# ( of !"#)0 (n) A list of the highest ten holders of units of each sche(e of the co(pany as on the date of application along with particulars as to the nu(ber of units held by and the address of each such holder0 ($) <articulars of units of the sche(e for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0
(%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer of units of a particular sche(e3 (ii) that the fully paid units issued under the sche(e will be free fro( all lien, while in the case of partly paid units the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such units3 (iii) that any a(ount paid+up in ad'ance of calls on any units (ay carry interest but shall not entitle the holder of the unit to participate in respect thereof, in a return subse*uently declared3 (iv) there will be no forfeiture of unclai(ed returns before the clai( beco(es barred by law3 (v) that option or right to call of units shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the units of a sche(e which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0 (b) At least twenty+fi'e per cent of the units or any other instru(ent of a sche(e issued by the co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and not (ore than ninety days, and that applications recei'ed in pursuance of such offer were allotted fairly and unconditionally , 4ro+i-e- that a recognised stoc) exchange (ay relax this re*uire(ent, with the pre'ious appro'al of the Securities and 7xchange 8oard of India in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#) and subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*Khere any part of the units or any other instru(ents sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely, the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental Insurance Co(pany =i(ited and the Hnited Insurance Co(pany =i(ited, or Hnit .rust of India, the total subscription to the units or any other instru(ent, whether by one or (ore of such bodies, shall not for( part of the twenty+fi'e per cent of the units or any other instru(ent to be offered to the public0 (3) A co(pany applying for listing of a sche(e shall, as a condition precedent, underta)e, inter alia,(a) (i) that letters of allot(ent of units or any other instru(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been
posted3 (ii) that letters of right will be issued si(ultaneously3 (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and, exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the units or any other instru(ent to which they relate3 (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right3 (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or return on the units or any other instru(ent will be calculated3 (b) to issue, when so re*uired, receipts for all units and any other instru(ent deposited with it whether for registration, sub+di'ision, exchange or for other purposes3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of units and any other instru(ent and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (c) to issue, when so re*uired, consolidation and renewal units or any other instru(ent in deno(inations of the (ar)et unit of trading, to split units or any other instru(ent, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3 (d) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders3 and (ii) to 'erify when the co(pany is unable to issue units or any other instru(ents or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (e) on production of the necessary docu(ents by unit holders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or si(ilar other docu(ent has been duly exhibited to and registered by the co(pany3 (f) to issue certificates in respect of units or any other instru(ent lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance units or any other instru(ent within the sa(e period where the transfer is acco(panied by a larger unit or any other instru(ent certificate3 (g) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a return or the issue or right or bonus units or
any other instru(ent will be considered3 (h) to reco((end or declare all returns andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all returns andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts of such sche(e as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued copies of all other notices and circulars sent to the unitLother instru(ent holders regarding any i(portant de'elop(ent or resolutions passed by the co(pany affecting the perfor(ance of the sche(e and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the unitLany other instru(ent holders, of any new issue of unitsLother instru(ents whether by way of right, pri'ilege, bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited unitsLother instru(ents or the issue of unitsLother instru(ents held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of unit capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of returns or issue of right or bonus unitsLany other instru(ents in the sche(e or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its unitLother instru(ent holders and specifying the purpose or purposes for which the transfer boo)s are to be closed or the record is to be ta)en3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority, subDect to which the issue is proposed to be (ade, ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after the preparation of annual accounts of at least ten principal holders of each class of unitsLany other instru(ents of the co(pany along with particulars as to the nu(ber of unitsLany other instru(ent held by, and address of, each such holder3 (+) to grant to unitLany other instru(ent holders of the sche(e the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e, not being less than four wee)s, within which to record, exercise, or renounce such rights, pri'ileges and benefits, and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3
(r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any unitLother instru(ent listed on the exchange3 (ii) of the intention to (a)e a drawing of such unitLother instru(ent inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing off the balance) for the drawing3 (iii) of the a(ount of unitsLother instru(ents outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the unitLany other instru(ent holders to appraise the position of the sche(e and to a'oid the establish(ent of a false (ar)et in the unitsLany other instru(ents of the co(pany3 (t) that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 ($) A fresh application for listing will be necessary in respect of all new sche(es desired to be dealt in , 4ro+i-e- that, where such new unitsLother instru(ents are identical in all respects with those already listed, ad(ission to dealing will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new sche(es0 ()%lanati$n0-HnitsLany other instru(ents are identical in all respects only if(a) they are issued under the sa(e sche(e3 (b) they are of the sa(e no(inal 'alue and the sa(e a(ount per unitLother instru(ents has been called up3 (c) they are entitled to returns at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the return payable on each unitLother issue will a(ount to exactly the sa(e su(, net and gross3 and (d) they carry the sa(e rights in all other respects0 (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the unitsLother instru(ents of a sche(e of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 4ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any unitLother instru(ent of a collecti'e in'est(ent sche(e, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an
opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and thereupon the orders of the Securities Appellate .ribunal shall be carried out by the stoc) exchange0 (#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore or read(it to dealings any unitsLother instru(ents suspended or withdrawn fro( the list0 (/) All the re*uire(ents with respect to listing prescribed by these rules, shall, so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature , 4ro+i-e- that a recognised stoc) exchange (ay relax the re*uire(ent of offer to the public for subscription of at least twenty+fi'e per cent of the units or any other instru(ent of a collecti'e in'est(ent sche(e issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 (>) .he Securities and 7xchange 8oard of India (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect of listing prescribed by these rules0: $ 4Deli!ti ( of !e'*ritie!. "1. A recogniFed stoc) exchange (ay, without preDudice to any other action that (ay be ta)en under the Act or under any other law for the ti(e being in force, delist any securities listed thereon on any of the following grounds in accordance with the regulations (ade by the Securities and 7xchange 8oard of India, na(ely,(a) the co(pany has incurred losses during the preceding three consecuti'e years and it has negati'e networth3 (b) trading in the securities of the co(pany has re(ained suspended for a period of (ore than six (onths3 (c) the securities of the co(pany ha'e re(ained infre*uently traded during the preceding three years3 (d) the co(pany or any of its pro(oters or any of its director has been con'icted for failure to co(ply with any of the pro'isions of the Act or the Securities and 7xchange 8oard of India Act, !!% or the 9epositories Act, !!# (%% of !!#) or rules, regulations, agree(ents (ade thereunder, as the case (ay be and awarded a penalty of not less than rupees one crore or i(prison(ent of not less than three years3 (e) the addresses of the co(pany or any of its pro(oter or any of its directors, are not )nown or false addresses ha'e been furnished or the co(pany has changed its registered office in contra'ention of the pro'isions of the Co(panies Act, !"# ( of !"#)3 or
$
Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %00>, w0e0f0 000#0%00!
(f) shareholding of the co(pany held by the public has co(e below the (ini(u( le'el applicable to the co(pany as per the listing agree(ent under the Act and the co(pany has failed to raise public holding to the re*uired le'el within the ti(e specified by the recogniFed stoc) exchange , 4ro+i-e- that no securities shall be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) If the securities is delisted under clause ( ),
(a) the co(pany, pro(oter and director of the co(pany shall be Dointly and se'erally liable to purchase the outstanding securities fro( those holders who wish to sell the( at a fair price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India, under the Act3 and (b) the said securities shall be delisted fro( all recogniFed stoc) exchanges0 (3) A recogniFed stoc) exchange (ay, on the re*uest of the co(pany, delist any securities listed thereon in accordance with the regulations (ade under the Act by Securities and 7xchange 8oard of India, subDect to the following conditions, na(ely ,(a) the securities of the co(pany ha'e been listed for a (ini(u( period of three years on the recogniFed stoc) exchange3 (b) the delisting of such securities has been appro'ed by the two+third of public shareholders3 and (c) the co(pany, pro(oter andLor the director of the co(pany purchase the outstanding securities fro( those holders who wish to sell the( at a price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India under the Act, 4ro+i-e- that the condition at (c) (ay be dispensed with by Securities and 7xchange 8oard of India if the securities re(ain listed at least on the Eational Stoc) 7xchange of India =i(ited or the 8o(bay Stoc) 7xchange =i(ited0: FORM A ( ee Rules 3 and /) A$$li'%tio for re'o( itio 1re e/%l of re'o( itio of % !to'6 e#'h% (e * -er !e'tio ) of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 .o 00000000000000000000000000000000000000 00000000000000000000000000000000000000 !bject,*A%%licati$n f$r rec$gniti$n-rene.al $f rec$gniti$n $f a #t$ck e)change !nder #ecti$n 3 $f the ec!ritie# /$ntract# (0eg!lati$n) Act' 1956& Sir, <ursuant to the $%4Securities and 7xchange 8oard of India: Eotification Eo0 00000000000000000000000000 00000000000000000 dated 000000000000000000000000000000000LCertificate of recognition dated0000000000000000000000000000000KeLI on behalf of 000000000000000000 (na(e and address of stoc) exchange) being a stoc) exchange as defined in section % of the Securities Contracts
$% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
(Regulation) Act, !"# hereby apply for recognitionLrenewal of recognition for the purposes of the said Act in respect of contracts in securities0 ". 6our copies of the rules, (e(orandu( and articles of association relating in general to the constitution and (anage(ent of the stoc) exchange and four copies of the bye+laws for the regulation and control contracts in securities are enclosed0 ). All the necessary infor(ation re*uired in the Annexure to this 6or( is enclosed0 Any additional infor(ation will be furnished as and when called for by the $34Securities and 7xchange 8oard of India:0 3. KeLI on behalf of the said stoc) exchange hereby underta)e to co(ply with the re*uire(ents of section $ of the said Act and such other conditions and ter(s as (ay be contained in the certificate of recognition or be prescribed or i(posed subse*uently0 5. .reasury Receipt Eo0 000000dated000000for Rs000000000000is attached0
Oours faithfully, Signature of applicant ANNEAURE TO 2OR@ BAC Part I - General 0 Ea(e of the applicant stoc) exchange0 %0 Address0 30 9ate of establish(ent0 $0 Is your exchange a Doint stoc) co(pany (state whether public or pri'ate) registered under the Indian Co(panies Act or an association for profit or otherwise P If it is organised on so(e other basis, this (ay be stated0 "0 &i'e details of your capital structure and attach three copies of the audited balance sheets and profit and loss account of the 7xchange for the preceding three years0 Part II - Membership #0 State the nu(ber of (e(bers at the ti(e of application0 Also specify how (any are inacti'e0 /0 State whether there is any pro'ision, resolution or con'ention for li(iting the nu(ber of (e(bers and whether in pursuance thereof you ha'e fixed a ceiling on the nu(ber of (e(bers that you would ta)e0 >0 9o you insist on any (ini(u( *ualifications and experience before enrolling new (e(bers P If so gi'e details0 !0 State the different classes of (e(bers, if any, the nu(ber thereof and the pri'ileges enDoyed by each class0 Khat is the procedure followed by your exchange for the ad(ission of different classes of new (e(bers P 00 Khat are the rates of your annual subscription in respect of the different classes of (e(bers P 0 9o you collect any security deposit fro( your (e(bers P If so, gi'e details and also state the (anner in which such deposits are utilised and the rate of interest allowed, if any0
$3 Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
%0 9o you collect any ad(ission or entrance fees fro( your (e(bers or fro( partners of fir(s who are (e(bers P If so, how (uch P 30 9o you insist on your (e(bers and partners of fir(s who are (e(bers di'esting the(sel'es of other acti'ities either as principal or as e(ployee P $0 9o your rules per(it fir(s to beco(e (e(bers P If so, is it incu(bent on (e(bers to see) the appro'al of the go'erning body before ad(itting new partners P State the conditions, if any, laid down in your rules for the ad(ission of such partners0 "0 If your rules do not per(it of fir(s being enrolled as (e(bers, do you per(it indi'idual (e(bers to for( a partnership P State the procedure followed for the recognition of such partnership0 #0 9o you per(it (e(bers to wor) in partnership with non+(e(bers P If so, how far such non+(e(bers subDect to the control of the stoc) exchange P Part III - Governing Body /0 Khat is the present strength of your go'erning body P &i'e details of the constitution, powers of (anage(ent, election and tenure of office of (e(bers of the go'erning body, and the (anner in which its business is transacted0 >0 Are any trade or co((ercial interest represented on your go'erning body P If so,
gi'e details of interests represented0 !0 9o you associate shareholders of in'estors associations with the (anage(ent of your exchange P If so, state the (anner in which it is done0 %00 Are there any &o'ern(ent representati'es on your go'erning body P If so, furnish their na(es0 % 0 9o your rules pro'ide for the direct election by (e(bers of any other bodies or co((ittees, apart fro( the go'erning body P If so, gi'e details of their constitution, tenure, powers and functions0 %%0 9o you ha'e any pro'ision for the appoint(ent of standing or ad h$c subco((ittees of the go'erning body P If so, furnish details of the (ethod of their appoint(ent, ter(s of office, powers and functions0 %30 &i'e the designations, powers and duties of principal office+bearers of your exchange0 Are any of these office+bearers in the pay of the stoc) exchange P If so, gi'e details as to the (ode of their appoint(ent, tenure of office and re(uneration0 Part IV - Trading %$0 9o you ha'e a trading ring P If not, how do you carry on the business P &i'e details0 %"0 State the different )inds of contracts in use on your exchange e&g&' spot, ready and forward0 State the period of deli'ery and pay(ent in each case0 %#0 &i'e details of business hours for each type of contract0 %/0 &i'e details of the scale of bro)erage and other charges, if any, prescribed by your exchange0 %>0 9o you prescribe standard for(s of contract for the use of your (e(bers P Attach three copies of each such contract for(0 %!0 9o you classify your (e(bers into bro)ers and Dobbers P If so, specify the bye+law under which this is done0 300 9o you ha'e a syste( of registration of re(isiers andLor authorised cler)s P If so, gi'e details as to their *ualifications, obligations and rights, etc0 3 0 9o you ha'e any regulations regarding dealings by (e(bers on their own account whether in the nature of 1aravani (day+to+day) or otherwise P 3%0 9o you ha'e any pro'isions for regulating the 'olu(e of business done by any indi'idual (e(ber other than through a syste( of (argins P If so, gi'e details0 330 Khat pro'isions ha'e you (ade for periodical settle(ent of contracts and differences thereunder, the deli'ery of, and pay(ent for securities and the passing of deli'ery orders P 3$0 9o you ha'e a clearing house for the settle(ent of contracts P If so, gi'e details of its organisation and (anage(ent0 3"0 If you ha'e clearing house, what returns do the (e(bers of your exchange sub(it regarding the transactions cleared through such clearing house P 9oes the exchange as) for any regular returns in respect of transactions settled outside the clearing house P Sub(it three copies of for(s used in this connection0 3#0 Iow do you fix, alter or postpone the dates of settle(ent P 3/0 Iow do you deter(ine and declare (a)ing+up prices P 3>0 9o you ha'e any arrange(ents for (a)ing or recording of bargains P 3!0 Ia'e you any arrange(ents for recording and publishing (ar)et rates including opening, closing, highest and lowest rates P $00 Khat pro'isions ha'e you (ade for regulating-(a) the entering into contracts, their
perfor(ance and rescission, including contracts , (i) between (e(bers, (ii) between a (e(ber and his constituent, and (iii) between a (e(ber and a non+(e(ber3 (b) the conse*uences of breach, default or insol'ency on the part of (e(bers whether acting as buyers, sellers or inter(ediaries 3 and (c) 2havala#3 and other (atters relating to conduct of business of (e(bers in the exchange P $ 0 9o you prescribe (argin re*uire(ents P If yes, gi'e details0 $%0 9o you prescribe (axi(u( and (ini(u( prices for securities P If so, how and under what conditions0 $30 9o you pro'ide any safeguards for the pre'ention of Nbulls*ueeFesJ and 3 NbearraidsJ and for (eeting e(ergencies in trade P &i'e details0 $$0 Khat are the (easures adopted by you to regulate or prohibit ad'ertising or issue of circulars by your (e(bers P $"0 Khat are the disciplinary power with the go'erning body to enforce due co(pliance by (e(bers of the rules and bye+laws of the exchange and generally to ensure proper standard of business conduct P $#0 9o you re*uire (e(bers to supply such infor(ation or explanation and to produce such boo)s relating to their business as your go'erning body (ay re*uire P $/0 9o you publish any statistics in regard to business done on the exchange including the transactions settled through the clearing house, if (aintained P In particular, ha'e you e'ol'ed any (achinery for co(puting the 'olu(e of transactions in the different )inds of contracts per(itted on your exchange P &i'e details0 $>0 9o you ha'e any bye+laws contra'ention of which (a)es a contract 'oid P Part V - Miscellaneo s $!0 9o you ha'e any (achinery for arbitration of disputes between (e(bers andLor between (e(bers and their constituents P &i'e details0 "00 Khat are the conditions subDect to which securities are listed for dealings on your exchange P " 0 Khat are your re*uire(ents for ad(itting securities to forward+trading P "%0 9o you ha'e the right to prohibit, withdraw or suspend dealings in a listed security P If so, under what circu(stances is this right exercised P "30 Khat pro'isions ha'e you (ade for the le'y and reco'ery of fees, fines and penalties P FORM B ( ee rules # and /) $$5The Se'*ritie! % - E#'h% (e ;o%r- of I -i%< 4e. 5elhi' the 20&&&&&&&&&&&&& Eo0 000000000000000000000000000000000000.he $"4Securities and 7xchange 8oard of India:, ha'ing considered the application for recognitionLrenewal of recognition (ade under section 3 of the Securities Contracts (Regulation) Act, !"# by000000000000000000000000000000 (na(e and address of exchange) and being satisfied that it would be in the interest of the trade and also in the public interest so to do, hereby grants, in exercise of the powers conferred by section $ of the Securities Contracts (Regulation) Act, !"# recognition to the said exchange under section $ of the said Act for 0000000000000000000 yearLyears ending 0000000000000000000000%0 0000000on a per(anent basis in respect of contracts in securities subDect to the conditions stated herein below or as (ay be prescribed or i(posed hereafter0 Seal of the $#48oard: Signature of Cfficer
Note&-Application for renewal of recognition shall be (ade so as to reach the Central &o'ern(ent not less than three (onths before the expiry of the period0 (.his certificate, will also ha'e to be published as a Eotification in the &aFette of India and also in the Cfficial &aFette of the State in which principal office of the recognised stoc) exchange is situate)0 $/5FORM ! ( ee rule 3) Noti'e to !ho/ '%*!e %(%i !t the /ith-r%/%l of re'o( itio .I7 S7CHRI.I7S AE9 7ACIAE&7 8CAR9 C6 IE9IA 6!"bai' the&&&&&&&&&&& .o 0000000000000000000000000000000000000000000000000000000000000000000000000000000000
$$ Substituted
for 1&o'ern(ent of India, ?inistry of 6inance2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 $" Substituted for 1Central &o'ern(ent2, ibid0 $# Substituted for 1?inistry2, ibid0 $/ Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#
0000000000000000000000000000000000000000000000000000000000000000000000000000000000 (na(e and address of the exchange) Oou are hereby called upon to show cause on or before 0000000000000000000000000000000000000 at the office of 0000000000000000000000000000000000000000000000000000 ( designation of the officer) why the recognition granted to you under the ?inistry of 6inanceLthe Securities and 7xchange 8oard of India, Eotification Eo0 0000000000000000000000000000 dated 000000000000000000000000000000000000000 and Certificate Eo0 00000000000000000000000000000 dated 000000000000000000000000000000 should not be withdrawn for the reasons gi'en in the annexure to this notice0 8y order and in the na(e of the Securities and 7xchange 8oard of India0 Seal of the Securities and 7xchange 8oard of India0 Notifi'%tio & 4$& 576' dated 217271957&
SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< SECTIONS
80(9:6:4A0; 1. Short title, extent and co((ence(ent ". 9efinitions 0(/<=4: (5 1</> (?/@A4=( ). Application for recognition of stoc) exchanges 3. &rant of recognition to stoc) exchanges0 3A. Corporatisation and de(utualisation of stoc) exchanges 3;. <rocedure for corporatisation and de(utualisation 5. Kithdrawal of recognition 8. <ower of Central &o'ern(ent to call for periodical returns or direct in*uiries to be (ade 7. Annual reports to be furnished to Central &o'ern(ent by stoc) exchanges 7A. <ower of recognised stoc) exchange to (a)e rules restricting 'oting rights, etc :. <ower of Central &o'ern(ent to direct rules to be (ade or to (a)e rules :A. Clearing corporation 9. <ower of recognised stoc) exchanges to (a)e bye+laws 1=. <ower of Securities and 7xchange 8oard of India to (a)e or a(end byelaws of recognised stoc) exchanges 11. <ower of Central &o'ern(ent to supersede go'erning body of a recognised stoc) exchange 1". <ower to suspend business of recognised stoc) exchanges0 1"A. <ower to issue directions 1). Contracts in notified areas illegal in certain circu(stances 1)A. Additional trading floor 13. Contracts in notified areas to be 'oid in certain circu(stances 15. ?e(bers (ay not act as principals in certain circu(stances 18. <ower to prohibit contracts in certain cases 17. =icensing of dealers in securities in certain areas 17A. <ublic issue and listing of securities referred to in sub+clause ( ie) of clause (h) of section % 1:. 7xclusion of spot deli'ery contracts fro( sections 3, $, " and / 1:A. Contracts in deri'ati'e 19. Stoc) exchanges other than recognised stoc) exchanges prohibited "=. <rohibition of options in securities "1. Conditions for listing "1A. 9elisting of securities "". Right of appeal against refusal of stoc) exchanges to list securities of public co(panies ""A. Right of appeal to Securities Appellate .ribunal against refusal of stoc) exchange to list securities of public co(panies "";. <rocedure and powers of Securities Appellate .ribunal ""C. Right to legal representation ""D. =i(itation ""E. Ci'il court not to ha'e Durisdiction
""2. Appeal to Supre(e Court 8(4A91:( A45 80</(5A0( "). <enalties ")A. <enalty for failure to furnish infor(ation, return, etc0 ");. <enalty for failure by any person to enter into an agree(ent with clients ")C. <enalty for failure to redress in'estorsJ grie'ances ")D. <enalty for failure to segregate securities or (oneys of client or clients ")E. <enalty for failure to co(ply with pro'ision of listing conditions or delisting conditions or grounds ")2. <enalty for excess de(aterialisation or deli'ery of unlisted securities ")G. <enalty for failure to furnish periodical returns, etc0 ")D. <enalty for contra'ention where no separate penalty has been pro'ided ")0I. <ower to adDudicate ")E. 6actors to be ta)en into account by adDudicating officer ")EA. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! ")E;. Re'o+er> of %.o* t! ")F. Crediting su(s realised by way of penalties to Consolidated 6und of India ")L. Appeal to Securities Appellate .ribunal ")@. Cffences ")N. Co(position of certain offences ")0O. <ower to grant i((unity "3. Cffences by co(panies "5. Certain offences to be cogniFable "8. CogniFance of offences by courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! 6: /(99A4(<A "7. .itle to di'idends "7A. Right to recei'e inco(e fro( collecti'e in'est(ent sche(e "7;. Right to recei'e inco(e fro( (utual fund ":. Act not to apply in certain cases "9. <rotection of action ta)en in good faith "9A. <ower to delegate )=. <ower to (a)e rules )1. <ower of Securities and 7xchange 8oard of India to (a)e regulations SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< 53th Se$te.,er, 1958< A A't to $re+e t * -e!ir%,le tr% !%'tio ! i !e'*ritie! ,> re(*l%ti ( the ,*!i e!! of -e%li ( therei , 14***: ,> $ro+i-i ( for 'ert%i other .%tter! 'o e'te- there/ith. 87 it enacted by <arlia(ent in the Se'enth Oear of the Republic of India as follows ,
80(9:6:4A0; Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities Contracts (Regulation) Act, !"#0 (%) It extends to the whole of India0
Kords 1by prohibiting options and2 o(itted by the Securities =aws (A(end(ent) Act, !!", Sec0 >, w0e0f0 %"+0 + !!".
(3) It shall co(e into force on such date% as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 Defi itio !. ". In this Act, unless the context otherwise re*uires,(a) 1contract2 (eans a contract for or relating to the purchase or sale of securities3 3 4(aa) 1corporatisation2 (eans the succession of a recognised stoc) exchange, being a body of indi'iduals or a society registered under the Societies Registration Act, >#0 (% of >#0), by another stoc) exchange, being a co(pany incorporated for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities carried on by such indi'iduals or society3 (ab) 1de(utualisation2 (eans the segregation of ownership and (anage(ent fro( the trading rights of the (e(bers of a recognised stoc) exchange in accordance with a sche(e appro'ed by the Securities and 7xchange 8oard of India3: $4"4(ac): 1deri'ati'e2 includes(A) a security deri'ed fro( a debt instru(ent, share, loan, whether secured or unsecured, ris) instru(ent or contract for differences or any other for( of security3 (B) a contract which deri'es its 'alue fro( the prices, or index of prices, of underlying securities3: (b) 1&o'ern(ent security2 (eans a security created and issued, whether before or after the co((ence(ent of this Act, by the Central &o'ern(ent or a State &o'ern(ent for the purpose of raising a public loan and ha'ing one of the for(s specified in clause (2) of section % of the <ublic 9ebt Act, !$$ ( > of !$$)3 (c) 1(e(ber2 (eans a (e(ber of a recognised stoc) exchange3 (d) 1option in securities2 (eans a contract for the purchase or sale of a right to buy or sell, or a right to buy and sell, securities in future, and includes a teji' a "andi' a teji "andi' a galli' a put, a call or a put and call in securities3 (e) 1prescribed2 (eans prescribed by rules (ade under this Act3
% %0+%+
!"/ vide SRC "%>, dated #+0%+ !"/, published in the &aFette of India, 7xtra0, <t0 II, Sec0 3, p0 "$!, dated #+0%+ !"/0 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 $ Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000 " Clause (aa) renu(bered as clause (ac) by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0
(f) 1recognised stoc) exchange2 (eans a stoc) exchange which is for the ti(e
being recognised by the Central &o'ern(ent under section $3 (g) 1rules2, with reference to the rules relating in general to the constitution and (anage(ent of a stoc) exchange, includes, in the case of a stoc) exchange which is an incorporated association, its (e(orandu( and articles of association3 64(ga) 1sche(e2 (eans a sche(e for corporatisation or de(utualisation of a recognised stoc) exchange which (ay pro'ide for(i) the issue of shares for a lawful consideration and pro'ision of trading rights in lieu of (e(bership cards of (e(bers of a recognised stoc) exchange3 (ii) the restrictions on 'oting rights3 (iii) the transfer of property, business, assets, rights, liabilities, recognitions, contracts of the recognised stoc) exchange, legal proceedings by, or against, the recognised stoc) exchange, whether in the na(e of the recognised stoc) exchange or any trustee or otherwise and any per(ission gi'en to, or by, the recognised stoc) exchange3 (iv) the transfer of e(ployees of a recognised stoc) exchange to another recognised stoc) exchange3 (v) any other (atter re*uired for the purpose of, or in connection with, the corporatisation or de(utualisation, as the case (ay be, of the recognised stoc) exchange3: /4>4(gb): 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (h) 1securities2 include(i) shares, scrips, stoc)s, bonds, debentures, debenture stoc) or other (ar)etable securities of a li)e nature in or of any incorporated co(pany or other body corporate3 !4(ia) deri'ati'e3 (ib) units or any other instru(ent issued by any collecti'e in'est(ent sche(e to the in'estors in such sche(es3:
# Inserted / Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (Second A(end(ent) Act, !!!, Sec %, w0e0f0 #+ %+ !!!0 > Clause (ga) renu(bered as clause (gb) by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 ! Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000
04(ic) security receipt as defined in clause ( Cg) of section % of the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%3: 114(id) units or any other such instru(ent issued to the in'estors under any (utual fund sche(e3: %47xplanation0-6or the re(o'al of doubts, it is hereby declared that ;securities; shall not include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(bined benefit ris) on the life of the persons and in'est(ent by such
persons and issued by an insurer referred to in clause (!) of section % of the Insurance Act, !3> ($ of !3>)3: 35(ie) any certificate or instru(ent (by whate'er na(e called), issued to an in'estor by any issuer being a special purpose distinct entity which possesses any debt or recei'able, including (ortgage debt, assigned to such entity, and ac)nowledging beneficial interest of such in'estor in such debt or recei'able, including (ortgage debt, as the case (ay be3 <
0 Inserted by the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%, Sec0 $ and Schedule, w0r0e0f0 % +#+%00%0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0e0f0 %+ 0+%00$0 % Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, Sec $, w0r0e0f0 0!+0$+%0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, read as under , ;CIA<.7R BI ?ISC7==AE7CHS #0 Dalidati$n&-Eotwithstanding anything contained in any Dudg(ent, decree or order of any Court, .ribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly, any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 0e%eal and #aving#&*( ) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0; 3 Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec %, w0e0f0 %>+"+ %00/0
$4(ii) &o'ern(ent securities3 (iia) such other instru(ents as (ay be declared by the Central &o'ern(ent to be securities3 and: (iii) rights or interest in securities3 "4(i) 1spot deli'ery contract2 (eans a contract which pro'ides for,(a) actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e
town or locality3 (b) transfer of the securities by the depository fro( the account of a beneficial owner to the account of another beneficial owner when such securities are dealt with by a depository3: #4(j) 1stoc) exchange2 (eans(a) any body of indi'iduals, whether incorporated or not, constituted before corporatisation and de(utualisation under sections $A and $8, or (b) a body corporate incorporated under the Co(panies Act, !"# ( of !"#) whether under a sche(e of corporatisation and de(utualisation or otherwise, for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0: /4I ter$ret%tio of 'ert%i /or-! % - e#$re!!io !. "A. Kords and expressions used herein and not defined in this Act but defined in the Co(panies Act, !"# ( of !"#) or the Securities and 7xchange 8oard of India
$ Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, for sub+clause (ii), w0r0e0f0 30+0 + !!%0 " Substituted by the 9epositories Act, !!#, Sec 30 and Schedule, <t0 III, w0r0e0f0 %0+0!+ !!" . <rior to its substitution, clause (i) read as under , N(i) 1spot deli'ery contract2 (eans a contract which pro'ides for the actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e town or locality3J # Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (j) read as under ,N(j) 1stoc) exchange2 (eans any body of indi'iduals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0J / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
Act, !!% ( " of !!%) or the 9epositories Act, !!# (%% of !!#) shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts0: 0(/<=4: (5 1</> (?/@A4=( A$$li'%tio for re'o( itio of !to'6 e#'h% (e!. ). ( ) Any stoc) exchange, which is desirous of being recognised for the purposes of this Act, (ay (a)e an application in the prescribed (anner to the Central &o'ern(ent01: (%) 7'ery application under sub+section ( ) shall contain such particulars as (ay be prescribed, and shall be acco(panied by a copy of the bye+laws of the stoc) exchange for the regulation and control of contracts and also a copy of the rules relating in general to the constitution of the stoc) exchange and in particular, to(a) the go'erning body of such stoc) exchange, its constitution and powers of (anage(ent and the (anner in which its business is to be transacted3 (b) the powers and duties of the office bearers of the stoc) exchange3 (c) the ad(ission into the stoc) exchange of 'arious classes of (e(bers, the *ualifications for (e(bership, and the exclusion, suspension, expulsion and
re+ad(ission of (e(bers therefro( or thereinto3 (d) the procedure for the registration of partnerships as (e(bers of the stoc) exchange in cases where the rules pro'ide for such (e(bership3 and the no(ination and appoint(ent of authorised representati'es and cler)s0 Gr% t of re'o( itio to !to'6 e#'h% (e!. 3. ( ) If the Central &o'ern(ent ! is satisfied, after (a)ing such in*uiry as (ay be necessary in this behalf and after obtaining such further infor(ation, if any, as it (ay re*uire,(a) that the rules and bye+laws of a stoc) exchange applying for registration are in confor(ity with such conditions as (ay be prescribed with a 'iew to ensure fair dealing and to protect in'estors3 (b) that the stoc) exchange is willing to co(ply with any other conditions (including conditions as to the nu(ber of (e(bers) which the Central &o'ern(ent, after consultation with the go'erning body of the stoc) exchange and ha'ing regard to the area ser'ed by the stoc) exchange and its standing and the nature of the securities dealt with by it, (ay i(pose for the purpose of carrying out the obDects of this Act3 and
> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 ! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
(c) that it would be in the interest of the trade and also in the public interest to grant recognition to the stoc) exchange3 it (ay grant recognition to the stoc) exchange subDect to the conditions i(posed upon it as aforesaid and in such for( as (ay be prescribed0 (%) .he conditions which the Central &o'ern(ent %0 (ay prescribe under clause (a) of sub+section ( ) for the grant of recognition to the stoc) exchanges (ay include, a(ong other (atters, conditions relating to,(i) the *ualifications for (e(bership of stoc) exchanges3 (ii) the (anner in which contracts shall be entered into and enforced as between (e(bers3 (iii) the representation of the Central &o'ern(ent on each of the stoc) exchange by such nu(ber of persons not exceeding three as the Central &o'ern(ent (ay no(inate in this behalf3 and (iv) the (aintenance of accounts of (e(bers and their audit by chartered accountants whene'er such audit is re*uired by the Central &o'ern(ent0 (3) 7'ery grant of recognition to a stoc) exchange under this section shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office as of the stoc) exchange is situate, and such recognition shall ha'e effect as fro( the date of its publication in the &aFette of India0 % ($) Eo application for the grant of recognition shall be refused except after gi'ing an opportunity to the stoc) exchange concerned to be heard in the (atter3 and the reasons for such refusal shall be co((unicated to the stoc) exchange in writing0 %% (") Eo rules of a recognised stoc) exchange relating to any of the (atters specified in sub+section (%) of section 3 shall be a(ended except with the appro'al of the
Central &o'ern(ent0%3 "35Cor$or%ti!%tio % - -e.*t*%li!%tio of !to'6 e#'h% (e!. 3A. Cn and fro( the appointed date, all recognised stoc) exchanges (if not corporatised and de(utualised before the appointed date) shall be corporatised and de(utualised in accordance with the pro'isions contained in section $8 ,
%0 <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 % <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %% <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %3 <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 %$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
4ro+i-e- that the Securities and 7xchange 8oard of India (ay, if it is satisfied that any recognised stoc) exchange was pre'ented by sufficient cause fro( being corporatised and de(utualised on or after the appointed date, specify another appointed date in respect of that recognised stoc) exchange and such recognised stoc) exchange (ay continue as such before such appointed date0 ()%lanati$n&*6or the purposes of this section, 1appointed date2 (eans the date which the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, appoint and different appointed dates (ay be appointed for different recognised stoc) exchanges0: "554ro'e-*re for 'or$or%ti!%tio % - -e.*t*%li!%tio . 3;. ( ) All recognised stoc) exchanges referred to in section $A shall, within such ti(e as (ay be specified by the Securities and 7xchange 8oard of India, sub(it a sche(e for corporatisation and de(utualisation for its appro'al , 4ro+i-e- that the Securities and 7xchange 8oard of India, (ay, by notification in the Cfficial &aFette, specify na(e of the recognised stoc) exchange, which had already been corporatised and de(utualised, and such stoc) exchange shall not be re*uired to sub(it the sche(e under this section0 (%) Cn receipt of the sche(e referred to in sub+section ( ), the Securities and 7xchange 8oard of India (ay, after (a)ing such en*uiry as (ay be necessary in this behalf and obtaining such further infor(ation, if any, as it (ay re*uire and if it is satisfied that it would be in the interest of the trade and also in the public interest, appro'e the sche(e with or without (odification0 (3) Eo sche(e under sub+section (%) shall be appro'ed by the Securities and 7xchange 8oard of India if the issue of shares for a lawful consideration or pro'ision of trading rights in lieu of (e(bership card of the (e(bers of a recognised stoc) exchange or pay(ent of di'idends to (e(bers ha'e been proposed out of any reser'es or assets of that stoc) exchange0 ($) Khere the sche(e is appro'ed under sub+section (%), the sche(e so appro'ed shall be published i((ediately by(a) the Securities and 7xchange 8oard of India in the Cfficial &aFette3 (b) the recognised stoc) exchange in such two daily newspapers circulating in India, as (ay be specified by the Securities and 7xchange 8oard of India,
and upon such publication, notwithstanding anything to the contrary contained in this Act or any other law for the ti(e being in force or any agree(ent, award, Dudg(ent, decree or other instru(ent for the ti(e being in force, the sche(e shall ha'e effect and be binding on all persons and authorities including all (e(bers, creditors, depositors and e(ployees of the recognised stoc) exchange and on all
%" Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
persons ha'ing any contract, right, power, obligation or liability with, against, o'er, to, or in connection with, the recognised stoc) exchange or its (e(bers0 (") Khere the Securities and 7xchange 8oard of India is satisfied that it would not be in the interest of the trade and also in the public interest to appro'e the sche(e under sub+section (%), it (ay, by an order, reDect the sche(e and such order of reDection shall be published by it in the Cfficial &aFette , 4ro+i-e- that the Securities and 7xchange 8oard of India shall gi'e a reasonable opportunity of being heard to all the persons concerned and the recognised stoc) exchange concerned before passing an order reDecting the sche(e0 (#) .he Securities and 7xchange 8oard of India (ay, while appro'ing the sche(e under sub+section (%), by an order in writing, restrict(a) the 'oting rights of the shareholders who are also stoc) bro)ers of the reognised stoc) exchange3 (b) the right of shareholders or a stoc) bro)er of the recognised stoc) exchange to appoint the representati'es on the go'erning board of the stoc) exchange3 (c) the (axi(u( nu(ber of representati'es of the stoc) bro)ers of the recognised stoc) exchange to be appointed on the go'erning board of the recognised stoc) exchange, which shall not exceed one+fourth of the total strength of the go'erning board0 (/) .he order (ade under sub+section (#) shall be published in the Cfficial &aFette and on the publication thereof, the order shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#), or any other law for the ti(e being in force, ha'e full effect0 (>) 7'ery recognised stoc) exchange, in respect of which the sche(e for corporatisation or de(utualisation has been appro'ed under sub+section (%), shall, either by fresh issue of e*uity shares to the public or in any other (anner as (ay be specified by the regulations (ade by the Securities and 7xchange 8oard of India %#, ensure that at least fifty+one per cent of its e*uity share capital is held, within twel'e (onths fro( the date of publication of the order under sub+section (/), by the public other than shareholders ha'ing trading rights , 4ro+i-e- that the Securities and 7xchange 8oard of India (ay, on sufficient cause being shown to it and in the public interest, extend the said period by another twel'e (onths0:
ee Securities Contracts (Regulation) (Stoc) 7xchanges and Clearing Corporations) Regulations, %0 %, w0e0f0 %0+0#+%0 % notified vide &aFette Eotification Eo0 =A9+ ERCL&EL%0 %+ 3L0/L 3"$#, 7xtra0, <t0 III, Section $, dtd %0+0#+%0 %0
%#
?ith-r%/%l of re'o( itio .
5. %/4( ): If the Central &o'ern(ent%> is of opinion that the recognition granted to a stoc) exchange under the pro'isions of this Act should, in the interest of the trade or in the public interest, be withdrawn, the Central &o'ern(ent (ay ser'e on the go'erning body of the stoc) exchange a written notice that the Central &o'ern(ent is considering the withdrawal of the recognition for the reasons stated in the notice and after gi'ing an opportunity to the go'erning body to be heard in the (atter, the Central &o'ern(ent (ay withdraw, by notification in the Cfficial &aFette, the recognition granted to the stoc) exchange , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Central &o'ern(ent (ay, after consultation with the stoc) exchange, (a)e such pro'ision as it dee(s fit in the notification of withdrawal or in any subse*uent notification si(ilarly published for the due perfor(ance of any contracts outstanding on that date0 %!4(%) Khere the recognised stoc) exchange has not been corporatised or de(utualised or it fails to sub(it the sche(e referred to in sub+section ( ) of section $8 within the specified ti(e therefor or the sche(e has been reDected by the Securities and 7xchange 8oard of India under sub+section (") of section $8, the recognition granted to such stoc) exchange under section $, shall, notwithstanding anything to the contrary contained in this Act, stand withdrawn and the Central &o'ern(ent shall publish, by notification in the Cfficial &aFette, such withdrawal of recognition , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Securities and 7xchange 8oard of India (ay, after consultation with the stoc) exchange, (a)e such pro'isions as it dee(s fit in the order reDecting the sche(e published in the Cfficial &aFette under sub+section (") of section $80: 4o/er of Ce tr%l Go+er .e t to '%ll for $erio-i'%l ret*r ! or -ire't i 7*irie! to ,e .%-e. 8. ( ) 7'ery recognised stoc) exchange shall furnish to the 304Securities and 7xchange 8oard of India: such periodical returns relating to its affairs as (ay be prescribed0
%/ Section
" renu(bered as sub+section ( ) by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 %> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 30 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(%) 7'ery recognised stoc) exchange and e'ery (e(ber thereof shall (aintain and preser'e for such periods not exceeding fi'e years such boo)s of account, and other docu(ents as the Central &o'ern(ent, after consultation with the stoc) exchange concerned, (ay prescribe in the interest of the trade or in the public interest, and such boo)s of account, and other docu(ents shall be subDect to inspection at all reasonable ti(es 3 4by the Securities and 7xchange 8oard of India:0 (3) Kithout preDudice to the pro'isions contained in sub+sections ( ) and (%), the
3%4Securities
and 7xchange 8oard of India:, if it is satisfied that it is in the interest of the trade or in the public interest so to do, (ay, by order in writing,(a) call upon a recognised stoc) exchange or any (e(ber thereof to furnish in writing such infor(ation or explanation relating to the affairs of the stoc) exchange or of the (e(ber in relation to the stoc) exchange as the 334Securities and 7xchange 8oard of India: (ay re*uire3 or (b) appoint one or (ore persons to (a)e an in*uiry in the prescribed (anner in relation to the affairs of the go'erning body of a stoc) exchange or the affairs of any of the (e(bers of the stoc) exchange in relation to the stoc) exchange and sub(it a report of the result of such in*uiry to the 3$4Securities and 7xchange 8oard of India: within such ti(e as (ay be specified in the order or, in the case of an in*uiry in relation to the affairs of any of the (e(bers of a stoc) exchange, direct the go'erning body to (a)e the in*uiry and sub(it its report to the 3"4Securities and 7xchange 8oard of India:0 ($) Khere an in*uiry in relation to the affairs of a recognised stoc) exchange or the affairs of any of its (e(bers in relation to the stoc) exchange has been underta)en under sub+section (3),(a) e'ery director, (anager, secretary or other officer of such stoc) exchange3 (b) e'ery (e(ber of such stoc) exchange3 (c) if the (e(ber of the stoc) exchange is a fir(, e'ery partner, (anager, secretary or other officer of the fir(3 and (d) e'ery other person or body of persons who has had dealings in the course of business with any of the persons (entioned in clauses ( a), (b) and (c), whether directly or indirectly3
Substituted for ;by the Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3% Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 33 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3" Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
3
shall be bound to produce before the authority (a)ing the in*uiry all such boo)s of account, and other docu(ents in his custody or power relating to or ha'ing a bearing on the subDect+(atter of such in*uiry and also to furnish the authorities within such ti(e as (ay be specified with any such state(ent or infor(ation relating thereto as (ay be re*uired of hi(0 )8A *%l re$ort! to ,e f*r i!he- to Ce tr%l Go+er .e t ,> !to'6 e#'h% (e!. 7. 7'ery recognised stoc) exchange shall furnish the Central &o'ern(ent with a copy of the annual report, and such annual report shall contain such particulars as (ay be prescribed0 )754o/er of re'o( i!e- !to'6 e#'h% (e to .%6e r*le! re!tri'ti ( +oti ( ri(ht!, et'. 7A. ( ) A recognised stoc) exchange (ay (a)e rules or a(end any rules (ade by it
to pro'ide for all or any of the following (atters, na(ely ,(a) the restriction of 'oting rights to (e(bers only in respect of any (atter placed before the stoc) exchange at any (eeting3 (b) the regulation of 'oting rights in respect of any (atter placed before the stoc) exchange at any (eeting so that each (e(ber (ay be entitled to ha'e one 'ote only, irrespecti'e of his share of the paid+up e*uity capital of the stoc) exchange3 (c) the restriction on the right of a (e(ber to appoint another person as his proxy to attend and 'ote at a (eeting of the stoc) exchange3 (d) such incidental, conse*uential and supple(entary (atters as (ay be necessary to gi'e effect to any of the (atters specified in clauses ( a), (b) and (c)0 (%) Eo rules of a recognised stoc) exchange (ade or a(ended in relation to any (atter referred to in clauses (a) to (d) of sub+section ( ) shall ha'e effect until they ha'e been appro'ed by the Central &o'ern(ent 3> and published by that &o'ern(ent in the Cfficial &aFette and, in appro'ing the rules so (ade or a(ended, the Central &o'ern(ent (ay (a)e such (odifications therein as it thin)s fit, and on such publication, the rules as appro'ed by the Central &o'ern(ent shall be dee(ed to ha'e been 'alidly (ade, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#)0:
3# <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 3/ Inserted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec %, w0e0f0 0>+ %+ !"!0 3> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
4o/er of Ce tr%l Go+er .e t )9 to -ire't r*le! to ,e .%-e or to .%6e r*le!. :. ( ) Khere, after consultation with the go'erning bodies of stoc) exchanges generally or with the go'erning body of any stoc) exchange in particular, the Central &o'ern(ent is of opinion that it is necessary or expedient so to do, it (ay, by order in writing together with a state(ent of the reasons therefor, direct recognised stoc) exchanges generally or any recognised stoc) exchange in particular, as the case (ay be, to (a)e any rules or to a(end any rules already (ade in respect of all or any of the (atters specified in sub+section (%) of section 3 within a period of $04two (onths: fro( the date of the order0 (%) If any recognised stoc) exchange fails or neglects to co(ply with any order (ade under sub+section ( ) within the period specified therein, the Central &o'ern(ent (ay (a)e the rules for, or a(end the rules (ade by, the recognised stoc) exchange, either in the for( proposed in the order or with such (odifications thereof as (ay be agreed to between the stoc) exchange and the Central &o'ern(ent0 (3) Khere in pursuance of this section any rules ha'e been (ade or a(ended, the rules so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette or &aFettes of the State or States in which the principal office or offices of the recognised stoc) exchange or exchanges is or are situate, and, on the publication thereof in the &aFette of India, the rules so (ade or a(ended shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# (
of !"#), or in any other law for the ti(e being in force, ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange or stoc) exchanges, as the case (ay be0 315Cle%ri ( 'or$or%tio . :A. ( ) A recognised stoc) exchange (ay, with the prior appro'al of the Securities and 7xchange 8oard of India, transfer the duties and functions of a clearing house to a clearing corporation, being a co(pany incorporated under the Co(panies Act, !"# ( of !"#), for the purpose of(a) the periodical settle(ent of contracts and differences thereunder3 (b) the deli'ery of, and pay(ent for, securities3 (c) any other (atter incidental to, or connected with, such transfer0 (%) 7'ery clearing corporation shall, for the purpose of transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( ),
3! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 $0 Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec !, w0e0f0 %"+ 0 + !!"0 $ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0
(a)e bye+laws and sub(it the sa(e to the Securities and 7xchange 8oard of India for its appro'al0 (3) .he Securities and 7xchange 8oard of India (ay, on being satisfied that it is in the interest of the trade and also in the public interest to transfer the duties and functions of a clearing house to a clearing corporation, grant appro'al to the byelaws sub(itted to it under sub+section (%) and appro'e the transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( )0 ($) .he pro'isions of sections $, ", #, /, >, !, 0, and % shall, as far as (ay be, apply to a clearing corporation referred to in sub+section ( ) as they apply in relation to a recognised stoc) exchange0: 4o/er of re'o( i!e- !to'6 e#'h% (e! to .%6e ,>e0l%/!. 9. ( ) Any recognised stoc) exchange (ay, subDect to the pre'ious appro'al of the $%4Securities and 7xchange 8oard of India:, (a)e bye+laws for the regulation and control of contracts0 (%) In particular, and without preDudice to the generality of the foregoing power, such bye+laws (ay pro'ide for , (a) the opening and closing of (ar)ets and the regulation of the hours of trade3 (b) a clearing house for the periodical settle(ent of contracts and differences thereunder, the deli'ery of and pay(ent for securities, the passing on of deli'ery orders and the regulation and (aintenance of such clearing house3 (c) the sub(ission to the $34Securities and 7xchange 8oard of India: by the clearing house as soon as (ay be after each periodical settle(ent of all or any of the following particulars as the $$4Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, re*uire, na(ely ,(i) the total nu(ber of each category of security carried o'er fro( one settle(ent period to another3 (ii) the total nu(ber of each category of security, contracts in respect of
which ha'e been s*uared up during the course of each settle(ent period3 (iii) the total nu(ber of each category of security actually deli'ered at each clearing3
$% Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(d) the publication by the clearing house of all or any of the particulars sub(itted to the $"4Securities and 7xchange 8oard of India: under clause ( c) subDect to the directions, if any, issued by the $#4Securities and 7xchange 8oard of India: in this behalf3 (e) the regulation or prohibition of blan) transfers3 (f) the nu(ber and classes of contracts in respect of which settle(ents shall be (ade or differences paid through the clearing house3 (g) the regulation, or prohibition of b!dla# or carry+o'er facilities3 (h) the fixing, altering or postponing of days for settle(ents3 (i) the deter(ination and declaration of (ar)et rates, including the opening, closing highest and lowest rates for securities3 (j) the ter(s, conditions and incidents of contracts, including the prescription of (argin re*uire(ents, if any, and conditions relating thereto, and the for(s of contracts in writing3 (k) the regulation of the entering into, (a)ing, perfor(ance, recession and ter(ination, of contracts, including contracts between (e(bers or between a (e(ber and his constituent or between a (e(ber and a person who is not a (e(ber, and the conse*uences of default or insol'ency on the part of a seller or buyer or inter(ediary, the conse*uences of a breach or o(ission by a seller or buyer, and the responsibility of (e(bers who are not parties to such contracts3 (l) the regulation of taravani business including the placing of li(itations thereon3 (") the listing of securities on the stoc) exchange, the inclusion of any security for the purpose of dealings and the suspension or withdrawal of any such securities, and the suspension or prohibition of trading in any specified securities3 (n) the (ethod and procedure for the settle(ent of clai(s or disputes, including settle(ent by arbitration3 ($) the le'y and reco'ery of fees, fines and penalties3 (%) the regulation of the course of business between parties to contracts in any capacity3 (+) the fixing of a scale of bro)erage and other charges3 (r) the (a)ing, co(paring, settling and closing of bargains3 (#) the e(ergencies in trade which (ay arise, whether as a result of pool or syndicated operations or cornering or otherwise, and the exercise of powers in
$" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%,
Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $# Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
such e(ergencies, including the power to fix (axi(u( and (ini(u( prices for securities3 (t) the regulation of dealings by (e(bers for their own account3 (!) the separation of the functions of Dobbers and bro)ers3 (v) the li(itations on the 'olu(e of trade done by any indi'idual (e(ber in exceptional circu(stances3 (.) the obligation of (e(bers to supply such infor(ation or explanation and to produce such docu(ents relating to the business as the go'erning body (ay re*uire0 (3) .he bye+laws (ade under this section (ay(a) specify the bye+laws the contra'ention of which shall (a)e a contract entered into otherwise than in accordance with the bye+laws 'oid under sub+section ( ) of section $3 (b) pro'ide that the contra'ention of any of the bye+laws shall render the (e(ber concerned liable to one or (ore of the following punish(ents, na(ely ,(i) fine, (ii) expulsion fro( (e(bership, (iii) suspension fro( (e(bership for a specified period, (iv) any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney0 ($) Any bye+laws (ade under this section shall be subDect to such conditions in regard to pre'ious publication as (ay be prescribed, and, when appro'ed by the $/4Securities and 7xchange 8oard of India:, shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and shall ha'e effect as fro( the date of its publication in the &aFette of India , 4ro+i-e- that if the $>4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+law should be (ade i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0
$/ Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $> Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4o/er of 395Se'*ritie! % - E#'h% (e ;o%r- of I -i%< to .%6e or %.e - ,>e0l%/! of re'o( i!e- !to'6 e#'h% (e!. 1=. ( ) .he "04Securities and 7xchange 8oard of India: (ay, either on a re*uest in writing recei'ed by it in this behalf fro( the go'erning body of a recognised stoc) exchange or on its own (otion, if it is satisfied after consultation with the go'erning body of the stoc) exchange that it is necessary or expedient so to do and after recording its reasons for so doing, (a)e bye+laws for all or any of the (atters specified in section ! or a(end any bye+laws (ade by such stoc) exchange under that section0
(%) Khere in pursuance of this section any bye+laws ha'e been (ade or a(ended the bye+laws so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and on the publication thereof in the &aFette of India, the bye+laws so (ade or a(ended shall ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange concerned0 (3) Eotwithstanding anything contained in this section, where the go'erning body of a recognised stoc) exchange obDects to any bye+laws (ade or a(ended under this section by the " 4Securities and 7xchange 8oard of India: on its own (otion, it (ay, within "%4two (onths: of the publication thereof in the &aFette of India under subsection (%), apply to the "34Securities and 7xchange 8oard of India: for re'ision thereof, and the "$4Securities and 7xchange 8oard of India: (ay, after gi'ing an opportunity to the go'erning body of the stoc) exchange to be heard in the (atter, re'ise the bye+laws so (ade or a(ended, anywhere any bye+laws so (ade or a(ended are re'ised as a result of any action ta)en under this sub+section, the byelaws so re'ised shall be published and shall beco(e effecti'e as pro'ided in subsection (%)0 ($) .he (a)ing or the a(end(ent or re'ision of any bye+laws under this section shall in all cases be subDect to the condition of pre'ious publication ,
$! Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "0 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 " Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "% Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec %0, w0e0f0 %"+ 0 + !!"0 "3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4ro+i-e- that if the ""4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+laws should be (ade, a(ended or re'ised i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0 4o/er of Ce tr%l Go+er .e t 58 to !*$er!e-e (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e. 11. ( ) Kithout preDudice to any other powers 'ested in the Central &o'ern(ent under this Act, where the Central &o'ern(ent is of opinion that the go'erning body of any recognised stoc) exchange should be superseded, then, notwithstanding anything contained in any other law for the ti(e being in force, in the Central &o'ern(ent (ay ser'e on the go'erning body a written notice that the Central &o'ern(ent is considering the supersession of the go'erning body for the reasons specified in the notice and after gi'ing an opportunity to the go'erning body to be
heard in the (atter, it (ay, by notification in the Cfficial &aFette, declare the go'erning body of such stoc) exchange to be superseded, and (ay appoint any person or persons to exercise and perfor( all the powers and duties of the go'erning body, and, where (ore persons than one are appointed, (ay appoint one of such persons to be the chair(an and another to be the 'ice+chair(an thereof0 (%) Cn the publication of a notification in the Cfficial &aFette under sub+section ( ), the following conse*uences shall ensue, na(ely,(a) the (e(bers of the go'erning body which has been superseded shall, as fro( the date of the notification of supersession, cease to hold office as such (e(bers3 (b) the person or persons appointed under sub+section ( ) (ay exercise and perfor( all the powers and duties of the go'erning body which has been superseded3 (c) all such property of the recognised stoc) exchange as the person or persons appointed under sub+section ( ) (ay, by order in writing, specify in this behalf as being necessary for the purpose of enabling hi( or the( to carry on the business of the stoc) exchange, shall 'est in such person or persons0 (3) Eotwithstanding anything to the contrary contained in any law or the rules or bye+laws of the recognised stoc) exchange the go'erning body of which is superseded under sub+section ( ), the person or persons appointed under that subsection shall hold office for such period as (ay be specified in the notification published under that sub+section and the Central &o'ern(ent (ay fro( ti(e to ti(e, by li)e notification, 'ary such period0
"" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "# <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0
($) .he Central &o'ern(ent (ay at any ti(e before the deter(ination of the period of office of any person or persons appointed under this section call upon the recognised stoc) exchange to re+constitute the go'erning body in accordance with its rules and on such re+constitution all the property of the recognised stoc) exchange which has 'ested in, or was in the possession of, the person or persons appointed under sub+section ( ), shall re+'est or 'est, as the case (ay be, in the go'erning body so re+constituted , 4ro+i-e- that until a go'erning body is so re+constituted, the person or persons appointed under sub+section ( ) shall continue to exercise and perfor( their powers and duties0 4o/er57 to !*!$e - ,*!i e!! of re'o( i!e- !to'6 e#'h% (e!. 1". If in the opinion of the Central &o'ern(ent an e(ergency has arisen and for the purpose of (eeting the e(ergency the Central &o'ern(ent considers it expedient so to do, it (ay, by notification in the Cfficial &aFette, for reasons to be set out therein, direct a recognised stoc) exchange to suspend such of its business for such period not exceeding se'en days and subDect to such conditions as (ay be specified in the notification, and, if, in the opinion of the Central &o'ern(ent, the interest of
the trade or the public interest re*uires that the period should be extended, (ay, by li)e notification extend the said period fro( ti(e to ti(e , 4ro+i-e- that where the period of suspension is to be extended beyond the first period, no notification extending the period of suspension shall be issued unless the go'erning body of the ">4recognised stoc) exchange: has been gi'en an opportunity of being heard in the (atter0 "!54o/er to i!!*e -ire'tio !. 1"A. If, after (a)ing or causing to be (ade an in*uiry, the Securities and 7xchange 8oard of India is satisfied that it is necessary(a) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (b) to pre'ent the affairs of any recognised stoc) exchange or clearing corporation, or such other agency or person, pro'iding trading or clearing or settle(ent facility in respect of securities, being conducted in a (anner detri(ental to the interests of in'estors or securities (ar)et3 or (c) to secure the proper (anage(ent of any such stoc) exchange or clearing corporation or agency or person, referred to in clause ( b),
"/ <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 "> Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 "! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0
it (ay issue such directions,(i) to any stoc) exchange or clearing corporation or agency or person referred to in clause (b) or any person or class of persons associated with the securities (ar)et3 or (ii) to any co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 8=5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< /<410A/1 A45 <81:<4 :4 (/A0:1:( Co tr%'t! i otifie- %re%! ille(%l i 'ert%i 'ir'*.!t% 'e!. 1). If the Central &o'ern(ent# is satisfied, ha'ing regard to the nature or the 'olu(e of transactions in securities in any #%4State or States or area: that it is necessary so to do, it (ay, by notification in the Cfficial &aFette, declared this section to apply to such #34State or States or area:, and thereupon e'ery contract in such #$4State or States or area: which is entered into after the date of the notification otherwise than #"4between (e(bers of a recognised stoc) exchange or recognised stoc) exchanges: in such ##4State or States or area: or through or with such (e(ber shall be illegal ,
#0 I #
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 #% Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #3 Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #$ Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$ for ;between (e(bers of a recognised stoc) exchange; & ## Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0
#/54ro+i-e-
that any contract entered into between (e(bers of two or (ore recognised stoc) exchanges in such State or States or area, shall(i) be subDect to such ter(s and conditions as (ay be stipulated by the respecti'e stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India3 (ii) re*uire prior per(ission fro( the respecti'e stoc) exchanges if so stipulated by the stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India0: #>4A--itio %l tr%-i ( floor. 1)A. A stoc) exchange (ay establish additional trading floor with the prior appro'al of the Securities and 7xchange 8oard of India in accordance with the ter(s and conditions stipulated by the said 8oard0 ()%lanati$n , 6or the purposes of this section, 1additional trading floor2 (eans a trading ring or trading facility offered by a recognised stoc) exchange outside its area of operation to enable the in'estors to buy and sell securities through such trading floor under the regulatory fra(ewor) of that stoc) exchange0: Co tr%'t! i otifie- %re%! to ,e +oi- i 'ert%i 'ir'*.!t% 'e!. 13. ( ) Any contract entered into in any State or area specified in the notification under section 3 which is in contra'ention of any of the bye+laws specified in that behalf under clause (a) of sub+section (3) of section ! shall be 'oid , (i) as respects the rights of any (e(ber of the recognised stoc) exchange who has entered into such contract in contra'ention of any such bye+law, and also (ii) as respects the rights of any other person who has )nowingly participated in the transaction entailing such contra'ention0 (%) Eothing in sub+section ( ) shall be construed to affect the right of any person other than a (e(ber of the recognised stoc) exchange to enforce any such contract or to reco'er any su( under or in respect of such contract if such person had no )nowledge that the transaction was in contra'ention of any of the bye+laws specified in clause (a) of sub+section (3) of section !0 @e.,er! .%> ot %'t %! $ri 'i$%l! i 'ert%i 'ir'*.!t% 'e!. 15. Eo (e(ber of a recognised stoc) exchange shall in respect of any securities enter into any contract as a principal with any person other than a (e(ber of a recognised stoc) exchange, unless he has secured the consent or authority of such
#/ Inserted #> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (A(end(ent) Act, !!", Sec % , w0e0f0 %"+0 + !!"0
person and discloses in the note, (e(orandu( or agree(ent of sale or purchase that he is acting as a principal , 4ro+i-e- that where the (e(ber has secured the consent or authority of such person otherwise than in writing he shall secure written confir(ation by such person or such consent or authority within three days fro( the date of the contract , 4ro+i-e- f*rther that no such written consent or authority of such person shall be necessary for closing out any outstanding contract entered into by such person in accordance with the bye+laws, if the (e(ber discloses in the note, (e(orandu( or agree(ent of sale or purchase in respect of such closing out that he is acting as a principal0 4o/er89 to $rohi,it 'o tr%'t! i 'ert%i '%!e!. 18. ( ) If the Central &o'ern(ent is of opinion that it is necessary to pre'ent undesirable speculation in specified securities in any State or area, it (ay, by notification in the Cfficial &aFette, declare that no person in the State or area specified in the notification shall, sa'e with the per(ission of the Central &o'ern(ent, enter into any contract for the sale or purchase of any security specified in the notification except to the extent and in the (anner, if any, specified therein0 (%) All contracts in contra'ention of the pro'isions of sub+section ( ) entered into after the date of notification issued thereunder shall be illegal0 Li'e !i ( of -e%ler! i !e'*ritie! i 'ert%i %re%!. 17. ( ) SubDect to the pro'isions of sub+section (3) and to the other pro'isions contained in this Act, no person shall carry on or purport to carry on, whether on his own behalf or on behalf of any other person, the business of dealing in securities in any State or area to which section 3 has not been declared to apply and to which the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, declare this section to apply, except under the authority of a /04licence granted by the Securities and 7xchange 8oard of India: in this behalf0 (%) Eo notification under sub+section ( ) shall be issued with respect to any State or area unless the Central &o'ern(ent is satisfied, ha'ing regard to the (anner in which securities are being dealt with in such State or area, that it is desirable or
#! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 <owers are exercisable by R8I also 'ide &o'ern(ent of India Eotification Eo0 >3 (7), 9ated 0 +03+%000 in relation to any contracts in go'ern(ent securities, (oney (ar)et securities etc0 /0 Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% for ;licence granted by the Central &o'ern(ent;0
expedient in the interest of the trade or in the public interest that such dealings should be regulated by a syste( of licensing0 (3) .he restrictions i(posed by sub+section ( ) in relation to dealings in securities shall not apply to the doing of anything by or on behalf of a (e(ber of any recognised stoc) exchange0
7154*,li'
i!!*e % - li!ti ( of !e'*ritie! referre- to i !*,0'l%*!e ( ie) of 'l%*!e (h)
of !e'tio ". 17A. ( ) Kithout preDudice to the pro'isions contained in this Act or any other law for the ti(e being in force, no securities of the nature referred to in sub+clause (ie) of clause (h) of section % shall be offered to the public or listed on any recognised stoc) exchange unless the issuer fulfils such eligibility criteria and co(plies with such other re*uire(ents as (ay be specified by regulations (ade by the Securities and 7xchange 8oard of India0 (%) 7'ery issuer referred to in sub+clause (ie) of clause (h) of section % intending to offer the certificates or instru(ents referred therein to the public shall (a)e an application, before issuing the offer docu(ent to the public, to one or (ore recognised stoc) exchanges for per(ission for such certificates or instru(ents to be listed on the stoc) exchange or each such stoc) exchange0 (3) Khere the per(ission applied for under sub+section (%) for listing has not been granted or refused by the recognised stoc) exchanges or any of the(, the issuer shall forthwith repay all (oneys, if any, recei'ed fro( applicants in pursuance of the offer docu(ent, and if any such (oney is not repaid within eight days after the issuer beco(es liable to repay it, the issuer and e'ery director or trustee thereof, as the case (ay be, who is in default shall, on and fro( the expiry of the eighth day, be Dointly and se'erally liable to repay that (oney with interest at the rate of fifteen per cent per annu(0 7xplanation0-In rec)oning the eighth day after another day, any inter'ening day which is a public holiday under the Eegotiable Instru(ents Act, >> (%# of >> ), shall be disregarded, and if the eighth day (as so rec)oned) is itself such a public holiday, there shall for the said purposes be substituted the first day thereafter which is not a holiday0 ($) All the pro'isions of this Act relating to listing of securities of a public co(pany on a recognised stoc) exchange shall, (utatis (utandis, apply to the listing of the securities of the nature referred to in sub+clause (ie) of clause (h) of section % by the issuer, being a special purpose distinct entity0 <
Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec 3, w0e0f0 %>+0"+ %00/0
/
E#'l*!io of !$ot -eli+er> 'o tr%'t! fro. !e'tio ! 1), 13, 15 % - 17. 1:. ( ) Eothing contained in sections 3, $, " and / shall apply to spot deli'ery contracts0 (%) Eotwithstanding anything contained in sub+section ( ), if the Central &o'ern(ent/% is of opinion that in the interest of the trade or in the public interest it is expedient to regulate and control the business of dealing in spot deli'ery contracts also in any State or area (whether section 3 has been declared to apply to that State or area or not), it (ay, by notification in the Cfficial &aFette, declare that the pro'isions of section / shall also apply to such State or area in respect of spot deli'ery contracts generally or in respect of spot deli'ery contracts for the sale or purchase of such securities as (ay be specified in the notification, and (ay also specify the (anner in which, and the extent to which, the pro'isions of that section
shall so apply0 /34Co tr%'t! i -eri+%ti+e. 1:A. Eotwithstanding anything contained in any other law for the ti(e being in force, contracts in deri'ati'e shall be legal and 'alid if such contracts are(a) traded on a recognised stoc) exchange3 (b) settled on the clearing house of the recognised stoc) exchange, in accordance with the rules and bye+laws of such stoc) exchange0: Sto'6 e#'h% (e! other th% re'o( i!e- !to'6 e#'h% (e! $rohi,ite-. 19. ( ) Eo person shall, except with the per(ission of the Central &o'ern(ent, organise or assist in organising or be a (e(ber of any stoc) exchange (other than a recognised stoc) exchange) for the purpose of assisting in, entering into or perfor(ing any contracts in securities0 (%) .his section shall co(e into force in any State or area on such date as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 4rohi,itio of o$tio ! i !e'*ritie!. "=. 734GGGGG:
/% <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 /3 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec 3, w0e0f0 %%+%+%0000 /$ C(itted by the Securities =aws (A(end(ent) Act, !!", Sec %%, w0e0f0 %"+0 + !!"0 <rior to o(ission, section %0 read as under , 1%00 8r$hibiti$n $f $%ti$n# in #ec!ritie#&-( ) Eotwithstanding anything contained in this Act or in any other law for the ti(e being in force, all options in securities entered into after the co((ence(ent of this Act shall be illegal0
9: 1:4= <E (/A0:1:( 754GGG: /#4Co -itio ! for li!ti (. "1. Khere securities are listed on the application of any person in any recognised stoc) exchange, such person shall co(ply with the conditions of the listing agree(ent with that stoc) exchange&: 775Deli!ti ( of !e'*ritie!. "1A. ( ) A recognised stoc) exchange (ay delist the securities, after recording the reasons therefor, fro( any recognised stoc) exchange on any of the ground or grounds as (ay be prescribed under this Act , 4ro+i-e- that the securities of a co(pany shall not be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) A listed co(pany or an aggrie'ed in'estor (ay file an appeal before the Securities Appellate .ribunal against the decision of the recognised stoc) exchange delisting the securities within fifteen days fro( the date of the decision of the recognised stoc) exchange delisting the securities and the pro'isions of sections %%8 to %%7 of this Act, shall apply, as far as (ay be, to such appeals , 4ro+i-e- that the Securities Appellate .ribunal (ay, if it is satisfied that the co(pany was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding one (onth0:
(%) Any option in securities which has been entered into before such co((ence(ent and which re(ains to be perfor(ed, whether wholly or in part, after such co((ence(ent shall, to that
extent, beco(e 'oid02 /" Kords 18O <H8=IC CC?<AEI7S2 o(itted by the Securities =aws (A(end(ent) Act, !!!, Sec $, w0e0f0 %%+0%+%0000 /# Substituted by the Securities =aws (A(end(ent) Act, !!", Sec 33, w0e0f0 %"+0 + !!" . <rior to substitution, section % read as under , 1% 0 8$.er t$ c$"%el li#ting $f #ec!ritie# bF %!blic c$"%anie#& -Eotwithstanding anything contained in any other law for the ti(e being in force, if the Securities and 7xchange 8oard of India is of opinion, ha'ing regard to the nature of the securities issued by any public co(pany as defined in the Co(panies Act, !"# ( of !"#), or to the dealings in the(, that it is necessary or expedient in the interest of the trade or in the public interest so to do, it (ay re*uire the co(pany, after gi'ing it an opportunity of being heard in the (atter, to co(ply with such re*uire(ents as (ay be prescribed with respect to the listing of its securities on any recognised stoc) exchange02 // Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec >, w0r0e0f0 %+ 0+%00$0
7:5Ri(ht
of %$$e%l %(%i !t ref*!%l of !to'6 e#'h% (e! to li!t !e'*ritie! of $*,li' 'o.$% ie!. 79"". Khere a recognised stoc) exchange acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any public co(pany >04or collecti'e in'est(ent sche(e:, the co(pany > 4or sche(e: shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( ) of section /3 of the Co(panies Act, !"# ( of !"#) (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Central &o'ern(ent (ay, on sufficient cause being shown, allow, appeal to the Central &o'ern(ent against such refusal, o(ission or failure, as the case (ay be, and thereupon the Central &o'ern(ent (ay, after gi'ing the stoc) exchange an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange, or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Central &o'ern(ent sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Central &o'ern(ent: , >%44ro+i-e- that no appeal shall be preferred against refusal, o(ission or failure, as the case (ay be, under this section on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!0: :)5Ri(ht of %$$e%l to Se'*ritie! A$$ell%te Tri,* %l %(%i !t ref*!%l of !to'6 e#'h% (e to li!t !e'*ritie! of $*,li' 'o.$% ie!.
/> Substituted
by .he Co(panies (A(end(ent) Act, !/$ (Act Eo0 $ of !/$), Sec $%, w0e0f0 0 + 0%+ !/"0 /! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the
&aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 >0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%00003 Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 > Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%0000 >% Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec $, w0e0f0 #+ %+ !!!0 >3 Sections %%A, %%8, %%C, %%9, %%7 and %%6 inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!!& 7arlier section %%A was inserted by .he
""A. ( ) Khere a recognised stoc) exchange, acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any co(pany, the co(pany shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( A) of section /3 of the Co(panies Act, !"# ( of !"#), (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Securities Appellate .ribunal (ay, on sufficient cause being shown, allow, appeal to the Securities Appellate .ribunal ha'ing Durisdiction in the (atter against such refusal, o(ission or failure, as the case (ay be, and thereupon the Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange, an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange3 or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Securities Appellate .ribunal sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Securities Appellate .ribunal0 (%) 7'ery appeal under sub+section ( ) shall be in such for( and be acco(panied by such fee as (ay be prescribed0 (3) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 ($) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: :354ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. "";. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of
Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec %, w0e0f0 /+ 0 + !>#, and o(itted by the 9epositories Act, !!#, Sec 30 and Sch0, <t0III, w0r0e0f0 %0+0!+ !!"0 >$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath 3 (b) re*uiring the disco'ery and production of docu(ents 3 (c) recei'ing e'idence on affida'its 3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents 3 (e) re'iewing its decisions 3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte ; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0: :55Ri(ht to le(%l re$re!e t%tio . ""C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of sub+section ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of subsection ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of
>" Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
!"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, vakil or an attorney of any Iigh Court, and includes a pleader in practice0: :85Li.it%tio . ""D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0: :75Ci+il 'o*rt ot to h%+e G*ri!-i'tio .
""E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0: ::5A$$e%l to S*$re.e Co*rt. ""2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order, 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: 8(4A91:( A45 80</(5A0( 4e %ltie!. "). ( ) Any person who+
># Inserted >/ Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & >> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec !, w0r0e0f0 %+ 0+%00$0 7arlier section %%6 as inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", read as under,+ 1""2. A$$e%l to Di(h Co*rt.+Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order , 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
(a) without reasonable excuse (the burden of pro'ing which shall be on hi() fails to co(ply with any re*uisition (ade under sub+section ($) of section #3 or (b) enters into any contract in contra'ention of any of the pro'isions contained in section 3 or section #3 or (c) contra'enes the pro'isions contained in >!5section / or section /A<, or section !3 or 90 4(d) enters into any contract in deri'ati'e in contra'ention of section >A or the rules (ade under section 303: (e) owns or )eeps a place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act and )nowingly per(its such place to be used for such purposes3 or (f) (anages, controls, or assists in )eeping any place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act or at which contracts are recorded or adDusted or rights or liabilities arising out of contracts are adDusted, regulated or enforced in any (anner whatsoe'er3 or (g) not being a (e(ber of a recognised stoc) exchange or his agent authorised as
such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section / wilfully represents to or induces any person to belie'e that contracts can be entered into or perfor(ed under this Act through hi(3 or (h) not being a (e(ber of a recognised stoc) exchange or his agent authorised as such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section /, can'asses, ad'ertises or touts in any (anner either for hi(self or on behalf of any other persons for any business connected with contracts in contra'ention of any of the pro'isions of this Act3 or (i) Doins, gathers or assists in gathering at any place other than the place of business specified in the bye+laws of a recognised stoc) exchange any person or persons for (a)ing bids or offers or for entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act3 ! 4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which
>! Inserted
by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec $, w0e0f0 %>+0"+ %00/ for ;section /;0 !0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec #, w0e0f0 %%+0%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 ! Substituted for 1shall, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0
(ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: (%) Any person who enters into any contract in contra'ention of the pro'isions contained in section " !%4or who fails to co(ply with the pro'isions of !34section % or section % A: or with the orders of: or section %% !$4or with the orders of the Securities Appellate .ribunal: !"4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 9854e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. ")A. Any person, who is re*uired under this Act or any rules (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to a recognised stoc) exchange, fails to furnish the sa(e within the ti(e specified therefor in the listing agree(ent or conditions or bye+laws of the recognised stoc) exchange, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to (aintain boo)s of account or records, as per the listing agree(ent or conditions, or bye+laws of a recognised stoc) exchange, fails to (aintain the sa(e, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0:
9754e
%lt> for f%il*re ,> % > $er!o to e ter i to % %(ree.e t /ith 'lie t!. ");. If any person, who is re*uired under this Act or any bye+laws of a recognised stoc) exchange (ade thereunder, to enter into an agree(ent with his client, fails to enter into such an agree(ent, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0:
!% Substituted
for 1or who fails to co(ply with the orders of the Securities and 7xchange 8oard of India under section % 2 by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 <rior to !!", ;Securities and 7xchange 8oard of India under section % or Central &o'ern(ent under section %%; were substituted for ;Central &o'ern(ent under section % or section %%; vide .he Schedule, <art II of Securities and 7xchange 8oard of India Act, !!%, w0e0f0 30+0 + !!%0 !3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec #, w0e0f0 #+ %+ !!!0 !" Substituted for 1shall, on con'iction, be punishable with fine which (ay extend to one thousand rupees2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !# Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$ & !/ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$0
9:54e
%lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. ")C. If any stoc) bro)er or sub+bro)er or a co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, after ha'ing been called upon by the Securities and 7xchange 8oard of India or a recognised stoc) exchange in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e stipulated by the Securities and 7xchange 8oard of India or a recognised stoc) exchange, he or it shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 9954e %lt> for f%il*re to !e(re(%te !e'*ritie! or .o e>! of 'lie t or 'lie t!. ")D. If any person, who is registered under section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%) as a stoc) bro)er or sub+bro)er, fails to segregate securities or (oneys of the client or clients or uses the securities or (oneys of a client or clients for self or for any other client, he shall be liable to a penalty not exceeding one crore rupees0: 1==54e %lt> for f%il*re to 'o.$l> /ith $ro+i!io of li!ti ( 'o -itio ! or -eli!ti ( 'o -itio ! or (ro* -!. ")E. If a co(pany or any person (anaging collecti'e in'est(ent sche(e or (utual fund, fails to co(ply with the listing conditions or delisting conditions or grounds or co((its a breach thereof, it or he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0: 1=154e %lt> for e#'e!! -e.%teri%li!%tio or -eli+er> of * li!te- !e'*ritie!. ")2. If any issuer de(aterialises securities (ore than the issued securities of a co(pany or deli'ers in the stoc) exchanges the securities which are not listed in the recognised stoc) exchange or deli'ers securities where no trading per(ission has been gi'en by the recognised stoc) exchange, he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0:
!> Inserted !! Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 00 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0
%+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0
1="54e
%lt> for f%il*re to f*r i!h $erio-i'%l ret*r !, et'. ")G. If a recognised stoc) exchange fails or neglects to furnish periodical returns to the Securities and 7xchange 8oard of India or fails or neglects to (a)e or a(end its rules or bye+laws as directed by the Securities and 7xchange 8oard of India or fails to co(ply with directions issued by the Securities and 7xchange 8oard of India, such recognised stoc) exchange shall be liable to a penalty which (ay extend to twenty+fi'e crore rupees0: 1=)54e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. ")D. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or articles or bye+ laws or the regulations of the recognised stoc) exchange or directions issued by the Securities and 7xchange 8oard of India for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 1=354o/er to %-G*-i'%te. ")0I. ( ) 6or the purpose of adDudging under sections %3A, %38, %3C, %39, %37, %36, %3& and %3I, the Securities and 7xchange 8oard of India shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0: 1=552%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. ")E. Khile adDudging the *uantu( of penalty under section %3+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3
0% Inserted 03 Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec 0$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0" Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 , w0r0e0f0 , w0r0e0f0 , w0r0e0f0
%+ %+ %+ %+
0+%00$0 0+%00$0 0+%00$0 0+%00$0
(b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0: 1=85 Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!.
")EA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 1"A or !e'tio ")0I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%tefor the %lle(e- -ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re %! !$e'ifie,> the ;o%r- * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")L %(%i !t % > or-er $%!!e- ,> the ;o%ror %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 1=75Re'o+er> of %.o* t!. ")E;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 1"A or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H
0# I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30"==7) 0/ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %!
.%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - ThirS'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")L of thi! A't. (") The re'o+er> offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ())Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 0'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 1"A, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1),(") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 1=:5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. ")F. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: 1=95A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")L. ( ) Any person aggrie'ed, by the order or decision of the recogniFed stoc) exchange or the adDudicating officer or any order (ade by the Securities and 7xchange 8oard of India under section $8, (ay prefer an appeal before the Securities Appellate .ribunal and the pro'isions of sections %%8, %%C, %%9 and %%7 of this Act, shall apply, as far as (ay be, to such appeals0 (%) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order or decision is recei'ed by the
appellant and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 (3) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 ($) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the parties to the appeal and to the concerned adDudicating officer0 (") .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: 11=5Offe 'e!. ")@. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws
0> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 0! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
(ade thereunder, for which no punish(ent is pro'ided elsewhere in this Act, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 1115Co.$o!itio of 'ert%i offe 'e!. ")N. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0: 11"54o/er to (r% t i..* it>. ")0O. ( ) .he Central &o'ern(ent (ay, on reco((endation by the Securities and 7xchange 8oard of India, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation,
4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that the reco((endation of the Securities and 7xchange 8oard of India under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under
% Inserted
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
this Act to which such person would ha'e been liable, had not such i((unity been granted0: Offe 'e! ,> 'o.$% ie!. "3. ( ) Khere an offence has been co((itted by a co(pany, e'ery person who, at the ti(e when the offence was co((itted, was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence, and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any gross negligence on the part of any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer of the co(pany, shall also be dee(ed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n0-6or the purpose of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals, and 34(b) 1director2, in relation to(i) a fir(, (eans a partner in the fir(3 (ii) any association of persons or a body of indi'iduals, (eans any (e(ber controlling the affairs thereof0: $4(3) .he pro'isions of this section shall be in addition to, and not in derogation of, the pro'isions of section %%A0: Cert%i offe 'e! to ,e 'o( iL%,le. "5. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, >!> (" of >!>) ", any offence punishable under #4GGG: section %3 shall be dee(ed to be a
cogniFable offence within the (eaning of that Code0
3 Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec /, w0e0f0 %%+%+%0000 <rior to its substitution, sub+clause (b) read as under, N(b) 1director2, in relation to a fir(, (eans a partner in the fir(0J $ Inserted by .he Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec 3, w0e0f0 /+0 + !>#0
iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central &o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or a recognised stoc) exchange or by any person0 >5(")********< 1195E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
ee now the Code of Cri(inal <rocedure, !/3 (% of !/$) 1sub+section ( ) of2 o(itted by the Securities =aws (A(end(ent) Act, %00$, w0e0f0 %+ 0+%00$0 / Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$ & <rior to its substitution section %# read as under ,1%#0 G!ri#dicti$n t$ trF $ffence# !nder thi# Act&-Eo court inferior to that of a presidency (agistrate or a (agistrate of the first class shall ta)e cogniFance of or try any offence punishable under this Act02 > O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JEo court inferior to that of a Court of Session shall try any offence punishable under this Act .K ! I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
" # Kords
/4Co(
A$$e%l % - Re+i!io . "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt. "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel% $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io !. "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< 6: /(99A4(<A Title to -i+i-e -!. "7. ( ) It shall be lawful for the holder of any security whose na(e appears on the boo)s of the co(pany issuing the said security to recei'e and retain any di'idend declared by the co(pany in respect thereof for any year, notwithstanding that the said security has already been transferred by hi( for consideration, unless the transferee who clai(s the di'idend fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the co(pany with the co(pany for being registered in his na(e within fifteen days of the date on which the di'idend beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the di'idend3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security and other docu(ents relating to
the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a co(pany to pay any di'idend which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the co(pany as the holder of the security in respect of which the di'idend has beco(e due3 or (b) the right of the transferee of any security to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security in the na(e of the transferee0 %04Ri(ht to re'ei+e i 'o.e fro. 'olle'ti+e i +e!t.e t !'he.e. "7A. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, whose na(e appears on the boo)s of the collecti'e in'est(ent sche(e issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e declared by the collecti'e in'est(ent sche(e in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e fro( the transfer or has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the collecti'e in'est(ent sche(e with the collecti'e in'est(ent sche(e for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec >, w0e0f0 %%+%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the collecti'e in'est(ent sche(e3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a collecti'e in'est(ent sche(e to pay any inco(e fro( units or other instru(ents issued by the collecti'e in'est(ent sche(e which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the collecti'e in'est(ent sche(e as the holder of the security being
units or other instru(ents issued by the collecti'e in'est(ent sche(e in respect of which the inco(e in respect of units or other instru(ents issued by the collecti'e sche(e has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security being units or other instru(ents issued by the collecti'e in'est(ent sche(e in the na(e of the transferee0: % 4Ri(ht to re'ei+e i 'o.e fro. .*t*%l f* -. "7;. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by any (utual fund, whose na(e appears on the boo)s of the (utual fund issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the (utual fund declared by the (utual fund in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the (utual fund, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the (utual fund fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the (utual fund with the (utual fund for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the (utual fund beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the (utual fund3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the (utual fund, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a (utual fund to pay any inco(e fro( units or other instru(ents issued by the (utual fund which has beco(e due to any person, whose na(e is for the ti(e being registered in the boo)s of the (utual fund as the holder of the security being units or other instru(ents issued by the (utual fund in respect of which the inco(e in respect of units or other instru(ents issued by the (utual fund has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the (utual fund, to enforce against the transferor or any other person, his rights, if any, in relation to the transfer in any case where the (utual fund has refused to register the transfer of the security being units or other instru(ents issued by the (utual fund in the na(e of the transferee0:
1""5A't
ot to %$$l> i 'ert%i '%!e!. ":. ( ) .he pro'isions of this Act shall not apply to(a) the &o'ern(ent, the Reser'e 8an) of India, any local authority or any corporation set up by a special law or any person who has effected any transaction with or through the agency of any such authority as is referred to in this clause3 (b) any con'ertible bond or share warrant or any option or right in relation thereto, in so far as it entitles the person in whose fa'our any of the foregoing has been issued to obtain at his option fro( the co(pany or other body corporate, issuing the sa(e or fro( any of its shareholders or duly appointed agentsJ shares of the co(pany or other body corporate, whether by con'ersion of the bond or warrant or otherwise, on the basis of the price agreed upon when the sa(e was issued0 (%) Kithout preDudice to the pro'isions contained in sub+section ( ), if the Central &o'ern(ent %3 is satisfied that in the interests of trade and co((erce or the
%% Substituted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec 3, w0e0f0 0>+ %+ !"!0
econo(ic de'elop(ent of the country it is necessary or expedient so to do, it (ay, by notification in the Cfficial &aFette, specify any class of contracts as contracts to which this Act or any pro'ision contained therein shall not apply, and also the conditions, li(itations or restrictions, if any, subDect to which it shall not so apply0: 4rote'tio of %'tio t%6e i (oo- f%ith. "9. Eo suit, prosecution or other legal proceeding whatsoe'er shall lie in any court against the go'erning body or any (e(ber, office bearer or ser'ant of any recognised stoc) exchange or against any person or persons appointed under subsection ( ) of section for anything which is in good faith done or intended to be done in pursuance of this Act or of any rules or bye+laws (ade thereunder0 %$44o/er to -ele(%te. "9A. .he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers (except the power under section 30) exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India or the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)0: 4o/er to .%6e r*le!. )=. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for the purpose of carrying into effect the obDects of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for,(a) the (anner in which applications (ay be (ade, the particulars which they should contain and the le'y of a fee in respect of such applications 3 (b) the (anner in which any in*uiry for the purpose of recognising any stoc) exchange (ay be (ade, the conditions which (ay be i(posed for the grant of such recognition, including conditions as to the ad(ission of (e(bers if the
%3 <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %$ Inserted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% and Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec !, w0e0f0 %%+0%+%0000 <rior to its substitution, section %!A read as under , 1%!A0 8$.er t$ delegate&*.he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India02
stoc) exchange concerned is to be the only recognised stoc) exchange in the area3 and the for( in which such recognition shall be granted3 (c) the particulars which should be contained in the periodical returns and annual reports to be furnished to the Central &o'ern(ent3 (d) the docu(ents which should be (aintained and preser'ed under section # and the periods for which they should be preser'ed3 (e) the (anner in which any in*uiry by the go'erning body of a stoc) exchange shall be (ade under section #3 (f) the (anner in which the bye+laws to be (ade or a(ended under this Act shall before being so (ade or a(ended be published for criticis(3 (g) the (anner in which applications (ay be (ade by dealers in securities for licences under section /, the fee payable in respect thereof and the period of such licences, the conditions subDect to which licences (ay be granted, including conditions relating to the for(s which (ay be used in (a)ing contracts, the docu(ents to be (aintained by licensed dealers and the furnishing of periodical infor(ation to such authority as (ay be specified and the re'ocation of licences for breach of conditions3 %"4(h) the re*uire(ents which shall be co(plied with(A) by public co(panies for the purpose of getting their securities listed on any stoc) exchange3 (B) by collecti'e in'est(ent sche(e for the purpose of getting their units listed on any stoc) exchange3: %#4GGG: %/4(ha) the grounds on which the securities of a co(pany (ay be delisted fro( any recognised stoc) exchange under sub+section ( ) of section % A3 (hb) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under sub+section (%) of section % A and the fees payable in respect of such appeal3 (hc) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3
%" Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec 0, w0e0f0 %%+0%+%0000 <rior to its substitution, clause (h) read as under , 1(h) the re*uire(ents which shall be co(plied with by public co(panies for the purpose of getting their securities listed on any stoc) exchange32 %# .he word ;and; o(itted by .he Securities Contracts (Regulation) A(end(ent Act, !>", Sec $, w0e0f0 /+0 + !>#0 %/ Substituted for clause (ha) by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 7arlier clause (ha), as a(ended by the Securities =aws (A(end(ent) Act, !!!, read as
under ,1(ha) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3 and2
(hd) the (anner of in*uiry under sub+section ( ) of section %3+I3 (he) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3= and the fees payable in respect of such appeal3: (i) any other (atter which is to be or (ay be prescribed0 %>4(3) 7'ery rule (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule0: 1"954o/er of Se'*ritie! % - E#'h% (e ;o%r- of I -i% to .%6e re(*l%tio !. )1. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 305(%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,%> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 <rior to its substitution, sub+section (3), as a(ended by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!", read as under , 1(3) 7'ery rule (ade under this section shall, as soon as (ay be, after its publication in the Cfficial &aFette, be laid before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e session aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule02 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0 7arlier it was repealed by the Repealing and A(ending Act, !#0, Sec % and 6irst Sch0 w0e0f0 %>+ %+ !#00 30 Substituted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec ", w0e0f0 %>+ 0"+%00/0 <rior to substitution it read as under , 1(%) In particular and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for the (anner in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section02
(a) the (anner, in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of
publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section3 (b) the eligibility criteria and other re*uire(ents under section /A0 < (3) 7'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the regulation or both Iouses agree that the regulation should not be (ade, the regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that regulation0:
DE4OSITORIES ACT, 1998 SECTIONS /@A81(0 : 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS ). Certificate of co((ence(ent of business by depositories /@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS 3. Agree(ent between depository and participant 5. Ser'ices of depository 8. Surrender of certificate of security 7. Registration of transfer of securities with depositories :. Cptions to recei'e security certificate or hold securities with depository 9. Securities in depositories to be in fungible for( 1=. Rights of depositories and beneficial owner 11. Register of beneficial owner 1". <ledge or hypothecation of securities held in a depository 1). 6urnishing of infor(ation and records by depository and issuer 13. Cption to opt out in respect of any security 15. Act > of >! to apply to depositories 18. 9epositories to inde(nify loss in certain cases 17. Rights and obligations of depositories, etc0 /@A81(0 :: EN9UIRM AND INS4ECTION 1:. <ower of 8oard to call for infor(ation and en*uiry 19. <ower of 8oard to gi'e directions in certain cases 19A. <enalty for failure to furnish infor(ation, return, etc0 19;. <enalty for failure to enter into an agree(ent 19C. <enalty for failure to redress in'estorsJ grie'ances
19D. <enalty for delay in de(aterialisation or issue of certificate of securities 19E. <enalty for failure to reconcile records 192. <enalty for failure to co(ply with directions issued by 8oard under section ! of the Act 19G. <enalty for contra'ention where no separate penalty has been pro'ided 19D. <ower to adDudicate 190I. 6actors to be ta)en into account by adDudicating officer 190IA. Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (! 190I;. Re'o+er> of %.o* t! 190E. Crediting su(s realised by way of penalties to Consolidated 6und of India /@A81(0 D 4ENALTM "=. Cffences "1. Cffences by co(panies /@A81(0 D: @ISCELLANEOUS "". CogniFance of offences by courts ""A. Co(position of certain offences "";. <ower to grant i((unity ""C. E!t%,li!h.e t of S$e'i%l Co*rt! ""D. Offe 'e! tri%,le ,> S$e'i%l Co*rt! ""E. A$$e%l % - re+i!io ""2. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""G. Tr% !itio %l 4ro+i!io ! "). Appeals ")A. Appeal to Securities Appellate .ribunal ")A. Appeal to Securities Appellate .ribunal ");. <rocedure and powers of Securities Appellate .ribunal ")C. Right to =egal Representation ")D. =i(itation ")E. Ci'il court not to ha'e Durisdiction ")2. Appeal to Supre(e Court "3. <ower of Central &o'ern(ent to (a)e rules "5. <ower of 8oard to (a)e regulations "8. <ower of depositories to (a)e bye+laws "7. Rules and regulations to be laid before <arlia(ent ":. Application of other laws not barred "9. Re(o'al of difficulties )=. A(end(ents to certain enact(ents )1. Repeal and sa'ing /@(5A9( A?7E9?7E. .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0: DE4OSITORIES ACT, 1998 5"" O2 1998< 51=th A*(*!t, 1998< An Act to provide $or reg lation o$ depositories in sec rities and $or matters connected there%ith or incidental thereto& B( it enacted bF 8arlia"ent in the E$rtF7#eventh ;ear $f the 0e%!blic $f :ndia a# f$ll$.# ,*
/@A81(0 : 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the 9epositories Act, !!#0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the %0th day of Septe(ber, !!"0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 1beneficial owner2 (eans a person whose na(e is recorded as such with a depository3 (b) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 3 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (c) 1bye+laws2 (eans bye+laws (ade by a depository under section %#3 (d) 1Co(pany =aw 8oard2 (eans the 8oard of Co(pany =aw Ad(inistration constituted under section 07 of the Co(panies Act, !"# ( of !"#)3 (e) 1depository2 (eans a co(pany for(ed and registered under the Co(panies Act, !"# ( of !"#), and which has been granted a certificate of registration under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (f) 1issuer2 (eans any person (a)ing an issue of securities3 (g) 1participant2 (eans a person registered as such under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (h) 1prescribed2 (eans prescribed by rules (ade under this Act3 (i) 1record2 includes the records (aintained in the for( of boo)s or stored in a co(puter or in such other for( as (ay be deter(ined by regulations3 (j) 1registered owner2 (eans a depository whose na(e is entered as such in the register of the issuer3 (k) 1regulations2 (eans the regulations (ade by the 8oard3 4(ka) 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (l) 1security2 (eans such security as (ay be specified by the 8oard3 (") 1ser'ice2 (eans any ser'ice connected with recording of allot(ent of securities or transfer of ownership of securities in the record of a depository0 (%) Kords and expressions used herein and not defined but defined in the Co(panies Act, !"# ( of !"#), or the Securities Contracts (Regulation) Act, !"# ($% of !"#), or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), shall ha'e the (eanings respecti'ely assigned to the( in those Acts0 /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS Certifi'%te of 'o..e 'e.e t of ,*!i e!! ,> -e$o!itorie!. ). ( ) Eo depository shall act as a depository unless it obtains a certificate of co((ence(ent of business fro( the 8oard0 (%) A certificate granted under sub+section ( ) shall be in such for( as (ay be specified by the regulations0 (3) .he 8oard shall not grant a certificate under sub+section ( ) unless it is satisfied that the depository has ade*uate syste(s and safeguards to pre'ent (anipulation of records and transactions , 4ro+i-e- that no certificate shall be refused under this section unless the depository concerned has been gi'en a reasonable opportunity of being heard0
Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
/@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS A(ree.e t ,et/ee -e$o!itor> % - $%rti'i$% t. 3. ( ) A depository shall enter into an agree(ent with one or (ore participants as its agent0 (%) 7'ery agree(ent under sub+section ( ) shall be in such for( as (ay be specified by the bye+laws0 Ser+i'e! of -e$o!itor>. 5. Any person, through a participant, (ay enter into an agree(ent, in such for( as (ay be specified by the bye+laws, with any depository for a'ailing its ser'ices0 S*rre -er of 'ertifi'%te of !e'*rit>. 8. ( ) Any person who has entered into an agree(ent under section " shall surrender the certificate of security, for which he see)s to a'ail the ser'ices of a depository, to the issuer in such (anner as (ay be specified by the regulations0 (%) .he issuer, on receipt of certificate of security under sub+section ( ), shall cancel the certificate of security and substitute in its records the na(e of the depository as a registered owner in respect of that security and infor( the depository accordingly0 (3) A depository shall, on receipt of infor(ation under sub+section (%), enter the na(e of the person referred to in sub+section ( ) in its records, as the beneficial owner0 Re(i!tr%tio of tr% !fer of !e'*ritie! /ith -e$o!itor>. 7. ( ) 7'ery depository shall, on receipt of inti(ation fro( a participant, register the transfer of security in the na(e of the transferee0 (%) If a beneficial owner or a transferee of any security see)s to ha'e custody of such security the depository shall infor( the issuer accordingly0 O$tio ! to re'ei+e !e'*rit> 'ertifi'%te or hol- !e'*ritie! /ith -e$o!itor>. :. ( ) 7'ery person subscribing to securities offered by an issuer shall ha'e the option either to recei'e the security certificates or hold securities with a depository0 (%) Khere a person opts to hold a security with a depository, the issuer shall inti(ate such depository the details of allot(ent of the security, and on receipt of such infor(ation the depository shall enter in its records the na(e of the allottee as the beneficial owner of that security0 Se'*ritie! i -e$o!itorie! to ,e i f* (i,le for.. 9. ( ) All securities held by a depository shall be de(aterialised and shall be in a fungible for(0 %4(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#), shall apply to a depository in respect of securities held by it on behalf of the beneficial owners&: Ri(ht! of -e$o!itorie! % - ,e efi'i%l o/ er. 1=. ( ) Eotwithstanding anything contained in any other law for the ti(e being in force, a depository shall be dee(ed to be the registered owner for the purposes of effecting transfer of ownership of security on behalf of a beneficial owner0 (%) Sa'e as otherwise pro'ided in sub+section ( ), the depository as a registered owner shall not ha'e any 'oting rights or any other rights in respect of securities held by it0 (3) .he beneficial owner shall be entitled to all the rights and benefits and be subDected to all the liabilities in respect of his securities held by a depository0 Re(i!ter of ,e efi'i%l o/ er. 11. 7'ery depository shall (aintain a register and an index of beneficial owners in the
(anner pro'ided in sections "0, " and "% of the Co(panies Act, !"# ( of !"#)0 4le-(e or h>$othe'%tio of !e'*ritie! hel- i % -e$o!itor>. 1". ( ) SubDect to such regulations and bye+laws, as (ay be (ade in this behalf, a beneficial owner (ay with the pre'ious appro'al of the depository create a pledge or hypothecation in respect of a security owned by hi( through a depository0 (%) 7'ery beneficial owner shall gi'e inti(ation of such pledge or hypothecation to the depository and such depository shall thereupon (a)e entries in its records accordingly0 (3) Any entry in the records of a depository under sub+section (%) shall be e'idence of a pledge or hypothecation0 2*r i!hi ( of i for.%tio % - re'or-! ,> -e$o!itor> % - i!!*er. 1). ( ) 7'ery depository shall furnish to the issuer infor(ation about the transfer of securities in the na(e of beneficial owners at such inter'als and in such (anner as (ay be specified by the bye+laws0 (%) 7'ery issuer shall (a)e a'ailable to the depository copies of the rele'ant records in respect of securities held by such depository0 O$tio to o$t o*t i re!$e't of % > !e'*rit>.
% Substituted
by the 9epositories Related =aws (A(end(ent) Act, !!/, Sec %%, w0e0f0 "+0 + !!/0 <rior to its substitution sub+section (%) read as under , 1(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#) shall apply to the securities held by a depository on behalf of the beneficial owners02
13. ( ) If a beneficial owner see)s to opt out of a depository in respect of any security he shall infor( the depository accordingly0 (%) .he depository shall on receipt of inti(ation under sub+section ( ) (a)e appropriate entries in its records and shall infor( the issuer0 (3) 7'ery issuer shall, within thirty days of the receipt of inti(ation fro( the depository and on fulfil(ent of such conditions and on pay(ent of such fees as (ay be specified by the regulations, issue the certificate of securities to the beneficial owner or the transferee, as the case (ay be0 A't 1: of 1:91 to %$$l> to -e$o!itorie!. 15. .he 8an)ersJ 8oo)s 7'idence Act, >! shall apply in relation to a depository as if it were a ban) as defined in section % of that Act0 De$o!itorie! to i -e. if> lo!! i 'ert%i '%!e!. 18. ( ) Kithout preDudice to the pro'isions of any other law for the ti(e being in force, any loss caused to the beneficial owner due to the negligence of the depository or the participant, the depository shall inde(nify such beneficial owner0 (%) Khere the loss due to the negligence of the participant under sub+section ( ) is inde(nified by the depository, the depository shall ha'e the right to reco'er the sa(e fro( such participant0 Ri(ht! % - o,li(%tio ! of -e$o!itorie!, et'. 17. ( ) SubDect to the pro'isions of this Act, the rights and obligations of the depositories, participants and the issuers whose securities are dealt with by a depository shall be specified by the regulations0 (%) .he eligibility criteria for ad(ission of securities into the depository shall be specified by the regulations0 /@A81(0 :D EN9UIRM AND INS4ECTION 4o/er of ;o%r- to '%ll for i for.%tio % - e 7*ir>. 1:. ( ) .he 8oard, on being satisfied that it is necessary in the public interest or in the interest of in'estors so to do, (ay, by order in writing,-
(a) call upon any issuer, depository, participant or beneficial owner to furnish in writing such infor(ation relating to the securities held in a depository as it (ay re*uire3 or (b) authorise any person to (a)e an en*uiry or inspection in relation to the affairs of the issuer, beneficial owner, depository or participant, who shall sub(it a report of such en*uiry or inspection to it within such period as (ay be specified in the order0 (%) 7'ery director, (anager, partner, secretary, officer or e(ployee of the depository or issuer or the participant or beneficial owner shall on de(and produce before the person (a)ing the en*uiry or inspection all infor(ation or such records and other docu(ents in his custody ha'ing a bearing on the subDect+(atter of such en*uiry or inspection0 4o/er of ;o%r- to (i+e -ire'tio ! i 'ert%i '%!e!. 19. Sa'e as pro'ided in this Act, if after (a)ing or causing to be (ade an en*uiry or inspection, the 8oard is satisfied that it is necessary(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any depository or participant being conducted in the (anner detri(ental to the interests of in'estors or securities (ar)et, it (ay issue such directions,(a) to any depository or participant or any person associated with the securities (ar)et3 or (b) to any issuer, as (ay be appropriate in the interest of in'estors or the securities (ar)et0 )5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< $44e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 19A. Any person, who is re*uired under this Act or any rules or regulations or bye+laws (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to the 8oard, fails to furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations or bye+laws, fails to file return or furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0
3I $ Inserted
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the Securities =aws (A(end(ent) Act, %00$, Sec0 /, w0r0e0f0 %+ 0+%00$0
4e %lt> for f%il*re to e ter i to % %(ree.e t. 19;. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and is re*uired under this Act or any rules or regulations (ade thereunder, to enter into an agree(ent, fails to enter into such agree(ent, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0
4e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 19C. If any depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such depository or participant or issuer or its agents or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for -el%> i -e.%teri%li!%tio or i!!*e of 'ertifi'%te of !e'*ritie!. 19D. If any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to de(aterialise or issue the certificate of securities on opting out of a depository by the in'estors, within the ti(e specified under this Act or regulations or bye+laws (ade thereunder or abets in delaying the process of de(aterialisation or issue the certificate of securities on opting out of a depository of securities, such issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to re'o 'ile re'or-!. 19E. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to reconcile the records of de(aterialised securities with all the securities issued by the issuer as specified in the regulations, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to 'o.$l> /ith -ire'tio ! i!!*e- ,> ;o%r- * -er !e'tio 19 of the A't. 192. If any person fails to co(ply with the directions issued by the 8oard under section !, within the ti(e specified by it, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 19G. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations or bye+laws (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0 4o/er to %-G*-i'%te. 19D. ( ) 6or the purpose of adDudging under sections !A, !8, !C, !9, !7, !6 and !&, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the
sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. 190I. Khile adDudging the *uantu( of penalty under section !I, the adDudicating officer shall ha'e due regard to the following factors, na(ely,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 55 Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (!. 190IA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 19, !e'tio 19D, %! the '%!e .%> ,e, .%> file % %$$li'%tio i /riti ( to the ;o%r$ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e-ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h
"I
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re !$e'ifie- ,> the ;o%r* -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")A %(%i !t % > or-er $%!!e- ,> the ;o%r- or the %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 85 Re'o+er> of %.o* t!. 190I;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 19 or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6
%''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hilor !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C!
#I
!erte- ,> The Se'*ritie! L%/! (A.e- .e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
.o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")A of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 19, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 19E. All su(s realiFed by way of penalties under this Act shall be credited to the Consolidated 6und of India0: /@A81(0 D 4ENALTM /4Offe 'e!. "=. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws (ade thereunder, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0
/ Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 >, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %0 read as under,1%00 <ffence#0- Khoe'er contran'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or any regulations or bye+laws (ade thereunder shall be punishable with i(prison(ent for a ter( which (ay extend to fi'e years, or with fine or with both02
(%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with
fine, which (ay extend to twenty+fi'e crore rupees, or with both0: Offe 'e! ,> 'o.$% ie!. "1. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n&-6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and (b) 1director2, in relation to a fir(, (eans a partner in the fir(0 /@A81(0 D: @ISCELLANEOUS >4Co( iL% 'e of offe 'e! ,> 'o*rt!. "". ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central
> Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 !, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %% read as under,1%%0 /$gniCance $f $ffence# bF c$!rt#&*( ) Eo Court shall ta)e cogniFance of any offence punishable under this Act or any regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the 8oard0 (%) Eo court inferior to that of a ?etropolitan ?agistrate or a Dudicial ?agistrate of the first class shall try any offence punishable under this Act02
&o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or by any person0 !5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < Co.$o!itio of 'ert%i offe 'e!. ""A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "";. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any
penalty under this Act with respect to the alleged 'iolation , 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity , 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0: 1=5 E!t%,li!h.e t of S$e'i%l Co*rt!. ""C. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>.
! <rior
to o(ission, Sub+section(%) read 1Eo court inferior to that of a Court of Session shall try any offence punishable under this Act02 0 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. ""D. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-. A$$e%l % - Re+i!io ""E. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""2. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197).
(") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erioof ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! ""G. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< A$$e%l!. "). ( ) Any person aggrie'ed by an order of the 8oard (ade 4before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!: under this Act, or the regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor , 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0 (3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed , 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 %4A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")A. ( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!, under this Act, or the regulations (ade thereunder, 34or by an order (ade by an adDudicating officer under this Act: (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 $5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 8oard is recei'ed by the person referred to in sub+section ( ) and it shall be in such for( and be acco(panied by such fee as (ay be prescribed ,
Substituted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 $, w0e0f0 #+ %+ !!! for ;an order of the 8oard (ade;0 % Sections %3A to %36 inserted by the Securities =aws (Second A(end(ent) Act, !!! , Sec0 ", w0e0f0 #+ %+ !!!& 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %0, w0r0e0f0 %+ 0+%00$0 $ 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JNo %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-e ,> the ;o%r- /ith the 'o !e t of the $%rtie!.K
4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0
($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 (") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. ");. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3 (e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte; (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 Ri(ht to le(%l re$re!e t%tio . ")C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or an attorney of any Iigh Court, and
includes a pleader in practice0 Li.it%tio . ")D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 Ci+il 'o*rt ot to h%+e G*ri!-i'tio . ")E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "4A$$e%l to S*$re.e Co*rt. ")2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order ,
" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 % , w0r0e0f0 %+ 0+%00$0 <rior to its substitution, Section %36, as inserted by Securities =aws (Second A(end(ent) Act, !!!, w0e0f0 #+ %+ !!!, read as under,1%360 A%%eal t$ @igh /$!rt&-Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0:: 4o/er of Ce tr%l Go+er .e t to .%6e r*le!. "3. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for carrying out the pro'isions of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,164(a) the (anner of in*uiry under sub+section ( ) of section !I3 (aa) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %33: (b) the for( in which an appeal (ay be preferred under sub+section (3) of section %3 and the fees payable in respect of such appeal 3 (c) the procedure for disposing of an appeal under sub+section ($) of section %33 /4(d) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3A and the fees payable in respect of such appeal0: 4o/er of ;o%r- to .%6e re(*l%tio !. "5. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the 8oard (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for(a) the for( in which record is to be (aintained under clause ( i) of sub+section ( ) of section %3 (b) the for( in which the certificate of co((ence(ent of business shall be issued under
sub+section (%) of section 33 (c) the (anner in which the certificate of security shall be surrendered under sub+section ( ) of section #3 (d) the (anner of creating a pledge or hypothecation in respect of security owned by a beneficial owner under sub+section ( ) of section %3 (e) the conditions and the fees payable with respect to the issue of certificate of securities under sub+section (3) of section $3
# Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %%, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (a) read as under,1(a) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %332 / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 #, w0e0f0 #+ %+ !!!0
(f) the rights and obligations of the depositories, participants and the issuers under subsection ( ) of section /3 (g) the eligibility criteria for ad(ission of securities into the depository under sub+section (%) of section /0 4o/er of -e$o!itorie! to .%6e ,>e0l%/!. "8. ( ) A depository shall, with the pre'ious appro'al of the 8oard, (a)e bye+laws consistent with the pro'isions of this Act and the regulations0 (%) In particular, and without preDudice to the generality of the foregoing power, such byelaws shall pro'ide for(a) the eligibility criteria for ad(ission and re(o'al of securities in the depository3 (b) the conditions subDect to which the securities shall be dealt with3 (c) the eligibility criteria for ad(ission of any person as a participant3 (d) the (anner and procedure for de(aterialisation of securities3 (e) the procedure for transactions within the depository3 (f) the (anner in which securities shall be dealt with or withdrawn fro( a depository3 (g) the procedure for ensuring safeguards to protect the interests of participants and beneficial owners3 (h) the conditions of ad(ission into and withdrawal fro( a participant by a beneficial owner3 (i) the procedure for con'eying infor(ation to the participants and beneficial owners on di'idend declaration, shareholder (eetings and other (atters of interest to the beneficial owners3 (j) the (anner of distribution of di'idends, interest and (onetary benefits recei'ed fro( the co(pany a(ong beneficial owners3 (k) the (anner of creating pledge or hypothecation in respect of securities held with a depository3 (l) inter #e rights and obligations a(ong the depository, issuer, participants, and beneficial owners3 (") the (anner and the periodicity of furnishing infor(ation to the 8oard, issuer and other persons3 (n) the procedure for resol'ing disputes in'ol'ing depository, issuer, co(pany or a beneficial owner3 ($) the procedure for proceeding against the participant co((itting breach of the regulations and pro'isions for suspension and expulsion of participants fro( the depository and cancellation of agree(ents entered with the depository3 (%) the internal control standards including procedure for auditing, re'iewing and (onitoring0
(3) Khere the 8oard considers it expedient so to do, it (ay, by order in writing, direct a depository to (a)e any bye+laws or to a(end or re'o)e any bye+laws already (ade within such period as it (ay specify in this behalf0 ($) If the depository fails or neglects to co(ply with such order within the specified period, the 8oard (ay (a)e the bye+laws or a(end or re'o)e the bye+laws (ade either in the for( specified in the order or with such (odifications thereof as the 8oard thin)s fit0 R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t. "7. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. ":. .he pro'isions of this Act shall be in addition to, and not in derogation of, any other law for the ti(e being in force relating to the holding and transfer of securities0 Re.o+%l of -iffi'*ltie!. "9. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as appear to it to be necessary or expedient for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of a period of two years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 A.e -.e t! to 'ert%i e %'t.e t!. )=. 40e%ealed bF 0e%ealing H A"ending Act' 20010: Re$e%l % - !%+i (. )1. ( ) .he 9epositories (.hird) Crdinance, !!# (Crd0 %> of !!#), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 /@(5A9( 4 ee section 30: A?7E9?7E.S .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0:
SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 SECTIONS !'APT"R I 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions !'APT"R II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA
). 7stablish(ent and incorporation of 8oard 3. ?anage(ent of the 8oard 5. .er( of office and conditions of ser'ice of Chair(an and (e(bers of the 8oard 8. Re(o'al of (e(ber fro( office 7. ?eetings 7A. ?e(ber not to participate in (eetings in certain cases :. Bacancies, etc0, not to in'alidate proceedings of 8oard 9. Cfficers and e(ployees of the 8oard !'APT"R III TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD 1=. .ransfer of assets, liabilities, etc0, of existing Securities and 7xchange 8oard to the 8oard !'APT"R IV 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 11. 6unctions of 8oard 11A. 8oard to regulate or prohibit issue of prospectus, offer docu(ent or ad'ertise(ent soliciting (oney for issue of securities 11AA. Collecti'e in'est(ent sche(e 11;. <ower to issue directions 11C. In'estigation 11D. Cease and desist proceedings !'APT"R V REGISTRATION CERTI2ICATE 1". Registration of stoc) bro)ers, sub+bro)ers, share transfer agents, etc0
%
!'APT"R VA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 1"A. <rohibition of (anipulati'e and decepti'e de'ices, insider trading and substantial ac*uisition of securities or control !'APT"R VI 2INANCE, ACCOUNTS AND AUDIT 1). &rants by the Central &o'ern(ent 13. 6und 15. Accounts and audit !'APT"R VIA 4ENALTIES AND ADEUDICATION 15A. <enalty for failure to furnish infor(ation, return, etc & 15;. <enalty for failure by any person to enter into agree(ent with clients 15C. <enalty for failure to redress in'estorsJ grie'ances 15D. <enalty for certain defaults in case of (utual funds 15E. <enalty for failure to obser'e rules and regulations by an asset (anage(ent co(pany 152. <enalty for default in case of stoc) bro)ers 15G. <enalty for insider trading 15D. <enalty for non+disclosure of ac*uisition of shares and ta)eo'ers 15DA. <enalty for fraudulent and unfair trade practices 15D;. <enalty for contra'ention where no separate penalty has been pro'ided
150I. <ower to adDudicate 15E. 6actors to be ta)en into account by the AdDudicating Cfficer 15EA. Crediting su(s realised by way of penalties to Consolidated 6und of India 15E;. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! !'APT"R VIB ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL 15F. 7stablish(ent of Securities Appellate .ribunals 15L. Co(position of Securities Appellate .ribunal 15@. Qualification for appoint(ent as <residing Cfficer or ?e(ber of Securities Appellate .ribunal
3
15N. .enure of office of <residing Cfficer and other (e(bers of Securities Appellate .ribunal 150O. Salary and allowances and other ter(s and conditions of ser'ice of <residing Cfficers 154. 6illing up of 'acancies 159. Resignation and re(o'al 15R. Crders constituting Appellate .ribunal to be final and not to in'alidate its proceedings 15S. Staff of the Securities Appellate .ribunal 15T. Appeal to the Securities Appellate .ribunal 15U. <rocedure and powers of the Securities Appellate .ribunal 15I. Right to legal representation 15?. =i(itation 15A. <residing Cfficer, (e(bers and staff of Securities Appellate .ribunals to be public ser'ants 15M. Ci'il Court not to ha'e Durisdiction 15N. Appeal to Supre(e Court !'APT"R VII @ISCELLANEOUS 18. <ower of Central &o'ern(ent to issue directions 17. <ower of Central &o'ern(ent to supersede the 8oard 1:. Returns and reports 19. 9elegation "=. Appeals "=A. 8ar of Durisdiction "1. Sa'ings "". ?e(bers, officers and e(ployees of the 8oard to be public ser'ants "). <rotection of action ta)en in good faith "3. Cffences "3A. Co(position of certain offences "3;. <ower to grant i((unity "5. 7xe(ption fro( tax on wealth and inco(e "8. CogniFance of offences by Courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! "7. Cffences by co(panies
":. 4C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!":
$
":A. Re'o+er> of %.o* t! "9. <ower to (a)e rules )=. <ower to (a)e regulations )1. Rules and regulations to be laid before <arlia(ent )". Application of other laws not barred )). 4Repealed by Repealing R A(ending Act, %00 : )3. <ower to re(o'e difficulties )5. Repeal and sa'ing .I7 SCI79H=7 4Repealed by Repealing R A(ending Act, %00 : SECURITIES AND EACDANGE ;OARD O2 INDIA ACT, 199" 515 O2 199"< 53th A$ril, 199"< A A't to $ro+i-e for the e!t%,li!h.e t of % ;o%r- to $rote't the i tere!t! of i +e!tor! i !e'*ritie! % - to $ro.ote the -e+elo$.e t of, % - to re(*l%te, the !e'*ritie! .%r6et % - for .%tter! 'o e'te- there/ith or i 'i-e t%l thereto B( it enacted bF 8arlia"ent in the E$rtF7third ;ear $f the 0e%!blic $f :ndia a# f$ll$.# , CDA4TER I 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities and 7xchange 8oard of India Act, !!%0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the 30th day of Manuary, !!%0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 33 (b) 1Chair(an2 (eans the Chair(an of the 8oard3 4(ba) 1collecti'e in'est(ent sche(e2 (eans any sche(e or arrange(ent which satisfies the conditions specified in section AA3: (c) 1existing Securities and 7xchange 8oard2 (eans the Securities and 7xchange 8oard of India constituted under the Resolution of the &o'ern(ent of India in the 9epart(ent of 7cono(ic Affairs Eo0 ($$) S7L>#, dated the %th day of April, !>>3 (d) 16und2 (eans the 6und constituted under section $3 (e) 1(e(ber2 (eans a (e(ber of the 8oard and includes the Chair(an3 (f) 1notification2 (eans a notification published in the Cfficial &aFette3 (g) 1prescribed2 (eans prescribed by rules (ade under this Act3
Inserted by the Securities =aws (A(end(ent) Act, !!!, w0e0f0 %%+%+%0000
"
(h) 1regulations2 (eans the regulations (ade by the 8oard under this Act3 4(ha) 1Reser'e 8an)2 (eans the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)3: (i) 1securities2 has the (eaning assigned to it in section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#)0 %4(%) Kords and expressions used and not defined in this Act but defined in the Securities Contracts (Regulation) Act, !"# ($% of !"#) 34or the 9epositories Act, !!#:, shall ha'e the (eanings respecti'ely assigned to the( in that Act:0 CDA4TER II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA E!t%,li!h.e t % - i 'or$or%tio of ;o%r-.
). ( ) Kith effect fro( such date as the Central &o'ern(ent (ay, by notification, appoint, there shall be established, for the purposes of this Act, a 8oard by the na(e of the Securities and 7xchange 8oard of India0 (%) .he 8oard shall be a body corporate by the na(e aforesaid, ha'ing perpetual succession and a co((on seal, with power subDect to the pro'isions of this Act, to ac*uire, hold and dispose of property, both (o'able and i((o'able, and to contract, and shall, by the said na(e, sue or be sued0 (3) .he head office of the 8oard shall be at 8o(bay0 ($) .he 8oard (ay establish offices at other places in India0 @% %(e.e t of the ;o%r-. 3. ( ) .he 8oard shall consist of the following (e(bers, na(ely,(a) a Chair(an3 (b) two (e(bers fro( a(ongst the officials of the $4?inistry: of the Central &o'ern(ent dealing with 6inance "4and ad(inistration of the Co(panies Act, !"# ( of !"#):3 (c) one (e(ber fro( a(ongst the officials of #4the Reser'e 8an):3 /4(d) fi'e other (e(bers of who( at least three shall be the whole+ti(e (e(bers,: to be appointed by the Central &o'ern(ent0
Inserted by the Securities =aws (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0 <rior to its substitution, sub+section (%) reads as under, 1(%) Kords and expressions used and not defined in this Act but defined in the Capital Issues (Control) Act, !$/ or the Securities Contracts Regulation Act, !"# shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts02 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 $ Substituted for 1?inistries2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1and law2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act !3$ (% of !3$)2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 / Substituted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, clause (d) read as, 1(d) two other (e(bers20
% Substituted
#
(%) .he general superintendence, direction and (anage(ent of the affairs of the 8oard shall 'est in a 8oard of (e(bers, which (ay exercise all powers and do all acts and things which (ay be exercised or done by the 8oard0 (3) Sa'e as otherwise deter(ined by regulations, the Chair(an shall also ha'e powers of general superintendence and direction of the affairs of the 8oard and (ay also exercise all powers and do all acts and things which (ay be exercised or done by that 8oard0 ($) .he Chair(an and (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be appointed by the Central &o'ern(ent and the (e(bers referred to in clauses ( b) and (c) of that sub+section shall be no(inated by the Central &o'ern(ent and the 4Reser'e 8an): respecti'ely0 (") .he Chair(an and the other (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be persons of ability, integrity and standing who ha'e shown capacity in dealing with proble(s relating to securities (ar)et or ha'e special )nowledge or experience of law, finance, econo(ics, accountancy, ad(inistration or in any other discipline which, in the opinion of the Central &o'ern(ent, shall be useful to the 8oard0 Ter. of offi'e % - 'o -itio ! of !er+i'e of Ch%ir.% % - .e.,er! of the ;o%r-. 5. ( ) .he ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers referred to in clause (d) of sub+section ( ) of section $ shall be such as (ay be prescribed0 (%) Eotwithstanding anything contained in sub+section ( ), the Central &o'ern(ent shall ha'e the right to ter(inate the ser'ices of the Chair(an or a (e(ber appointed under clause ( d) of
sub+section ( ) of section $, at any ti(e before the expiry of the period prescribed under subsection ( ), by gi'ing hi( notice of not less than three (onths in writing or three (onthsJ salary and allowances in lieu thereof, and the Chair(an or a (e(ber, as the case (ay be, shall also ha'e the right to relin*uish his office, at any ti(e before the expiry of the period prescribed under sub+section ( ), by gi'ing to the Central &o'ern(ent notice of not less than three (onths in writing0 Re.o+%l of .e.,er fro. offi'e. 8. %4G G G: .he Central &o'ern(ent shall re(o'e a (e(ber fro( office if he(a) is, or at any ti(e has been, adDudicated as insol'ent3 (b) is of unsound (ind and stands so declared by a co(petent court3 (c) has been con'icted of an offence which, in the opinion of the Central &o'ern(ent, in'ol'es a (oral turpitude3 (d) 34G G G: (e) has, in the opinion of the Central &o'ern(ent, so abused his position as to render his continuation in office detri(ental to the public interest , 4ro+i-e- that no (e(ber shall be re(o'ed under this clause unless he has been gi'en a reasonable opportunity of being heard in the (atter0
Substituted for 1Reser'e 8an) of India2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 )2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 C(itted, by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to o(ission clause (d) read read as, 1(d) is appointed as a director of a co(pany20
% 1(
/
@eeti (!. 7. ( ) .he 8oard shall (eet at such ti(es and places, and shall obser'e such rules of procedure in regard to the transaction of business at its (eetings (including *uoru( at such (eetings) as (ay be pro'ided by regulations0 (%) .he Chair(an or, if for any reason, he is unable to attend a (eeting of the 8oard, any other (e(ber chosen by the (e(bers present fro( a(ongst the(sel'es at the (eeting shall preside at the (eeting0 (3) All *uestions which co(e up before any (eeting of the 8oard shall be decided by a (aDority 'otes of the (e(bers present and 'oting, and, in the e'ent of an e*uality of 'otes, the Chair(an, or in his absence, the person presiding, shall ha'e a second or casting 'ote0 4@e.,er ot to $%rti'i$%te i .eeti (! i 'ert%i '%!e!. 7A. Any (e(ber, who is a director of a co(pany and who as such director has any direct or indirect pecuniary interest in any (atter co(ing up for consideration at a (eeting of the 8oard, shall, as soon as possible after rele'ant circu(stances ha'e co(e to his )nowledge, disclose the nature of his interest at such (eeting and such disclosure shall be recorded in the proceedings of the 8oard, and the (e(ber shall not ta)e any part in any deliberation or decision of the 8oard with respect to that (atter0: I%'% 'ie!, et'., ot to i +%li-%te $ro'ee-i (! of ;o%r-. :. Eo act or proceeding of the 8oard shall be in'alid (erely by reason of(a) any 'acancy in, or any defect in the constitution of, the 8oard3 or (b) any defect in the appoint(ent of a person acting as a (e(ber of the 8oard3 or (c) any irregularity in the procedure of the 8oard not affecting the (erits of the case0 Offi'er! % - e.$lo>ee! of the ;o%r-. 9. ( ) .he 8oard (ay appoint such other officers and e(ployees as it considers necessary for the efficient discharge of its functions under this Act0 (%) .he ter( and other conditions of ser'ice of officers and e(ployees of the 8oard appointed under sub+section ( ) shall be such as (ay be deter(ined by regulations0 CDA4TER III
TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD Tr% !fer of %!!et!, li%,ilitie!, et'., of e#i!ti ( Se'*ritie! % - E#'h% (e ;o%r- to the ;o%r-. 1=. ( ) Cn and fro( the date of establish(ent of the 8oard,(a) any reference to the existing Securities and 7xchange 8oard in any law other than this Act or in any contract or other instru(ent shall be dee(ed as a reference to the 8oard3 (b) all properties and assets, (o'able and i((o'able, of, or belonging to, the existing Securities and 7xchange 8oard, shall 'est in the 8oard3
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
>
(c) all rights and liabilities of the existing Securities and 7xchange 8oard shall be transferred to, and be the rights and liabilities of, the 8oard3 (d) without preDudice to the pro'isions of clause (c), all debts, obligations and liabilities incurred, all contracts entered into and all (atters and things engaged to be done by, with or for the existing Securities and 7xchange 8oard i((ediately before that date, for or in connection with the purpose of the said existing 8oard shall be dee(ed to ha'e been incurred, entered into, or engaged to be done by, with or for, the 8oard3 (e) all su(s of (oney due to the existing Securities and 7xchange 8oard i((ediately before that date shall be dee(ed to be due to the 8oard3 (f) all suits and other legal proceedings instituted or which could ha'e been instituted by or against the existing Securities and 7xchange 8oard i((ediately before that date (ay be continued or (ay be instituted by or against the 8oard3 and (g) e'ery e(ployee holding any office under the existing Securities and 7xchange 8oard i((ediately before that date shall hold his office in the 8oard by the sa(e tenure and upon the sa(e ter(s and conditions of ser'ice as respects re(uneration, lea'e, pro'ident fund, retire(ent and other ter(inal benefits as he would ha'e held such office if the 8oard had not been established and shall continue to do so as an e(ployee of the 8oard or until the expiry of the period of six (onths fro( that date if such e(ployee opts not to be the e(ployee of the 8oard within such period0 (%) Eotwithstanding anything contained in the Industrial 9isputes Act, !$/ ( $ of !$/), or in any other law for the ti(e being in force, absorption of any e(ployee by the 8oard in its regular ser'ice under this section shall not entitle such e(ployee to any co(pensation under that Act or other law and no such clai( shall be entertained by any court, tribunal or other authority0 CDA4TER II 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 2* 'tio ! of ;o%r-. 11. ( ) SubDect to the pro'isions of this Act, it shall be the duty of the 8oard to protect the interests of in'estors in securities and to pro(ote the de'elop(ent of, and to regulate the securities (ar)et, by such (easures as it thin)s fit0 (%) Kithout preDudice to the generality of the foregoing pro'isions, the (easures referred to therein (ay pro'ide for(a) regulating the business in stoc) exchanges and any other securities (ar)ets3 (b) registering and regulating the wor)ing of stoc) bro)ers, sub+bro)ers, share transfer agents, ban)ers to an issue, trustees of trust deeds, registrars to an issue, (erchant ban)ers, underwriters, portfolio (anagers, in'est(ent ad'isers and such other inter(ediaries who (ay be associated with securities (ar)ets in any (anner3 4(ba) registering and regulating the wor)ing of the depositories, %4participants:, custodians of securities, foreign institutional in'estors, credit rating agencies and such other inter(ediaries as the 8oard (ay, by notification, specify in this behalf3: (c) registering and regulating the wor)ing of 4'enture capital funds and collecti'e
in'est(ent sche(es:, including (utual funds3
% Inserted
Inserted by Securities =aws (A(end(ent) Act !!", w0r0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+!+ !!"0
!
(d) pro(oting and regulating self+regulatory organisations3 (e) prohibiting fraudulent and unfair trade practices relating to securities (ar)ets3 (f) pro(oting in'estorsJ education and training of inter(ediaries of securities (ar)ets3 (g) prohibiting insider trading in securities3 (h) regulating substantial ac*uisition of shares and ta)e o'er of co(panies3 (i) calling for infor(ation fro(, underta)ing inspection, conducting in*uiries and audits of the %4stoc) exchanges, (utual funds, other persons associated with the securities (ar)et:, inter(ediaries and self+regulatory organisations in the securities (ar)et3 34(ia) '%lli ( for i for.%tio % - re'or-! fro. % > $er!o i 'l*-i ( % > ,% 6 or % > other %*thorit> or ,o%r- or 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l or St%te A't /hi'h, i the o$i io of the ;o%r-, !h%ll ,e rele+% t to % > i +e!ti(%tio or i 7*ir> ,> the ;o%r- i re!$e't of % > tr% !%'tio i !e'*ritie! 3: $5(i,) '%lli ( for i for.%tio fro., or f*r i!hi ( i for.%tio to, other %*thoritie!, /hether i I -i% or o*t!i-e I -i%, h%+i ( f* 'tio ! !i.il%r to tho!e of the ;o%r-, i the .%tter! rel%ti ( to the $re+e tio or -ete'tio of +iol%tio ! i re!$e't of !e'*ritie! l%/!, !*,Ge't to the $ro+i!io ! of other l%/! for the ti.e ,ei ( i for'e i thi! re(%r-& 4ro+i-e- th%t the ;o%r-, for the $*r$o!e of f*r i!hi ( % > i for.%tio to % > %*thorit> o*t!i-e I -i%, .%> e ter i to % %rr% (e.e t or %(ree.e t or * -er!t% -i ( /ith !*'h %*thorit> /ith the $rior %$$ro+%l of the Ce tr%l Go+er .e tH< (j) perfor(ing such functions and exercising such powers under the pro'isions of "4G G G: the Securities Contracts (Regulation) Act, !"# ($% of !"#), as (ay be delegated to it by the Central &o'ern(ent3 (k) le'ying fees or other charges for carrying out the purposes of this section3 (l) conducting research for the abo'e purposes3 #4(la) calling fro( or furnishing to any such agencies, as (ay be specified by the 8oard, such infor(ation as (ay be considered necessary by it for the efficient discharge of its functions3: (") perfor(ing such other functions as (ay be prescribed0 /4(%A) Kithout preDudice to the pro'isions contained in sub+section (%), the 8oard (ay ta)e (easures to underta)e inspection of any boo), or register, or other docu(ent or record of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard
Substituted for 1collecti'e in'est(ent sche(es2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % Substituted for 1stoc) exchanges and2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 S*,!tit*te- for J'%lli ( for i for.%tio % - re'or- fro. % > ,% 6 or % > other %*thorit> or ,o%ror 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l, St%te or 4ro+i 'i%l A't i re!$e't of % > tr% !%'tio i !e'*ritie! /hi'h i! * -er i +e!ti(%tio or i 7*ir> ,> the ;o%r-K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). E%rlier Se'tio 11(")(i%) /%! i !erte- ,> the SE;I (A.e -.e t) A't, "==" /.e.f. "901=0"=="0 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. =80=)0 199:) " .he words 1the Capital Issues (Control) Act, !$/ (%! of !$/) and2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
0
has reasonable grounds to belie'e that such co(pany has been indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et0: 4(3) Eotwithstanding anything contained in any other law for the ti(e being in force while exercising the powers under %4clause (i) or clause (ia) of sub+section (%) or sub+ section (2A):, the 8oard shall ha'e the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(i) the disco'ery and production of boo)s of account and other docu(ents, at such place and such ti(e as (ay be specified by the 8oard3 (ii) su((oning and enforcing the attendance of persons and exa(ining the( on oath3 (iii) inspection of any boo)s, registers and other docu(ents of any person referred to in section %, at any place3: 34(iv) inspection of any boo), or register, or other docu(ent or record of the co(pany referred to in sub+section (%A)3 (v) issuing co((issions for the exa(ination of witnesses or docu(ents0: $4($) Kithout preDudice to the pro'isions contained in sub+sections ( ), (%), (%A) and (3) and section 8, the 8oard (ay, by an order, for reasons to be recorded in writing, in the interests of in'estors or securities (ar)et, ta)e any of the following (easures, either pending in'estigation or in*uiry or on co(pletion of such in'estigation or in*uiry, na(ely,(a) suspend the trading of any security in a recognised stoc) exchange3 (b) restrain persons fro( accessing the securities (ar)et and prohibit any person associated with securities (ar)et to buy, sell or deal in securities3 (c) suspend any office+bearer of any stoc) exchange or self+regulatory organisation fro( holding such position3 (d) i(pound and retain the proceeds or securities in respect of any transaction which is under in'estigation3 (e) attach, after passing of an order on an application (ade for appro'al by the Mudicial ?agistrate of the first class ha'ing Durisdiction, for a period not exceeding one (onth, one or (ore ban) account or accounts of any inter(ediary or any person associated with the securities (ar)et in any (anner in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder , 4ro+i-e- that only the ban) account or accounts or any transaction entered therein, so far as it relates to the proceeds actually in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder shall be allowed to be attached3 (f) direct any inter(ediary or any person associated with the securities (ar)et in any (anner not to dispose of or alienate an asset for(ing part of any transaction which is under in'estigation , 4ro+i-e- that the 8oard (ay, without preDudice to the pro'isions contained in sub+section (%) or sub+section (%A), ta)e any of the (easures specified in clause ( d) or clause (e) or clause (f), in respect of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard has reasonable grounds to belie'e that such co(pany has been
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1clause (i) of sub+section (%)2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 3 Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 $ Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
% Substituted
indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et , 4ro+i-e- f*rther that the 8oard shall, either before or after passing such orders, gi'e an
opportunity of hearing to such inter(ediaries or persons concerned0: 15(5) The %.o* t -i!(or(e-, $*r!*% t to % -ire'tio i!!*e- * -er !e'tio 11; or !e'tio 1"A of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 or !e'tio 19 of the De$o!itorie! A't, 1998, %! the '%!e .%> ,e, !h%ll ,e 're-ite- to the I +e!tor 4rote'tio % - E-*'%tio 2* e!t%,li!he- ,> the ;o%r- % - !*'h %.o* t !h%ll ,e *tiliLe- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< %4;o%r- to re(*l%te or $rohi,it i!!*e of $ro!$e't*!, offer -o'*.e t or %-+erti!e.e t !oli'iti ( .o e> for i!!*e of !e'*ritie!. 11A. ( ) Kithout preDudice to the pro'isions of the Co(panies Act, !"# ( of !"#), the 8oard (ay, for the protection of in'estors,(a) specify, by regulations(i) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (ii) the (anner in which such (atters shall be disclosed by the co(panies3 (b) by general or special orders(i) prohibit any co(pany fro( issuing prospectus, any offer docu(ent, or ad'ertise(ent soliciting (oney fro( the public for the issue of securities3 (ii) specify the conditions subDect to which the prospectus, such offer docu(ent or ad'ertise(ent, if not prohibited, (ay be issued0 (%) Kithout preDudice to the pro'isions of section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the 8oard (ay specify the re*uire(ents for listing and transfer of securities and other (atters incidental thereto0: 34Colle'ti+e i +e!t.e t !'he.e. 11AA. ( ) Any sche(e or arrange(ent which satisfies the conditions referred to in subsection (%) $5or !*,0!e'tio ("A)< shall be a collecti'e in'est(ent sche(e0 "44ro+i-e- th%t % > $ooli ( of f* -! * -er % > !'he.e or %rr% (e.e t, /hi'h i! ot re(i!tere- /ith the ;o%r- or i! ot 'o+ere- * -er !*,0!e'tio ()), i +ol+i ( %
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 7arlier S0 A was inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" for S0 A0 <rior to its substitution, S0 A read as under,+ 1 A0 ?atters to be disclosed by the co(panies0+ Kithout <reDudice to the <ro'isions of the Co(panies Act , !"# ( of !"#), the board (ay , for the protection of in'estors, specify, by regulations,+ (a) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (b) the (anner in which such (atters, shall be disclosed by the co(panies02 3 Inserted by S78I (A(end(ent) Act !!!, w0e0f0 %%+%+%0000 $I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% Substituted
%
'or$*! %.o* t of o e h* -re- 'rore r*$ee! or .ore !h%ll ,e -ee.e- to ,e % 'olle'ti+e i +e!t.e t !'he.e.< (%) Any sche(e or arrange(ent (ade or offered by any 5$er!o < under which,(i) the contributions, or pay(ents (ade by the in'estors, by whate'er na(e called, are pooled and utiliFed for the purposes of the sche(e or arrange(ent3 (ii) the contributions or pay(ents are (ade to such sche(e or arrange(ent by the in'estors with a 'iew to recei'e profits, inco(e, produce or property, whether (o'able or i((o'able, fro( such sche(e or arrange(ent3 (iii) the property, contribution or in'est(ent for(ing part of sche(e or arrange(ent, whether identifiable or not, is (anaged on behalf of the in'estors3
(iv) the in'estors do not ha'e day+to+day control o'er the (anage(ent and operation of the sche(e or arrange(ent0 "5("A)< A > !'he.e or %rr% (e.e t .%-e or offere- ,> % > $er!o !%ti!f>i ( the 'o -itio ! %! .%> ,e !$e'ifie- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< (3) Eotwithstanding anything contained in sub+section (%) 35or !*,0!e'tio ("A)<, any sche(e or arrange(ent(i) (ade or offered by a co+operati'e society registered under the Co+operati'e Societies Act, ! % (% of ! %) or a society being a society registered or dee(ed to be registered under any law relating to co+operati'e societies for the ti(e being in force in any State3 (ii) under which deposits are accepted by non+ban)ing financial co(panies as defined in clause (f) of section $"+I of the Reser'e 8an) of India Act, !3$ (% of !3$)3 (iii) being a contract of insurance to which the Insurance Act, !3> ($ of !3>), applies3 (iv) pro'iding for any Sche(e, <ension Sche(e or the Insurance Sche(e fra(ed under the 7(ployees <ro'ident 6und and ?iscellaneous <ro'isions Act, !"% ( ! of !"%)3 (v) under which deposits are accepted under section ">A of the Co(panies Act, !"# ( of !"#)3 (vi) under which deposits are accepted by a co(pany declared as a Eidhi or a (utual benefit society under section #%0A of the Co(panies Act, !"# ( of !"#)3 (vii) falling within the (eaning of Chit business as defined in clause ( d) of section % of the Chit 6und Act, !>% ($0 of !>%)3 (viii) under which contributions (ade are in the nature of subscription to a (utual fund3 35(i#) !*'h other !'he.e or %rr% (e.e t /hi'h the Ce tr%l Go+er .e t .%>, i 'o !*lt%tio /ith the ;o%r-, otif>H< shall not be a collecti'e in'est(ent sche(e0: "54o/er to i!!*e -ire'tio !. 11;. Sa'e as otherwise pro'ided in section , if after (a)ing or causing to be (ade an en*uiry, the 8oard is satisfied that it is necessary,S*,!tit*te- for J'o.$% >K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) 3I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
%I
3
(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any inter(ediary or other persons referred to in section % being conducted in a (anner detri(ental to the interest of in'estors or securities (ar)et3 or (iii) to secure the proper (anage(ent of any such inter(ediary or person, it (ay issue such directions,(a) to any person or class of persons referred to in section %, or associated with the securities (ar)et3 or (b) to any co(pany in respect of (atters specified in section A, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 15E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< %4I +e!ti(%tio . 11C. ( ) Khere the 8oard has reasonable ground to belie'e that-
(a) the transactions in securities are being dealt with in a (anner detri(ental to the in'estors or the securities (ar)et3 or (b) any inter(ediary or any person associated with the securities (ar)et has 'iolated any of the pro'isions of this Act or the rules or the regulations (ade or directions issued by the 8oard thereunder, it (ay, at any ti(e by order in writing, direct any person (hereafter in this section referred to as the In'estigating Authority) specified in the order to in'estigate the affairs of such inter(ediary or persons associated with the securities (ar)et and to report thereon to the 8oard0 (%) Kithout preDudice to the pro'isions of sections %3" to %$ of the Co(panies Act, !"# ( of !"#), it shall be the duty of e'ery (anager, (anaging director, officer and other e(ployee of the co(pany and e'ery inter(ediary referred to in section % or e'ery person associated with the securities (ar)et to preser'e and to produce to the In'estigating Authority or any person authorised by it in this behalf, all the boo)s, registers, other docu(ents and record of, or relating to, the co(pany or, as the case (ay be, of or relating to, the inter(ediary or such person, which are in their custody or power0 (3) .he In'estigating Authority (ay re*uire any inter(ediary or any person associated with securities (ar)et in any (anner to furnish such infor(ation to, or produce such boo)s, or registers, or other docu(ents, or record before hi( or any person authorised by it in this behalf as it (ay consider necessary if the furnishing of such infor(ation or the production of such boo)s, or registers, or other docu(ents, or record is rele'ant or necessary for the purposes of its in'estigation0 ($) .he In'estigating Authority (ay )eep in its custody any boo)s, registers, other docu(ents and record produced under sub+section (%) or sub+section (3) for six (onths and thereafter
% Inserted
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
$
shall return the sa(e to any inter(ediary or any person associated with securities (ar)et by who( or on whose behalf the boo)s, registers, other docu(ents and record are produced , 4ro+i-e- that the In'estigating Authority (ay call for any boo), register, other docu(ent and record if they are needed again , 4ro+i-e- f*rther that if the person on whose behalf the boo)s, registers, other docu(ents and record are produced re*uires certified copies of the boo)s, registers, other docu(ents and record produced before the In'estigating Authority, it shall gi'e certified copies of such boo)s, registers, other docu(ents and record to such person or on whose behalf the boo)s, registers, other docu(ents and record were produced0 (") Any person, directed to (a)e an in'estigation under sub+section ( ), (ay exa(ine on oath, any (anager, (anaging director, officer and other e(ployee of any inter(ediary or any person associated with securities (ar)et in any (anner, in relation to the affairs of his business and (ay ad(inister an oath accordingly and for that purpose (ay re*uire any of those persons to appear before it personally0 (#) If any person fails without reasonable cause or refuses(a) to produce to the In'estigating Authority or any person authorised by it in this behalf any boo), register, other docu(ent and record which is his duty under sub+section (%) or sub+section (3) to produce3 or (b) to furnish any infor(ation which is his duty under sub+section (3) to furnish3 or (c) to appear before the In'estigating Authority personally when re*uired to do so under sub+section (") or to answer any *uestion which is put to hi( by the In'estigating Authority in pursuance of that sub+section3 or (d) to sign the notes of any exa(ination referred to in sub+section (/), he shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with
fine, which (ay extend to one crore rupees, or with both, and also with a further fine which (ay extend to fi'e la)h rupees for e'ery day after the first during which the failure or refusal continues0 (/) Eotes of any exa(ination under sub+section (") shall be ta)en down in writing and shall be read o'er to, or by, and signed by, the person exa(ined, and (ay thereafter be used in e'idence against hi(0 4(:) ?here i the 'o*r!e of % i +e!ti(%tio , the I +e!ti(%ti ( A*thorit> h%! re%!o to ,elie+e th%t % > $er!o or e ter$ri!e, %! the '%!e .%> ,e, to /ho. % oti'e * -er !*,!e'tio ()) h%! ,ee i!!*e- or .i(ht ,e i!!*e-, 0 (%) h%! o.itte- or f%ile- to $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! %! re7*irei the oti'eH or (,) /o*l- ot $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! /hi'h !h%ll ,e *!ef*l for, or rele+% t to, the i +e!ti(%tio H or (') /o*l- -e!tro>, .*til%te, %lter, f%l!if> or !e'rete the i for.%tio or -o'*.e t! *!ef*l for, or rele+% t to, the i +e!ti(%tio ,
S*,!tit*te- for JKhere in the course of in'estigation, the In'estigating Authority has reasonable ground to belie'e that the boo)s, registers, other docu(ents and record of, or relating to, any inter(ediary or any person associated with securities (ar)et in any (anner, (ay be destroyed, (utilated, altered, falsified or secreted, the In'estigating Authority (ay (a)e an application to the Mudicial ?agistrate of the first class ha'ing Durisdiction for an order for the seiFure of such boo)s, registers, other docu(ents and record K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
"
the , the Ch%ir.% .%>, %fter ,ei ( !%ti!fie- th%t it i! e'e!!%r> to -o !o, %*thoriLe the I +e!ti(%ti ( A*thorit> or % > other offi'er of the ;o%r- (the offi'er !o %*thoriLe- i %ll '%!e! ,ei ( herei %fter referre- to %! the %*thori!e- offi'er), to0 (i) e ter % - !e%r'h, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft /here !*'h i for.%tio or -o'*.e t! %re e#$e'te- or ,elie+e- to ,e 6e$tH (ii) ,re%6 o$e the lo'6 of % > -oor, ,o#, lo'6er, !%fe, %l.ir%h or other re'e$t%'le for e#er'i!i ( the $o/er! 'o ferre- ,> !*,0'l%*!e (i), /here the 6e>! thereof %re ot %+%il%,leH (iii) !e%r'h % > $er!o /ho h%! (ot o*t of, or i! %,o*t to (et i to, or i! i , the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft, if the %*thoriLe- offi'er h%! re%!o to !*!$e't th%t !*'h $er!o h%! !e'rete- %,o*t hi! $er!o % > !*'h ,oo6! of %''o* t or other -o'*.e t!H (i+) re7*ire % > $er!o /ho i! fo* - to ,e i $o!!e!!io or 'o trol of % > ,oo6! of %''o* t or other -o'*.e t!, .%i t%i e- i the for. of ele'tro i' re'or-, to $ro+i-e the %*thori!e- offi'er the e'e!!%r> f%'ilit> to i !$e't !*'h ,oo6! of %''o* t or other -o'*.e t!. "#planation0 2or the $*r$o!e of thi! !*,0'l%*!e, the e#$re!!io Jele'tro i' re'or-K !h%ll h%+e the .e% i ( %!!i( e- to it i 'l%*!e (t) of !*,0!e'tio (1) of !e'tio " of the I for.%tio Te'h olo(> A't, "===. (+) !eiLe % > !*'h ,oo6! of %''o* t or other -o'*.e t! fo* - %! % re!*lt of !*'h !e%r'hH (+i) $l%'e .%r6! of i-e tifi'%tio o % > ,oo6! of %''o* t or other -o'*.e t! or .%6e or '%*!e to ,e .%-e e#tr%'t! or 'o$ie! therefro.H (+ii) re'or- o o%th the !t%te.e t of % > $er!o /ho i! fo* - to ,e i $o!!e!!io or i 'o trol of the i for.%tio or -o'*.e t! referre- to i !*,0'l%*!e! (i), (iii) % - (i+).< 4(9) The ;o%r- .%> .%6e re(*l%tio ! i rel%tio to % > !e%r'h or !eiL*re * -er thi! !e'tio H % - i $%rti'*l%r, /itho*t $reG*-i'e to the (e er%lit> of the fore(oi ( $o/er, !*'h re(*l%tio ! .%> $ro+i-e for the $ro'e-*re to ,e follo/e- ,> the %*thori!e- offi'er0
(%) for o,t%i i ( i (re!! i to % > ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft to ,e !e%r'he- /here free i (re!! thereto i! ot %+%il%,leH
1 S*,!tit*te-
,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) for the follo/i (& JAfter 'o !i-eri ( the %$$li'%tio % - he%ri ( the I +e!ti(%ti ( A*thorit>, if e'e!!%r>, the @%(i!tr%te .%>, ,> or-er, %*thori!e the I +e!ti(%ti ( A*thorit>O (a) to e ter, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the $l%'e or $l%'e! /here !*'h ,oo6!, re(i!ter!, other -o'*.e t! % - re'or- %re 6e$tH (b) to !e%r'h th%t $l%'e or tho!e $l%'e! i the .% er !$e'ifie- i the or-erH % (c) to !eiLe ,oo6!, re(i!ter!, other -o'*.e t! % - re'or-, it 'o !i-er! e'e!!%r> for the $*r$o!e! of the i +e!ti(%tio & 4ro+i-e- th%t the @%(i!tr%te !h%ll ot %*thori!e !eiL*re of ,oo6!, re(i!ter!, other -o'*.e t! % re'or-, of % > li!te- $*,li' 'o.$% > or % $*,li' 'o.$% > ( ot ,ei ( the i ter.e-i%rie! !$e'ifie* -er !e'tio 1") /hi'h i te -! to (et it! !e'*ritie! li!te- o % > re'o( i!e- !to'6 e#'h% (e * le!! !*'h 'o.$% > i -*l(e! i i !i-er tr%-i ( or .%r6et .% i$*l%tio .K
#
(,) for e !*ri ( !%fe '*!to-> of % > ,oo6! of %''o* t or other -o'*.e t! or %!!et! !eiLe-.< ( 0) .he In'estigating Authority shall )eep in its custody the boo)s, registers, other docu(ents and record seiFed under this section for such period not later than the conclusion of the in'estigation as it considers necessary and thereafter shall return the sa(e to the co(pany or the other body corporate, or, as the case (ay be, to the (anaging director or the (anager or any other person, fro( whose custody or power they were seiFed 5***<, 4ro+i-e- that the In'estigating Authority (ay, before returning such boo)s, registers, other docu(ents and record as aforesaid, place identification (ar)s on the( or any part thereof0 ( ) Sa'e as otherwise pro'ided in this section, e'ery search or seiFure (ade under this section shall be carried out in accordance with the pro'isions of the Code of Cri(inal <rocedure, !/3 (% of !/$) relating to searches or seiFures (ade under that Code0 Ce%!e % - -e!i!t $ro'ee-i (!. 11D. If the 8oard finds, after causing an in*uiry to be (ade, that any person has 'iolated, or is li)ely to 'iolate, any pro'isions of this Act, or any rules or regulations (ade thereunder, it (ay pass an order re*uiring such person to cease and desist fro( co((itting or causing such 'iolation, 4ro+i-e- that the 8oard shall not pass such order in respect of any listed public co(pany or a public co(pany (other than the inter(ediaries specified under section %) which intends to get its securities listed on any recognised stoc) exchange unless the 8oard has reasonable grounds to belie'e that such co(pany has indulged in insider trading or (ar)et (anipulation0: CDA4TER I REGISTRATION CERTI2ICATE Re(i!tr%tio of !to'6 ,ro6er!, !*,0,ro6er!, !h%re tr% !fer %(e t!, et'. 1". ( ) Eo stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et shall buy, sell or deal in securities except under, and in accordance with, the conditions of a certificate of registration obtained fro( the 8oard in accordance with the %4regulations: (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et i((ediately before the establish(ent of the 8oard for which no registration certificate was
necessary prior to such establish(ent, (ay continue to do so for a period of three (onths fro( such establish(ent or, if he has (ade an application for such registration within the said period of three (onths, till the disposal of such application,
The /or-! P% - i for. the @%(i!tr%te of !*'h ret*r P, o.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) % Substituted for 1rules2 by Securities =aw (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0
/
44ro+i-e- f*rther that any certificate of registration, obtained i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", shall be dee(ed to ha'e been obtained fro( the 8oard in accordance with the regulations pro'iding for such registration0 ( A) Eo depository, %4participant,: custodian of securities, foreign institutional in'estor, credit rating agency, or any other inter(ediary associated with the securities (ar)et as the 8oard (ay by notification in this behalf specify, shall buy or sell or deal in securities except under and in accordance with the conditions of a certificate of registration obtained fro( the 8oard in accordance with the regulations (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a depository, 34participant,: custodian of securities, foreign institutional in'estor or credit rating agency i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to buy or sell securities or otherwise deal with the securities (ar)et until such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300 ( 8) Eo person shall sponsor or cause to be sponsored or carry on or caused to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es including (utual funds, unless he obtains a certificate of registration fro( the 8oard in accordance with the regulations, 4ro+i-e- that any person sponsoring or causing to be sponsored, carrying or causing to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es operating in the securities (ar)et i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to operate till such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300:
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0
% Inserted
>
4()%lanati$n7 6or the re(o'al of doubts, it is hereby declared that, for purposes of this section, a collecti'e in'est(ent sche(e or (utual fund shall not be include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(ponent of in'est(ent besides the co(ponent of insurance issued by the insurer0: (%) 7'ery application for registration shall be in such (anner and on pay(ent of such fees as (ay be deter(ined by regulations0 (3) .he 8oard (ay, by order, suspend or cancel a certificate of registration in such (anner as (ay be deter(ined by regulations, 4ro+i-e- that no order under this sub+section shall be (ade unless the person concerned has been gi'en a reasonable opportunity of being heard0 %4CIA<.7R BA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 4rohi,itio of .% i$*l%ti+e % - -e'e$ti+e -e+i'e!, i !i-er tr%-i ( % - !*,!t% ti%l %'7*i!itio of !e'*ritie! or 'o trol.
1"A. Eo person shall directly or indirectly(a) use or e(ploy, in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recogniFed stoc) exchange, any (anipulati'e or decepti'e de'ice or contri'ance in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3
Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, w0r0e0f !+$+ %0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, reads as under, /@A81(0 D: ?ISC7==AE7CHS #0 Balidation+ Eotwithstanding anything contained in any Dudg(ent, decree or order of any court, tribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 Repeal and sa'ings + (1) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (2) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0 % Chapter BA inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
!
(b) e(ploy any de'ice, sche(e or artifice to defraud in connection with issue or dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange3 (c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange, in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (d) engage in insider trading3 (e) deal in securities while in possession of (aterial or non+public infor(ation or co((unicate such (aterial or non+public infor(ation to any other person, in a (anner which is in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (f) ac*uire control of any co(pany or securities (ore than the percentage of e*uity share capital of a co(pany whose securities are listed or proposed to be listed on a recognised stoc) exchange in contra'ention of the regulations (ade under this Act0: CDA4TER II 2INANCE, ACCOUNTS AND AUDIT Gr% t! ,> the Ce tr%l Go+er .e t. 1). .he Central &o'ern(ent (ay, after due appropriation (ade by <arlia(ent by law in this behalf, (a)e to the 8oard grants of such su(s of (oney as that &o'ern(ent (ay thin) fit for being utiliFed for the purposes of this Act0 2* -. 13. ( ) .here shall be constituted a 6und to be called the Securities and 7xchange 8oard of
India &eneral 6und and there shall be credited thereto(a) all grants, fees and charges recei'ed by the 8oard under this Act3 4G G G: (aa) %4G G G: (b) all su(s recei'ed by the 8oard fro( such other sources as (ay be decided upon by the Central &o'ern(ent0 (%) .he 6und shall be applied for (eeting(a) the salaries, allowances and other re(uneration of the (e(bers, officers and other e(ployees of the 8oard3 (b) the expenses of the 8oard in the discharge of its functions under section 3 (c) the expenses on obDects and for purposes authorised by this Act0
.he word 1and2 o(itted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 (aa) o(itted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 It was inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Clause (aa) reads as under,+ 1(aa) all su(s realiFed by way of <enalties under this Act3 and20
% Clause
%0
A''o* t! % - %*-it. 15. ( ) .he 8oard shall (aintain proper accounts and other rele'ant records and prepare an annual state(ent of accounts in such for( as (ay be prescribed by the Central &o'ern(ent in consultation with the Co(ptroller and Auditor+&eneral of India0 (%) .he accounts of the 8oard shall be audited by the Co(ptroller and Auditor+&eneral of India at such inter'als as (ay be specified by hi( and any expenditure incurred in connection with such audit shall be payable by the 8oard to the Co(ptroller and Auditor+&eneral of India0 (3) .he Co(ptroller and Auditor+&eneral of India and any other person appointed by hi( in connection with the audit of the accounts of the 8oard shall ha'e the sa(e rights and pri'ileges and authority in connection with such audit as the Co(ptroller and Auditor+ &eneral generally has in connection with the audit of the &o'ern(ent accounts and, in particular, shall ha'e the right to de(and the production of boo)s, accounts, connected 'ouchers and other docu(ents and papers and to inspect any of the offices of the 8oard0 ($) .he accounts of the 8oard as certified by the Co(ptroller and Auditor+&eneral of India or any other person appointed by hi( in this behalf together with the audit report thereon shall be forwarded annually to the Central &o'ern(ent and that &o'ern(ent shall cause the sa(e to be laid before each Iouse of <arlia(ent0 5CDA4TER IIA 4ENALTIES AND ADEUDICATION 4e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 15A. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder,(a) to furnish any docu(ent, return or report to the 8oard, fails to furnish the sa(e, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations, fails to file return or furnish the sa(e within the ti(e specified therefor in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0
Chapters BI A and BI 8 containing Ss0 "A to "M and "@ to "S respecti'ely, inserted by Securities =aws (A(end(ent) Act, !!" w0e0f0 %"+ + !!"0 % Substituted for 1a penalty not exceeding one la)h and fifty thousand rupees for each such failure2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding fi'e thousand rupees for e'ery day during which such failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for e'ery day during which the failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%
4e %lt> for f%il*re ,> % > $er!o to e ter i to %(ree.e t /ith 'lie t!. 15;. If any person, who is registered as an inter(ediary and is re*uired under this Act or any rules or regulations (ade thereunder to enter into an agree(ent with his client, fails to enter into such agree(ent, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 %54e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 15C. If any listed co(pany or any person who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such co(pany or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 4e %lt> for 'ert%i -ef%*lt! i '%!e of .*t*%l f* -!. 15D. If any person, who is(a) re*uired under this Act or any rules or regulations (ade thereunder to obtain a certificate of registration fro( the 8oard for sponsoring or carrying on any collecti'e in'est(ent sche(e, including (utual funds, sponsors or carries on any collecti'e in'est(ent sche(e, including (utual funds, without obtaining such certificate of registration, he shall be liable to 34a penalty of one la)h rupees for each day during which he sponsors or carries on any such collecti'e in'est(ent sche(e including (utual funds, or one crore rupees, whiche'er is less:3 (b) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, for sponsoring or carrying on any in'est(ent sche(e, fails to co(ply with the ter(s and conditions of certificate of registration, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, fails to (a)e an application for listing of its sche(es as pro'ided for in the regulations
Substituted for 1a penalty not exceeding fi'e la)h rupees for e'ery such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1If any person, who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing to redress the grie'ances of in'estors, fails to redress such grie'ances, he shall be liable to a penalty not exceeding ten thousand rupees for each such failure2, by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding ten thousand rupees for each day during which he carries on any such collecti'e in'est(ent sche(e including (utual funds, or ten la)h rupees whiche'er is higher02 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for each day during which such failure continues or ten la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0
%%
go'erning such listing, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (d) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to despatch
unit certificates of any sche(e in the (anner pro'ided in the regulation go'erning such despatch, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (e) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to refund the application (onies paid by the in'estors within the period specified in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (f) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to in'est (oney collected by such collecti'e in'est(ent sche(es in the (anner or within the period specified in the regulations, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for f%il*re to o,!er+e r*le! % - re(*l%tio ! ,> % %!!et .% %(e.e t 'o.$% >. 15E. Khere any asset (anage(ent co(pany of a (utual fund registered under this Act, fails to co(ply with any of the regulations pro'iding for restrictions on the acti'ities of the asset (anage(ent co(panies, such asset (anage(ent co(pany shall be liable to "4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for -ef%*lt i '%!e of !to'6 ,ro6er!. 152. If any person, who is registered as a stoc) bro)er under this Act,(a) fails to issue contract notes in the for( and (anner specified by the stoc) exchange of which such bro)er is a (e(ber, he shall be liable to a penalty not exceeding fi'e ti(es the a(ount for which the contract note was re*uired to be issued by that bro)er3 (b) fails to deli'er any security or fails to (a)e pay(ent of the a(ount due to the in'estor in the (anner within the period specified in the regulations, he shall be liable to #4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3
Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues or fi'e la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding one thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%3
(c) charges an a(ount of bro)erage which is in excess of the bro)erage specified in the regulations, he shall be liable to 4a penalty of one la)h rupees: or fi'e ti(es the a(ount of bro)erage charged in excess of the specified bro)erage, whiche'er is higher0 4e %lt> for i !i-er tr%-i (. 15G. If any insider who,(i) either on his own behalf or on behalf of any other person, deals in securities of a body corporate listed on any stoc) exchange on the basis of any unpublished price+sensiti'e infor(ation3 or (ii) co((unicates any unpublished price+sensiti'e infor(ation to any person, with or without his re*uest for such infor(ation except as re*uired in the ordinary course of business or under any law3 or
(iii) counsels, or procures for any other person to deal in any securities of any body corporate on the basis of unpublished price+sensiti'e infor(ation, shall be liable to a penalty %4of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of insider trading, whiche'er is higher:0 4e %lt> for o 0-i!'lo!*re of %'7*i!itio of !h%re! % - t%6eo+er!. 15D. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder, fails to,(i) disclose the aggregate of his shareholding in the body corporate before he ac*uires any shares of that body corporate3 or (ii) (a)e a public announce(ent to ac*uire shares at a (ini(u( price3 or 34(iii) (a)e a public offer by sending letter of offer to the shareholders of the concerned co(pany3 or (iv) (a)e pay(ent of consideration to the shareholders who sold their shares pursuant to letter of offer,: he shall be liable to a penalty $4of twenty+fi'e crore rupees or three ti(es the a(ount of profits profits (ade out of such failure, whiche'er is higher:0 554e %lt> for fr%*-*le t % - * f%ir tr%-e $r%'ti'e!. 15DA. If any person indulges in fraudulent and unfair trade practices relating to securities, he shall be liable to a penalty of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of such practices, whiche'er is higher0
Substituted for 1a penalty not exceeding fi'e thousand rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00% 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00% %00% " Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00%0
%$
4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 15D;. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 4o/er to %-G*-i'%te. 150I. ( ) 6or the purpose of adDudging under sections "A, "8, "C, "9, "7, "6, "& 4, "I, "IA and "I8:, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in subsection ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> the %-G*-i'%ti ( offi'er. 15E. Khile adDudging *uantu( of penalty under section "+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade
as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 "5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 15EA. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: )5Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!. 15E;. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 11, !e'tio 11;, !e'tio 11D, !*,0!e'tio ()) of !e'tio 1" or !e'tio 150I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e- -ef%*lt!.
Substituted for 1and "I2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the S78I (A(end(ent) Act, %00%, S0 ! w0e0f0 %!+ 0+%00%0 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
% Inserted
%"
(") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't. ()) The !ettle.e t $ro'ee-i (! * -er thi! !e'tio !h%ll ,e 'o -*'te- i %''or-% 'e /ith the $ro'e-*re !$e'ifie- i the re(*l%tio ! .%-e * -er thi! A't. (3) No %$$e%l !h%ll lie * -er !e'tio 15T %(%i !t % > or-er $%!!e- ,> the ;o%r- or %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio . < CDA4TER II; ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL E!t%,li!h.e t of Se'*ritie! A$$ell%te Tri,* %l!. 15F. ( ) .he Central &o'ern(ent shall by notification, establish one or (ore Appellate .ribunals to be )nown as the Securities Appellate .ribunal to exercise the Durisdiction, powers and authority conferred on such .ribunal by or under this Act 4or any other law for the ti(e being in force:0 (%) .he Central &o'ern(ent shall also specify in the notification referred to in sub+section ( ) the (atters and places in relation to which the Securities Appellate .ribunal (ay exercise Durisdiction0 "5Co.$o!itio of Se'*ritie! A$$ell%te Tri,* %l. 15L. A Securities Appellate .ribunal shall consist of a <residing Cfficer and two other (e(bers, to be appointed, by notification, by the Central &o'ern(ent, 4ro+i-e- that the Securities Appellate .ribunal, consisting of one person only, established before the co((ence(ent of the Securities and 7xchange 8oard of India (A(end(ent) Act, %00%, shall continue to exercise the Durisdiction, powers and authority conferred on it by or under this Act or any other law for the ti(e being in force till two other ?e(bers are appointed under this section0 9*%lifi'%tio for %$$oi t.e t %! 4re!i-i ( Offi'er or @e.,er of Se'*ritie! A$$ell%te Tri,* %l.
Inserted by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for Sections "= and "? by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "= and "? read as under,+ 1 "+=0 Co(position of securities Appellate .ribunal0 5 A Securities Appellate .ribunal shall consist of
% Substituted
one person only (hereinafter referred to as the <residing Cfficer of the Securities Appellate .ribunal) to be appointed, by notification, by the central &o'ern(ent0 "?0 Qualifications for appoint(ent as <residing Cfficer of the Securities Appellate .ribunal0 5 A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he + (a) is, or has been, or is *ualified to be, a Mudge of a Iigh Court3 or (b) has been a (e(ber of the Indian =egal Ser'ice and has held a post in &rade I of that ser'ice for at least three years3 or (c) has held office as the <residing Cfficer of a tribunal for at least three years02
%#
15@. 15( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of the Securities Appellate .ribunal unless he + (a) is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court3 or (b) is a sitting or retired Mudge of a Iigh Court who has co(pleted not less than se'en years of ser'ice as a Mudge in a Iigh Court0 ( A) .he <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0: (%) A person shall not be *ualified for appoint(ent as (e(ber of a Securities Appellate .ribunal unless he is a person of ability, integrity and standing who has shown capacity in dealing with proble(s relating to securities (ar)et and has *ualification and experience of corporate law, securities laws, finance, econo(ics or accountancy, 4ro+i-e- that a (e(ber of the 8oard or any person holding a post at senior (anage(ent le'el e*ui'alent to 7xecuti'e 9irector in the 8oard shall not be appointed as <residing Cfficer or ?e(ber of a Securities Appellate .ribunal during his ser'ice or tenure as such with the 8oard or within two years fro( the date on which he ceases to hold office as such in the 8oard0: %4Te *re of offi'e of 4re!i-i ( Offi'er % - other @e.,er! of Se'*ritie! A$$ell%te Tri,* %l. 15N. .he <residing Cfficer and e'ery other ?e(ber of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office and shall be eligible for re+appoint(ent, 4ro+i-e- that no person shall hold office as the <residing Cfficer of the Securities Appellate .ribunal after he has attained the age of sixty+eight years, 4ro+i-e- f*rther that no person shall hold office as a ?e(ber of the Securities Appellate .ribunal after he has attained the age of sixty+two years0: S%l%r> % - %llo/% 'e! % - other ter.! % - 'o -itio ! of !er+i'e of 4re!i-i ( Offi'er!. 150O. .he salary and allowances payable to and the other ter(s and conditions of ser'ice including pension, gratuity and other retire(ent benefits of the 4<residing Cfficer and other ?e(bers: of a Securities Appellate .ribunal shall be such as (ay be prescribed,
Substituted for sub+section ( ) of Section "? by the S78I (A(end(ent) Crdinance, %0 3 w0e0f0 % 00 0%0 30 <rior to substitution, it read as under,+ ;( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court , 4ro+i-e- that the <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0; % Substituted for Section "E, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "E read as under,+ 1 "E0 .er( of office0+ .he <residing officer of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office or until he attains the age of sixtyfi'e years, whiche'er is earlier02
%/
4ro+i-e- that neither the salary and allowances nor the other ter(s and conditions of ser'ice of the %4<residing Cfficer and other ?e(bers of a Securities Appellate .ribunal: shall be 'aried to their disad'antage after appoint(ent0 2illi ( *$ of +%'% 'ie!. 154. If, for reason other than te(porary absence, any 'acancy occurs in the 34office of the <residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal, then the Central &o'ern(ent shall appoint another person in accordance with the pro'isions of this Act to fill the 'acancy and the proceedings (ay be continued before the Securities Appellate .ribunal fro( the stage at which the 'acancy is filled0 Re!i( %tio % - re.o+%l. 159. ( ) .he $4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal (ay, by notice in writing under his hand addressed to the Central &o'ern(ent, resign his office, 4ro+i-e- that "4the <residing Cfficer or any other ?e(ber: shall, unless he is per(itted by the Central &o'ern(ent to relin*uish his office sooner, continue to hold office, until the expiry of three (onths fro( the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his ter( of office, whiche'er is the earliest0 (%) .he #4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal shall not be re(o'ed fro( his office except by an order by the Central &o'ern(ent on the ground of pro'ed (isbeha'iour or incapacity after an in*uiry (ade by a Mudge of the Supre(e Court, in which the /4<residing Cfficer or any other ?e(ber: concerned has been infor(ed of the charges against hi( and gi'en a reasonable opportunity of being heard in respect of these charges0 (3) .he Central &o'ern(ent (ay, by rules, regulate the procedure for the in'estigation of (isbeha'iour or incapacity of the >4<residing Cfficer or any other ?e(ber:0 Or-er! 'o !tit*ti ( A$$ell%te Tri,* %l to ,e fi %l % - ot to i +%li-%te it! $ro'ee-i (!. 15R. Eo order of the Central &o'ern(ent appointing any person as the !4<residing Cfficer or a ?e(ber: of a Securities Appellate .ribunal shall be called in *uestion in any (anner, and no act or proceeding before a Securities Appellate .ribunal shall be called in *uestion in any (anner on the ground (erely of any defect in the constitution of a Securities Appellate .ribunal0
Substituted for 1<residing Cfficer of a Securities Appellate .ribunal2 by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 / Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 > Substituted for 1aforesaid <residing Cfficer2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 ! Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0
%>
St%ff of the Se'*ritie! A$$ell%te Tri,* %l. 15S. ( ) .he Central &o'ern(ent shall pro'ide the Securities Appellate .ribunal with such officers and e(ployees as that &o'ern(ent (ay thin) fit0 (%) .he officers and e(ployees of the Securities Appellate .ribunal shall discharge their functions under general superintendence of the <residing Cfficer0 (3) .he salaries and allowances and other conditions of ser'ice of the officers and e(ployees of the Securities Appellate .ribunal shall be such as (ay be prescribed0 A$$e%l to the Se'*ritie! A$$ell%te Tri,* %l. 15T. 4( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed,(a) by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws
(Second A(end(ent) Act, !!!, under this Act, or the rules or regulations (ade thereunder3 or (b) by an order (ade by an adDudicating officer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 "5(") ********< (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 348oard or the AdDudicating Cfficer, as the case case (ay be,: is recei'ed by hi( and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 ($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0
Substituted for Sub+sec ( ) R (%) by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, Sub+sections ( ) R (%) were read as under, 1( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by any order (ade by any AdDudicating Cfficer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 (%) Eo appeal shall lie to the Securities Appellate .ribunal fro( an order (ade by an AdDudicating Cfficer with the consent of the parties02 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , o.i!!io , S*,0!e'tio (") re%- %! * -er& J(") No %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-eO (a) ,> the ;o%r- o % - %fter the 'o..e 'e.e t of the Se'*ritie! L%/! (Se'o - A.e -.e t) A't, 1999H (b) ,> % %-G*-i'%ti ( offi'er, /ith the 'o !e t of the $%rtie!.2 3 Substituted for 1a copy of the order (ade by the adDudicating officer2 by S78I (A(end(ent) Act !!!, !!!, w0e0f0 #+ %+ !!!0
%!
(") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 48oard, the: parties to the appeal and to the concerned AdDudicating Cfficer0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of the Se'*ritie! A$$ell%te Tri,* %l. 15U. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act, and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purposes of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3
(e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte 3 (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0), and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 %4Ri(ht to le(%l re$re!e t%tio . 15I. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,Substituted for 1parties2, S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for S0 "B by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, S0 "B read as under,+ 1 "B0 .he appellant (ay either appear in person or authorise one or (ore legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal02
% Substituted
30
(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of subsection ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or any attorney of any Iigh Court, and includes a pleader in practice0: Li.it%tio . 15?. .he pro'isions of the =i(itation Act, !#3 (3# of !#3), shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 54re!i-i ( Offi'er, @e.,er! % - !t%ff of Se'*ritie! A$$ell%te Tri,* %l! to ,e $*,li' !er+% t!. 15A. .he <residing Cfficer, ?e(bers and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0: Ci+il Co*rt ot to h%+e G*ri!-i'tio . 15M. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which an adDudicating officer appointed under this Act or a Securities Appellate .ribunal constituted under this Act is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "5A$$e%l to S*$re.e Co*rt.
Substituted for S0 "A by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, it read as under, + 1 "A0 .he <residing Cfficer and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian penal Code( $" of >#0)20 % Substituted for S0 "S by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution , it
was read as under,+ 1 "S0 Appeal to Iigh Court0+ Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, <ro'ided that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
3
15N. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order , 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the applicant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: CDA4TER III @ISCELLANEOUS 4o/er of Ce tr%l Go+er .e t to i!!*e -ire'tio !. 18. ( ) Kithout preDudice to the foregoing pro'isions of this Act 4or the 9epositories Act, !!#:, the 8oard shall, in exercise of its powers or the perfor(ance of its functions under this Act, be bound by such directions on *uestions of policy as the Central &o'ern(ent (ay gi'e in writing to it fro( ti(e to ti(e , 4ro+i-e- that the 8oard shall, as far as practicable, be gi'en an opportunity to express its 'iews before any direction is gi'en under this sub+section0 (%) .he decision of the Central &o'ern(ent whether a *uestion is one of policy or not shall be final0 4o/er of Ce tr%l Go+er .e t to !*$er!e-e the ;o%r-. 17. ( ) If at any ti(e the Central &o'ern(ent is of opinion(a) that on account of gra'e e(ergency, the 8oard is unable to discharge the functions and duties i(posed on it by or under the pro'isions of this Act3 or (b) that the 8oard has persistently (ade default in co(plying with any direction issued by the Central &o'ern(ent under this Act or in the discharge of the functions and duties i(posed on it by or under the pro'isions of this Act and as a result of such default the financial position of the 8oard or the ad(inistration of the 8oard has deteriorated3 or (c) that circu(stances exist which render it necessary in the public interest so to do, the Central &o'ern(ent (ay, by notification, supersede the 8oard for such period, not exceeding six (onths, as (ay be specified in the notification0 (%) Hpon the publication of a notification under sub+section ( ) superseding the 8oard,(a) all the (e(bers shall, as fro( the date of supersession, 'acate their offices as such3 (b) all the powers, functions and duties which (ay, by or under the pro'isions of this Act, be exercised or discharged by or on behalf of the 8oard, shall until the 8oard is reconstituted under sub+section (3), be exercised and discharged by such person or persons as the Central &o'ern(ent (ay direct3 and (c) all property owned or controlled by the 8oard shall, until the 8oard is reconstituted under sub+section (3), 'est in the Central &o'ern(ent0
Substituted for 1this Act2 by the 9epositories Act !!#, w0r0e0f0 %0+!+ !!"0
3%
(3) Cn the expiration of the period of supersession specified in the notification issued under sub+section ( ), the Central &o'ern(ent (ay reconstitute the 8oard by a fresh appoint(ent
and in such case any person or persons who 'acated their offices under clause ( a) of subsection (%), shall not be dee(ed dis*ualified for appoint(ent , 4ro+i-e- that the Central &o'ern(ent (ay, at any ti(e, before the expiration of the period of supersession, ta)e action under this sub+section0 ($) .he Central &o'ern(ent shall cause a notification issued under sub+section ( ) and a full report of any action ta)en under this section and the circu(stances leading to such action to be laid before each Iouse of <arlia(ent at the earliest0 Ret*r ! % - re$ort!. 1:. ( ) .he 8oard shall furnish to the Central &o'ern(ent at such ti(e and in such for( and (anner as (ay be prescribed or as the Central &o'ern(ent (ay direct, such returns and state(ents and such particulars in regard to any proposed or existing progra((e for the pro(otion and de'elop(ent of the securities (ar)et, as the Central &o'ern(ent (ay, fro( ti(e to ti(e, re*uire0 (%) Kithout preDudice to the pro'isions of sub+section ( ), the 8oard shall, within 4ninety: days after the end of each financial year, sub(it to the Central &o'ern(ent a report in such for(, as (ay be prescribed, gi'ing a true and full account of its acti'ities, policy and progra((es during the pre'ious financial year0 (3) A copy of the report recei'ed under sub+section (%) shall be laid, as soon as (ay be after it is recei'ed, before each Iouse of <arlia(ent0 Dele(%tio . 19. .he 8oard (ay, by general or special order in writing delegate to any (e(ber, officer of the 8oard or any other person subDect to such conditions, if any, as (ay be specified in the order, such of its powers and functions under this Act (except the powers under section %!) as it (ay dee( necessary0 A$$e%l!. "=. ( ) Any person aggrie'ed by an order of the 8oard (ade %4, before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!,: under this Act, or the rules or regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor, 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0
Substituted for 1sixty days2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1an order of the 8oard (ade2 by Securities =aws (Second A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0
% Substituted
33
(3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed, 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 4;%r of G*ri!-i'tio . "=A. Eo order passed by the 8oard %4or the AdDudicating Cfficer: under this Act shall be appealable except as pro'ided in 34section ". or: section %0 and no ci'il court shall ha'e Durisdiction in respect of any (atter which the 8oard $4or the AdDudicating Cfficer: is e(powered by, or under, this Act to pass any order and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any order passed by the 8oard "4or the AdDudicating Cfficer: by, or under, this Act0: S%+i (!.
"1. Eothing in this Act shall exe(pt any person fro( any suit or other proceedings which (ight, apart fro( this Act, be brought against hi(0 @e.,er!, offi'er! % - e.$lo>ee! of the ;o%r- to ,e $*,li' !er+% t!. "". All (e(bers, officers and other e(ployees of the 8oard shall be dee(ed, when acting or purporting to act in pursuance of any of the pro'isions of this Act, to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0 4rote'tio of %'tio t%6e i (oo- f%ith. "). Eo suit, prosecution or other legal proceedings shall lie against the Central &o'ern(ent #4or 8oard: or any officer of the Central &o'ern(ent or any (e(ber, officer or other e(ployee of the 8oard for anything which is in good faith done or intended to be done under this Act or the rules or regulations (ade thereunder0 /4Offe 'e!. "3. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, he shall be punishable with
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 18oard2 by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 3 Substituted for 1Section %02, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 $ Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 " Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Substituted by for S0 %$, Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" && <rior to its substitution S0%$ read as under, 1%$0 <enalty0+ Khoe'er contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both02
% Substituted
3$
i(prison(ent for a ter( which (ay extend to 4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to %4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 34Co.$o!itio of 'ert%i offe 'e!. "3A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "3;. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of the alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation, 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0
(%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0:
Substituted for 1one year, or with fine, or with both2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%, for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both20 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3"
E#e.$tio fro. t%# o /e%lth % - i 'o.e. "5. Eotwithstanding anything contained in the Kealth+tax Act, !"/ (%/ of !"/), the Inco(etax Act, !# ($3 of !# ) or any other enact(ent for the ti(e being in force relating to tax on wealth, inco(e, profits or gains(a) the 8oard3 (b) the existing Securities and 7xchange 8oard fro( the date of its constitution to the date of establish(ent of the 8oard, shall not be liable to pay wealth+tax, inco(e+tax or any other tax in respect of their wealth, inco(e, profits or gains deri'ed0 Co( iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations (ade thereunder, sa'e on a co(plaint (ade by the 8oard 4G G G:0 "5(") *****< )5 E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
.he words 1with the pre'ious sanction of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to the o.i!!io , S*,0!e'tio (") re%- %! * -er& 1(") No 'o*rt i ferior to th%t of "5% Co*rt of Se!!io < !h%ll tr> % > offe 'e $* i!h%,le * -er thi!
A't.2 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3#
A$$e%l % - re+i!io "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e of Cri.i %l 4ro'e-*re, 197) to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< Offe 'e! ,> 'o.$% ie!. "7. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly, 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n , 6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and
3/
(b) 1director2, in relation to a fir(, (eans a partner in the fir(0 4o/er to e#e.$t. ":. 4GGGGGG: "5 Re'o+er> of %.o* t! ":A. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith %
-ire'tio of -i!(or(e.e t or-er i!!*e- * -er !e'tio 11; or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifiefor. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.et%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't.
C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Section %> read as under, 1%>0 8$.er t$ e)e"%t+ If the central go'ern(ent if of the opinion that it is necessary or expedient so to do in public interest, it (ay, by order published in the Cfficial gaFette, exe(pt any person or class of persons buying or selling securities or otherwise dealing with the securities (ar)et fro( the operation of sub+section ! ) of Section %02 % I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3>
"#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio 15T of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 11;, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% !
% > offi'er of the ;o%r- /ho .%> ,e %*thoriLe-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 4o/er to .%6e r*le!. "9. ( ) .he Central &o'ern(ent (ay, by notification, (a)e rules for carrying out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers under sub+section ( ) of section "3 (b) the additional functions that (ay be perfor(ed by the 8oard under section 3 (c) 4G G G: (d) the (anner in which the accounts of the 8oard shall be (aintained under section "3 %4(da) the (anner of in*uiry under sub+section ( ) of section "+I3 (db) the salaries and allowances and other ter(s and conditions of ser'ice of the 34<residing Cfficers, ?e(bers: and other officers and e(ployees of the Securities Appellate .ribunal under section "+C and sub+section (3) of section "S3 (dc) the procedure for the in'estigation of (isbeha'iour or incapacity of the 4<residing Cfficers, or other ?e(bers: of the Securities Appellate .ribunal under sub+section (3) of section "Q3
Clause (c) o(itted by Securities laws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, clause (c) it read as under, 1(c) the conditions subDect to which registration certificate is to be issued under sub+section ( ) of section %20 % Inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 3 Substituted for 1<residing Cfficers2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3!
(dd) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section ". and the fees payable in respect of such appeal3: (e) the for( and the (anner in which returns and report to be (ade to the Central &o'ern(ent under section >3 (f) any other (atter which is to be, or (ay be, prescribed, or in respect of which pro'ision is to be, or (ay be, (ade by rules0 4o/er to .%6e re(*l%tio !. )=. ( ) .he 8oard (ay, %4GGG: by notification, (a)e regulations consistent with this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ti(es and places of (eetings of the 8oard and the procedure to be followed at such (eetings under sub+section ( ) of section / including *uoru( necessary for the transaction of business3 (b) the ter(s and other conditions of ser'ice of officers and e(ployees of the 8oard under sub+section (%) of section !3 34(c) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto and the (anner in which such (atters shall be disclosed by the co(panies under section A3 35('%) the *tiliL%tio of the %.o* t 're-ite- * -er !*,0!e'tio (5) of !e'tio 11H (',) the f*lfill.e t of other 'o -itio ! rel%ti ( to 'olle'ti+e i +e!t.e t !'he.e * -er !*,0!e'tio ("A) of !e'tio 11AAH ('') the $ro'e-*re to ,e follo/e- ,> the %*thoriLe- offi'er for !e%r'h or !eiL*re * -er !*,0!e'tio (9) of !e'tio 11CH < (d) the conditions subDect to which certificate of registration is to be issued, the a(ount of
fee to be paid for certificate of registration and the (anner of suspension or cancellation of certificate of registration under section %0: 55(-%) the ter.! -eter.i e- ,> the ;o%r- for !ettle.e t of $ro'ee-i (! * -er !*,!e'tio (") % - the $ro'e-*re for 'o -*'ti ( of !ettle.e t $ro'ee-i (! * -er !*,!e'tio ()) of !e'tio 15E;H (-,) % > other .%tter /hi'h i! re7*ire- to ,e, or .%> ,e, !$e'ifie- ,> re(*l%tio ! or i re!$e't of /hi'h $ro+i!io i! to ,e .%-e ,> re(*l%tio !.< R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t.
Substituted for 1<residing Cfficers2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 words 1with the pre'ious appro'al of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 3 Substituted for the existing clause (c) by the Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 <rior to substitution this clause read as under, 1(c) the a(ount of fee to be paid for registration certificate and (anner of suspension or cancellation of registration certificate under sub+section (%) and (3) of section %02 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% .he
$0
)1. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. )". .he pro'isions of this Act shall be in addition to, and not in derogation of, the pro'isions of any other law for the ti(e being in force0 A.e -.e t of 'ert%i e %'t.e t!. )). 40e%ealed bF 0e%ealing H A"ending Act' 2001&: 4o/er to re.o+e -iffi'*ltie!. )3. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order, published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as (ay appear to be necessary for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of fi'e years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 Re$e%l % - !%+i (. )5. ( ) .he Securities and 7xchange 8oard of India Crdinance, !!% (Crd0 " of !!%), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 1@( /@(5A9( 4 ee section 33: A@END@ENT O2 CERTAIN ENACT@ENTS 40e%ealed bF 0e%ealing H A"ending Act' 2001:
*SECURITIES CONTRACTS (REGULATION) RULES, 1957
In exercise of the powers conferred by section 30 of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the Central &o'ern(ent hereby (a)es the following rules, the sa(e ha'ing been pre'iously published as re*uired by sub+section (3) of the said section, na(ely ,Short title. 1. .hese rules (ay be called the Securities Contracts (Regulation) Rules, !"/0 Defi itio !. ". In these rules, unless the context otherwise re*uires,(a) 1for(2 (eans a for( appended to these rules3 (b) 1the Act2 (eans the Securities Contracts (Regulation) Act, !"# ($% of !"#)3 (c) 1&o'ern(ent co(pany2 (eans a co(pany in which not less than fifty+one per cent of the share capital is held by the Central &o'ern(ent or by any State &o'ern(ent or &o'ern(ents or partly by the Central &o'ern(ent and partly by one or (ore State &o'ern(ents ; 4(d) 1public2 (eans persons other than 5 (i) the pro(oter and pro(oter group3 (ii) subsidiaries and associates of the co(pany0 E#$l% %tio & 6or the purpose of this clause the words 1pro(oter2 and 1pro(oter group2 shall ha'e the sa(e (eaning as assigned to the( under the Securities and 7xchange 8oard of India (Issue of Capital and 9isclosure Re*uire(ents) Regulations, %00!3: %4(da) ;public sector co(pany; (eans a body corporate constituted by an Act of <arlia(ent or any State =egislature and includes a go'ern(ent co(pany,: 4(e) 1public shareholding2 (eans e*uity shares of the co(pany held by public and shall exclude shares which are held by custodian against depository receipts issued o'erseas0: A$$li'%tio for re'o( itio . ). An application under section 3 of the Act for recognition of a stoc) exchange shall be (ade to the 34Securities and 7xchange 8oard of India: in 6or( A0
* The!e R*le! h%+e ,ee *$-%te- ,%!e- o the R*le! % - A.e -.e t! %+%il%,le o the /e,!ite of the De$%rt.e t of E'o o.i' Aff%ir!0 htt$&11fi .i . i'.i 1l%/1i -e#.%!$ % - %+%il%,le %.e -.e t otifi'%tio !. Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 % Inserted by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3 Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
2ee! for %$$li'%tio . 3. ( ) .here shall be paid in respect of e'ery application under rule 3 a fee of rupees fi'e hundred0 (%) .he a(ount of the fee shall be deposited in the nearest &o'ern(ent treasury or the nearest branch of the State 8an) of India, 4ro+i-e- that at 8o(bay, Calcutta, ?adras, 9elhi and @anpur, the a(ount shall be deposited in the Reser'e 8an) of India0 (3) .he a(ount of the fee so deposited shall be credited to the receipt head 1A=BI?iscellaneous-Cther fees, fines and forfeitures20 Do'*.e t! to ,e file- %lo ( /ith the %$$li'%tio % - $%rti'*l%r! it !ho*l- 'o t%i . 5. 7'ery application shall be acco(panied by four copies of the rules (including the (e(orandu( and articles of association where the applicant stoc) exchange is an
incorporated body) and bye+laws of the stoc) exchange applying for recognition as specified in section 3 of the Act and the receipt granted by the &o'ern(ent treasury, or as the case (ay be, the State 8an) of India or the Reser'e 8an) of India, in respect of the a(ount of the fee deposited and shall contain clear particulars as to the (atters specified in the Annexure to 6or( A0 $54o/er to .%6e i 7*irie! % - '%ll for i for.%tio . 5A. 8efore granting recognition to a stoc) exchange under section $ of the Act, the "4Securities and 7xchange 8oard of India: (ay (a)e such in*uiries and re*uire such further infor(ation to be furnished, as it dee(s necessary, relating to the infor(ation furnished by the stoc) exchange in the Annexure to its application in 6or( A0: 2or. of re'o( itio . 8. .he recognition granted to a stoc) exchange shall be in 6or( 8 and be subDect to the following conditions, na(ely ,(a) that the recognition unless granted on a per(anent basis, shall be for such period not less than one year as (ay be specified in the recognition3 (b) that the stoc) exchange shall co(ply with such conditions as are or (ay be prescribed or i(posed under the pro'isions of the Act and these rules fro( ti(e to ti(e0
$ Inserted
by &SR 0!# dated $00/0 !#/, w0e0f0 %%00/0 !#/ for 1Central &o'ern(ent2 by the Securities Contracts (Regulation)(A(end(ent )Rules, !!#, w0e0f0 %30 %0 !!#0
" Substituted
Re e/%l of re'o( itio . 7. ( ) .hree (onths before the expiry of the period of recognition, a recognised stoc) exchange desirous of renewal of such recognition (ay (a)e an application to the #4Securities and 7xchange 8oard of India: in 6or( A0 (%) .he pro'isions of rule 3, rule $, rule ", rule "A and rule # shall apply in relation to renewal of recognition as they apply in relation to grant of recognition except that the fee payable in respect of an application for renewal of recognition shall be rupees two hundred0 9*%lifi'%tio ! for .e.,er!hi$ of % re'o( i!e- !to'6 e#'h% (e. :. .he rules relating to ad(ission of (e(bers of a stoc) exchange see)ing recognition shall inter alia pro'ide that , (1) Eo person shall be eligible to be elected as a (e(ber if(a) he is less than twenty+one years of age3 (b) he is not a citiFen of India3 pro'ided that the go'erning body (ay in suitable cases relax this condition with the prior appro'al of the !4Securities and 7xchange 8oard of India:3 (c) he has been adDudged ban)rupt or a recei'ing order in ban)ruptcy has been (ade against hi( or he has been pro'ed to be insol'ent e'en though he has obtained his final discharge3 (d) he has co(pounded with his creditors unless he has paid sixteen annas in the rupee3 (e) he has been con'icted of an offence in'ol'ing fraud or dishonesty3 (f) he is engaged as principal or e(ployee in any business other than that of securities /4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability unless he underta)es on ad(ission to se'er his connection with such business ,
>44ro+i-e-
that no (e(ber (ay conduct business in co((odity deri'ati'es, except by setting up a separate co(pany which shall co(ply with the regulatory re*uire(ents, such as, networth, capital ade*uacy, (argins and exposure nor(s as (ay be specified by the 6orward ?ar)et Co((ission, fro( ti(e to ti(e ,
# Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, w0e0f0 %30 %0 !!#0 / Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 > Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 <rior to its substitution, the pro'iso as a(ended by Securities Contracts (Regulation) (A(end(ent) Rules, !!# w0e0f0 %30 %0 !!#, read as under, 1<ro'ided that the Securities and 7xchange 8oard of India (ay, for reasons sufficient in the opinion of the said 8oard, per(it a recogniFed stoc) exchange to suspend the enforce(ent of this clause for a specified period on condition that the applicant is not associated with or is a (e(ber of or subscriber to or shareholder or debenture holder in or connected through a partner or e(ployee with any other organisation, institution, association, co(pany or corporation in India where forward business of any )ind whether in goods or co((odities or otherwise is carried on or is not engaged as a principal or e(ployee ion any such business02
4ro+i-e- f*rther that nothing herein shall be applicable to any corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to ()) of the pro'iso to sub+rule ($)0:3 (g) !4GGG: (h) he has been at any ti(e expelled or declared a defaulter by any other stoc) exchange3 (i) he has been pre'iously refused ad(ission to (e(bership unless a period of one year has elapsed since the date of such reDection0 (2) Eo person eligible for ad(ission as a (e(ber under sub+rule ( ) shall be ad(itted as a (e(ber unless ,(a) he has wor)ed for not less than two years as a partner with, or an authorised assistant or authorised cler) or re(isier or apprentice to, a (e(ber3 or (b) he agrees to wor) for a (ini(u( period of two years as a partner or representati'e (e(ber with another (e(ber and to enter into bargains on the floor of the stoc) exchange and not in his own na(e but in the na(e of such other (e(ber 3 or (c) he succeeds to the established business of a deceased or retiring (e(ber who is his father, uncle, brother or any other person who is, in the opinion of the go'erning body, a close relati'e , 4ro+i-e- that the rules of the stoc) exchange (ay authorise the go'erning body to wai'e co(pliance with any of the foregoing conditions if the person see)ing ad(ission is in respect of (eans, position, integrity, )nowledge and experience of business in securities, considered by the go'erning body to be otherwise *ualified for (e(bership0 (3) Eo person who is a (e(ber at the ti(e of application for recognition or subse*uently ad(itted as a (e(ber shall continue as such if(a) he ceases to be a citiFen of India , 4ro+i-e- that nothing herein shall affect those who are not citiFens of India but who were (e(bers at the ti(e of such application or were ad(itted subse*uently under the pro'isions of clause (b) of sub+rule ( ) of this rule, subDect to their co(plying with all other re*uire(ents of this rule3
(b) he is adDudged ban)rupt or a recei'ing order in ban)ruptcy is (ade against hi( or he is pro'ed to be insol'ent3 (c) he is con'icted of an offence in'ol'ing fraud or dishonesty3 (d) 04G G G: (e) 4G G G: (f) he engages either as principal or e(ployee in any business other than that of securities %4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability, pro'ided that! C(itted 0 Ibid0
by &SR 0/0(7) dated "0
0 !>>
Ibid0
% Inserted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(i) the go'erning body (ay, for reasons, to be recorded in writing, per(it a (e(ber to engage hi(self as principal or e(ployee in any such business, if the (e(ber in *uestion ceases to carry on business on the stoc) exchange either as an indi'idual or as a partner in a fir(, (ii) in the case of those (e(bers who were under the rules in force at the ti(e of such application per(itted to engage in any such business and were actually so engaged on the date of such application, a period of three years fro( the date of the grant of recognition shall be allowed for se'ering their connection with any such business, 34(iii) nothing herein shall affect (e(bers of a recognised stoc) exchange which are corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to (k) of the pro'iso to sub+rule ($)0: (4) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section 3%% of the said Act3 (ii) a (aDority of the directors of such co(pany are shareholders of such co(pany and also (e(bers of that stoc) exchange3 and (iii) the directors of such co(pany, who are (e(bers of that stoc) exchange, ha'e ulti(ate liability in such co(pany , 4ro+i-e- that where the $4Securities and 7xchange 8oard of India: (a)es a reco((endation in this regard, the go'erning body of a stoc) exchange shall, in relaxation of the re*uire(ents of this clause, ad(it as (e(ber the following corporations "4,bodies corporate:, co(panies or institutions, na(ely ,(a) the Industrial 6inance Corporation, established under the Industrial 6inance Corporation Act, !$> ( " of !$>)3 (b) the Industrial 9e'elop(ent 8an) of India, established under the Industrial 9e'elop(ent 8an) Act, !#$ ( > of !#$)3 (c) the =ife Insurance Corporation of India, established under the =ife Insurance Corporation Act, !"# (3 of !"#)3 (d) the &eneral Insurance Corporation of India constituted under the &eneral Insurance Corporation (Eationalisation) Act, !/% ("/ of !/%)3 (e) the Hnit .rust of India, established under the Hnit .rust of India Act, !#3 ("% of !#3)3
3 Substituted, ibid0 <rior to its substitution, sub+clause (iii) read as under, 1(iii) nothing herein shall affect (e(bers of a recogniFed stoc) exchange per(itted under the pro'iso to clause (f) of sub+rule( ) to suspend the enforce(ent of the aforesaid clause, for so long as such suspension is effecti'e, except that no (e(ber of such exchange shall engage in forward business of any )ind whether in goods or co((odities or otherwise and , if actually so engaged on the date of such application , he shall se'er his connection with any such business within a period of three years fro( the date of the grant of recognition02 $ Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# " Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(f) the Industrial Credit and In'est(ent Corporation of India, a co(pany registered under the Co(panies Act, !"# ( of !"#)3 (g) the subsidiaries of any of the corporations or co(panies specified in (a) to (f) and any subsidiary of the State 8an) of India or any nationalised ban) set up for pro'iding (erchant ban)ing ser'ices, buying and selling securities and other si(ilar acti'ities0 #4(h) any ban) included in the Second Schedule to the Reser'e 8an) of India Act, !3$ (% of !3$)3 (i) the 7xport I(port 8an) of India, established under the 7xport I(port 8an) of India Act, !> (%> of !> )3 (j) the Eational 8an) for Agriculture and Rural 9e'elop(ent, established under the Eational 8an) for Agriculture and Rural 9e'elop(ent Act, !> (# of !> )3 and (k) the Eational Iousing 8an), established under the Eational Iousing 8an) Act, !>/ ("3 of !>/)0: (4A) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall also be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section % of the said Act3 (ii) such co(pany underta)es to co(ply with such financial re*uire(ents and nor(s as (ay be specified by the Securities and 7xchange 8oard of India for the registration of such co(pany under sub+section ( ) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (iii) /4G G G: (iv) the directors of the co(pany are not dis*ualified fro( being (e(bers of a stoc) exchange under >4clause ( ) 4except sub+clause (b) and sub+clause (f) thereof: or clause (3) 4except sub+clause (a) and sub+clause (f) thereof:: and the 9irectors of the co(pany had not held the offices of the 9irectors in any co(pany which had been a (e(ber of the stoc) exchange and had been declared defaulter or expelled by the stoc) exchange3 and (v) not less than two directors of the co(pany are persons who possess a (ini(u( two yearsJ experience , (a) in dealing in securities3 or (b) as portfolio (anagers3 or (c) as in'est(ent consultants0 (5) Khere any (e(ber of a stoc) exchange is a fir(, the pro'isions of sub+rules ( ), (3) and ($), shall, so far as they can, apply to the ad(ission or continuation of any partner in such fir(0
# Inserted, / C(itted
ibid0 by &SR /$! (7), dated %0 00 !!$ > Substituted by &SR /!0(7), dated 0/0 0 !!$
Co tr%'t! ,et/ee .e.,er! of re'o( i!e- !to'6 e#'h% (e. 9. All contracts between the (e(bers of a recognised stoc) exchange shall be confir(ed in writing and shall be enforced in accordance with the rules and bye+laws of the stoc) exchange of which they are (e(bers0 !5No.i ee! of the Se'*ritie! % - E#'h% (e ;o%r- of I -i%< o the (o+er i ( ,o-ie! of re'o( i!e- !to'6 e#'h% (e!. 1=. .he %04Securities and 7xchange 8oard of India: (ay no(inate one or (ore persons not exceeding three in nu(ber, as (e(ber or (e(bers of the go'erning body of e'ery recognised stoc) exchange0 Such (e(ber or (e(bers shall enDoy the sa(e status and powers as other (e(bers of the go'erning body0 O,li(%tio of the (o+er i ( ,o-> to t%6e -i!'i$li %r> %'tio %(%i !t % .e.,er if !o -ire'te- ,> the % 5Se'*ritie! % - E#'h% (e ;o%r- of I -i%<. 11. After recei'ing the report of the result of an en*uiry (ade under clause (b) of subsection (3) of section # of the Act, the % 4Securities and 7xchange 8oard of India: (ay ta)e such action as they dee( proper and, in particular, (ay direct the go'erning body of the stoc) exchange to ta)e such disciplinary action against the offending (e(ber, including fine, expulsion, suspension or any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney, as (ay be specified by the % 4Securities and 7xchange 8oard of India:3 notwithstanding anything to the contrary contained in the rules or bye+laws of the stoc) exchange concerned, the go'erning body shall gi'e effect to the directions of the % 4Securities and 7xchange 8oard of India: in this behalf and shall not in any (anner co((ute, re'o)e or (odify the action ta)en in pursuance of such directions, without the prior appro'al of the % 4Securities and 7xchange 8oard of India:0 .he % 4Securities and 7xchange 8oard of India: (ay, howe'er, either of its own (otion or on the representation of the (e(ber concerned, (odify or withdraw its direction to the go'erning body0 A*-it of %''o* t! of .e.,er!. 1". 7'ery (e(ber shall get his accounts audited by a chartered accountant whene'er such audit is re*uired by the % 4Securities and 7xchange 8oard of India:0 ?ith-r%/%l of re'o( itio . 1). .he written notice referred to in section " of the Act shall be in 6or( C0
! Substituted %0 Ibid0 %
by 60 Eo0 L3/LS7L!$, dated %#0 00 !!$0
Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> re'o( i!e- !to'6 e#'h% (e. 13. 7'ery recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years, (1) ?inute boo)s of the (eetings of(a) (e(bers3 (b) go'erning body3 (c) any standing co((ittee or co((ittees of the go'erning body or of the general body of (e(bers0
(2) Register of (e(bers showing their full na(es and addresses0 Khere any (e(ber of the stoc) exchange is a fir(, full na(es and addresses of all partners shall be shown0 (3) Register of authorised cler)s0 (4) Register of re(isiers of authorised assistants0 (5) Record of security deposits0 (6) ?argin deposits boo)0 (7) =edgers0 (8) Mournals0 (9) Cash boo)0 (10) 8an) pass+boo)0 ;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> .e.,er of % re'o( i!e- !to'6 e#'h% (e. 15. ( ) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years , (a) Register of transactions ( a!da boo))0 (b) ClientsJ ledger0 (c) &eneral ledger0 (d) Mournals0 (e) Cash boo)0 (f) 8an) pass+boo)0 (g) 9ocu(ents register showing full particulars of shares and securities recei'ed and deli'ered0 (2) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following docu(ents for a period of two years, (a) ?e(berJs contract boo)s showing details of all contracts entered into by hi( with other (e(bers of the sa(e exchange or counterfoils or duplicates of (e(os of confir(ation issued to such other (e(bers0 (b) Counterfoils or duplicates of contract notes issued to clients0 (c) Kritten consent of clients in respect of contracts entered into as principals0 @% er of i 7*ir> i rel%tio to the %ff%ir! of the (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e or the %ff%ir! of % > .e.,er of the !to'6 e#'h% (e i rel%tio to the !to'6 e#'h% (e. 18. ( )(a) .he person or persons appointed by the %%4Securities and 7xchange 8oard of India: to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act shall hereafter in this rule be referred to as the Nin*uiring authorityJ3 (b) where the in*uiring authority consists of two or (ore persons, one of the( shall be appointed as the chair(an or senior (e(ber thereof3 (c) the in*uiring authority shall hand o'er a state(ent of issues to be in*uired into to the go'erning body or the (e(ber concerned, as the case (ay be, who will be gi'en a reasonable opportunity to state their or his side of the case3 (d) if any witness is called for exa(ination, an opportunity shall be pro'ided to the go'erning body or the (e(ber whose affairs are being in*uired into, as the case (ay be, to cross+exa(ine such witness3 (e) where the in*uiring authority consists of (ore than one person, the 'iews of the (aDority shall be dee(ed to represent the findings of such authority and, in the e'ent of
an e*uality of 'otes, the chair(an or senior (e(ber shall ha'e a casting 'ote3 (f) the in*uiring authority shall sub(it its report in writing to the %%4Securities and 7xchange 8oard of India: within the period specified in the order of appoint(ent3 (g) te(porary absence fro( any hearing or hearings of any (e(ber of the in*uiring authority shall not 'itiate its proceedings0 (%) Khere the %%4Securities and 7xchange 8oard of India: has directed the go'erning body of a stoc) exchange to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act, the go'erning body concerned shall appoint one or (ore (e(bers thereof to (a)e the in*uiry and the pro'isions of sub+rule ( ) shall apply "!tati# "!tandi# to such in*uiry0 S*,.i!!io of % *%l re$ort. 17. ( ) 7'ery recognised stoc) exchange shall before the 3 st day of Manuary in each year or within such extended ti(e as the %34Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, allow, furnish the %34Securities and 7xchange 8oard of India: annually with a report about its acti'ities during the preceding calendar year, which shall inter alia contain detailed infor(ation about the following (atters , (a) changes in rules and bye+laws, if any3 (b) changes in the co(position of the go'erning body3 (c) any new sub+co((ittees set up and changes in the co(position of existing ones3
%% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# %3 Ibid0
(d) ad(issions, re+ad(issions, deaths or resignations of (e(bers3 (e) disciplinary action against (e(bers3 (f) arbitration of disputes (nature and nu(ber) between (e(bers and non+(e(bers3 (g) defaults3 (h) action ta)en to co(bat any e(ergency in trade3 (i) securities listed and de+listed3 and (j) securities brought on or re(o'ed fro( the forward list0 (%) 7'ery recognised stoc) exchange shall within one (onth of the date of the holding of its annual general (eeting, furnish the %$4Securities and 7xchange 8oard of India: with a copy of its audited balance+sheet and profit and loss account for its preceding financial year0 S*,.i!!io of $erio-i'%l ret*r !. 17A. 7'ery recognised stoc) exchange shall furnish the %$4Securities and 7xchange 8oard of India: periodical returns relating to(i) the official rates for the securities enlisted thereon3 (ii) the nu(ber of shares deli'ered through the clearing house3 (iii) the (a)ing+up prices3 (iv) the clearing house progra((es3 (v) the nu(ber of securities listed and de+listed during the pre'ious three (onths3 (vi) the nu(ber of securities brought on or re(o'ed fro( the forward list during the pre'ious three (onths3 and (vii) any other (atter as (ay be specified by the %$4Securities and 7xchange 8oard of India:0 @% er of $*,li'%tio of ,>e0l%/! for 'riti'i!.. 1:. .he bye+laws to be (ade, a(ended or re'ised under the Act shall be published for
criticis( in accordance with the pro'isions of section %3 of the &eneral Clauses Act, >!/ both in the &aFette of India and Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate0 Re7*ire.e t! /ith re!$e't to the li!ti ( of !e'*ritie! o % re'o( i!e- !to'6 e#'h% (e. 19. ( ) A public co(pany as defined under the Co(panies Act, !"#, desirous of getting its securities listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars ,
%$ Ibid0
(a) ?e(orandu( and articles of association and, in the case of a debenture issue, a copy of the trust deed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any securities for subscription or sale during the last fi'e years0 (d) Copies of balance+sheets and audited accounts for the last fi'e years, or in the case of new co(panies, for such shorter period for which accounts ha'e been (ade up0 (e) A state(ent showing(i) di'idends and cash bonuses, if any, paid during the last ten years (or such shorter period as the co(pany has been in existence, whether as a pri'ate or public co(pany), (ii) di'idends or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents with or between ,(i) 'endors andLor pro(oters, (ii) underwriters and sub+underwriters, (iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents with(i) (anaging agents and secretaries and treasurers, (ii) selling agents, (iii) (anaging directors and technical directors, (iv) general (anager, sales (anager, (anager or secretary0 (h) Certified copy of e'ery letter, report, balance+sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering securities for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents0 (j) A brief history of the co(pany since its incorporation gi'ing details of its acti'ities including any reorganisation, reconstruction or a(alga(ation, changes in its capital structure, (authorised, issued and subscribed) and debenture borrowings, if any0
(k) <articulars of shares and debentures issued-(i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s including an option for the issue of any )ind of the securities granted to any person0 (") Certified copies of%"4(i) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3: (ii) agree(ents, if any, with the Industrial 6inance Corporation, Industrial Credit and In'est(ent Corporation and si(ilar bodies0 (n) <articulars of shares forfeited0 ($) A list of highest ten holders of each class or )ind of securities of the co(pany as on the date of application along with particulars as to the nu(ber of shares or debentures held by and the address of each such holder0 (%) <articulars of shares or debentures for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0 (%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant co(pany shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer, (ii) that the fully paid shares will be free fro( all lien, while in the case of partly paid shares, the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such shares, (iii) that any a(ount paid+up in ad'ance of calls on any share (ay carry interest but shall not entitle the holder of the share to participate in respect thereof, in a di'idend subse*uently declared, (iv) there will be no forfeiture of unclai(ed di'idends before the clai( beco(es barred by law, (v) that option or right to call of shares shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the securities of a co(pany which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0
%" Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 <rior to its substitution, sub+clause (i), read as under, 1(i) letters of consent of the Controller of Capital Issues02
%#4(b)
(i) At least twenty fi'e per cent0 of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent3 or (ii) At least ten per cent of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent if the post issue capital of the
co(pany calculated at offer price is (ore than four thousand crore rupees, <ro'ided that the re*uire(ent of post issue capital being (ore than four thousand crore rupees shall not apply to a co(pany whose draft offer docu(ent is pending with the Securities and 7xchange 8oard of India on or before the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, if it satisfies the conditions prescribed in clause (b) of sub+rule % of rule ! of the Securities Contracts (Regulation) Rules, !"# as existed prior to the date of such co((ence(ent, %/4<ro'ided further that the co(pany, referred to in sub clause (ii), shall increase its public shareholding to at least twenty fi'e per cent, within a
%# Substituted
by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, clause (b) as a(ended by the A(end(ent Rules, %00 , w0e0f0 0/00#0%00 , read as under, 1(b) At least 0 per cent of each class or )ind of securities issued by a co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted subDect to the following conditions, (a) (ini(u( %0 la)h securities (excluding reser'ations, fir( allot(ent and pro(otersJ contribution) was offered to the public3 (b) the siFe of the offer to the public, i&e&' the offer price (ultiplied by the nu(ber of securities offered to the public was (ini(u( Rs0 00 crores3 and (c) the issue was (ade only through boo) building (ethod with allocation of #0 per cent of the issue siFe to the *ualified institutional buyers as specified by the Securities and 7xchange 8oard of India, 4ro+i-e- that if a co(pany does not fulfil the conditions, it shall offer at least %" per cent of each class or )ind of securities to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted, 4ro+i-e- f*rther that a recognised stoc) exchange (ay relax any of the conditions with the pre'ious appro'al of the Securities and 7xchange 8oard of India, in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#), and subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*6or the purpose of this clause, it is hereby clarified that where any part of the securities sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental 6ire and &eneral Insurance Co(pany =i(ited and the Hnited 6ire and &eneral Insurance Co(pany =i(ited or Hnit .rust of India, the total subscription to the securities, whether by one or (ore of such bodies, shall not for( part of the 0 per cent or %" per cent of the securities, as the case (ay be, to be offered to the public02 %/ Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 <rior to its substitution, second pro'iso, read as under, 1<ro'ided further that the co(pany, referred in sub+clause (ii), shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of atleast fi'e per
period of three years fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India0: %>4GGG:: %!4(c) Eotwithstanding anything contained in clause (b), a public sector co(pany, shall offer and allot at least ten per cent, of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares to public in ter(s of an offer docu(ent0: (3) A co(pany applying for listing shall, as a condition precedent, underta)e inter alia(a) (i) that letters of allot(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to
that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been posted, (ii) that letters of right will be issued si(ultaneously, (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the securities to which they relate, (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right, (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or di'idend on the securities will be calculated, (b) to issue, when so re*uired, receipts for all securities deposited with it whether for registration, sub+di'ision, exchange or for other purposes 3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of certificates and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (bb) to issue, when so re*uired, consolidation and renewal certificates in deno(inations of the (ar)et unit of trading to split certificates, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3
cent per annu( beginning fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India,2 %> C(itted, ibid <rior to its o(ission, third pro'iso, read as under, 1<ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase beings its public shareholding to the le'el of twenty fi'e per cent in that year02 %! Inserted, ibid0
(c) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders, and (ii) to 'erify when the co(pany is unable to issue certificates or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (d) on production of the necessary docu(ents by shareholders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or certificate of the Controller of 7state 9uty or si(ilar other docu(ent has been duly exhibited to
and registered by the co(pany3 (e) to issue certificates in respect of shares or debentures lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance certificates within the sa(e period where the transfer is acco(panied by a larger certificate3 (f) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a di'idend or the issue of right or bonus share will be considered3 (g) to reco((end or declare all di'idends andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all di'idends andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (h) to notify the stoc) exchange of any (aterial change in the general character or nature of the co(panyJs business3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (anaging agent or secretaries and treasurers, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued, copies of all other notices and circulars sent to the shareholders including proceedings of ordinary and extraordinary general (eetings of the co(pany and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the shareholders of any new issue of securities whether by way of right, pri'ilege bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited securities or the issue of securities held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of di'idend or issue of right or bonus shares or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s (or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its shareholders or debentureholders) and specifying the purpose or purposes for which the transfer boo)s are to be closed (or the record is to be ta)en)3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority subDect to which the issue is proposed to be (ade ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after each annual general (eeting of at least ten principal holders of each class of security of the co(pany along with particulars as to the nu(ber of shares or debentures held by,
and address of, each such holder3 (+) to grant to shareholders the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e not being less than four wee)s within which to record, exercise, or renounce such rights, pri'ileges and benefits and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3 (r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any securities listed on the exchange, (ii) of the intention to (a)e a drawing of such securities, inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing of the balance) for the drawing, (iii) of the a(ount of securities outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the shareholders to apprise the position of the co(pany and to a'oid the establish(ent of a false (ar)et in the shares of the co(pany3 (t) (t)that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 304($) An application for listing shall be necessary in respect of the following, (a) all new issues of any class or )ind of securities of a co(pany to be offered to the public3 (b) all further issues of any class or )ind of securities of a co(pany if such class or )ind of securities of the co(pany are already listed on a recognised stoc) exchange0: (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the securities of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 3 44ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any security, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and its orders shall be carried out by the stoc) exchange0: 3%4(#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore
or re+ad(it to dealings any securities suspended or withdrawn fro( the list0: 334(#A) 7xcept as otherwise pro'ided in these rules or per(itted by the Securities and 7xchange 8oard of India under sub+rule (/), all re*uire(ents with respect to listing
30 Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, sub+rule ($), read as under, 1($) A fresh application for listing will be necessary in respect of all new issues desired to be dealt in, pro'ided that, where such new securities are identical in all respects with those already listed, ad(ission to dealings will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new issues0 7xplanation, Shares are identical in all respects only if(a) they are of the sa(e no(inal 'alue and the sa(e a(ount per share has been called up3 (b) they are entitled to di'idend at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the di'idend payable on each share will a(ount to exactly the sa(e su(, net and gross3 and (c) they carry the sa(e rights in all other respects02 3 Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%0000 7arlier, the second pro'iso was a(ended by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 3% Substituted by the Securities Contracts (Regulation) (A(end(ent), %000, w0e0f0 0>00>0%0000 7arlier, subrule (#) was a(ended by the Securities Contracts (Regulation) (A(end(ent), !!#, w0e0f0 %30 %0 !!#0 33 Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!0>0%0 00 <rior to its substitution, sub+rule (#A) as a(ended by the Securities Contracts
prescribed by these rules shall, so far as they (ay be, also apply to a public sector co(pany0: 3$4GGG: (/) .he 3"4Securities and 7xchange 8oard of India: (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect to listing prescribed by these rules0 3#4Co ti *o*! Li!ti ( Re7*ire.e t. 19A. ( ) 7'ery listed co(pany 3/4other than public sector co(pany: shall (aintain public shareholding of at least twenty fi'e per cent0, 3>4<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent, on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall increase its public shareholding to at least twenty fi'e per cent, within a period of three years fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India0 7xplanation, 6or the purposes of this sub+rule, a co(pany whose securities has been listed pursuant to an offer and allot(ent (ade to public in ter(s of sub+clause (ii) of clause (b) of sub+rule (%) of rule !, shall (aintain (ini(u( twenty fi'e per cent, public shareholding fro( the date on which the public shareholding in the co(pany reaches the le'el of twenty fi'e percent in ter(s of said sub+clause0: (%) Khere the public shareholding in a listed co(pany falls below twenty fi'e per cent0 at any ti(e, such co(pany shall bring the public shareholding to twenty fi'e per cent0
(Regulations)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 and &SR % (7) w0e0f0 0!0030 !!", read as under, 1(#A) All the re*uire(ents with respect to listing and continuous listing prescribed by these rules, shall so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature ,2 3$ C(itted by the Securities Contracts (Regulation)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its o(ission, pro'iso, as substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# and inserted by &SR %! (7) dated %/0030 !!", read as under,
1<ro'ided that a recognised stoc) exchange (ay relax the re*uire(ent of offer to public for subscription of atleast twenty+fi'e percent of the each class or )ind of securities issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e02 3" Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent), Rules, !!#, w0e0f0 %30 %0 !!#0 3# Inserted by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 3/ Inserted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3> Substituted, ibid0 <rior to substitution, pro'isos, read as under, 1<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of at least fi'e per cent per annu( beginning fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India, <ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase brings its public shareholding to the le'el of twenty fi'e per cent in that year02
within a (axi(u( period of twel'e (onths fro( the date of such fall in the (anner specified by the Securities and 7xchange 8oard of India0: 3!4(3) Eotwithstanding anything contained in this rule, e'ery listed public sector co(pany shall (aintain public shareholding of at least ten per cent0, <ro'ided that a listed public sector co(pany+ (a) which has public shareholding below ten per cent, on the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of three years fro( the date of such co((ence(ent3 (b) whose public shareholding reduces below ten per cent, after the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of twel'e (onths fro( the date of such reduction,0: $04Re7*ire.e t! /ith re!$e't to the li!ti ( of * it! or % > other i !tr*.e t of % Colle'ti+e I +e!t.e t S'he.e o % re'o( i!e- !to'6 e#'h% (e. "=. ( ) A Collecti'e In'est(ent ?anage(ent Co(pany (CI?C) which is desirous of getting its any collecti'e in'est(ent sche(e listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars , (a) Certificate of incorporation, (e(orandu( and articles of association of the co(pany and the copy of the trust deed of the sche(e intended to be listed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any unit or other instru(ent for subscription or sale during the last fi'e years, or in the case of a new co(pany, such shorter period during which the co(pany has been in existence0 (d) Copies of balance sheets and audited accounts for the last fi'e years, or in the case of a new co(pany, for such co(pleted financial year for which accounts ha'e been (ade up0 (e) A state(ent showing,(i) returns and cash bonuses, if any, paid during the last ten years (or such
shorter period as the co(pany has been in existence whether as a pri'ate or public co(pany)3 (ii) returns or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents pertaining to each sche(e of the co(pany with or between,(i) 'endors andLor pro(oters3 (ii) underwriters and sub+underwriters3
3! Inserted $0 Inserted
by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 0 by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%000
(iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents pertaining to each sche(e of a co(pany with(i) selling agents and other ser'ice pro'iders3 (ii) (anaging directors and technical directors3 (iii) general (anager, sales (anager, (anager or secretary0 (h) Certified copies of e'ery letter, report, balance sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering units or any other instru(ents of the sche(e for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents pertaining to such sche(e0 (j) A brief history of the Co(pany since its incorporation gi'ing details of its acti'ities including any re+organisation, reconstruction or a(alga(ation, changes in its capital structure (authorised, issued and subscribed) and debenture borrowings, if any, and the perfor(ance of other collecti'e in'est(ent sche(es of the co(pany0 (k) <articulars of units of the sche(e andLor shares, debentures of the co(pany issued (i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s granted to any person pertaining to such sche(e0 (") Certified copies of(i) certificate of registration granted by the Securities and 7xchange 8oard of India3 (ii) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3 (iii) agree(ents, if any, with any public financial institution as specified in section $A of the Co(panies Act, !"# ( of !"#)0 (n) A list of the highest ten holders of units of each sche(e of the co(pany as on the date of application along with particulars as to the nu(ber of units held by and the address of each such holder0 ($) <articulars of units of the sche(e for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0
(%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer of units of a particular sche(e3 (ii) that the fully paid units issued under the sche(e will be free fro( all lien, while in the case of partly paid units the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such units3 (iii) that any a(ount paid+up in ad'ance of calls on any units (ay carry interest but shall not entitle the holder of the unit to participate in respect thereof, in a return subse*uently declared3 (iv) there will be no forfeiture of unclai(ed returns before the clai( beco(es barred by law3 (v) that option or right to call of units shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the units of a sche(e which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0 (b) At least twenty+fi'e per cent of the units or any other instru(ent of a sche(e issued by the co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and not (ore than ninety days, and that applications recei'ed in pursuance of such offer were allotted fairly and unconditionally , 4ro+i-e- that a recognised stoc) exchange (ay relax this re*uire(ent, with the pre'ious appro'al of the Securities and 7xchange 8oard of India in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#) and subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*Khere any part of the units or any other instru(ents sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely, the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental Insurance Co(pany =i(ited and the Hnited Insurance Co(pany =i(ited, or Hnit .rust of India, the total subscription to the units or any other instru(ent, whether by one or (ore of such bodies, shall not for( part of the twenty+fi'e per cent of the units or any other instru(ent to be offered to the public0 (3) A co(pany applying for listing of a sche(e shall, as a condition precedent, underta)e, inter alia,(a) (i) that letters of allot(ent of units or any other instru(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been
posted3 (ii) that letters of right will be issued si(ultaneously3 (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and, exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the units or any other instru(ent to which they relate3 (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right3 (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or return on the units or any other instru(ent will be calculated3 (b) to issue, when so re*uired, receipts for all units and any other instru(ent deposited with it whether for registration, sub+di'ision, exchange or for other purposes3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of units and any other instru(ent and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (c) to issue, when so re*uired, consolidation and renewal units or any other instru(ent in deno(inations of the (ar)et unit of trading, to split units or any other instru(ent, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3 (d) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders3 and (ii) to 'erify when the co(pany is unable to issue units or any other instru(ents or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (e) on production of the necessary docu(ents by unit holders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or si(ilar other docu(ent has been duly exhibited to and registered by the co(pany3 (f) to issue certificates in respect of units or any other instru(ent lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance units or any other instru(ent within the sa(e period where the transfer is acco(panied by a larger unit or any other instru(ent certificate3 (g) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a return or the issue or right or bonus units or
any other instru(ent will be considered3 (h) to reco((end or declare all returns andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all returns andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts of such sche(e as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued copies of all other notices and circulars sent to the unitLother instru(ent holders regarding any i(portant de'elop(ent or resolutions passed by the co(pany affecting the perfor(ance of the sche(e and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the unitLany other instru(ent holders, of any new issue of unitsLother instru(ents whether by way of right, pri'ilege, bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited unitsLother instru(ents or the issue of unitsLother instru(ents held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of unit capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of returns or issue of right or bonus unitsLany other instru(ents in the sche(e or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its unitLother instru(ent holders and specifying the purpose or purposes for which the transfer boo)s are to be closed or the record is to be ta)en3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority, subDect to which the issue is proposed to be (ade, ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after the preparation of annual accounts of at least ten principal holders of each class of unitsLany other instru(ents of the co(pany along with particulars as to the nu(ber of unitsLany other instru(ent held by, and address of, each such holder3 (+) to grant to unitLany other instru(ent holders of the sche(e the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e, not being less than four wee)s, within which to record, exercise, or renounce such rights, pri'ileges and benefits, and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3
(r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any unitLother instru(ent listed on the exchange3 (ii) of the intention to (a)e a drawing of such unitLother instru(ent inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing off the balance) for the drawing3 (iii) of the a(ount of unitsLother instru(ents outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the unitLany other instru(ent holders to appraise the position of the sche(e and to a'oid the establish(ent of a false (ar)et in the unitsLany other instru(ents of the co(pany3 (t) that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 ($) A fresh application for listing will be necessary in respect of all new sche(es desired to be dealt in , 4ro+i-e- that, where such new unitsLother instru(ents are identical in all respects with those already listed, ad(ission to dealing will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new sche(es0 ()%lanati$n0-HnitsLany other instru(ents are identical in all respects only if(a) they are issued under the sa(e sche(e3 (b) they are of the sa(e no(inal 'alue and the sa(e a(ount per unitLother instru(ents has been called up3 (c) they are entitled to returns at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the return payable on each unitLother issue will a(ount to exactly the sa(e su(, net and gross3 and (d) they carry the sa(e rights in all other respects0 (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the unitsLother instru(ents of a sche(e of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 4ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any unitLother instru(ent of a collecti'e in'est(ent sche(e, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an
opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and thereupon the orders of the Securities Appellate .ribunal shall be carried out by the stoc) exchange0 (#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore or read(it to dealings any unitsLother instru(ents suspended or withdrawn fro( the list0 (/) All the re*uire(ents with respect to listing prescribed by these rules, shall, so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature , 4ro+i-e- that a recognised stoc) exchange (ay relax the re*uire(ent of offer to the public for subscription of at least twenty+fi'e per cent of the units or any other instru(ent of a collecti'e in'est(ent sche(e issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 (>) .he Securities and 7xchange 8oard of India (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect of listing prescribed by these rules0: $ 4Deli!ti ( of !e'*ritie!. "1. A recogniFed stoc) exchange (ay, without preDudice to any other action that (ay be ta)en under the Act or under any other law for the ti(e being in force, delist any securities listed thereon on any of the following grounds in accordance with the regulations (ade by the Securities and 7xchange 8oard of India, na(ely,(a) the co(pany has incurred losses during the preceding three consecuti'e years and it has negati'e networth3 (b) trading in the securities of the co(pany has re(ained suspended for a period of (ore than six (onths3 (c) the securities of the co(pany ha'e re(ained infre*uently traded during the preceding three years3 (d) the co(pany or any of its pro(oters or any of its director has been con'icted for failure to co(ply with any of the pro'isions of the Act or the Securities and 7xchange 8oard of India Act, !!% or the 9epositories Act, !!# (%% of !!#) or rules, regulations, agree(ents (ade thereunder, as the case (ay be and awarded a penalty of not less than rupees one crore or i(prison(ent of not less than three years3 (e) the addresses of the co(pany or any of its pro(oter or any of its directors, are not )nown or false addresses ha'e been furnished or the co(pany has changed its registered office in contra'ention of the pro'isions of the Co(panies Act, !"# ( of !"#)3 or
$
Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %00>, w0e0f0 000#0%00!
(f) shareholding of the co(pany held by the public has co(e below the (ini(u( le'el applicable to the co(pany as per the listing agree(ent under the Act and the co(pany has failed to raise public holding to the re*uired le'el within the ti(e specified by the recogniFed stoc) exchange , 4ro+i-e- that no securities shall be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) If the securities is delisted under clause ( ),
(a) the co(pany, pro(oter and director of the co(pany shall be Dointly and se'erally liable to purchase the outstanding securities fro( those holders who wish to sell the( at a fair price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India, under the Act3 and (b) the said securities shall be delisted fro( all recogniFed stoc) exchanges0 (3) A recogniFed stoc) exchange (ay, on the re*uest of the co(pany, delist any securities listed thereon in accordance with the regulations (ade under the Act by Securities and 7xchange 8oard of India, subDect to the following conditions, na(ely ,(a) the securities of the co(pany ha'e been listed for a (ini(u( period of three years on the recogniFed stoc) exchange3 (b) the delisting of such securities has been appro'ed by the two+third of public shareholders3 and (c) the co(pany, pro(oter andLor the director of the co(pany purchase the outstanding securities fro( those holders who wish to sell the( at a price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India under the Act, 4ro+i-e- that the condition at (c) (ay be dispensed with by Securities and 7xchange 8oard of India if the securities re(ain listed at least on the Eational Stoc) 7xchange of India =i(ited or the 8o(bay Stoc) 7xchange =i(ited0: FORM A ( ee Rules 3 and /) A$$li'%tio for re'o( itio 1re e/%l of re'o( itio of % !to'6 e#'h% (e * -er !e'tio ) of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 .o 00000000000000000000000000000000000000 00000000000000000000000000000000000000 !bject,*A%%licati$n f$r rec$gniti$n-rene.al $f rec$gniti$n $f a #t$ck e)change !nder #ecti$n 3 $f the ec!ritie# /$ntract# (0eg!lati$n) Act' 1956& Sir, <ursuant to the $%4Securities and 7xchange 8oard of India: Eotification Eo0 00000000000000000000000000 00000000000000000 dated 000000000000000000000000000000000LCertificate of recognition dated0000000000000000000000000000000KeLI on behalf of 000000000000000000 (na(e and address of stoc) exchange) being a stoc) exchange as defined in section % of the Securities Contracts
$% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
(Regulation) Act, !"# hereby apply for recognitionLrenewal of recognition for the purposes of the said Act in respect of contracts in securities0 ". 6our copies of the rules, (e(orandu( and articles of association relating in general to the constitution and (anage(ent of the stoc) exchange and four copies of the bye+laws for the regulation and control contracts in securities are enclosed0 ). All the necessary infor(ation re*uired in the Annexure to this 6or( is enclosed0 Any additional infor(ation will be furnished as and when called for by the $34Securities and 7xchange 8oard of India:0 3. KeLI on behalf of the said stoc) exchange hereby underta)e to co(ply with the re*uire(ents of section $ of the said Act and such other conditions and ter(s as (ay be contained in the certificate of recognition or be prescribed or i(posed subse*uently0 5. .reasury Receipt Eo0 000000dated000000for Rs000000000000is attached0
Oours faithfully, Signature of applicant ANNEAURE TO 2OR@ BAC Part I - General 0 Ea(e of the applicant stoc) exchange0 %0 Address0 30 9ate of establish(ent0 $0 Is your exchange a Doint stoc) co(pany (state whether public or pri'ate) registered under the Indian Co(panies Act or an association for profit or otherwise P If it is organised on so(e other basis, this (ay be stated0 "0 &i'e details of your capital structure and attach three copies of the audited balance sheets and profit and loss account of the 7xchange for the preceding three years0 Part II - Membership #0 State the nu(ber of (e(bers at the ti(e of application0 Also specify how (any are inacti'e0 /0 State whether there is any pro'ision, resolution or con'ention for li(iting the nu(ber of (e(bers and whether in pursuance thereof you ha'e fixed a ceiling on the nu(ber of (e(bers that you would ta)e0 >0 9o you insist on any (ini(u( *ualifications and experience before enrolling new (e(bers P If so gi'e details0 !0 State the different classes of (e(bers, if any, the nu(ber thereof and the pri'ileges enDoyed by each class0 Khat is the procedure followed by your exchange for the ad(ission of different classes of new (e(bers P 00 Khat are the rates of your annual subscription in respect of the different classes of (e(bers P 0 9o you collect any security deposit fro( your (e(bers P If so, gi'e details and also state the (anner in which such deposits are utilised and the rate of interest allowed, if any0
$3 Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
%0 9o you collect any ad(ission or entrance fees fro( your (e(bers or fro( partners of fir(s who are (e(bers P If so, how (uch P 30 9o you insist on your (e(bers and partners of fir(s who are (e(bers di'esting the(sel'es of other acti'ities either as principal or as e(ployee P $0 9o your rules per(it fir(s to beco(e (e(bers P If so, is it incu(bent on (e(bers to see) the appro'al of the go'erning body before ad(itting new partners P State the conditions, if any, laid down in your rules for the ad(ission of such partners0 "0 If your rules do not per(it of fir(s being enrolled as (e(bers, do you per(it indi'idual (e(bers to for( a partnership P State the procedure followed for the recognition of such partnership0 #0 9o you per(it (e(bers to wor) in partnership with non+(e(bers P If so, how far such non+(e(bers subDect to the control of the stoc) exchange P Part III - Governing Body /0 Khat is the present strength of your go'erning body P &i'e details of the constitution, powers of (anage(ent, election and tenure of office of (e(bers of the go'erning body, and the (anner in which its business is transacted0 >0 Are any trade or co((ercial interest represented on your go'erning body P If so,
gi'e details of interests represented0 !0 9o you associate shareholders of in'estors associations with the (anage(ent of your exchange P If so, state the (anner in which it is done0 %00 Are there any &o'ern(ent representati'es on your go'erning body P If so, furnish their na(es0 % 0 9o your rules pro'ide for the direct election by (e(bers of any other bodies or co((ittees, apart fro( the go'erning body P If so, gi'e details of their constitution, tenure, powers and functions0 %%0 9o you ha'e any pro'ision for the appoint(ent of standing or ad h$c subco((ittees of the go'erning body P If so, furnish details of the (ethod of their appoint(ent, ter(s of office, powers and functions0 %30 &i'e the designations, powers and duties of principal office+bearers of your exchange0 Are any of these office+bearers in the pay of the stoc) exchange P If so, gi'e details as to the (ode of their appoint(ent, tenure of office and re(uneration0 Part IV - Trading %$0 9o you ha'e a trading ring P If not, how do you carry on the business P &i'e details0 %"0 State the different )inds of contracts in use on your exchange e&g&' spot, ready and forward0 State the period of deli'ery and pay(ent in each case0 %#0 &i'e details of business hours for each type of contract0 %/0 &i'e details of the scale of bro)erage and other charges, if any, prescribed by your exchange0 %>0 9o you prescribe standard for(s of contract for the use of your (e(bers P Attach three copies of each such contract for(0 %!0 9o you classify your (e(bers into bro)ers and Dobbers P If so, specify the bye+law under which this is done0 300 9o you ha'e a syste( of registration of re(isiers andLor authorised cler)s P If so, gi'e details as to their *ualifications, obligations and rights, etc0 3 0 9o you ha'e any regulations regarding dealings by (e(bers on their own account whether in the nature of 1aravani (day+to+day) or otherwise P 3%0 9o you ha'e any pro'isions for regulating the 'olu(e of business done by any indi'idual (e(ber other than through a syste( of (argins P If so, gi'e details0 330 Khat pro'isions ha'e you (ade for periodical settle(ent of contracts and differences thereunder, the deli'ery of, and pay(ent for securities and the passing of deli'ery orders P 3$0 9o you ha'e a clearing house for the settle(ent of contracts P If so, gi'e details of its organisation and (anage(ent0 3"0 If you ha'e clearing house, what returns do the (e(bers of your exchange sub(it regarding the transactions cleared through such clearing house P 9oes the exchange as) for any regular returns in respect of transactions settled outside the clearing house P Sub(it three copies of for(s used in this connection0 3#0 Iow do you fix, alter or postpone the dates of settle(ent P 3/0 Iow do you deter(ine and declare (a)ing+up prices P 3>0 9o you ha'e any arrange(ents for (a)ing or recording of bargains P 3!0 Ia'e you any arrange(ents for recording and publishing (ar)et rates including opening, closing, highest and lowest rates P $00 Khat pro'isions ha'e you (ade for regulating-(a) the entering into contracts, their
perfor(ance and rescission, including contracts , (i) between (e(bers, (ii) between a (e(ber and his constituent, and (iii) between a (e(ber and a non+(e(ber3 (b) the conse*uences of breach, default or insol'ency on the part of (e(bers whether acting as buyers, sellers or inter(ediaries 3 and (c) 2havala#3 and other (atters relating to conduct of business of (e(bers in the exchange P $ 0 9o you prescribe (argin re*uire(ents P If yes, gi'e details0 $%0 9o you prescribe (axi(u( and (ini(u( prices for securities P If so, how and under what conditions0 $30 9o you pro'ide any safeguards for the pre'ention of Nbulls*ueeFesJ and 3 NbearraidsJ and for (eeting e(ergencies in trade P &i'e details0 $$0 Khat are the (easures adopted by you to regulate or prohibit ad'ertising or issue of circulars by your (e(bers P $"0 Khat are the disciplinary power with the go'erning body to enforce due co(pliance by (e(bers of the rules and bye+laws of the exchange and generally to ensure proper standard of business conduct P $#0 9o you re*uire (e(bers to supply such infor(ation or explanation and to produce such boo)s relating to their business as your go'erning body (ay re*uire P $/0 9o you publish any statistics in regard to business done on the exchange including the transactions settled through the clearing house, if (aintained P In particular, ha'e you e'ol'ed any (achinery for co(puting the 'olu(e of transactions in the different )inds of contracts per(itted on your exchange P &i'e details0 $>0 9o you ha'e any bye+laws contra'ention of which (a)es a contract 'oid P Part V - Miscellaneo s $!0 9o you ha'e any (achinery for arbitration of disputes between (e(bers andLor between (e(bers and their constituents P &i'e details0 "00 Khat are the conditions subDect to which securities are listed for dealings on your exchange P " 0 Khat are your re*uire(ents for ad(itting securities to forward+trading P "%0 9o you ha'e the right to prohibit, withdraw or suspend dealings in a listed security P If so, under what circu(stances is this right exercised P "30 Khat pro'isions ha'e you (ade for the le'y and reco'ery of fees, fines and penalties P FORM B ( ee rules # and /) $$5The Se'*ritie! % - E#'h% (e ;o%r- of I -i%< 4e. 5elhi' the 20&&&&&&&&&&&&& Eo0 000000000000000000000000000000000000.he $"4Securities and 7xchange 8oard of India:, ha'ing considered the application for recognitionLrenewal of recognition (ade under section 3 of the Securities Contracts (Regulation) Act, !"# by000000000000000000000000000000 (na(e and address of exchange) and being satisfied that it would be in the interest of the trade and also in the public interest so to do, hereby grants, in exercise of the powers conferred by section $ of the Securities Contracts (Regulation) Act, !"# recognition to the said exchange under section $ of the said Act for 0000000000000000000 yearLyears ending 0000000000000000000000%0 0000000on a per(anent basis in respect of contracts in securities subDect to the conditions stated herein below or as (ay be prescribed or i(posed hereafter0 Seal of the $#48oard: Signature of Cfficer
Note&-Application for renewal of recognition shall be (ade so as to reach the Central &o'ern(ent not less than three (onths before the expiry of the period0 (.his certificate, will also ha'e to be published as a Eotification in the &aFette of India and also in the Cfficial &aFette of the State in which principal office of the recognised stoc) exchange is situate)0 $/5FORM ! ( ee rule 3) Noti'e to !ho/ '%*!e %(%i !t the /ith-r%/%l of re'o( itio .I7 S7CHRI.I7S AE9 7ACIAE&7 8CAR9 C6 IE9IA 6!"bai' the&&&&&&&&&&& .o 0000000000000000000000000000000000000000000000000000000000000000000000000000000000
$$ Substituted
for 1&o'ern(ent of India, ?inistry of 6inance2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 $" Substituted for 1Central &o'ern(ent2, ibid0 $# Substituted for 1?inistry2, ibid0 $/ Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#
0000000000000000000000000000000000000000000000000000000000000000000000000000000000 (na(e and address of the exchange) Oou are hereby called upon to show cause on or before 0000000000000000000000000000000000000 at the office of 0000000000000000000000000000000000000000000000000000 ( designation of the officer) why the recognition granted to you under the ?inistry of 6inanceLthe Securities and 7xchange 8oard of India, Eotification Eo0 0000000000000000000000000000 dated 000000000000000000000000000000000000000 and Certificate Eo0 00000000000000000000000000000 dated 000000000000000000000000000000 should not be withdrawn for the reasons gi'en in the annexure to this notice0 8y order and in the na(e of the Securities and 7xchange 8oard of India0 Seal of the Securities and 7xchange 8oard of India0 Notifi'%tio & 4$& 576' dated 217271957&
SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< SECTIONS
80(9:6:4A0; 1. Short title, extent and co((ence(ent ". 9efinitions 0(/<=4: (5 1</> (?/@A4=( ). Application for recognition of stoc) exchanges 3. &rant of recognition to stoc) exchanges0 3A. Corporatisation and de(utualisation of stoc) exchanges 3;. <rocedure for corporatisation and de(utualisation 5. Kithdrawal of recognition 8. <ower of Central &o'ern(ent to call for periodical returns or direct in*uiries to be (ade 7. Annual reports to be furnished to Central &o'ern(ent by stoc) exchanges 7A. <ower of recognised stoc) exchange to (a)e rules restricting 'oting rights, etc :. <ower of Central &o'ern(ent to direct rules to be (ade or to (a)e rules :A. Clearing corporation 9. <ower of recognised stoc) exchanges to (a)e bye+laws 1=. <ower of Securities and 7xchange 8oard of India to (a)e or a(end byelaws of recognised stoc) exchanges 11. <ower of Central &o'ern(ent to supersede go'erning body of a recognised stoc) exchange 1". <ower to suspend business of recognised stoc) exchanges0 1"A. <ower to issue directions 1). Contracts in notified areas illegal in certain circu(stances 1)A. Additional trading floor 13. Contracts in notified areas to be 'oid in certain circu(stances 15. ?e(bers (ay not act as principals in certain circu(stances 18. <ower to prohibit contracts in certain cases 17. =icensing of dealers in securities in certain areas 17A. <ublic issue and listing of securities referred to in sub+clause ( ie) of clause (h) of section % 1:. 7xclusion of spot deli'ery contracts fro( sections 3, $, " and / 1:A. Contracts in deri'ati'e 19. Stoc) exchanges other than recognised stoc) exchanges prohibited "=. <rohibition of options in securities "1. Conditions for listing "1A. 9elisting of securities "". Right of appeal against refusal of stoc) exchanges to list securities of public co(panies ""A. Right of appeal to Securities Appellate .ribunal against refusal of stoc) exchange to list securities of public co(panies "";. <rocedure and powers of Securities Appellate .ribunal ""C. Right to legal representation ""D. =i(itation ""E. Ci'il court not to ha'e Durisdiction
""2. Appeal to Supre(e Court 8(4A91:( A45 80</(5A0( "). <enalties ")A. <enalty for failure to furnish infor(ation, return, etc0 ");. <enalty for failure by any person to enter into an agree(ent with clients ")C. <enalty for failure to redress in'estorsJ grie'ances ")D. <enalty for failure to segregate securities or (oneys of client or clients ")E. <enalty for failure to co(ply with pro'ision of listing conditions or delisting conditions or grounds ")2. <enalty for excess de(aterialisation or deli'ery of unlisted securities ")G. <enalty for failure to furnish periodical returns, etc0 ")D. <enalty for contra'ention where no separate penalty has been pro'ided ")0I. <ower to adDudicate ")E. 6actors to be ta)en into account by adDudicating officer ")EA. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! ")E;. Re'o+er> of %.o* t! ")F. Crediting su(s realised by way of penalties to Consolidated 6und of India ")L. Appeal to Securities Appellate .ribunal ")@. Cffences ")N. Co(position of certain offences ")0O. <ower to grant i((unity "3. Cffences by co(panies "5. Certain offences to be cogniFable "8. CogniFance of offences by courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! 6: /(99A4(<A "7. .itle to di'idends "7A. Right to recei'e inco(e fro( collecti'e in'est(ent sche(e "7;. Right to recei'e inco(e fro( (utual fund ":. Act not to apply in certain cases "9. <rotection of action ta)en in good faith "9A. <ower to delegate )=. <ower to (a)e rules )1. <ower of Securities and 7xchange 8oard of India to (a)e regulations SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< 53th Se$te.,er, 1958< A A't to $re+e t * -e!ir%,le tr% !%'tio ! i !e'*ritie! ,> re(*l%ti ( the ,*!i e!! of -e%li ( therei , 14***: ,> $ro+i-i ( for 'ert%i other .%tter! 'o e'te- there/ith. 87 it enacted by <arlia(ent in the Se'enth Oear of the Republic of India as follows ,
80(9:6:4A0; Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities Contracts (Regulation) Act, !"#0 (%) It extends to the whole of India0
Kords 1by prohibiting options and2 o(itted by the Securities =aws (A(end(ent) Act, !!", Sec0 >, w0e0f0 %"+0 + !!".
(3) It shall co(e into force on such date% as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 Defi itio !. ". In this Act, unless the context otherwise re*uires,(a) 1contract2 (eans a contract for or relating to the purchase or sale of securities3 3 4(aa) 1corporatisation2 (eans the succession of a recognised stoc) exchange, being a body of indi'iduals or a society registered under the Societies Registration Act, >#0 (% of >#0), by another stoc) exchange, being a co(pany incorporated for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities carried on by such indi'iduals or society3 (ab) 1de(utualisation2 (eans the segregation of ownership and (anage(ent fro( the trading rights of the (e(bers of a recognised stoc) exchange in accordance with a sche(e appro'ed by the Securities and 7xchange 8oard of India3: $4"4(ac): 1deri'ati'e2 includes(A) a security deri'ed fro( a debt instru(ent, share, loan, whether secured or unsecured, ris) instru(ent or contract for differences or any other for( of security3 (B) a contract which deri'es its 'alue fro( the prices, or index of prices, of underlying securities3: (b) 1&o'ern(ent security2 (eans a security created and issued, whether before or after the co((ence(ent of this Act, by the Central &o'ern(ent or a State &o'ern(ent for the purpose of raising a public loan and ha'ing one of the for(s specified in clause (2) of section % of the <ublic 9ebt Act, !$$ ( > of !$$)3 (c) 1(e(ber2 (eans a (e(ber of a recognised stoc) exchange3 (d) 1option in securities2 (eans a contract for the purchase or sale of a right to buy or sell, or a right to buy and sell, securities in future, and includes a teji' a "andi' a teji "andi' a galli' a put, a call or a put and call in securities3 (e) 1prescribed2 (eans prescribed by rules (ade under this Act3
% %0+%+
!"/ vide SRC "%>, dated #+0%+ !"/, published in the &aFette of India, 7xtra0, <t0 II, Sec0 3, p0 "$!, dated #+0%+ !"/0 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 $ Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000 " Clause (aa) renu(bered as clause (ac) by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0
(f) 1recognised stoc) exchange2 (eans a stoc) exchange which is for the ti(e
being recognised by the Central &o'ern(ent under section $3 (g) 1rules2, with reference to the rules relating in general to the constitution and (anage(ent of a stoc) exchange, includes, in the case of a stoc) exchange which is an incorporated association, its (e(orandu( and articles of association3 64(ga) 1sche(e2 (eans a sche(e for corporatisation or de(utualisation of a recognised stoc) exchange which (ay pro'ide for(i) the issue of shares for a lawful consideration and pro'ision of trading rights in lieu of (e(bership cards of (e(bers of a recognised stoc) exchange3 (ii) the restrictions on 'oting rights3 (iii) the transfer of property, business, assets, rights, liabilities, recognitions, contracts of the recognised stoc) exchange, legal proceedings by, or against, the recognised stoc) exchange, whether in the na(e of the recognised stoc) exchange or any trustee or otherwise and any per(ission gi'en to, or by, the recognised stoc) exchange3 (iv) the transfer of e(ployees of a recognised stoc) exchange to another recognised stoc) exchange3 (v) any other (atter re*uired for the purpose of, or in connection with, the corporatisation or de(utualisation, as the case (ay be, of the recognised stoc) exchange3: /4>4(gb): 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (h) 1securities2 include(i) shares, scrips, stoc)s, bonds, debentures, debenture stoc) or other (ar)etable securities of a li)e nature in or of any incorporated co(pany or other body corporate3 !4(ia) deri'ati'e3 (ib) units or any other instru(ent issued by any collecti'e in'est(ent sche(e to the in'estors in such sche(es3:
# Inserted / Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (Second A(end(ent) Act, !!!, Sec %, w0e0f0 #+ %+ !!!0 > Clause (ga) renu(bered as clause (gb) by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 ! Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000
04(ic) security receipt as defined in clause ( Cg) of section % of the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%3: 114(id) units or any other such instru(ent issued to the in'estors under any (utual fund sche(e3: %47xplanation0-6or the re(o'al of doubts, it is hereby declared that ;securities; shall not include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(bined benefit ris) on the life of the persons and in'est(ent by such
persons and issued by an insurer referred to in clause (!) of section % of the Insurance Act, !3> ($ of !3>)3: 35(ie) any certificate or instru(ent (by whate'er na(e called), issued to an in'estor by any issuer being a special purpose distinct entity which possesses any debt or recei'able, including (ortgage debt, assigned to such entity, and ac)nowledging beneficial interest of such in'estor in such debt or recei'able, including (ortgage debt, as the case (ay be3 <
0 Inserted by the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%, Sec0 $ and Schedule, w0r0e0f0 % +#+%00%0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0e0f0 %+ 0+%00$0 % Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, Sec $, w0r0e0f0 0!+0$+%0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, read as under , ;CIA<.7R BI ?ISC7==AE7CHS #0 Dalidati$n&-Eotwithstanding anything contained in any Dudg(ent, decree or order of any Court, .ribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly, any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 0e%eal and #aving#&*( ) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0; 3 Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec %, w0e0f0 %>+"+ %00/0
$4(ii) &o'ern(ent securities3 (iia) such other instru(ents as (ay be declared by the Central &o'ern(ent to be securities3 and: (iii) rights or interest in securities3 "4(i) 1spot deli'ery contract2 (eans a contract which pro'ides for,(a) actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e
town or locality3 (b) transfer of the securities by the depository fro( the account of a beneficial owner to the account of another beneficial owner when such securities are dealt with by a depository3: #4(j) 1stoc) exchange2 (eans(a) any body of indi'iduals, whether incorporated or not, constituted before corporatisation and de(utualisation under sections $A and $8, or (b) a body corporate incorporated under the Co(panies Act, !"# ( of !"#) whether under a sche(e of corporatisation and de(utualisation or otherwise, for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0: /4I ter$ret%tio of 'ert%i /or-! % - e#$re!!io !. "A. Kords and expressions used herein and not defined in this Act but defined in the Co(panies Act, !"# ( of !"#) or the Securities and 7xchange 8oard of India
$ Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, for sub+clause (ii), w0r0e0f0 30+0 + !!%0 " Substituted by the 9epositories Act, !!#, Sec 30 and Schedule, <t0 III, w0r0e0f0 %0+0!+ !!" . <rior to its substitution, clause (i) read as under , N(i) 1spot deli'ery contract2 (eans a contract which pro'ides for the actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e town or locality3J # Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (j) read as under ,N(j) 1stoc) exchange2 (eans any body of indi'iduals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0J / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
Act, !!% ( " of !!%) or the 9epositories Act, !!# (%% of !!#) shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts0: 0(/<=4: (5 1</> (?/@A4=( A$$li'%tio for re'o( itio of !to'6 e#'h% (e!. ). ( ) Any stoc) exchange, which is desirous of being recognised for the purposes of this Act, (ay (a)e an application in the prescribed (anner to the Central &o'ern(ent01: (%) 7'ery application under sub+section ( ) shall contain such particulars as (ay be prescribed, and shall be acco(panied by a copy of the bye+laws of the stoc) exchange for the regulation and control of contracts and also a copy of the rules relating in general to the constitution of the stoc) exchange and in particular, to(a) the go'erning body of such stoc) exchange, its constitution and powers of (anage(ent and the (anner in which its business is to be transacted3 (b) the powers and duties of the office bearers of the stoc) exchange3 (c) the ad(ission into the stoc) exchange of 'arious classes of (e(bers, the *ualifications for (e(bership, and the exclusion, suspension, expulsion and
re+ad(ission of (e(bers therefro( or thereinto3 (d) the procedure for the registration of partnerships as (e(bers of the stoc) exchange in cases where the rules pro'ide for such (e(bership3 and the no(ination and appoint(ent of authorised representati'es and cler)s0 Gr% t of re'o( itio to !to'6 e#'h% (e!. 3. ( ) If the Central &o'ern(ent ! is satisfied, after (a)ing such in*uiry as (ay be necessary in this behalf and after obtaining such further infor(ation, if any, as it (ay re*uire,(a) that the rules and bye+laws of a stoc) exchange applying for registration are in confor(ity with such conditions as (ay be prescribed with a 'iew to ensure fair dealing and to protect in'estors3 (b) that the stoc) exchange is willing to co(ply with any other conditions (including conditions as to the nu(ber of (e(bers) which the Central &o'ern(ent, after consultation with the go'erning body of the stoc) exchange and ha'ing regard to the area ser'ed by the stoc) exchange and its standing and the nature of the securities dealt with by it, (ay i(pose for the purpose of carrying out the obDects of this Act3 and
> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 ! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
(c) that it would be in the interest of the trade and also in the public interest to grant recognition to the stoc) exchange3 it (ay grant recognition to the stoc) exchange subDect to the conditions i(posed upon it as aforesaid and in such for( as (ay be prescribed0 (%) .he conditions which the Central &o'ern(ent %0 (ay prescribe under clause (a) of sub+section ( ) for the grant of recognition to the stoc) exchanges (ay include, a(ong other (atters, conditions relating to,(i) the *ualifications for (e(bership of stoc) exchanges3 (ii) the (anner in which contracts shall be entered into and enforced as between (e(bers3 (iii) the representation of the Central &o'ern(ent on each of the stoc) exchange by such nu(ber of persons not exceeding three as the Central &o'ern(ent (ay no(inate in this behalf3 and (iv) the (aintenance of accounts of (e(bers and their audit by chartered accountants whene'er such audit is re*uired by the Central &o'ern(ent0 (3) 7'ery grant of recognition to a stoc) exchange under this section shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office as of the stoc) exchange is situate, and such recognition shall ha'e effect as fro( the date of its publication in the &aFette of India0 % ($) Eo application for the grant of recognition shall be refused except after gi'ing an opportunity to the stoc) exchange concerned to be heard in the (atter3 and the reasons for such refusal shall be co((unicated to the stoc) exchange in writing0 %% (") Eo rules of a recognised stoc) exchange relating to any of the (atters specified in sub+section (%) of section 3 shall be a(ended except with the appro'al of the
Central &o'ern(ent0%3 "35Cor$or%ti!%tio % - -e.*t*%li!%tio of !to'6 e#'h% (e!. 3A. Cn and fro( the appointed date, all recognised stoc) exchanges (if not corporatised and de(utualised before the appointed date) shall be corporatised and de(utualised in accordance with the pro'isions contained in section $8 ,
%0 <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 % <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %% <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %3 <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 %$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
4ro+i-e- that the Securities and 7xchange 8oard of India (ay, if it is satisfied that any recognised stoc) exchange was pre'ented by sufficient cause fro( being corporatised and de(utualised on or after the appointed date, specify another appointed date in respect of that recognised stoc) exchange and such recognised stoc) exchange (ay continue as such before such appointed date0 ()%lanati$n&*6or the purposes of this section, 1appointed date2 (eans the date which the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, appoint and different appointed dates (ay be appointed for different recognised stoc) exchanges0: "554ro'e-*re for 'or$or%ti!%tio % - -e.*t*%li!%tio . 3;. ( ) All recognised stoc) exchanges referred to in section $A shall, within such ti(e as (ay be specified by the Securities and 7xchange 8oard of India, sub(it a sche(e for corporatisation and de(utualisation for its appro'al , 4ro+i-e- that the Securities and 7xchange 8oard of India, (ay, by notification in the Cfficial &aFette, specify na(e of the recognised stoc) exchange, which had already been corporatised and de(utualised, and such stoc) exchange shall not be re*uired to sub(it the sche(e under this section0 (%) Cn receipt of the sche(e referred to in sub+section ( ), the Securities and 7xchange 8oard of India (ay, after (a)ing such en*uiry as (ay be necessary in this behalf and obtaining such further infor(ation, if any, as it (ay re*uire and if it is satisfied that it would be in the interest of the trade and also in the public interest, appro'e the sche(e with or without (odification0 (3) Eo sche(e under sub+section (%) shall be appro'ed by the Securities and 7xchange 8oard of India if the issue of shares for a lawful consideration or pro'ision of trading rights in lieu of (e(bership card of the (e(bers of a recognised stoc) exchange or pay(ent of di'idends to (e(bers ha'e been proposed out of any reser'es or assets of that stoc) exchange0 ($) Khere the sche(e is appro'ed under sub+section (%), the sche(e so appro'ed shall be published i((ediately by(a) the Securities and 7xchange 8oard of India in the Cfficial &aFette3 (b) the recognised stoc) exchange in such two daily newspapers circulating in India, as (ay be specified by the Securities and 7xchange 8oard of India,
and upon such publication, notwithstanding anything to the contrary contained in this Act or any other law for the ti(e being in force or any agree(ent, award, Dudg(ent, decree or other instru(ent for the ti(e being in force, the sche(e shall ha'e effect and be binding on all persons and authorities including all (e(bers, creditors, depositors and e(ployees of the recognised stoc) exchange and on all
%" Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
persons ha'ing any contract, right, power, obligation or liability with, against, o'er, to, or in connection with, the recognised stoc) exchange or its (e(bers0 (") Khere the Securities and 7xchange 8oard of India is satisfied that it would not be in the interest of the trade and also in the public interest to appro'e the sche(e under sub+section (%), it (ay, by an order, reDect the sche(e and such order of reDection shall be published by it in the Cfficial &aFette , 4ro+i-e- that the Securities and 7xchange 8oard of India shall gi'e a reasonable opportunity of being heard to all the persons concerned and the recognised stoc) exchange concerned before passing an order reDecting the sche(e0 (#) .he Securities and 7xchange 8oard of India (ay, while appro'ing the sche(e under sub+section (%), by an order in writing, restrict(a) the 'oting rights of the shareholders who are also stoc) bro)ers of the reognised stoc) exchange3 (b) the right of shareholders or a stoc) bro)er of the recognised stoc) exchange to appoint the representati'es on the go'erning board of the stoc) exchange3 (c) the (axi(u( nu(ber of representati'es of the stoc) bro)ers of the recognised stoc) exchange to be appointed on the go'erning board of the recognised stoc) exchange, which shall not exceed one+fourth of the total strength of the go'erning board0 (/) .he order (ade under sub+section (#) shall be published in the Cfficial &aFette and on the publication thereof, the order shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#), or any other law for the ti(e being in force, ha'e full effect0 (>) 7'ery recognised stoc) exchange, in respect of which the sche(e for corporatisation or de(utualisation has been appro'ed under sub+section (%), shall, either by fresh issue of e*uity shares to the public or in any other (anner as (ay be specified by the regulations (ade by the Securities and 7xchange 8oard of India %#, ensure that at least fifty+one per cent of its e*uity share capital is held, within twel'e (onths fro( the date of publication of the order under sub+section (/), by the public other than shareholders ha'ing trading rights , 4ro+i-e- that the Securities and 7xchange 8oard of India (ay, on sufficient cause being shown to it and in the public interest, extend the said period by another twel'e (onths0:
ee Securities Contracts (Regulation) (Stoc) 7xchanges and Clearing Corporations) Regulations, %0 %, w0e0f0 %0+0#+%0 % notified vide &aFette Eotification Eo0 =A9+ ERCL&EL%0 %+ 3L0/L 3"$#, 7xtra0, <t0 III, Section $, dtd %0+0#+%0 %0
%#
?ith-r%/%l of re'o( itio .
5. %/4( ): If the Central &o'ern(ent%> is of opinion that the recognition granted to a stoc) exchange under the pro'isions of this Act should, in the interest of the trade or in the public interest, be withdrawn, the Central &o'ern(ent (ay ser'e on the go'erning body of the stoc) exchange a written notice that the Central &o'ern(ent is considering the withdrawal of the recognition for the reasons stated in the notice and after gi'ing an opportunity to the go'erning body to be heard in the (atter, the Central &o'ern(ent (ay withdraw, by notification in the Cfficial &aFette, the recognition granted to the stoc) exchange , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Central &o'ern(ent (ay, after consultation with the stoc) exchange, (a)e such pro'ision as it dee(s fit in the notification of withdrawal or in any subse*uent notification si(ilarly published for the due perfor(ance of any contracts outstanding on that date0 %!4(%) Khere the recognised stoc) exchange has not been corporatised or de(utualised or it fails to sub(it the sche(e referred to in sub+section ( ) of section $8 within the specified ti(e therefor or the sche(e has been reDected by the Securities and 7xchange 8oard of India under sub+section (") of section $8, the recognition granted to such stoc) exchange under section $, shall, notwithstanding anything to the contrary contained in this Act, stand withdrawn and the Central &o'ern(ent shall publish, by notification in the Cfficial &aFette, such withdrawal of recognition , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Securities and 7xchange 8oard of India (ay, after consultation with the stoc) exchange, (a)e such pro'isions as it dee(s fit in the order reDecting the sche(e published in the Cfficial &aFette under sub+section (") of section $80: 4o/er of Ce tr%l Go+er .e t to '%ll for $erio-i'%l ret*r ! or -ire't i 7*irie! to ,e .%-e. 8. ( ) 7'ery recognised stoc) exchange shall furnish to the 304Securities and 7xchange 8oard of India: such periodical returns relating to its affairs as (ay be prescribed0
%/ Section
" renu(bered as sub+section ( ) by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 %> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 30 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(%) 7'ery recognised stoc) exchange and e'ery (e(ber thereof shall (aintain and preser'e for such periods not exceeding fi'e years such boo)s of account, and other docu(ents as the Central &o'ern(ent, after consultation with the stoc) exchange concerned, (ay prescribe in the interest of the trade or in the public interest, and such boo)s of account, and other docu(ents shall be subDect to inspection at all reasonable ti(es 3 4by the Securities and 7xchange 8oard of India:0 (3) Kithout preDudice to the pro'isions contained in sub+sections ( ) and (%), the
3%4Securities
and 7xchange 8oard of India:, if it is satisfied that it is in the interest of the trade or in the public interest so to do, (ay, by order in writing,(a) call upon a recognised stoc) exchange or any (e(ber thereof to furnish in writing such infor(ation or explanation relating to the affairs of the stoc) exchange or of the (e(ber in relation to the stoc) exchange as the 334Securities and 7xchange 8oard of India: (ay re*uire3 or (b) appoint one or (ore persons to (a)e an in*uiry in the prescribed (anner in relation to the affairs of the go'erning body of a stoc) exchange or the affairs of any of the (e(bers of the stoc) exchange in relation to the stoc) exchange and sub(it a report of the result of such in*uiry to the 3$4Securities and 7xchange 8oard of India: within such ti(e as (ay be specified in the order or, in the case of an in*uiry in relation to the affairs of any of the (e(bers of a stoc) exchange, direct the go'erning body to (a)e the in*uiry and sub(it its report to the 3"4Securities and 7xchange 8oard of India:0 ($) Khere an in*uiry in relation to the affairs of a recognised stoc) exchange or the affairs of any of its (e(bers in relation to the stoc) exchange has been underta)en under sub+section (3),(a) e'ery director, (anager, secretary or other officer of such stoc) exchange3 (b) e'ery (e(ber of such stoc) exchange3 (c) if the (e(ber of the stoc) exchange is a fir(, e'ery partner, (anager, secretary or other officer of the fir(3 and (d) e'ery other person or body of persons who has had dealings in the course of business with any of the persons (entioned in clauses ( a), (b) and (c), whether directly or indirectly3
Substituted for ;by the Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3% Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 33 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3" Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
3
shall be bound to produce before the authority (a)ing the in*uiry all such boo)s of account, and other docu(ents in his custody or power relating to or ha'ing a bearing on the subDect+(atter of such in*uiry and also to furnish the authorities within such ti(e as (ay be specified with any such state(ent or infor(ation relating thereto as (ay be re*uired of hi(0 )8A *%l re$ort! to ,e f*r i!he- to Ce tr%l Go+er .e t ,> !to'6 e#'h% (e!. 7. 7'ery recognised stoc) exchange shall furnish the Central &o'ern(ent with a copy of the annual report, and such annual report shall contain such particulars as (ay be prescribed0 )754o/er of re'o( i!e- !to'6 e#'h% (e to .%6e r*le! re!tri'ti ( +oti ( ri(ht!, et'. 7A. ( ) A recognised stoc) exchange (ay (a)e rules or a(end any rules (ade by it
to pro'ide for all or any of the following (atters, na(ely ,(a) the restriction of 'oting rights to (e(bers only in respect of any (atter placed before the stoc) exchange at any (eeting3 (b) the regulation of 'oting rights in respect of any (atter placed before the stoc) exchange at any (eeting so that each (e(ber (ay be entitled to ha'e one 'ote only, irrespecti'e of his share of the paid+up e*uity capital of the stoc) exchange3 (c) the restriction on the right of a (e(ber to appoint another person as his proxy to attend and 'ote at a (eeting of the stoc) exchange3 (d) such incidental, conse*uential and supple(entary (atters as (ay be necessary to gi'e effect to any of the (atters specified in clauses ( a), (b) and (c)0 (%) Eo rules of a recognised stoc) exchange (ade or a(ended in relation to any (atter referred to in clauses (a) to (d) of sub+section ( ) shall ha'e effect until they ha'e been appro'ed by the Central &o'ern(ent 3> and published by that &o'ern(ent in the Cfficial &aFette and, in appro'ing the rules so (ade or a(ended, the Central &o'ern(ent (ay (a)e such (odifications therein as it thin)s fit, and on such publication, the rules as appro'ed by the Central &o'ern(ent shall be dee(ed to ha'e been 'alidly (ade, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#)0:
3# <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 3/ Inserted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec %, w0e0f0 0>+ %+ !"!0 3> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
4o/er of Ce tr%l Go+er .e t )9 to -ire't r*le! to ,e .%-e or to .%6e r*le!. :. ( ) Khere, after consultation with the go'erning bodies of stoc) exchanges generally or with the go'erning body of any stoc) exchange in particular, the Central &o'ern(ent is of opinion that it is necessary or expedient so to do, it (ay, by order in writing together with a state(ent of the reasons therefor, direct recognised stoc) exchanges generally or any recognised stoc) exchange in particular, as the case (ay be, to (a)e any rules or to a(end any rules already (ade in respect of all or any of the (atters specified in sub+section (%) of section 3 within a period of $04two (onths: fro( the date of the order0 (%) If any recognised stoc) exchange fails or neglects to co(ply with any order (ade under sub+section ( ) within the period specified therein, the Central &o'ern(ent (ay (a)e the rules for, or a(end the rules (ade by, the recognised stoc) exchange, either in the for( proposed in the order or with such (odifications thereof as (ay be agreed to between the stoc) exchange and the Central &o'ern(ent0 (3) Khere in pursuance of this section any rules ha'e been (ade or a(ended, the rules so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette or &aFettes of the State or States in which the principal office or offices of the recognised stoc) exchange or exchanges is or are situate, and, on the publication thereof in the &aFette of India, the rules so (ade or a(ended shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# (
of !"#), or in any other law for the ti(e being in force, ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange or stoc) exchanges, as the case (ay be0 315Cle%ri ( 'or$or%tio . :A. ( ) A recognised stoc) exchange (ay, with the prior appro'al of the Securities and 7xchange 8oard of India, transfer the duties and functions of a clearing house to a clearing corporation, being a co(pany incorporated under the Co(panies Act, !"# ( of !"#), for the purpose of(a) the periodical settle(ent of contracts and differences thereunder3 (b) the deli'ery of, and pay(ent for, securities3 (c) any other (atter incidental to, or connected with, such transfer0 (%) 7'ery clearing corporation shall, for the purpose of transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( ),
3! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 $0 Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec !, w0e0f0 %"+ 0 + !!"0 $ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0
(a)e bye+laws and sub(it the sa(e to the Securities and 7xchange 8oard of India for its appro'al0 (3) .he Securities and 7xchange 8oard of India (ay, on being satisfied that it is in the interest of the trade and also in the public interest to transfer the duties and functions of a clearing house to a clearing corporation, grant appro'al to the byelaws sub(itted to it under sub+section (%) and appro'e the transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( )0 ($) .he pro'isions of sections $, ", #, /, >, !, 0, and % shall, as far as (ay be, apply to a clearing corporation referred to in sub+section ( ) as they apply in relation to a recognised stoc) exchange0: 4o/er of re'o( i!e- !to'6 e#'h% (e! to .%6e ,>e0l%/!. 9. ( ) Any recognised stoc) exchange (ay, subDect to the pre'ious appro'al of the $%4Securities and 7xchange 8oard of India:, (a)e bye+laws for the regulation and control of contracts0 (%) In particular, and without preDudice to the generality of the foregoing power, such bye+laws (ay pro'ide for , (a) the opening and closing of (ar)ets and the regulation of the hours of trade3 (b) a clearing house for the periodical settle(ent of contracts and differences thereunder, the deli'ery of and pay(ent for securities, the passing on of deli'ery orders and the regulation and (aintenance of such clearing house3 (c) the sub(ission to the $34Securities and 7xchange 8oard of India: by the clearing house as soon as (ay be after each periodical settle(ent of all or any of the following particulars as the $$4Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, re*uire, na(ely ,(i) the total nu(ber of each category of security carried o'er fro( one settle(ent period to another3 (ii) the total nu(ber of each category of security, contracts in respect of
which ha'e been s*uared up during the course of each settle(ent period3 (iii) the total nu(ber of each category of security actually deli'ered at each clearing3
$% Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(d) the publication by the clearing house of all or any of the particulars sub(itted to the $"4Securities and 7xchange 8oard of India: under clause ( c) subDect to the directions, if any, issued by the $#4Securities and 7xchange 8oard of India: in this behalf3 (e) the regulation or prohibition of blan) transfers3 (f) the nu(ber and classes of contracts in respect of which settle(ents shall be (ade or differences paid through the clearing house3 (g) the regulation, or prohibition of b!dla# or carry+o'er facilities3 (h) the fixing, altering or postponing of days for settle(ents3 (i) the deter(ination and declaration of (ar)et rates, including the opening, closing highest and lowest rates for securities3 (j) the ter(s, conditions and incidents of contracts, including the prescription of (argin re*uire(ents, if any, and conditions relating thereto, and the for(s of contracts in writing3 (k) the regulation of the entering into, (a)ing, perfor(ance, recession and ter(ination, of contracts, including contracts between (e(bers or between a (e(ber and his constituent or between a (e(ber and a person who is not a (e(ber, and the conse*uences of default or insol'ency on the part of a seller or buyer or inter(ediary, the conse*uences of a breach or o(ission by a seller or buyer, and the responsibility of (e(bers who are not parties to such contracts3 (l) the regulation of taravani business including the placing of li(itations thereon3 (") the listing of securities on the stoc) exchange, the inclusion of any security for the purpose of dealings and the suspension or withdrawal of any such securities, and the suspension or prohibition of trading in any specified securities3 (n) the (ethod and procedure for the settle(ent of clai(s or disputes, including settle(ent by arbitration3 ($) the le'y and reco'ery of fees, fines and penalties3 (%) the regulation of the course of business between parties to contracts in any capacity3 (+) the fixing of a scale of bro)erage and other charges3 (r) the (a)ing, co(paring, settling and closing of bargains3 (#) the e(ergencies in trade which (ay arise, whether as a result of pool or syndicated operations or cornering or otherwise, and the exercise of powers in
$" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%,
Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $# Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
such e(ergencies, including the power to fix (axi(u( and (ini(u( prices for securities3 (t) the regulation of dealings by (e(bers for their own account3 (!) the separation of the functions of Dobbers and bro)ers3 (v) the li(itations on the 'olu(e of trade done by any indi'idual (e(ber in exceptional circu(stances3 (.) the obligation of (e(bers to supply such infor(ation or explanation and to produce such docu(ents relating to the business as the go'erning body (ay re*uire0 (3) .he bye+laws (ade under this section (ay(a) specify the bye+laws the contra'ention of which shall (a)e a contract entered into otherwise than in accordance with the bye+laws 'oid under sub+section ( ) of section $3 (b) pro'ide that the contra'ention of any of the bye+laws shall render the (e(ber concerned liable to one or (ore of the following punish(ents, na(ely ,(i) fine, (ii) expulsion fro( (e(bership, (iii) suspension fro( (e(bership for a specified period, (iv) any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney0 ($) Any bye+laws (ade under this section shall be subDect to such conditions in regard to pre'ious publication as (ay be prescribed, and, when appro'ed by the $/4Securities and 7xchange 8oard of India:, shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and shall ha'e effect as fro( the date of its publication in the &aFette of India , 4ro+i-e- that if the $>4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+law should be (ade i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0
$/ Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $> Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4o/er of 395Se'*ritie! % - E#'h% (e ;o%r- of I -i%< to .%6e or %.e - ,>e0l%/! of re'o( i!e- !to'6 e#'h% (e!. 1=. ( ) .he "04Securities and 7xchange 8oard of India: (ay, either on a re*uest in writing recei'ed by it in this behalf fro( the go'erning body of a recognised stoc) exchange or on its own (otion, if it is satisfied after consultation with the go'erning body of the stoc) exchange that it is necessary or expedient so to do and after recording its reasons for so doing, (a)e bye+laws for all or any of the (atters specified in section ! or a(end any bye+laws (ade by such stoc) exchange under that section0
(%) Khere in pursuance of this section any bye+laws ha'e been (ade or a(ended the bye+laws so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and on the publication thereof in the &aFette of India, the bye+laws so (ade or a(ended shall ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange concerned0 (3) Eotwithstanding anything contained in this section, where the go'erning body of a recognised stoc) exchange obDects to any bye+laws (ade or a(ended under this section by the " 4Securities and 7xchange 8oard of India: on its own (otion, it (ay, within "%4two (onths: of the publication thereof in the &aFette of India under subsection (%), apply to the "34Securities and 7xchange 8oard of India: for re'ision thereof, and the "$4Securities and 7xchange 8oard of India: (ay, after gi'ing an opportunity to the go'erning body of the stoc) exchange to be heard in the (atter, re'ise the bye+laws so (ade or a(ended, anywhere any bye+laws so (ade or a(ended are re'ised as a result of any action ta)en under this sub+section, the byelaws so re'ised shall be published and shall beco(e effecti'e as pro'ided in subsection (%)0 ($) .he (a)ing or the a(end(ent or re'ision of any bye+laws under this section shall in all cases be subDect to the condition of pre'ious publication ,
$! Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "0 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 " Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "% Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec %0, w0e0f0 %"+ 0 + !!"0 "3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4ro+i-e- that if the ""4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+laws should be (ade, a(ended or re'ised i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0 4o/er of Ce tr%l Go+er .e t 58 to !*$er!e-e (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e. 11. ( ) Kithout preDudice to any other powers 'ested in the Central &o'ern(ent under this Act, where the Central &o'ern(ent is of opinion that the go'erning body of any recognised stoc) exchange should be superseded, then, notwithstanding anything contained in any other law for the ti(e being in force, in the Central &o'ern(ent (ay ser'e on the go'erning body a written notice that the Central &o'ern(ent is considering the supersession of the go'erning body for the reasons specified in the notice and after gi'ing an opportunity to the go'erning body to be
heard in the (atter, it (ay, by notification in the Cfficial &aFette, declare the go'erning body of such stoc) exchange to be superseded, and (ay appoint any person or persons to exercise and perfor( all the powers and duties of the go'erning body, and, where (ore persons than one are appointed, (ay appoint one of such persons to be the chair(an and another to be the 'ice+chair(an thereof0 (%) Cn the publication of a notification in the Cfficial &aFette under sub+section ( ), the following conse*uences shall ensue, na(ely,(a) the (e(bers of the go'erning body which has been superseded shall, as fro( the date of the notification of supersession, cease to hold office as such (e(bers3 (b) the person or persons appointed under sub+section ( ) (ay exercise and perfor( all the powers and duties of the go'erning body which has been superseded3 (c) all such property of the recognised stoc) exchange as the person or persons appointed under sub+section ( ) (ay, by order in writing, specify in this behalf as being necessary for the purpose of enabling hi( or the( to carry on the business of the stoc) exchange, shall 'est in such person or persons0 (3) Eotwithstanding anything to the contrary contained in any law or the rules or bye+laws of the recognised stoc) exchange the go'erning body of which is superseded under sub+section ( ), the person or persons appointed under that subsection shall hold office for such period as (ay be specified in the notification published under that sub+section and the Central &o'ern(ent (ay fro( ti(e to ti(e, by li)e notification, 'ary such period0
"" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "# <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0
($) .he Central &o'ern(ent (ay at any ti(e before the deter(ination of the period of office of any person or persons appointed under this section call upon the recognised stoc) exchange to re+constitute the go'erning body in accordance with its rules and on such re+constitution all the property of the recognised stoc) exchange which has 'ested in, or was in the possession of, the person or persons appointed under sub+section ( ), shall re+'est or 'est, as the case (ay be, in the go'erning body so re+constituted , 4ro+i-e- that until a go'erning body is so re+constituted, the person or persons appointed under sub+section ( ) shall continue to exercise and perfor( their powers and duties0 4o/er57 to !*!$e - ,*!i e!! of re'o( i!e- !to'6 e#'h% (e!. 1". If in the opinion of the Central &o'ern(ent an e(ergency has arisen and for the purpose of (eeting the e(ergency the Central &o'ern(ent considers it expedient so to do, it (ay, by notification in the Cfficial &aFette, for reasons to be set out therein, direct a recognised stoc) exchange to suspend such of its business for such period not exceeding se'en days and subDect to such conditions as (ay be specified in the notification, and, if, in the opinion of the Central &o'ern(ent, the interest of
the trade or the public interest re*uires that the period should be extended, (ay, by li)e notification extend the said period fro( ti(e to ti(e , 4ro+i-e- that where the period of suspension is to be extended beyond the first period, no notification extending the period of suspension shall be issued unless the go'erning body of the ">4recognised stoc) exchange: has been gi'en an opportunity of being heard in the (atter0 "!54o/er to i!!*e -ire'tio !. 1"A. If, after (a)ing or causing to be (ade an in*uiry, the Securities and 7xchange 8oard of India is satisfied that it is necessary(a) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (b) to pre'ent the affairs of any recognised stoc) exchange or clearing corporation, or such other agency or person, pro'iding trading or clearing or settle(ent facility in respect of securities, being conducted in a (anner detri(ental to the interests of in'estors or securities (ar)et3 or (c) to secure the proper (anage(ent of any such stoc) exchange or clearing corporation or agency or person, referred to in clause ( b),
"/ <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 "> Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 "! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0
it (ay issue such directions,(i) to any stoc) exchange or clearing corporation or agency or person referred to in clause (b) or any person or class of persons associated with the securities (ar)et3 or (ii) to any co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 8=5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< /<410A/1 A45 <81:<4 :4 (/A0:1:( Co tr%'t! i otifie- %re%! ille(%l i 'ert%i 'ir'*.!t% 'e!. 1). If the Central &o'ern(ent# is satisfied, ha'ing regard to the nature or the 'olu(e of transactions in securities in any #%4State or States or area: that it is necessary so to do, it (ay, by notification in the Cfficial &aFette, declared this section to apply to such #34State or States or area:, and thereupon e'ery contract in such #$4State or States or area: which is entered into after the date of the notification otherwise than #"4between (e(bers of a recognised stoc) exchange or recognised stoc) exchanges: in such ##4State or States or area: or through or with such (e(ber shall be illegal ,
#0 I #
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 #% Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #3 Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #$ Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$ for ;between (e(bers of a recognised stoc) exchange; & ## Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0
#/54ro+i-e-
that any contract entered into between (e(bers of two or (ore recognised stoc) exchanges in such State or States or area, shall(i) be subDect to such ter(s and conditions as (ay be stipulated by the respecti'e stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India3 (ii) re*uire prior per(ission fro( the respecti'e stoc) exchanges if so stipulated by the stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India0: #>4A--itio %l tr%-i ( floor. 1)A. A stoc) exchange (ay establish additional trading floor with the prior appro'al of the Securities and 7xchange 8oard of India in accordance with the ter(s and conditions stipulated by the said 8oard0 ()%lanati$n , 6or the purposes of this section, 1additional trading floor2 (eans a trading ring or trading facility offered by a recognised stoc) exchange outside its area of operation to enable the in'estors to buy and sell securities through such trading floor under the regulatory fra(ewor) of that stoc) exchange0: Co tr%'t! i otifie- %re%! to ,e +oi- i 'ert%i 'ir'*.!t% 'e!. 13. ( ) Any contract entered into in any State or area specified in the notification under section 3 which is in contra'ention of any of the bye+laws specified in that behalf under clause (a) of sub+section (3) of section ! shall be 'oid , (i) as respects the rights of any (e(ber of the recognised stoc) exchange who has entered into such contract in contra'ention of any such bye+law, and also (ii) as respects the rights of any other person who has )nowingly participated in the transaction entailing such contra'ention0 (%) Eothing in sub+section ( ) shall be construed to affect the right of any person other than a (e(ber of the recognised stoc) exchange to enforce any such contract or to reco'er any su( under or in respect of such contract if such person had no )nowledge that the transaction was in contra'ention of any of the bye+laws specified in clause (a) of sub+section (3) of section !0 @e.,er! .%> ot %'t %! $ri 'i$%l! i 'ert%i 'ir'*.!t% 'e!. 15. Eo (e(ber of a recognised stoc) exchange shall in respect of any securities enter into any contract as a principal with any person other than a (e(ber of a recognised stoc) exchange, unless he has secured the consent or authority of such
#/ Inserted #> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (A(end(ent) Act, !!", Sec % , w0e0f0 %"+0 + !!"0
person and discloses in the note, (e(orandu( or agree(ent of sale or purchase that he is acting as a principal , 4ro+i-e- that where the (e(ber has secured the consent or authority of such person otherwise than in writing he shall secure written confir(ation by such person or such consent or authority within three days fro( the date of the contract , 4ro+i-e- f*rther that no such written consent or authority of such person shall be necessary for closing out any outstanding contract entered into by such person in accordance with the bye+laws, if the (e(ber discloses in the note, (e(orandu( or agree(ent of sale or purchase in respect of such closing out that he is acting as a principal0 4o/er89 to $rohi,it 'o tr%'t! i 'ert%i '%!e!. 18. ( ) If the Central &o'ern(ent is of opinion that it is necessary to pre'ent undesirable speculation in specified securities in any State or area, it (ay, by notification in the Cfficial &aFette, declare that no person in the State or area specified in the notification shall, sa'e with the per(ission of the Central &o'ern(ent, enter into any contract for the sale or purchase of any security specified in the notification except to the extent and in the (anner, if any, specified therein0 (%) All contracts in contra'ention of the pro'isions of sub+section ( ) entered into after the date of notification issued thereunder shall be illegal0 Li'e !i ( of -e%ler! i !e'*ritie! i 'ert%i %re%!. 17. ( ) SubDect to the pro'isions of sub+section (3) and to the other pro'isions contained in this Act, no person shall carry on or purport to carry on, whether on his own behalf or on behalf of any other person, the business of dealing in securities in any State or area to which section 3 has not been declared to apply and to which the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, declare this section to apply, except under the authority of a /04licence granted by the Securities and 7xchange 8oard of India: in this behalf0 (%) Eo notification under sub+section ( ) shall be issued with respect to any State or area unless the Central &o'ern(ent is satisfied, ha'ing regard to the (anner in which securities are being dealt with in such State or area, that it is desirable or
#! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 <owers are exercisable by R8I also 'ide &o'ern(ent of India Eotification Eo0 >3 (7), 9ated 0 +03+%000 in relation to any contracts in go'ern(ent securities, (oney (ar)et securities etc0 /0 Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% for ;licence granted by the Central &o'ern(ent;0
expedient in the interest of the trade or in the public interest that such dealings should be regulated by a syste( of licensing0 (3) .he restrictions i(posed by sub+section ( ) in relation to dealings in securities shall not apply to the doing of anything by or on behalf of a (e(ber of any recognised stoc) exchange0
7154*,li'
i!!*e % - li!ti ( of !e'*ritie! referre- to i !*,0'l%*!e ( ie) of 'l%*!e (h)
of !e'tio ". 17A. ( ) Kithout preDudice to the pro'isions contained in this Act or any other law for the ti(e being in force, no securities of the nature referred to in sub+clause (ie) of clause (h) of section % shall be offered to the public or listed on any recognised stoc) exchange unless the issuer fulfils such eligibility criteria and co(plies with such other re*uire(ents as (ay be specified by regulations (ade by the Securities and 7xchange 8oard of India0 (%) 7'ery issuer referred to in sub+clause (ie) of clause (h) of section % intending to offer the certificates or instru(ents referred therein to the public shall (a)e an application, before issuing the offer docu(ent to the public, to one or (ore recognised stoc) exchanges for per(ission for such certificates or instru(ents to be listed on the stoc) exchange or each such stoc) exchange0 (3) Khere the per(ission applied for under sub+section (%) for listing has not been granted or refused by the recognised stoc) exchanges or any of the(, the issuer shall forthwith repay all (oneys, if any, recei'ed fro( applicants in pursuance of the offer docu(ent, and if any such (oney is not repaid within eight days after the issuer beco(es liable to repay it, the issuer and e'ery director or trustee thereof, as the case (ay be, who is in default shall, on and fro( the expiry of the eighth day, be Dointly and se'erally liable to repay that (oney with interest at the rate of fifteen per cent per annu(0 7xplanation0-In rec)oning the eighth day after another day, any inter'ening day which is a public holiday under the Eegotiable Instru(ents Act, >> (%# of >> ), shall be disregarded, and if the eighth day (as so rec)oned) is itself such a public holiday, there shall for the said purposes be substituted the first day thereafter which is not a holiday0 ($) All the pro'isions of this Act relating to listing of securities of a public co(pany on a recognised stoc) exchange shall, (utatis (utandis, apply to the listing of the securities of the nature referred to in sub+clause (ie) of clause (h) of section % by the issuer, being a special purpose distinct entity0 <
Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec 3, w0e0f0 %>+0"+ %00/0
/
E#'l*!io of !$ot -eli+er> 'o tr%'t! fro. !e'tio ! 1), 13, 15 % - 17. 1:. ( ) Eothing contained in sections 3, $, " and / shall apply to spot deli'ery contracts0 (%) Eotwithstanding anything contained in sub+section ( ), if the Central &o'ern(ent/% is of opinion that in the interest of the trade or in the public interest it is expedient to regulate and control the business of dealing in spot deli'ery contracts also in any State or area (whether section 3 has been declared to apply to that State or area or not), it (ay, by notification in the Cfficial &aFette, declare that the pro'isions of section / shall also apply to such State or area in respect of spot deli'ery contracts generally or in respect of spot deli'ery contracts for the sale or purchase of such securities as (ay be specified in the notification, and (ay also specify the (anner in which, and the extent to which, the pro'isions of that section
shall so apply0 /34Co tr%'t! i -eri+%ti+e. 1:A. Eotwithstanding anything contained in any other law for the ti(e being in force, contracts in deri'ati'e shall be legal and 'alid if such contracts are(a) traded on a recognised stoc) exchange3 (b) settled on the clearing house of the recognised stoc) exchange, in accordance with the rules and bye+laws of such stoc) exchange0: Sto'6 e#'h% (e! other th% re'o( i!e- !to'6 e#'h% (e! $rohi,ite-. 19. ( ) Eo person shall, except with the per(ission of the Central &o'ern(ent, organise or assist in organising or be a (e(ber of any stoc) exchange (other than a recognised stoc) exchange) for the purpose of assisting in, entering into or perfor(ing any contracts in securities0 (%) .his section shall co(e into force in any State or area on such date as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 4rohi,itio of o$tio ! i !e'*ritie!. "=. 734GGGGG:
/% <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 /3 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec 3, w0e0f0 %%+%+%0000 /$ C(itted by the Securities =aws (A(end(ent) Act, !!", Sec %%, w0e0f0 %"+0 + !!"0 <rior to o(ission, section %0 read as under , 1%00 8r$hibiti$n $f $%ti$n# in #ec!ritie#&-( ) Eotwithstanding anything contained in this Act or in any other law for the ti(e being in force, all options in securities entered into after the co((ence(ent of this Act shall be illegal0
9: 1:4= <E (/A0:1:( 754GGG: /#4Co -itio ! for li!ti (. "1. Khere securities are listed on the application of any person in any recognised stoc) exchange, such person shall co(ply with the conditions of the listing agree(ent with that stoc) exchange&: 775Deli!ti ( of !e'*ritie!. "1A. ( ) A recognised stoc) exchange (ay delist the securities, after recording the reasons therefor, fro( any recognised stoc) exchange on any of the ground or grounds as (ay be prescribed under this Act , 4ro+i-e- that the securities of a co(pany shall not be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) A listed co(pany or an aggrie'ed in'estor (ay file an appeal before the Securities Appellate .ribunal against the decision of the recognised stoc) exchange delisting the securities within fifteen days fro( the date of the decision of the recognised stoc) exchange delisting the securities and the pro'isions of sections %%8 to %%7 of this Act, shall apply, as far as (ay be, to such appeals , 4ro+i-e- that the Securities Appellate .ribunal (ay, if it is satisfied that the co(pany was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding one (onth0:
(%) Any option in securities which has been entered into before such co((ence(ent and which re(ains to be perfor(ed, whether wholly or in part, after such co((ence(ent shall, to that
extent, beco(e 'oid02 /" Kords 18O <H8=IC CC?<AEI7S2 o(itted by the Securities =aws (A(end(ent) Act, !!!, Sec $, w0e0f0 %%+0%+%0000 /# Substituted by the Securities =aws (A(end(ent) Act, !!", Sec 33, w0e0f0 %"+0 + !!" . <rior to substitution, section % read as under , 1% 0 8$.er t$ c$"%el li#ting $f #ec!ritie# bF %!blic c$"%anie#& -Eotwithstanding anything contained in any other law for the ti(e being in force, if the Securities and 7xchange 8oard of India is of opinion, ha'ing regard to the nature of the securities issued by any public co(pany as defined in the Co(panies Act, !"# ( of !"#), or to the dealings in the(, that it is necessary or expedient in the interest of the trade or in the public interest so to do, it (ay re*uire the co(pany, after gi'ing it an opportunity of being heard in the (atter, to co(ply with such re*uire(ents as (ay be prescribed with respect to the listing of its securities on any recognised stoc) exchange02 // Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec >, w0r0e0f0 %+ 0+%00$0
7:5Ri(ht
of %$$e%l %(%i !t ref*!%l of !to'6 e#'h% (e! to li!t !e'*ritie! of $*,li' 'o.$% ie!. 79"". Khere a recognised stoc) exchange acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any public co(pany >04or collecti'e in'est(ent sche(e:, the co(pany > 4or sche(e: shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( ) of section /3 of the Co(panies Act, !"# ( of !"#) (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Central &o'ern(ent (ay, on sufficient cause being shown, allow, appeal to the Central &o'ern(ent against such refusal, o(ission or failure, as the case (ay be, and thereupon the Central &o'ern(ent (ay, after gi'ing the stoc) exchange an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange, or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Central &o'ern(ent sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Central &o'ern(ent: , >%44ro+i-e- that no appeal shall be preferred against refusal, o(ission or failure, as the case (ay be, under this section on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!0: :)5Ri(ht of %$$e%l to Se'*ritie! A$$ell%te Tri,* %l %(%i !t ref*!%l of !to'6 e#'h% (e to li!t !e'*ritie! of $*,li' 'o.$% ie!.
/> Substituted
by .he Co(panies (A(end(ent) Act, !/$ (Act Eo0 $ of !/$), Sec $%, w0e0f0 0 + 0%+ !/"0 /! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the
&aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 >0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%00003 Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 > Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%0000 >% Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec $, w0e0f0 #+ %+ !!!0 >3 Sections %%A, %%8, %%C, %%9, %%7 and %%6 inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!!& 7arlier section %%A was inserted by .he
""A. ( ) Khere a recognised stoc) exchange, acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any co(pany, the co(pany shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( A) of section /3 of the Co(panies Act, !"# ( of !"#), (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Securities Appellate .ribunal (ay, on sufficient cause being shown, allow, appeal to the Securities Appellate .ribunal ha'ing Durisdiction in the (atter against such refusal, o(ission or failure, as the case (ay be, and thereupon the Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange, an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange3 or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Securities Appellate .ribunal sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Securities Appellate .ribunal0 (%) 7'ery appeal under sub+section ( ) shall be in such for( and be acco(panied by such fee as (ay be prescribed0 (3) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 ($) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: :354ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. "";. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of
Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec %, w0e0f0 /+ 0 + !>#, and o(itted by the 9epositories Act, !!#, Sec 30 and Sch0, <t0III, w0r0e0f0 %0+0!+ !!"0 >$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath 3 (b) re*uiring the disco'ery and production of docu(ents 3 (c) recei'ing e'idence on affida'its 3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents 3 (e) re'iewing its decisions 3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte ; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0: :55Ri(ht to le(%l re$re!e t%tio . ""C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of sub+section ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of subsection ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of
>" Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
!"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, vakil or an attorney of any Iigh Court, and includes a pleader in practice0: :85Li.it%tio . ""D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0: :75Ci+il 'o*rt ot to h%+e G*ri!-i'tio .
""E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0: ::5A$$e%l to S*$re.e Co*rt. ""2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order, 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: 8(4A91:( A45 80</(5A0( 4e %ltie!. "). ( ) Any person who+
># Inserted >/ Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & >> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec !, w0r0e0f0 %+ 0+%00$0 7arlier section %%6 as inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", read as under,+ 1""2. A$$e%l to Di(h Co*rt.+Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order , 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
(a) without reasonable excuse (the burden of pro'ing which shall be on hi() fails to co(ply with any re*uisition (ade under sub+section ($) of section #3 or (b) enters into any contract in contra'ention of any of the pro'isions contained in section 3 or section #3 or (c) contra'enes the pro'isions contained in >!5section / or section /A<, or section !3 or 90 4(d) enters into any contract in deri'ati'e in contra'ention of section >A or the rules (ade under section 303: (e) owns or )eeps a place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act and )nowingly per(its such place to be used for such purposes3 or (f) (anages, controls, or assists in )eeping any place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act or at which contracts are recorded or adDusted or rights or liabilities arising out of contracts are adDusted, regulated or enforced in any (anner whatsoe'er3 or (g) not being a (e(ber of a recognised stoc) exchange or his agent authorised as
such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section / wilfully represents to or induces any person to belie'e that contracts can be entered into or perfor(ed under this Act through hi(3 or (h) not being a (e(ber of a recognised stoc) exchange or his agent authorised as such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section /, can'asses, ad'ertises or touts in any (anner either for hi(self or on behalf of any other persons for any business connected with contracts in contra'ention of any of the pro'isions of this Act3 or (i) Doins, gathers or assists in gathering at any place other than the place of business specified in the bye+laws of a recognised stoc) exchange any person or persons for (a)ing bids or offers or for entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act3 ! 4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which
>! Inserted
by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec $, w0e0f0 %>+0"+ %00/ for ;section /;0 !0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec #, w0e0f0 %%+0%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 ! Substituted for 1shall, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0
(ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: (%) Any person who enters into any contract in contra'ention of the pro'isions contained in section " !%4or who fails to co(ply with the pro'isions of !34section % or section % A: or with the orders of: or section %% !$4or with the orders of the Securities Appellate .ribunal: !"4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 9854e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. ")A. Any person, who is re*uired under this Act or any rules (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to a recognised stoc) exchange, fails to furnish the sa(e within the ti(e specified therefor in the listing agree(ent or conditions or bye+laws of the recognised stoc) exchange, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to (aintain boo)s of account or records, as per the listing agree(ent or conditions, or bye+laws of a recognised stoc) exchange, fails to (aintain the sa(e, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0:
9754e
%lt> for f%il*re ,> % > $er!o to e ter i to % %(ree.e t /ith 'lie t!. ");. If any person, who is re*uired under this Act or any bye+laws of a recognised stoc) exchange (ade thereunder, to enter into an agree(ent with his client, fails to enter into such an agree(ent, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0:
!% Substituted
for 1or who fails to co(ply with the orders of the Securities and 7xchange 8oard of India under section % 2 by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 <rior to !!", ;Securities and 7xchange 8oard of India under section % or Central &o'ern(ent under section %%; were substituted for ;Central &o'ern(ent under section % or section %%; vide .he Schedule, <art II of Securities and 7xchange 8oard of India Act, !!%, w0e0f0 30+0 + !!%0 !3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec #, w0e0f0 #+ %+ !!!0 !" Substituted for 1shall, on con'iction, be punishable with fine which (ay extend to one thousand rupees2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !# Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$ & !/ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$0
9:54e
%lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. ")C. If any stoc) bro)er or sub+bro)er or a co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, after ha'ing been called upon by the Securities and 7xchange 8oard of India or a recognised stoc) exchange in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e stipulated by the Securities and 7xchange 8oard of India or a recognised stoc) exchange, he or it shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 9954e %lt> for f%il*re to !e(re(%te !e'*ritie! or .o e>! of 'lie t or 'lie t!. ")D. If any person, who is registered under section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%) as a stoc) bro)er or sub+bro)er, fails to segregate securities or (oneys of the client or clients or uses the securities or (oneys of a client or clients for self or for any other client, he shall be liable to a penalty not exceeding one crore rupees0: 1==54e %lt> for f%il*re to 'o.$l> /ith $ro+i!io of li!ti ( 'o -itio ! or -eli!ti ( 'o -itio ! or (ro* -!. ")E. If a co(pany or any person (anaging collecti'e in'est(ent sche(e or (utual fund, fails to co(ply with the listing conditions or delisting conditions or grounds or co((its a breach thereof, it or he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0: 1=154e %lt> for e#'e!! -e.%teri%li!%tio or -eli+er> of * li!te- !e'*ritie!. ")2. If any issuer de(aterialises securities (ore than the issued securities of a co(pany or deli'ers in the stoc) exchanges the securities which are not listed in the recognised stoc) exchange or deli'ers securities where no trading per(ission has been gi'en by the recognised stoc) exchange, he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0:
!> Inserted !! Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 00 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0
%+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0
1="54e
%lt> for f%il*re to f*r i!h $erio-i'%l ret*r !, et'. ")G. If a recognised stoc) exchange fails or neglects to furnish periodical returns to the Securities and 7xchange 8oard of India or fails or neglects to (a)e or a(end its rules or bye+laws as directed by the Securities and 7xchange 8oard of India or fails to co(ply with directions issued by the Securities and 7xchange 8oard of India, such recognised stoc) exchange shall be liable to a penalty which (ay extend to twenty+fi'e crore rupees0: 1=)54e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. ")D. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or articles or bye+ laws or the regulations of the recognised stoc) exchange or directions issued by the Securities and 7xchange 8oard of India for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 1=354o/er to %-G*-i'%te. ")0I. ( ) 6or the purpose of adDudging under sections %3A, %38, %3C, %39, %37, %36, %3& and %3I, the Securities and 7xchange 8oard of India shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0: 1=552%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. ")E. Khile adDudging the *uantu( of penalty under section %3+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3
0% Inserted 03 Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec 0$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0" Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 , w0r0e0f0 , w0r0e0f0 , w0r0e0f0
%+ %+ %+ %+
0+%00$0 0+%00$0 0+%00$0 0+%00$0
(b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0: 1=85 Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!.
")EA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 1"A or !e'tio ")0I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%tefor the %lle(e- -ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re %! !$e'ifie,> the ;o%r- * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")L %(%i !t % > or-er $%!!e- ,> the ;o%ror %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 1=75Re'o+er> of %.o* t!. ")E;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 1"A or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H
0# I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30"==7) 0/ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %!
.%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - ThirS'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")L of thi! A't. (") The re'o+er> offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ())Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 0'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 1"A, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1),(") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 1=:5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. ")F. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: 1=95A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")L. ( ) Any person aggrie'ed, by the order or decision of the recogniFed stoc) exchange or the adDudicating officer or any order (ade by the Securities and 7xchange 8oard of India under section $8, (ay prefer an appeal before the Securities Appellate .ribunal and the pro'isions of sections %%8, %%C, %%9 and %%7 of this Act, shall apply, as far as (ay be, to such appeals0 (%) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order or decision is recei'ed by the
appellant and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 (3) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 ($) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the parties to the appeal and to the concerned adDudicating officer0 (") .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: 11=5Offe 'e!. ")@. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws
0> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 0! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
(ade thereunder, for which no punish(ent is pro'ided elsewhere in this Act, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 1115Co.$o!itio of 'ert%i offe 'e!. ")N. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0: 11"54o/er to (r% t i..* it>. ")0O. ( ) .he Central &o'ern(ent (ay, on reco((endation by the Securities and 7xchange 8oard of India, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation,
4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that the reco((endation of the Securities and 7xchange 8oard of India under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under
% Inserted
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
this Act to which such person would ha'e been liable, had not such i((unity been granted0: Offe 'e! ,> 'o.$% ie!. "3. ( ) Khere an offence has been co((itted by a co(pany, e'ery person who, at the ti(e when the offence was co((itted, was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence, and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any gross negligence on the part of any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer of the co(pany, shall also be dee(ed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n0-6or the purpose of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals, and 34(b) 1director2, in relation to(i) a fir(, (eans a partner in the fir(3 (ii) any association of persons or a body of indi'iduals, (eans any (e(ber controlling the affairs thereof0: $4(3) .he pro'isions of this section shall be in addition to, and not in derogation of, the pro'isions of section %%A0: Cert%i offe 'e! to ,e 'o( iL%,le. "5. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, >!> (" of >!>) ", any offence punishable under #4GGG: section %3 shall be dee(ed to be a
cogniFable offence within the (eaning of that Code0
3 Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec /, w0e0f0 %%+%+%0000 <rior to its substitution, sub+clause (b) read as under, N(b) 1director2, in relation to a fir(, (eans a partner in the fir(0J $ Inserted by .he Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec 3, w0e0f0 /+0 + !>#0
iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central &o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or a recognised stoc) exchange or by any person0 >5(")********< 1195E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
ee now the Code of Cri(inal <rocedure, !/3 (% of !/$) 1sub+section ( ) of2 o(itted by the Securities =aws (A(end(ent) Act, %00$, w0e0f0 %+ 0+%00$0 / Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$ & <rior to its substitution section %# read as under ,1%#0 G!ri#dicti$n t$ trF $ffence# !nder thi# Act&-Eo court inferior to that of a presidency (agistrate or a (agistrate of the first class shall ta)e cogniFance of or try any offence punishable under this Act02 > O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JEo court inferior to that of a Court of Session shall try any offence punishable under this Act .K ! I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
" # Kords
/4Co(
A$$e%l % - Re+i!io . "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt. "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel% $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io !. "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< 6: /(99A4(<A Title to -i+i-e -!. "7. ( ) It shall be lawful for the holder of any security whose na(e appears on the boo)s of the co(pany issuing the said security to recei'e and retain any di'idend declared by the co(pany in respect thereof for any year, notwithstanding that the said security has already been transferred by hi( for consideration, unless the transferee who clai(s the di'idend fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the co(pany with the co(pany for being registered in his na(e within fifteen days of the date on which the di'idend beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the di'idend3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security and other docu(ents relating to
the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a co(pany to pay any di'idend which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the co(pany as the holder of the security in respect of which the di'idend has beco(e due3 or (b) the right of the transferee of any security to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security in the na(e of the transferee0 %04Ri(ht to re'ei+e i 'o.e fro. 'olle'ti+e i +e!t.e t !'he.e. "7A. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, whose na(e appears on the boo)s of the collecti'e in'est(ent sche(e issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e declared by the collecti'e in'est(ent sche(e in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e fro( the transfer or has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the collecti'e in'est(ent sche(e with the collecti'e in'est(ent sche(e for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec >, w0e0f0 %%+%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the collecti'e in'est(ent sche(e3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a collecti'e in'est(ent sche(e to pay any inco(e fro( units or other instru(ents issued by the collecti'e in'est(ent sche(e which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the collecti'e in'est(ent sche(e as the holder of the security being
units or other instru(ents issued by the collecti'e in'est(ent sche(e in respect of which the inco(e in respect of units or other instru(ents issued by the collecti'e sche(e has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security being units or other instru(ents issued by the collecti'e in'est(ent sche(e in the na(e of the transferee0: % 4Ri(ht to re'ei+e i 'o.e fro. .*t*%l f* -. "7;. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by any (utual fund, whose na(e appears on the boo)s of the (utual fund issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the (utual fund declared by the (utual fund in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the (utual fund, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the (utual fund fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the (utual fund with the (utual fund for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the (utual fund beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the (utual fund3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the (utual fund, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a (utual fund to pay any inco(e fro( units or other instru(ents issued by the (utual fund which has beco(e due to any person, whose na(e is for the ti(e being registered in the boo)s of the (utual fund as the holder of the security being units or other instru(ents issued by the (utual fund in respect of which the inco(e in respect of units or other instru(ents issued by the (utual fund has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the (utual fund, to enforce against the transferor or any other person, his rights, if any, in relation to the transfer in any case where the (utual fund has refused to register the transfer of the security being units or other instru(ents issued by the (utual fund in the na(e of the transferee0:
1""5A't
ot to %$$l> i 'ert%i '%!e!. ":. ( ) .he pro'isions of this Act shall not apply to(a) the &o'ern(ent, the Reser'e 8an) of India, any local authority or any corporation set up by a special law or any person who has effected any transaction with or through the agency of any such authority as is referred to in this clause3 (b) any con'ertible bond or share warrant or any option or right in relation thereto, in so far as it entitles the person in whose fa'our any of the foregoing has been issued to obtain at his option fro( the co(pany or other body corporate, issuing the sa(e or fro( any of its shareholders or duly appointed agentsJ shares of the co(pany or other body corporate, whether by con'ersion of the bond or warrant or otherwise, on the basis of the price agreed upon when the sa(e was issued0 (%) Kithout preDudice to the pro'isions contained in sub+section ( ), if the Central &o'ern(ent %3 is satisfied that in the interests of trade and co((erce or the
%% Substituted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec 3, w0e0f0 0>+ %+ !"!0
econo(ic de'elop(ent of the country it is necessary or expedient so to do, it (ay, by notification in the Cfficial &aFette, specify any class of contracts as contracts to which this Act or any pro'ision contained therein shall not apply, and also the conditions, li(itations or restrictions, if any, subDect to which it shall not so apply0: 4rote'tio of %'tio t%6e i (oo- f%ith. "9. Eo suit, prosecution or other legal proceeding whatsoe'er shall lie in any court against the go'erning body or any (e(ber, office bearer or ser'ant of any recognised stoc) exchange or against any person or persons appointed under subsection ( ) of section for anything which is in good faith done or intended to be done in pursuance of this Act or of any rules or bye+laws (ade thereunder0 %$44o/er to -ele(%te. "9A. .he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers (except the power under section 30) exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India or the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)0: 4o/er to .%6e r*le!. )=. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for the purpose of carrying into effect the obDects of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for,(a) the (anner in which applications (ay be (ade, the particulars which they should contain and the le'y of a fee in respect of such applications 3 (b) the (anner in which any in*uiry for the purpose of recognising any stoc) exchange (ay be (ade, the conditions which (ay be i(posed for the grant of such recognition, including conditions as to the ad(ission of (e(bers if the
%3 <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %$ Inserted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% and Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec !, w0e0f0 %%+0%+%0000 <rior to its substitution, section %!A read as under , 1%!A0 8$.er t$ delegate&*.he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India02
stoc) exchange concerned is to be the only recognised stoc) exchange in the area3 and the for( in which such recognition shall be granted3 (c) the particulars which should be contained in the periodical returns and annual reports to be furnished to the Central &o'ern(ent3 (d) the docu(ents which should be (aintained and preser'ed under section # and the periods for which they should be preser'ed3 (e) the (anner in which any in*uiry by the go'erning body of a stoc) exchange shall be (ade under section #3 (f) the (anner in which the bye+laws to be (ade or a(ended under this Act shall before being so (ade or a(ended be published for criticis(3 (g) the (anner in which applications (ay be (ade by dealers in securities for licences under section /, the fee payable in respect thereof and the period of such licences, the conditions subDect to which licences (ay be granted, including conditions relating to the for(s which (ay be used in (a)ing contracts, the docu(ents to be (aintained by licensed dealers and the furnishing of periodical infor(ation to such authority as (ay be specified and the re'ocation of licences for breach of conditions3 %"4(h) the re*uire(ents which shall be co(plied with(A) by public co(panies for the purpose of getting their securities listed on any stoc) exchange3 (B) by collecti'e in'est(ent sche(e for the purpose of getting their units listed on any stoc) exchange3: %#4GGG: %/4(ha) the grounds on which the securities of a co(pany (ay be delisted fro( any recognised stoc) exchange under sub+section ( ) of section % A3 (hb) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under sub+section (%) of section % A and the fees payable in respect of such appeal3 (hc) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3
%" Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec 0, w0e0f0 %%+0%+%0000 <rior to its substitution, clause (h) read as under , 1(h) the re*uire(ents which shall be co(plied with by public co(panies for the purpose of getting their securities listed on any stoc) exchange32 %# .he word ;and; o(itted by .he Securities Contracts (Regulation) A(end(ent Act, !>", Sec $, w0e0f0 /+0 + !>#0 %/ Substituted for clause (ha) by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 7arlier clause (ha), as a(ended by the Securities =aws (A(end(ent) Act, !!!, read as
under ,1(ha) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3 and2
(hd) the (anner of in*uiry under sub+section ( ) of section %3+I3 (he) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3= and the fees payable in respect of such appeal3: (i) any other (atter which is to be or (ay be prescribed0 %>4(3) 7'ery rule (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule0: 1"954o/er of Se'*ritie! % - E#'h% (e ;o%r- of I -i% to .%6e re(*l%tio !. )1. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 305(%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,%> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 <rior to its substitution, sub+section (3), as a(ended by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!", read as under , 1(3) 7'ery rule (ade under this section shall, as soon as (ay be, after its publication in the Cfficial &aFette, be laid before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e session aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule02 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0 7arlier it was repealed by the Repealing and A(ending Act, !#0, Sec % and 6irst Sch0 w0e0f0 %>+ %+ !#00 30 Substituted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec ", w0e0f0 %>+ 0"+%00/0 <rior to substitution it read as under , 1(%) In particular and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for the (anner in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section02
(a) the (anner, in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of
publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section3 (b) the eligibility criteria and other re*uire(ents under section /A0 < (3) 7'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the regulation or both Iouses agree that the regulation should not be (ade, the regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that regulation0:
DE4OSITORIES ACT, 1998 SECTIONS /@A81(0 : 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS ). Certificate of co((ence(ent of business by depositories /@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS 3. Agree(ent between depository and participant 5. Ser'ices of depository 8. Surrender of certificate of security 7. Registration of transfer of securities with depositories :. Cptions to recei'e security certificate or hold securities with depository 9. Securities in depositories to be in fungible for( 1=. Rights of depositories and beneficial owner 11. Register of beneficial owner 1". <ledge or hypothecation of securities held in a depository 1). 6urnishing of infor(ation and records by depository and issuer 13. Cption to opt out in respect of any security 15. Act > of >! to apply to depositories 18. 9epositories to inde(nify loss in certain cases 17. Rights and obligations of depositories, etc0 /@A81(0 :: EN9UIRM AND INS4ECTION 1:. <ower of 8oard to call for infor(ation and en*uiry 19. <ower of 8oard to gi'e directions in certain cases 19A. <enalty for failure to furnish infor(ation, return, etc0 19;. <enalty for failure to enter into an agree(ent 19C. <enalty for failure to redress in'estorsJ grie'ances
19D. <enalty for delay in de(aterialisation or issue of certificate of securities 19E. <enalty for failure to reconcile records 192. <enalty for failure to co(ply with directions issued by 8oard under section ! of the Act 19G. <enalty for contra'ention where no separate penalty has been pro'ided 19D. <ower to adDudicate 190I. 6actors to be ta)en into account by adDudicating officer 190IA. Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (! 190I;. Re'o+er> of %.o* t! 190E. Crediting su(s realised by way of penalties to Consolidated 6und of India /@A81(0 D 4ENALTM "=. Cffences "1. Cffences by co(panies /@A81(0 D: @ISCELLANEOUS "". CogniFance of offences by courts ""A. Co(position of certain offences "";. <ower to grant i((unity ""C. E!t%,li!h.e t of S$e'i%l Co*rt! ""D. Offe 'e! tri%,le ,> S$e'i%l Co*rt! ""E. A$$e%l % - re+i!io ""2. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""G. Tr% !itio %l 4ro+i!io ! "). Appeals ")A. Appeal to Securities Appellate .ribunal ")A. Appeal to Securities Appellate .ribunal ");. <rocedure and powers of Securities Appellate .ribunal ")C. Right to =egal Representation ")D. =i(itation ")E. Ci'il court not to ha'e Durisdiction ")2. Appeal to Supre(e Court "3. <ower of Central &o'ern(ent to (a)e rules "5. <ower of 8oard to (a)e regulations "8. <ower of depositories to (a)e bye+laws "7. Rules and regulations to be laid before <arlia(ent ":. Application of other laws not barred "9. Re(o'al of difficulties )=. A(end(ents to certain enact(ents )1. Repeal and sa'ing /@(5A9( A?7E9?7E. .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0: DE4OSITORIES ACT, 1998 5"" O2 1998< 51=th A*(*!t, 1998< An Act to provide $or reg lation o$ depositories in sec rities and $or matters connected there%ith or incidental thereto& B( it enacted bF 8arlia"ent in the E$rtF7#eventh ;ear $f the 0e%!blic $f :ndia a# f$ll$.# ,*
/@A81(0 : 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the 9epositories Act, !!#0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the %0th day of Septe(ber, !!"0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 1beneficial owner2 (eans a person whose na(e is recorded as such with a depository3 (b) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 3 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (c) 1bye+laws2 (eans bye+laws (ade by a depository under section %#3 (d) 1Co(pany =aw 8oard2 (eans the 8oard of Co(pany =aw Ad(inistration constituted under section 07 of the Co(panies Act, !"# ( of !"#)3 (e) 1depository2 (eans a co(pany for(ed and registered under the Co(panies Act, !"# ( of !"#), and which has been granted a certificate of registration under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (f) 1issuer2 (eans any person (a)ing an issue of securities3 (g) 1participant2 (eans a person registered as such under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (h) 1prescribed2 (eans prescribed by rules (ade under this Act3 (i) 1record2 includes the records (aintained in the for( of boo)s or stored in a co(puter or in such other for( as (ay be deter(ined by regulations3 (j) 1registered owner2 (eans a depository whose na(e is entered as such in the register of the issuer3 (k) 1regulations2 (eans the regulations (ade by the 8oard3 4(ka) 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (l) 1security2 (eans such security as (ay be specified by the 8oard3 (") 1ser'ice2 (eans any ser'ice connected with recording of allot(ent of securities or transfer of ownership of securities in the record of a depository0 (%) Kords and expressions used herein and not defined but defined in the Co(panies Act, !"# ( of !"#), or the Securities Contracts (Regulation) Act, !"# ($% of !"#), or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), shall ha'e the (eanings respecti'ely assigned to the( in those Acts0 /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS Certifi'%te of 'o..e 'e.e t of ,*!i e!! ,> -e$o!itorie!. ). ( ) Eo depository shall act as a depository unless it obtains a certificate of co((ence(ent of business fro( the 8oard0 (%) A certificate granted under sub+section ( ) shall be in such for( as (ay be specified by the regulations0 (3) .he 8oard shall not grant a certificate under sub+section ( ) unless it is satisfied that the depository has ade*uate syste(s and safeguards to pre'ent (anipulation of records and transactions , 4ro+i-e- that no certificate shall be refused under this section unless the depository concerned has been gi'en a reasonable opportunity of being heard0
Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
/@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS A(ree.e t ,et/ee -e$o!itor> % - $%rti'i$% t. 3. ( ) A depository shall enter into an agree(ent with one or (ore participants as its agent0 (%) 7'ery agree(ent under sub+section ( ) shall be in such for( as (ay be specified by the bye+laws0 Ser+i'e! of -e$o!itor>. 5. Any person, through a participant, (ay enter into an agree(ent, in such for( as (ay be specified by the bye+laws, with any depository for a'ailing its ser'ices0 S*rre -er of 'ertifi'%te of !e'*rit>. 8. ( ) Any person who has entered into an agree(ent under section " shall surrender the certificate of security, for which he see)s to a'ail the ser'ices of a depository, to the issuer in such (anner as (ay be specified by the regulations0 (%) .he issuer, on receipt of certificate of security under sub+section ( ), shall cancel the certificate of security and substitute in its records the na(e of the depository as a registered owner in respect of that security and infor( the depository accordingly0 (3) A depository shall, on receipt of infor(ation under sub+section (%), enter the na(e of the person referred to in sub+section ( ) in its records, as the beneficial owner0 Re(i!tr%tio of tr% !fer of !e'*ritie! /ith -e$o!itor>. 7. ( ) 7'ery depository shall, on receipt of inti(ation fro( a participant, register the transfer of security in the na(e of the transferee0 (%) If a beneficial owner or a transferee of any security see)s to ha'e custody of such security the depository shall infor( the issuer accordingly0 O$tio ! to re'ei+e !e'*rit> 'ertifi'%te or hol- !e'*ritie! /ith -e$o!itor>. :. ( ) 7'ery person subscribing to securities offered by an issuer shall ha'e the option either to recei'e the security certificates or hold securities with a depository0 (%) Khere a person opts to hold a security with a depository, the issuer shall inti(ate such depository the details of allot(ent of the security, and on receipt of such infor(ation the depository shall enter in its records the na(e of the allottee as the beneficial owner of that security0 Se'*ritie! i -e$o!itorie! to ,e i f* (i,le for.. 9. ( ) All securities held by a depository shall be de(aterialised and shall be in a fungible for(0 %4(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#), shall apply to a depository in respect of securities held by it on behalf of the beneficial owners&: Ri(ht! of -e$o!itorie! % - ,e efi'i%l o/ er. 1=. ( ) Eotwithstanding anything contained in any other law for the ti(e being in force, a depository shall be dee(ed to be the registered owner for the purposes of effecting transfer of ownership of security on behalf of a beneficial owner0 (%) Sa'e as otherwise pro'ided in sub+section ( ), the depository as a registered owner shall not ha'e any 'oting rights or any other rights in respect of securities held by it0 (3) .he beneficial owner shall be entitled to all the rights and benefits and be subDected to all the liabilities in respect of his securities held by a depository0 Re(i!ter of ,e efi'i%l o/ er. 11. 7'ery depository shall (aintain a register and an index of beneficial owners in the
(anner pro'ided in sections "0, " and "% of the Co(panies Act, !"# ( of !"#)0 4le-(e or h>$othe'%tio of !e'*ritie! hel- i % -e$o!itor>. 1". ( ) SubDect to such regulations and bye+laws, as (ay be (ade in this behalf, a beneficial owner (ay with the pre'ious appro'al of the depository create a pledge or hypothecation in respect of a security owned by hi( through a depository0 (%) 7'ery beneficial owner shall gi'e inti(ation of such pledge or hypothecation to the depository and such depository shall thereupon (a)e entries in its records accordingly0 (3) Any entry in the records of a depository under sub+section (%) shall be e'idence of a pledge or hypothecation0 2*r i!hi ( of i for.%tio % - re'or-! ,> -e$o!itor> % - i!!*er. 1). ( ) 7'ery depository shall furnish to the issuer infor(ation about the transfer of securities in the na(e of beneficial owners at such inter'als and in such (anner as (ay be specified by the bye+laws0 (%) 7'ery issuer shall (a)e a'ailable to the depository copies of the rele'ant records in respect of securities held by such depository0 O$tio to o$t o*t i re!$e't of % > !e'*rit>.
% Substituted
by the 9epositories Related =aws (A(end(ent) Act, !!/, Sec %%, w0e0f0 "+0 + !!/0 <rior to its substitution sub+section (%) read as under , 1(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#) shall apply to the securities held by a depository on behalf of the beneficial owners02
13. ( ) If a beneficial owner see)s to opt out of a depository in respect of any security he shall infor( the depository accordingly0 (%) .he depository shall on receipt of inti(ation under sub+section ( ) (a)e appropriate entries in its records and shall infor( the issuer0 (3) 7'ery issuer shall, within thirty days of the receipt of inti(ation fro( the depository and on fulfil(ent of such conditions and on pay(ent of such fees as (ay be specified by the regulations, issue the certificate of securities to the beneficial owner or the transferee, as the case (ay be0 A't 1: of 1:91 to %$$l> to -e$o!itorie!. 15. .he 8an)ersJ 8oo)s 7'idence Act, >! shall apply in relation to a depository as if it were a ban) as defined in section % of that Act0 De$o!itorie! to i -e. if> lo!! i 'ert%i '%!e!. 18. ( ) Kithout preDudice to the pro'isions of any other law for the ti(e being in force, any loss caused to the beneficial owner due to the negligence of the depository or the participant, the depository shall inde(nify such beneficial owner0 (%) Khere the loss due to the negligence of the participant under sub+section ( ) is inde(nified by the depository, the depository shall ha'e the right to reco'er the sa(e fro( such participant0 Ri(ht! % - o,li(%tio ! of -e$o!itorie!, et'. 17. ( ) SubDect to the pro'isions of this Act, the rights and obligations of the depositories, participants and the issuers whose securities are dealt with by a depository shall be specified by the regulations0 (%) .he eligibility criteria for ad(ission of securities into the depository shall be specified by the regulations0 /@A81(0 :D EN9UIRM AND INS4ECTION 4o/er of ;o%r- to '%ll for i for.%tio % - e 7*ir>. 1:. ( ) .he 8oard, on being satisfied that it is necessary in the public interest or in the interest of in'estors so to do, (ay, by order in writing,-
(a) call upon any issuer, depository, participant or beneficial owner to furnish in writing such infor(ation relating to the securities held in a depository as it (ay re*uire3 or (b) authorise any person to (a)e an en*uiry or inspection in relation to the affairs of the issuer, beneficial owner, depository or participant, who shall sub(it a report of such en*uiry or inspection to it within such period as (ay be specified in the order0 (%) 7'ery director, (anager, partner, secretary, officer or e(ployee of the depository or issuer or the participant or beneficial owner shall on de(and produce before the person (a)ing the en*uiry or inspection all infor(ation or such records and other docu(ents in his custody ha'ing a bearing on the subDect+(atter of such en*uiry or inspection0 4o/er of ;o%r- to (i+e -ire'tio ! i 'ert%i '%!e!. 19. Sa'e as pro'ided in this Act, if after (a)ing or causing to be (ade an en*uiry or inspection, the 8oard is satisfied that it is necessary(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any depository or participant being conducted in the (anner detri(ental to the interests of in'estors or securities (ar)et, it (ay issue such directions,(a) to any depository or participant or any person associated with the securities (ar)et3 or (b) to any issuer, as (ay be appropriate in the interest of in'estors or the securities (ar)et0 )5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< $44e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 19A. Any person, who is re*uired under this Act or any rules or regulations or bye+laws (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to the 8oard, fails to furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations or bye+laws, fails to file return or furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0
3I $ Inserted
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the Securities =aws (A(end(ent) Act, %00$, Sec0 /, w0r0e0f0 %+ 0+%00$0
4e %lt> for f%il*re to e ter i to % %(ree.e t. 19;. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and is re*uired under this Act or any rules or regulations (ade thereunder, to enter into an agree(ent, fails to enter into such agree(ent, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0
4e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 19C. If any depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such depository or participant or issuer or its agents or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for -el%> i -e.%teri%li!%tio or i!!*e of 'ertifi'%te of !e'*ritie!. 19D. If any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to de(aterialise or issue the certificate of securities on opting out of a depository by the in'estors, within the ti(e specified under this Act or regulations or bye+laws (ade thereunder or abets in delaying the process of de(aterialisation or issue the certificate of securities on opting out of a depository of securities, such issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to re'o 'ile re'or-!. 19E. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to reconcile the records of de(aterialised securities with all the securities issued by the issuer as specified in the regulations, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to 'o.$l> /ith -ire'tio ! i!!*e- ,> ;o%r- * -er !e'tio 19 of the A't. 192. If any person fails to co(ply with the directions issued by the 8oard under section !, within the ti(e specified by it, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 19G. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations or bye+laws (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0 4o/er to %-G*-i'%te. 19D. ( ) 6or the purpose of adDudging under sections !A, !8, !C, !9, !7, !6 and !&, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the
sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. 190I. Khile adDudging the *uantu( of penalty under section !I, the adDudicating officer shall ha'e due regard to the following factors, na(ely,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 55 Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (!. 190IA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 19, !e'tio 19D, %! the '%!e .%> ,e, .%> file % %$$li'%tio i /riti ( to the ;o%r$ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e-ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h
"I
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re !$e'ifie- ,> the ;o%r* -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")A %(%i !t % > or-er $%!!e- ,> the ;o%r- or the %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 85 Re'o+er> of %.o* t!. 190I;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 19 or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6
%''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hilor !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C!
#I
!erte- ,> The Se'*ritie! L%/! (A.e- .e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
.o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")A of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 19, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 19E. All su(s realiFed by way of penalties under this Act shall be credited to the Consolidated 6und of India0: /@A81(0 D 4ENALTM /4Offe 'e!. "=. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws (ade thereunder, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0
/ Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 >, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %0 read as under,1%00 <ffence#0- Khoe'er contran'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or any regulations or bye+laws (ade thereunder shall be punishable with i(prison(ent for a ter( which (ay extend to fi'e years, or with fine or with both02
(%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with
fine, which (ay extend to twenty+fi'e crore rupees, or with both0: Offe 'e! ,> 'o.$% ie!. "1. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n&-6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and (b) 1director2, in relation to a fir(, (eans a partner in the fir(0 /@A81(0 D: @ISCELLANEOUS >4Co( iL% 'e of offe 'e! ,> 'o*rt!. "". ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central
> Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 !, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %% read as under,1%%0 /$gniCance $f $ffence# bF c$!rt#&*( ) Eo Court shall ta)e cogniFance of any offence punishable under this Act or any regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the 8oard0 (%) Eo court inferior to that of a ?etropolitan ?agistrate or a Dudicial ?agistrate of the first class shall try any offence punishable under this Act02
&o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or by any person0 !5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < Co.$o!itio of 'ert%i offe 'e!. ""A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "";. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any
penalty under this Act with respect to the alleged 'iolation , 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity , 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0: 1=5 E!t%,li!h.e t of S$e'i%l Co*rt!. ""C. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>.
! <rior
to o(ission, Sub+section(%) read 1Eo court inferior to that of a Court of Session shall try any offence punishable under this Act02 0 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. ""D. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-. A$$e%l % - Re+i!io ""E. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""2. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197).
(") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erioof ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! ""G. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< A$$e%l!. "). ( ) Any person aggrie'ed by an order of the 8oard (ade 4before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!: under this Act, or the regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor , 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0 (3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed , 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 %4A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")A. ( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!, under this Act, or the regulations (ade thereunder, 34or by an order (ade by an adDudicating officer under this Act: (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 $5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 8oard is recei'ed by the person referred to in sub+section ( ) and it shall be in such for( and be acco(panied by such fee as (ay be prescribed ,
Substituted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 $, w0e0f0 #+ %+ !!! for ;an order of the 8oard (ade;0 % Sections %3A to %36 inserted by the Securities =aws (Second A(end(ent) Act, !!! , Sec0 ", w0e0f0 #+ %+ !!!& 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %0, w0r0e0f0 %+ 0+%00$0 $ 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JNo %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-e ,> the ;o%r- /ith the 'o !e t of the $%rtie!.K
4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0
($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 (") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. ");. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3 (e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte; (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 Ri(ht to le(%l re$re!e t%tio . ")C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or an attorney of any Iigh Court, and
includes a pleader in practice0 Li.it%tio . ")D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 Ci+il 'o*rt ot to h%+e G*ri!-i'tio . ")E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "4A$$e%l to S*$re.e Co*rt. ")2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order ,
" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 % , w0r0e0f0 %+ 0+%00$0 <rior to its substitution, Section %36, as inserted by Securities =aws (Second A(end(ent) Act, !!!, w0e0f0 #+ %+ !!!, read as under,1%360 A%%eal t$ @igh /$!rt&-Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0:: 4o/er of Ce tr%l Go+er .e t to .%6e r*le!. "3. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for carrying out the pro'isions of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,164(a) the (anner of in*uiry under sub+section ( ) of section !I3 (aa) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %33: (b) the for( in which an appeal (ay be preferred under sub+section (3) of section %3 and the fees payable in respect of such appeal 3 (c) the procedure for disposing of an appeal under sub+section ($) of section %33 /4(d) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3A and the fees payable in respect of such appeal0: 4o/er of ;o%r- to .%6e re(*l%tio !. "5. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the 8oard (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for(a) the for( in which record is to be (aintained under clause ( i) of sub+section ( ) of section %3 (b) the for( in which the certificate of co((ence(ent of business shall be issued under
sub+section (%) of section 33 (c) the (anner in which the certificate of security shall be surrendered under sub+section ( ) of section #3 (d) the (anner of creating a pledge or hypothecation in respect of security owned by a beneficial owner under sub+section ( ) of section %3 (e) the conditions and the fees payable with respect to the issue of certificate of securities under sub+section (3) of section $3
# Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %%, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (a) read as under,1(a) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %332 / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 #, w0e0f0 #+ %+ !!!0
(f) the rights and obligations of the depositories, participants and the issuers under subsection ( ) of section /3 (g) the eligibility criteria for ad(ission of securities into the depository under sub+section (%) of section /0 4o/er of -e$o!itorie! to .%6e ,>e0l%/!. "8. ( ) A depository shall, with the pre'ious appro'al of the 8oard, (a)e bye+laws consistent with the pro'isions of this Act and the regulations0 (%) In particular, and without preDudice to the generality of the foregoing power, such byelaws shall pro'ide for(a) the eligibility criteria for ad(ission and re(o'al of securities in the depository3 (b) the conditions subDect to which the securities shall be dealt with3 (c) the eligibility criteria for ad(ission of any person as a participant3 (d) the (anner and procedure for de(aterialisation of securities3 (e) the procedure for transactions within the depository3 (f) the (anner in which securities shall be dealt with or withdrawn fro( a depository3 (g) the procedure for ensuring safeguards to protect the interests of participants and beneficial owners3 (h) the conditions of ad(ission into and withdrawal fro( a participant by a beneficial owner3 (i) the procedure for con'eying infor(ation to the participants and beneficial owners on di'idend declaration, shareholder (eetings and other (atters of interest to the beneficial owners3 (j) the (anner of distribution of di'idends, interest and (onetary benefits recei'ed fro( the co(pany a(ong beneficial owners3 (k) the (anner of creating pledge or hypothecation in respect of securities held with a depository3 (l) inter #e rights and obligations a(ong the depository, issuer, participants, and beneficial owners3 (") the (anner and the periodicity of furnishing infor(ation to the 8oard, issuer and other persons3 (n) the procedure for resol'ing disputes in'ol'ing depository, issuer, co(pany or a beneficial owner3 ($) the procedure for proceeding against the participant co((itting breach of the regulations and pro'isions for suspension and expulsion of participants fro( the depository and cancellation of agree(ents entered with the depository3 (%) the internal control standards including procedure for auditing, re'iewing and (onitoring0
(3) Khere the 8oard considers it expedient so to do, it (ay, by order in writing, direct a depository to (a)e any bye+laws or to a(end or re'o)e any bye+laws already (ade within such period as it (ay specify in this behalf0 ($) If the depository fails or neglects to co(ply with such order within the specified period, the 8oard (ay (a)e the bye+laws or a(end or re'o)e the bye+laws (ade either in the for( specified in the order or with such (odifications thereof as the 8oard thin)s fit0 R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t. "7. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. ":. .he pro'isions of this Act shall be in addition to, and not in derogation of, any other law for the ti(e being in force relating to the holding and transfer of securities0 Re.o+%l of -iffi'*ltie!. "9. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as appear to it to be necessary or expedient for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of a period of two years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 A.e -.e t! to 'ert%i e %'t.e t!. )=. 40e%ealed bF 0e%ealing H A"ending Act' 20010: Re$e%l % - !%+i (. )1. ( ) .he 9epositories (.hird) Crdinance, !!# (Crd0 %> of !!#), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 /@(5A9( 4 ee section 30: A?7E9?7E.S .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0:
SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 SECTIONS !'APT"R I 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions !'APT"R II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA
). 7stablish(ent and incorporation of 8oard 3. ?anage(ent of the 8oard 5. .er( of office and conditions of ser'ice of Chair(an and (e(bers of the 8oard 8. Re(o'al of (e(ber fro( office 7. ?eetings 7A. ?e(ber not to participate in (eetings in certain cases :. Bacancies, etc0, not to in'alidate proceedings of 8oard 9. Cfficers and e(ployees of the 8oard !'APT"R III TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD 1=. .ransfer of assets, liabilities, etc0, of existing Securities and 7xchange 8oard to the 8oard !'APT"R IV 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 11. 6unctions of 8oard 11A. 8oard to regulate or prohibit issue of prospectus, offer docu(ent or ad'ertise(ent soliciting (oney for issue of securities 11AA. Collecti'e in'est(ent sche(e 11;. <ower to issue directions 11C. In'estigation 11D. Cease and desist proceedings !'APT"R V REGISTRATION CERTI2ICATE 1". Registration of stoc) bro)ers, sub+bro)ers, share transfer agents, etc0
%
!'APT"R VA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 1"A. <rohibition of (anipulati'e and decepti'e de'ices, insider trading and substantial ac*uisition of securities or control !'APT"R VI 2INANCE, ACCOUNTS AND AUDIT 1). &rants by the Central &o'ern(ent 13. 6und 15. Accounts and audit !'APT"R VIA 4ENALTIES AND ADEUDICATION 15A. <enalty for failure to furnish infor(ation, return, etc & 15;. <enalty for failure by any person to enter into agree(ent with clients 15C. <enalty for failure to redress in'estorsJ grie'ances 15D. <enalty for certain defaults in case of (utual funds 15E. <enalty for failure to obser'e rules and regulations by an asset (anage(ent co(pany 152. <enalty for default in case of stoc) bro)ers 15G. <enalty for insider trading 15D. <enalty for non+disclosure of ac*uisition of shares and ta)eo'ers 15DA. <enalty for fraudulent and unfair trade practices 15D;. <enalty for contra'ention where no separate penalty has been pro'ided
150I. <ower to adDudicate 15E. 6actors to be ta)en into account by the AdDudicating Cfficer 15EA. Crediting su(s realised by way of penalties to Consolidated 6und of India 15E;. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! !'APT"R VIB ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL 15F. 7stablish(ent of Securities Appellate .ribunals 15L. Co(position of Securities Appellate .ribunal 15@. Qualification for appoint(ent as <residing Cfficer or ?e(ber of Securities Appellate .ribunal
3
15N. .enure of office of <residing Cfficer and other (e(bers of Securities Appellate .ribunal 150O. Salary and allowances and other ter(s and conditions of ser'ice of <residing Cfficers 154. 6illing up of 'acancies 159. Resignation and re(o'al 15R. Crders constituting Appellate .ribunal to be final and not to in'alidate its proceedings 15S. Staff of the Securities Appellate .ribunal 15T. Appeal to the Securities Appellate .ribunal 15U. <rocedure and powers of the Securities Appellate .ribunal 15I. Right to legal representation 15?. =i(itation 15A. <residing Cfficer, (e(bers and staff of Securities Appellate .ribunals to be public ser'ants 15M. Ci'il Court not to ha'e Durisdiction 15N. Appeal to Supre(e Court !'APT"R VII @ISCELLANEOUS 18. <ower of Central &o'ern(ent to issue directions 17. <ower of Central &o'ern(ent to supersede the 8oard 1:. Returns and reports 19. 9elegation "=. Appeals "=A. 8ar of Durisdiction "1. Sa'ings "". ?e(bers, officers and e(ployees of the 8oard to be public ser'ants "). <rotection of action ta)en in good faith "3. Cffences "3A. Co(position of certain offences "3;. <ower to grant i((unity "5. 7xe(ption fro( tax on wealth and inco(e "8. CogniFance of offences by Courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! "7. Cffences by co(panies
":. 4C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!":
$
":A. Re'o+er> of %.o* t! "9. <ower to (a)e rules )=. <ower to (a)e regulations )1. Rules and regulations to be laid before <arlia(ent )". Application of other laws not barred )). 4Repealed by Repealing R A(ending Act, %00 : )3. <ower to re(o'e difficulties )5. Repeal and sa'ing .I7 SCI79H=7 4Repealed by Repealing R A(ending Act, %00 : SECURITIES AND EACDANGE ;OARD O2 INDIA ACT, 199" 515 O2 199"< 53th A$ril, 199"< A A't to $ro+i-e for the e!t%,li!h.e t of % ;o%r- to $rote't the i tere!t! of i +e!tor! i !e'*ritie! % - to $ro.ote the -e+elo$.e t of, % - to re(*l%te, the !e'*ritie! .%r6et % - for .%tter! 'o e'te- there/ith or i 'i-e t%l thereto B( it enacted bF 8arlia"ent in the E$rtF7third ;ear $f the 0e%!blic $f :ndia a# f$ll$.# , CDA4TER I 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities and 7xchange 8oard of India Act, !!%0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the 30th day of Manuary, !!%0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 33 (b) 1Chair(an2 (eans the Chair(an of the 8oard3 4(ba) 1collecti'e in'est(ent sche(e2 (eans any sche(e or arrange(ent which satisfies the conditions specified in section AA3: (c) 1existing Securities and 7xchange 8oard2 (eans the Securities and 7xchange 8oard of India constituted under the Resolution of the &o'ern(ent of India in the 9epart(ent of 7cono(ic Affairs Eo0 ($$) S7L>#, dated the %th day of April, !>>3 (d) 16und2 (eans the 6und constituted under section $3 (e) 1(e(ber2 (eans a (e(ber of the 8oard and includes the Chair(an3 (f) 1notification2 (eans a notification published in the Cfficial &aFette3 (g) 1prescribed2 (eans prescribed by rules (ade under this Act3
Inserted by the Securities =aws (A(end(ent) Act, !!!, w0e0f0 %%+%+%0000
"
(h) 1regulations2 (eans the regulations (ade by the 8oard under this Act3 4(ha) 1Reser'e 8an)2 (eans the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)3: (i) 1securities2 has the (eaning assigned to it in section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#)0 %4(%) Kords and expressions used and not defined in this Act but defined in the Securities Contracts (Regulation) Act, !"# ($% of !"#) 34or the 9epositories Act, !!#:, shall ha'e the (eanings respecti'ely assigned to the( in that Act:0 CDA4TER II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA E!t%,li!h.e t % - i 'or$or%tio of ;o%r-.
). ( ) Kith effect fro( such date as the Central &o'ern(ent (ay, by notification, appoint, there shall be established, for the purposes of this Act, a 8oard by the na(e of the Securities and 7xchange 8oard of India0 (%) .he 8oard shall be a body corporate by the na(e aforesaid, ha'ing perpetual succession and a co((on seal, with power subDect to the pro'isions of this Act, to ac*uire, hold and dispose of property, both (o'able and i((o'able, and to contract, and shall, by the said na(e, sue or be sued0 (3) .he head office of the 8oard shall be at 8o(bay0 ($) .he 8oard (ay establish offices at other places in India0 @% %(e.e t of the ;o%r-. 3. ( ) .he 8oard shall consist of the following (e(bers, na(ely,(a) a Chair(an3 (b) two (e(bers fro( a(ongst the officials of the $4?inistry: of the Central &o'ern(ent dealing with 6inance "4and ad(inistration of the Co(panies Act, !"# ( of !"#):3 (c) one (e(ber fro( a(ongst the officials of #4the Reser'e 8an):3 /4(d) fi'e other (e(bers of who( at least three shall be the whole+ti(e (e(bers,: to be appointed by the Central &o'ern(ent0
Inserted by the Securities =aws (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0 <rior to its substitution, sub+section (%) reads as under, 1(%) Kords and expressions used and not defined in this Act but defined in the Capital Issues (Control) Act, !$/ or the Securities Contracts Regulation Act, !"# shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts02 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 $ Substituted for 1?inistries2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1and law2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act !3$ (% of !3$)2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 / Substituted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, clause (d) read as, 1(d) two other (e(bers20
% Substituted
#
(%) .he general superintendence, direction and (anage(ent of the affairs of the 8oard shall 'est in a 8oard of (e(bers, which (ay exercise all powers and do all acts and things which (ay be exercised or done by the 8oard0 (3) Sa'e as otherwise deter(ined by regulations, the Chair(an shall also ha'e powers of general superintendence and direction of the affairs of the 8oard and (ay also exercise all powers and do all acts and things which (ay be exercised or done by that 8oard0 ($) .he Chair(an and (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be appointed by the Central &o'ern(ent and the (e(bers referred to in clauses ( b) and (c) of that sub+section shall be no(inated by the Central &o'ern(ent and the 4Reser'e 8an): respecti'ely0 (") .he Chair(an and the other (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be persons of ability, integrity and standing who ha'e shown capacity in dealing with proble(s relating to securities (ar)et or ha'e special )nowledge or experience of law, finance, econo(ics, accountancy, ad(inistration or in any other discipline which, in the opinion of the Central &o'ern(ent, shall be useful to the 8oard0 Ter. of offi'e % - 'o -itio ! of !er+i'e of Ch%ir.% % - .e.,er! of the ;o%r-. 5. ( ) .he ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers referred to in clause (d) of sub+section ( ) of section $ shall be such as (ay be prescribed0 (%) Eotwithstanding anything contained in sub+section ( ), the Central &o'ern(ent shall ha'e the right to ter(inate the ser'ices of the Chair(an or a (e(ber appointed under clause ( d) of
sub+section ( ) of section $, at any ti(e before the expiry of the period prescribed under subsection ( ), by gi'ing hi( notice of not less than three (onths in writing or three (onthsJ salary and allowances in lieu thereof, and the Chair(an or a (e(ber, as the case (ay be, shall also ha'e the right to relin*uish his office, at any ti(e before the expiry of the period prescribed under sub+section ( ), by gi'ing to the Central &o'ern(ent notice of not less than three (onths in writing0 Re.o+%l of .e.,er fro. offi'e. 8. %4G G G: .he Central &o'ern(ent shall re(o'e a (e(ber fro( office if he(a) is, or at any ti(e has been, adDudicated as insol'ent3 (b) is of unsound (ind and stands so declared by a co(petent court3 (c) has been con'icted of an offence which, in the opinion of the Central &o'ern(ent, in'ol'es a (oral turpitude3 (d) 34G G G: (e) has, in the opinion of the Central &o'ern(ent, so abused his position as to render his continuation in office detri(ental to the public interest , 4ro+i-e- that no (e(ber shall be re(o'ed under this clause unless he has been gi'en a reasonable opportunity of being heard in the (atter0
Substituted for 1Reser'e 8an) of India2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 )2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 C(itted, by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to o(ission clause (d) read read as, 1(d) is appointed as a director of a co(pany20
% 1(
/
@eeti (!. 7. ( ) .he 8oard shall (eet at such ti(es and places, and shall obser'e such rules of procedure in regard to the transaction of business at its (eetings (including *uoru( at such (eetings) as (ay be pro'ided by regulations0 (%) .he Chair(an or, if for any reason, he is unable to attend a (eeting of the 8oard, any other (e(ber chosen by the (e(bers present fro( a(ongst the(sel'es at the (eeting shall preside at the (eeting0 (3) All *uestions which co(e up before any (eeting of the 8oard shall be decided by a (aDority 'otes of the (e(bers present and 'oting, and, in the e'ent of an e*uality of 'otes, the Chair(an, or in his absence, the person presiding, shall ha'e a second or casting 'ote0 4@e.,er ot to $%rti'i$%te i .eeti (! i 'ert%i '%!e!. 7A. Any (e(ber, who is a director of a co(pany and who as such director has any direct or indirect pecuniary interest in any (atter co(ing up for consideration at a (eeting of the 8oard, shall, as soon as possible after rele'ant circu(stances ha'e co(e to his )nowledge, disclose the nature of his interest at such (eeting and such disclosure shall be recorded in the proceedings of the 8oard, and the (e(ber shall not ta)e any part in any deliberation or decision of the 8oard with respect to that (atter0: I%'% 'ie!, et'., ot to i +%li-%te $ro'ee-i (! of ;o%r-. :. Eo act or proceeding of the 8oard shall be in'alid (erely by reason of(a) any 'acancy in, or any defect in the constitution of, the 8oard3 or (b) any defect in the appoint(ent of a person acting as a (e(ber of the 8oard3 or (c) any irregularity in the procedure of the 8oard not affecting the (erits of the case0 Offi'er! % - e.$lo>ee! of the ;o%r-. 9. ( ) .he 8oard (ay appoint such other officers and e(ployees as it considers necessary for the efficient discharge of its functions under this Act0 (%) .he ter( and other conditions of ser'ice of officers and e(ployees of the 8oard appointed under sub+section ( ) shall be such as (ay be deter(ined by regulations0 CDA4TER III
TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD Tr% !fer of %!!et!, li%,ilitie!, et'., of e#i!ti ( Se'*ritie! % - E#'h% (e ;o%r- to the ;o%r-. 1=. ( ) Cn and fro( the date of establish(ent of the 8oard,(a) any reference to the existing Securities and 7xchange 8oard in any law other than this Act or in any contract or other instru(ent shall be dee(ed as a reference to the 8oard3 (b) all properties and assets, (o'able and i((o'able, of, or belonging to, the existing Securities and 7xchange 8oard, shall 'est in the 8oard3
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
>
(c) all rights and liabilities of the existing Securities and 7xchange 8oard shall be transferred to, and be the rights and liabilities of, the 8oard3 (d) without preDudice to the pro'isions of clause (c), all debts, obligations and liabilities incurred, all contracts entered into and all (atters and things engaged to be done by, with or for the existing Securities and 7xchange 8oard i((ediately before that date, for or in connection with the purpose of the said existing 8oard shall be dee(ed to ha'e been incurred, entered into, or engaged to be done by, with or for, the 8oard3 (e) all su(s of (oney due to the existing Securities and 7xchange 8oard i((ediately before that date shall be dee(ed to be due to the 8oard3 (f) all suits and other legal proceedings instituted or which could ha'e been instituted by or against the existing Securities and 7xchange 8oard i((ediately before that date (ay be continued or (ay be instituted by or against the 8oard3 and (g) e'ery e(ployee holding any office under the existing Securities and 7xchange 8oard i((ediately before that date shall hold his office in the 8oard by the sa(e tenure and upon the sa(e ter(s and conditions of ser'ice as respects re(uneration, lea'e, pro'ident fund, retire(ent and other ter(inal benefits as he would ha'e held such office if the 8oard had not been established and shall continue to do so as an e(ployee of the 8oard or until the expiry of the period of six (onths fro( that date if such e(ployee opts not to be the e(ployee of the 8oard within such period0 (%) Eotwithstanding anything contained in the Industrial 9isputes Act, !$/ ( $ of !$/), or in any other law for the ti(e being in force, absorption of any e(ployee by the 8oard in its regular ser'ice under this section shall not entitle such e(ployee to any co(pensation under that Act or other law and no such clai( shall be entertained by any court, tribunal or other authority0 CDA4TER II 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 2* 'tio ! of ;o%r-. 11. ( ) SubDect to the pro'isions of this Act, it shall be the duty of the 8oard to protect the interests of in'estors in securities and to pro(ote the de'elop(ent of, and to regulate the securities (ar)et, by such (easures as it thin)s fit0 (%) Kithout preDudice to the generality of the foregoing pro'isions, the (easures referred to therein (ay pro'ide for(a) regulating the business in stoc) exchanges and any other securities (ar)ets3 (b) registering and regulating the wor)ing of stoc) bro)ers, sub+bro)ers, share transfer agents, ban)ers to an issue, trustees of trust deeds, registrars to an issue, (erchant ban)ers, underwriters, portfolio (anagers, in'est(ent ad'isers and such other inter(ediaries who (ay be associated with securities (ar)ets in any (anner3 4(ba) registering and regulating the wor)ing of the depositories, %4participants:, custodians of securities, foreign institutional in'estors, credit rating agencies and such other inter(ediaries as the 8oard (ay, by notification, specify in this behalf3: (c) registering and regulating the wor)ing of 4'enture capital funds and collecti'e
in'est(ent sche(es:, including (utual funds3
% Inserted
Inserted by Securities =aws (A(end(ent) Act !!", w0r0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+!+ !!"0
!
(d) pro(oting and regulating self+regulatory organisations3 (e) prohibiting fraudulent and unfair trade practices relating to securities (ar)ets3 (f) pro(oting in'estorsJ education and training of inter(ediaries of securities (ar)ets3 (g) prohibiting insider trading in securities3 (h) regulating substantial ac*uisition of shares and ta)e o'er of co(panies3 (i) calling for infor(ation fro(, underta)ing inspection, conducting in*uiries and audits of the %4stoc) exchanges, (utual funds, other persons associated with the securities (ar)et:, inter(ediaries and self+regulatory organisations in the securities (ar)et3 34(ia) '%lli ( for i for.%tio % - re'or-! fro. % > $er!o i 'l*-i ( % > ,% 6 or % > other %*thorit> or ,o%r- or 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l or St%te A't /hi'h, i the o$i io of the ;o%r-, !h%ll ,e rele+% t to % > i +e!ti(%tio or i 7*ir> ,> the ;o%r- i re!$e't of % > tr% !%'tio i !e'*ritie! 3: $5(i,) '%lli ( for i for.%tio fro., or f*r i!hi ( i for.%tio to, other %*thoritie!, /hether i I -i% or o*t!i-e I -i%, h%+i ( f* 'tio ! !i.il%r to tho!e of the ;o%r-, i the .%tter! rel%ti ( to the $re+e tio or -ete'tio of +iol%tio ! i re!$e't of !e'*ritie! l%/!, !*,Ge't to the $ro+i!io ! of other l%/! for the ti.e ,ei ( i for'e i thi! re(%r-& 4ro+i-e- th%t the ;o%r-, for the $*r$o!e of f*r i!hi ( % > i for.%tio to % > %*thorit> o*t!i-e I -i%, .%> e ter i to % %rr% (e.e t or %(ree.e t or * -er!t% -i ( /ith !*'h %*thorit> /ith the $rior %$$ro+%l of the Ce tr%l Go+er .e tH< (j) perfor(ing such functions and exercising such powers under the pro'isions of "4G G G: the Securities Contracts (Regulation) Act, !"# ($% of !"#), as (ay be delegated to it by the Central &o'ern(ent3 (k) le'ying fees or other charges for carrying out the purposes of this section3 (l) conducting research for the abo'e purposes3 #4(la) calling fro( or furnishing to any such agencies, as (ay be specified by the 8oard, such infor(ation as (ay be considered necessary by it for the efficient discharge of its functions3: (") perfor(ing such other functions as (ay be prescribed0 /4(%A) Kithout preDudice to the pro'isions contained in sub+section (%), the 8oard (ay ta)e (easures to underta)e inspection of any boo), or register, or other docu(ent or record of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard
Substituted for 1collecti'e in'est(ent sche(es2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % Substituted for 1stoc) exchanges and2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 S*,!tit*te- for J'%lli ( for i for.%tio % - re'or- fro. % > ,% 6 or % > other %*thorit> or ,o%ror 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l, St%te or 4ro+i 'i%l A't i re!$e't of % > tr% !%'tio i !e'*ritie! /hi'h i! * -er i +e!ti(%tio or i 7*ir> ,> the ;o%r-K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). E%rlier Se'tio 11(")(i%) /%! i !erte- ,> the SE;I (A.e -.e t) A't, "==" /.e.f. "901=0"=="0 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. =80=)0 199:) " .he words 1the Capital Issues (Control) Act, !$/ (%! of !$/) and2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
0
has reasonable grounds to belie'e that such co(pany has been indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et0: 4(3) Eotwithstanding anything contained in any other law for the ti(e being in force while exercising the powers under %4clause (i) or clause (ia) of sub+section (%) or sub+ section (2A):, the 8oard shall ha'e the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(i) the disco'ery and production of boo)s of account and other docu(ents, at such place and such ti(e as (ay be specified by the 8oard3 (ii) su((oning and enforcing the attendance of persons and exa(ining the( on oath3 (iii) inspection of any boo)s, registers and other docu(ents of any person referred to in section %, at any place3: 34(iv) inspection of any boo), or register, or other docu(ent or record of the co(pany referred to in sub+section (%A)3 (v) issuing co((issions for the exa(ination of witnesses or docu(ents0: $4($) Kithout preDudice to the pro'isions contained in sub+sections ( ), (%), (%A) and (3) and section 8, the 8oard (ay, by an order, for reasons to be recorded in writing, in the interests of in'estors or securities (ar)et, ta)e any of the following (easures, either pending in'estigation or in*uiry or on co(pletion of such in'estigation or in*uiry, na(ely,(a) suspend the trading of any security in a recognised stoc) exchange3 (b) restrain persons fro( accessing the securities (ar)et and prohibit any person associated with securities (ar)et to buy, sell or deal in securities3 (c) suspend any office+bearer of any stoc) exchange or self+regulatory organisation fro( holding such position3 (d) i(pound and retain the proceeds or securities in respect of any transaction which is under in'estigation3 (e) attach, after passing of an order on an application (ade for appro'al by the Mudicial ?agistrate of the first class ha'ing Durisdiction, for a period not exceeding one (onth, one or (ore ban) account or accounts of any inter(ediary or any person associated with the securities (ar)et in any (anner in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder , 4ro+i-e- that only the ban) account or accounts or any transaction entered therein, so far as it relates to the proceeds actually in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder shall be allowed to be attached3 (f) direct any inter(ediary or any person associated with the securities (ar)et in any (anner not to dispose of or alienate an asset for(ing part of any transaction which is under in'estigation , 4ro+i-e- that the 8oard (ay, without preDudice to the pro'isions contained in sub+section (%) or sub+section (%A), ta)e any of the (easures specified in clause ( d) or clause (e) or clause (f), in respect of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard has reasonable grounds to belie'e that such co(pany has been
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1clause (i) of sub+section (%)2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 3 Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 $ Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
% Substituted
indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et , 4ro+i-e- f*rther that the 8oard shall, either before or after passing such orders, gi'e an
opportunity of hearing to such inter(ediaries or persons concerned0: 15(5) The %.o* t -i!(or(e-, $*r!*% t to % -ire'tio i!!*e- * -er !e'tio 11; or !e'tio 1"A of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 or !e'tio 19 of the De$o!itorie! A't, 1998, %! the '%!e .%> ,e, !h%ll ,e 're-ite- to the I +e!tor 4rote'tio % - E-*'%tio 2* e!t%,li!he- ,> the ;o%r- % - !*'h %.o* t !h%ll ,e *tiliLe- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< %4;o%r- to re(*l%te or $rohi,it i!!*e of $ro!$e't*!, offer -o'*.e t or %-+erti!e.e t !oli'iti ( .o e> for i!!*e of !e'*ritie!. 11A. ( ) Kithout preDudice to the pro'isions of the Co(panies Act, !"# ( of !"#), the 8oard (ay, for the protection of in'estors,(a) specify, by regulations(i) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (ii) the (anner in which such (atters shall be disclosed by the co(panies3 (b) by general or special orders(i) prohibit any co(pany fro( issuing prospectus, any offer docu(ent, or ad'ertise(ent soliciting (oney fro( the public for the issue of securities3 (ii) specify the conditions subDect to which the prospectus, such offer docu(ent or ad'ertise(ent, if not prohibited, (ay be issued0 (%) Kithout preDudice to the pro'isions of section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the 8oard (ay specify the re*uire(ents for listing and transfer of securities and other (atters incidental thereto0: 34Colle'ti+e i +e!t.e t !'he.e. 11AA. ( ) Any sche(e or arrange(ent which satisfies the conditions referred to in subsection (%) $5or !*,0!e'tio ("A)< shall be a collecti'e in'est(ent sche(e0 "44ro+i-e- th%t % > $ooli ( of f* -! * -er % > !'he.e or %rr% (e.e t, /hi'h i! ot re(i!tere- /ith the ;o%r- or i! ot 'o+ere- * -er !*,0!e'tio ()), i +ol+i ( %
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 7arlier S0 A was inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" for S0 A0 <rior to its substitution, S0 A read as under,+ 1 A0 ?atters to be disclosed by the co(panies0+ Kithout <reDudice to the <ro'isions of the Co(panies Act , !"# ( of !"#), the board (ay , for the protection of in'estors, specify, by regulations,+ (a) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (b) the (anner in which such (atters, shall be disclosed by the co(panies02 3 Inserted by S78I (A(end(ent) Act !!!, w0e0f0 %%+%+%0000 $I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% Substituted
%
'or$*! %.o* t of o e h* -re- 'rore r*$ee! or .ore !h%ll ,e -ee.e- to ,e % 'olle'ti+e i +e!t.e t !'he.e.< (%) Any sche(e or arrange(ent (ade or offered by any 5$er!o < under which,(i) the contributions, or pay(ents (ade by the in'estors, by whate'er na(e called, are pooled and utiliFed for the purposes of the sche(e or arrange(ent3 (ii) the contributions or pay(ents are (ade to such sche(e or arrange(ent by the in'estors with a 'iew to recei'e profits, inco(e, produce or property, whether (o'able or i((o'able, fro( such sche(e or arrange(ent3 (iii) the property, contribution or in'est(ent for(ing part of sche(e or arrange(ent, whether identifiable or not, is (anaged on behalf of the in'estors3
(iv) the in'estors do not ha'e day+to+day control o'er the (anage(ent and operation of the sche(e or arrange(ent0 "5("A)< A > !'he.e or %rr% (e.e t .%-e or offere- ,> % > $er!o !%ti!f>i ( the 'o -itio ! %! .%> ,e !$e'ifie- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< (3) Eotwithstanding anything contained in sub+section (%) 35or !*,0!e'tio ("A)<, any sche(e or arrange(ent(i) (ade or offered by a co+operati'e society registered under the Co+operati'e Societies Act, ! % (% of ! %) or a society being a society registered or dee(ed to be registered under any law relating to co+operati'e societies for the ti(e being in force in any State3 (ii) under which deposits are accepted by non+ban)ing financial co(panies as defined in clause (f) of section $"+I of the Reser'e 8an) of India Act, !3$ (% of !3$)3 (iii) being a contract of insurance to which the Insurance Act, !3> ($ of !3>), applies3 (iv) pro'iding for any Sche(e, <ension Sche(e or the Insurance Sche(e fra(ed under the 7(ployees <ro'ident 6und and ?iscellaneous <ro'isions Act, !"% ( ! of !"%)3 (v) under which deposits are accepted under section ">A of the Co(panies Act, !"# ( of !"#)3 (vi) under which deposits are accepted by a co(pany declared as a Eidhi or a (utual benefit society under section #%0A of the Co(panies Act, !"# ( of !"#)3 (vii) falling within the (eaning of Chit business as defined in clause ( d) of section % of the Chit 6und Act, !>% ($0 of !>%)3 (viii) under which contributions (ade are in the nature of subscription to a (utual fund3 35(i#) !*'h other !'he.e or %rr% (e.e t /hi'h the Ce tr%l Go+er .e t .%>, i 'o !*lt%tio /ith the ;o%r-, otif>H< shall not be a collecti'e in'est(ent sche(e0: "54o/er to i!!*e -ire'tio !. 11;. Sa'e as otherwise pro'ided in section , if after (a)ing or causing to be (ade an en*uiry, the 8oard is satisfied that it is necessary,S*,!tit*te- for J'o.$% >K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) 3I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
%I
3
(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any inter(ediary or other persons referred to in section % being conducted in a (anner detri(ental to the interest of in'estors or securities (ar)et3 or (iii) to secure the proper (anage(ent of any such inter(ediary or person, it (ay issue such directions,(a) to any person or class of persons referred to in section %, or associated with the securities (ar)et3 or (b) to any co(pany in respect of (atters specified in section A, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 15E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< %4I +e!ti(%tio . 11C. ( ) Khere the 8oard has reasonable ground to belie'e that-
(a) the transactions in securities are being dealt with in a (anner detri(ental to the in'estors or the securities (ar)et3 or (b) any inter(ediary or any person associated with the securities (ar)et has 'iolated any of the pro'isions of this Act or the rules or the regulations (ade or directions issued by the 8oard thereunder, it (ay, at any ti(e by order in writing, direct any person (hereafter in this section referred to as the In'estigating Authority) specified in the order to in'estigate the affairs of such inter(ediary or persons associated with the securities (ar)et and to report thereon to the 8oard0 (%) Kithout preDudice to the pro'isions of sections %3" to %$ of the Co(panies Act, !"# ( of !"#), it shall be the duty of e'ery (anager, (anaging director, officer and other e(ployee of the co(pany and e'ery inter(ediary referred to in section % or e'ery person associated with the securities (ar)et to preser'e and to produce to the In'estigating Authority or any person authorised by it in this behalf, all the boo)s, registers, other docu(ents and record of, or relating to, the co(pany or, as the case (ay be, of or relating to, the inter(ediary or such person, which are in their custody or power0 (3) .he In'estigating Authority (ay re*uire any inter(ediary or any person associated with securities (ar)et in any (anner to furnish such infor(ation to, or produce such boo)s, or registers, or other docu(ents, or record before hi( or any person authorised by it in this behalf as it (ay consider necessary if the furnishing of such infor(ation or the production of such boo)s, or registers, or other docu(ents, or record is rele'ant or necessary for the purposes of its in'estigation0 ($) .he In'estigating Authority (ay )eep in its custody any boo)s, registers, other docu(ents and record produced under sub+section (%) or sub+section (3) for six (onths and thereafter
% Inserted
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
$
shall return the sa(e to any inter(ediary or any person associated with securities (ar)et by who( or on whose behalf the boo)s, registers, other docu(ents and record are produced , 4ro+i-e- that the In'estigating Authority (ay call for any boo), register, other docu(ent and record if they are needed again , 4ro+i-e- f*rther that if the person on whose behalf the boo)s, registers, other docu(ents and record are produced re*uires certified copies of the boo)s, registers, other docu(ents and record produced before the In'estigating Authority, it shall gi'e certified copies of such boo)s, registers, other docu(ents and record to such person or on whose behalf the boo)s, registers, other docu(ents and record were produced0 (") Any person, directed to (a)e an in'estigation under sub+section ( ), (ay exa(ine on oath, any (anager, (anaging director, officer and other e(ployee of any inter(ediary or any person associated with securities (ar)et in any (anner, in relation to the affairs of his business and (ay ad(inister an oath accordingly and for that purpose (ay re*uire any of those persons to appear before it personally0 (#) If any person fails without reasonable cause or refuses(a) to produce to the In'estigating Authority or any person authorised by it in this behalf any boo), register, other docu(ent and record which is his duty under sub+section (%) or sub+section (3) to produce3 or (b) to furnish any infor(ation which is his duty under sub+section (3) to furnish3 or (c) to appear before the In'estigating Authority personally when re*uired to do so under sub+section (") or to answer any *uestion which is put to hi( by the In'estigating Authority in pursuance of that sub+section3 or (d) to sign the notes of any exa(ination referred to in sub+section (/), he shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with
fine, which (ay extend to one crore rupees, or with both, and also with a further fine which (ay extend to fi'e la)h rupees for e'ery day after the first during which the failure or refusal continues0 (/) Eotes of any exa(ination under sub+section (") shall be ta)en down in writing and shall be read o'er to, or by, and signed by, the person exa(ined, and (ay thereafter be used in e'idence against hi(0 4(:) ?here i the 'o*r!e of % i +e!ti(%tio , the I +e!ti(%ti ( A*thorit> h%! re%!o to ,elie+e th%t % > $er!o or e ter$ri!e, %! the '%!e .%> ,e, to /ho. % oti'e * -er !*,!e'tio ()) h%! ,ee i!!*e- or .i(ht ,e i!!*e-, 0 (%) h%! o.itte- or f%ile- to $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! %! re7*irei the oti'eH or (,) /o*l- ot $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! /hi'h !h%ll ,e *!ef*l for, or rele+% t to, the i +e!ti(%tio H or (') /o*l- -e!tro>, .*til%te, %lter, f%l!if> or !e'rete the i for.%tio or -o'*.e t! *!ef*l for, or rele+% t to, the i +e!ti(%tio ,
S*,!tit*te- for JKhere in the course of in'estigation, the In'estigating Authority has reasonable ground to belie'e that the boo)s, registers, other docu(ents and record of, or relating to, any inter(ediary or any person associated with securities (ar)et in any (anner, (ay be destroyed, (utilated, altered, falsified or secreted, the In'estigating Authority (ay (a)e an application to the Mudicial ?agistrate of the first class ha'ing Durisdiction for an order for the seiFure of such boo)s, registers, other docu(ents and record K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
"
the , the Ch%ir.% .%>, %fter ,ei ( !%ti!fie- th%t it i! e'e!!%r> to -o !o, %*thoriLe the I +e!ti(%ti ( A*thorit> or % > other offi'er of the ;o%r- (the offi'er !o %*thoriLe- i %ll '%!e! ,ei ( herei %fter referre- to %! the %*thori!e- offi'er), to0 (i) e ter % - !e%r'h, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft /here !*'h i for.%tio or -o'*.e t! %re e#$e'te- or ,elie+e- to ,e 6e$tH (ii) ,re%6 o$e the lo'6 of % > -oor, ,o#, lo'6er, !%fe, %l.ir%h or other re'e$t%'le for e#er'i!i ( the $o/er! 'o ferre- ,> !*,0'l%*!e (i), /here the 6e>! thereof %re ot %+%il%,leH (iii) !e%r'h % > $er!o /ho h%! (ot o*t of, or i! %,o*t to (et i to, or i! i , the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft, if the %*thoriLe- offi'er h%! re%!o to !*!$e't th%t !*'h $er!o h%! !e'rete- %,o*t hi! $er!o % > !*'h ,oo6! of %''o* t or other -o'*.e t!H (i+) re7*ire % > $er!o /ho i! fo* - to ,e i $o!!e!!io or 'o trol of % > ,oo6! of %''o* t or other -o'*.e t!, .%i t%i e- i the for. of ele'tro i' re'or-, to $ro+i-e the %*thori!e- offi'er the e'e!!%r> f%'ilit> to i !$e't !*'h ,oo6! of %''o* t or other -o'*.e t!. "#planation0 2or the $*r$o!e of thi! !*,0'l%*!e, the e#$re!!io Jele'tro i' re'or-K !h%ll h%+e the .e% i ( %!!i( e- to it i 'l%*!e (t) of !*,0!e'tio (1) of !e'tio " of the I for.%tio Te'h olo(> A't, "===. (+) !eiLe % > !*'h ,oo6! of %''o* t or other -o'*.e t! fo* - %! % re!*lt of !*'h !e%r'hH (+i) $l%'e .%r6! of i-e tifi'%tio o % > ,oo6! of %''o* t or other -o'*.e t! or .%6e or '%*!e to ,e .%-e e#tr%'t! or 'o$ie! therefro.H (+ii) re'or- o o%th the !t%te.e t of % > $er!o /ho i! fo* - to ,e i $o!!e!!io or i 'o trol of the i for.%tio or -o'*.e t! referre- to i !*,0'l%*!e! (i), (iii) % - (i+).< 4(9) The ;o%r- .%> .%6e re(*l%tio ! i rel%tio to % > !e%r'h or !eiL*re * -er thi! !e'tio H % - i $%rti'*l%r, /itho*t $reG*-i'e to the (e er%lit> of the fore(oi ( $o/er, !*'h re(*l%tio ! .%> $ro+i-e for the $ro'e-*re to ,e follo/e- ,> the %*thori!e- offi'er0
(%) for o,t%i i ( i (re!! i to % > ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft to ,e !e%r'he- /here free i (re!! thereto i! ot %+%il%,leH
1 S*,!tit*te-
,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) for the follo/i (& JAfter 'o !i-eri ( the %$$li'%tio % - he%ri ( the I +e!ti(%ti ( A*thorit>, if e'e!!%r>, the @%(i!tr%te .%>, ,> or-er, %*thori!e the I +e!ti(%ti ( A*thorit>O (a) to e ter, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the $l%'e or $l%'e! /here !*'h ,oo6!, re(i!ter!, other -o'*.e t! % - re'or- %re 6e$tH (b) to !e%r'h th%t $l%'e or tho!e $l%'e! i the .% er !$e'ifie- i the or-erH % (c) to !eiLe ,oo6!, re(i!ter!, other -o'*.e t! % - re'or-, it 'o !i-er! e'e!!%r> for the $*r$o!e! of the i +e!ti(%tio & 4ro+i-e- th%t the @%(i!tr%te !h%ll ot %*thori!e !eiL*re of ,oo6!, re(i!ter!, other -o'*.e t! % re'or-, of % > li!te- $*,li' 'o.$% > or % $*,li' 'o.$% > ( ot ,ei ( the i ter.e-i%rie! !$e'ifie* -er !e'tio 1") /hi'h i te -! to (et it! !e'*ritie! li!te- o % > re'o( i!e- !to'6 e#'h% (e * le!! !*'h 'o.$% > i -*l(e! i i !i-er tr%-i ( or .%r6et .% i$*l%tio .K
#
(,) for e !*ri ( !%fe '*!to-> of % > ,oo6! of %''o* t or other -o'*.e t! or %!!et! !eiLe-.< ( 0) .he In'estigating Authority shall )eep in its custody the boo)s, registers, other docu(ents and record seiFed under this section for such period not later than the conclusion of the in'estigation as it considers necessary and thereafter shall return the sa(e to the co(pany or the other body corporate, or, as the case (ay be, to the (anaging director or the (anager or any other person, fro( whose custody or power they were seiFed 5***<, 4ro+i-e- that the In'estigating Authority (ay, before returning such boo)s, registers, other docu(ents and record as aforesaid, place identification (ar)s on the( or any part thereof0 ( ) Sa'e as otherwise pro'ided in this section, e'ery search or seiFure (ade under this section shall be carried out in accordance with the pro'isions of the Code of Cri(inal <rocedure, !/3 (% of !/$) relating to searches or seiFures (ade under that Code0 Ce%!e % - -e!i!t $ro'ee-i (!. 11D. If the 8oard finds, after causing an in*uiry to be (ade, that any person has 'iolated, or is li)ely to 'iolate, any pro'isions of this Act, or any rules or regulations (ade thereunder, it (ay pass an order re*uiring such person to cease and desist fro( co((itting or causing such 'iolation, 4ro+i-e- that the 8oard shall not pass such order in respect of any listed public co(pany or a public co(pany (other than the inter(ediaries specified under section %) which intends to get its securities listed on any recognised stoc) exchange unless the 8oard has reasonable grounds to belie'e that such co(pany has indulged in insider trading or (ar)et (anipulation0: CDA4TER I REGISTRATION CERTI2ICATE Re(i!tr%tio of !to'6 ,ro6er!, !*,0,ro6er!, !h%re tr% !fer %(e t!, et'. 1". ( ) Eo stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et shall buy, sell or deal in securities except under, and in accordance with, the conditions of a certificate of registration obtained fro( the 8oard in accordance with the %4regulations: (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et i((ediately before the establish(ent of the 8oard for which no registration certificate was
necessary prior to such establish(ent, (ay continue to do so for a period of three (onths fro( such establish(ent or, if he has (ade an application for such registration within the said period of three (onths, till the disposal of such application,
The /or-! P% - i for. the @%(i!tr%te of !*'h ret*r P, o.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) % Substituted for 1rules2 by Securities =aw (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0
/
44ro+i-e- f*rther that any certificate of registration, obtained i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", shall be dee(ed to ha'e been obtained fro( the 8oard in accordance with the regulations pro'iding for such registration0 ( A) Eo depository, %4participant,: custodian of securities, foreign institutional in'estor, credit rating agency, or any other inter(ediary associated with the securities (ar)et as the 8oard (ay by notification in this behalf specify, shall buy or sell or deal in securities except under and in accordance with the conditions of a certificate of registration obtained fro( the 8oard in accordance with the regulations (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a depository, 34participant,: custodian of securities, foreign institutional in'estor or credit rating agency i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to buy or sell securities or otherwise deal with the securities (ar)et until such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300 ( 8) Eo person shall sponsor or cause to be sponsored or carry on or caused to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es including (utual funds, unless he obtains a certificate of registration fro( the 8oard in accordance with the regulations, 4ro+i-e- that any person sponsoring or causing to be sponsored, carrying or causing to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es operating in the securities (ar)et i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to operate till such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300:
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0
% Inserted
>
4()%lanati$n7 6or the re(o'al of doubts, it is hereby declared that, for purposes of this section, a collecti'e in'est(ent sche(e or (utual fund shall not be include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(ponent of in'est(ent besides the co(ponent of insurance issued by the insurer0: (%) 7'ery application for registration shall be in such (anner and on pay(ent of such fees as (ay be deter(ined by regulations0 (3) .he 8oard (ay, by order, suspend or cancel a certificate of registration in such (anner as (ay be deter(ined by regulations, 4ro+i-e- that no order under this sub+section shall be (ade unless the person concerned has been gi'en a reasonable opportunity of being heard0 %4CIA<.7R BA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 4rohi,itio of .% i$*l%ti+e % - -e'e$ti+e -e+i'e!, i !i-er tr%-i ( % - !*,!t% ti%l %'7*i!itio of !e'*ritie! or 'o trol.
1"A. Eo person shall directly or indirectly(a) use or e(ploy, in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recogniFed stoc) exchange, any (anipulati'e or decepti'e de'ice or contri'ance in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3
Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, w0r0e0f !+$+ %0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, reads as under, /@A81(0 D: ?ISC7==AE7CHS #0 Balidation+ Eotwithstanding anything contained in any Dudg(ent, decree or order of any court, tribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 Repeal and sa'ings + (1) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (2) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0 % Chapter BA inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
!
(b) e(ploy any de'ice, sche(e or artifice to defraud in connection with issue or dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange3 (c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange, in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (d) engage in insider trading3 (e) deal in securities while in possession of (aterial or non+public infor(ation or co((unicate such (aterial or non+public infor(ation to any other person, in a (anner which is in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (f) ac*uire control of any co(pany or securities (ore than the percentage of e*uity share capital of a co(pany whose securities are listed or proposed to be listed on a recognised stoc) exchange in contra'ention of the regulations (ade under this Act0: CDA4TER II 2INANCE, ACCOUNTS AND AUDIT Gr% t! ,> the Ce tr%l Go+er .e t. 1). .he Central &o'ern(ent (ay, after due appropriation (ade by <arlia(ent by law in this behalf, (a)e to the 8oard grants of such su(s of (oney as that &o'ern(ent (ay thin) fit for being utiliFed for the purposes of this Act0 2* -. 13. ( ) .here shall be constituted a 6und to be called the Securities and 7xchange 8oard of
India &eneral 6und and there shall be credited thereto(a) all grants, fees and charges recei'ed by the 8oard under this Act3 4G G G: (aa) %4G G G: (b) all su(s recei'ed by the 8oard fro( such other sources as (ay be decided upon by the Central &o'ern(ent0 (%) .he 6und shall be applied for (eeting(a) the salaries, allowances and other re(uneration of the (e(bers, officers and other e(ployees of the 8oard3 (b) the expenses of the 8oard in the discharge of its functions under section 3 (c) the expenses on obDects and for purposes authorised by this Act0
.he word 1and2 o(itted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 (aa) o(itted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 It was inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Clause (aa) reads as under,+ 1(aa) all su(s realiFed by way of <enalties under this Act3 and20
% Clause
%0
A''o* t! % - %*-it. 15. ( ) .he 8oard shall (aintain proper accounts and other rele'ant records and prepare an annual state(ent of accounts in such for( as (ay be prescribed by the Central &o'ern(ent in consultation with the Co(ptroller and Auditor+&eneral of India0 (%) .he accounts of the 8oard shall be audited by the Co(ptroller and Auditor+&eneral of India at such inter'als as (ay be specified by hi( and any expenditure incurred in connection with such audit shall be payable by the 8oard to the Co(ptroller and Auditor+&eneral of India0 (3) .he Co(ptroller and Auditor+&eneral of India and any other person appointed by hi( in connection with the audit of the accounts of the 8oard shall ha'e the sa(e rights and pri'ileges and authority in connection with such audit as the Co(ptroller and Auditor+ &eneral generally has in connection with the audit of the &o'ern(ent accounts and, in particular, shall ha'e the right to de(and the production of boo)s, accounts, connected 'ouchers and other docu(ents and papers and to inspect any of the offices of the 8oard0 ($) .he accounts of the 8oard as certified by the Co(ptroller and Auditor+&eneral of India or any other person appointed by hi( in this behalf together with the audit report thereon shall be forwarded annually to the Central &o'ern(ent and that &o'ern(ent shall cause the sa(e to be laid before each Iouse of <arlia(ent0 5CDA4TER IIA 4ENALTIES AND ADEUDICATION 4e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 15A. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder,(a) to furnish any docu(ent, return or report to the 8oard, fails to furnish the sa(e, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations, fails to file return or furnish the sa(e within the ti(e specified therefor in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0
Chapters BI A and BI 8 containing Ss0 "A to "M and "@ to "S respecti'ely, inserted by Securities =aws (A(end(ent) Act, !!" w0e0f0 %"+ + !!"0 % Substituted for 1a penalty not exceeding one la)h and fifty thousand rupees for each such failure2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding fi'e thousand rupees for e'ery day during which such failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for e'ery day during which the failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%
4e %lt> for f%il*re ,> % > $er!o to e ter i to %(ree.e t /ith 'lie t!. 15;. If any person, who is registered as an inter(ediary and is re*uired under this Act or any rules or regulations (ade thereunder to enter into an agree(ent with his client, fails to enter into such agree(ent, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 %54e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 15C. If any listed co(pany or any person who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such co(pany or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 4e %lt> for 'ert%i -ef%*lt! i '%!e of .*t*%l f* -!. 15D. If any person, who is(a) re*uired under this Act or any rules or regulations (ade thereunder to obtain a certificate of registration fro( the 8oard for sponsoring or carrying on any collecti'e in'est(ent sche(e, including (utual funds, sponsors or carries on any collecti'e in'est(ent sche(e, including (utual funds, without obtaining such certificate of registration, he shall be liable to 34a penalty of one la)h rupees for each day during which he sponsors or carries on any such collecti'e in'est(ent sche(e including (utual funds, or one crore rupees, whiche'er is less:3 (b) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, for sponsoring or carrying on any in'est(ent sche(e, fails to co(ply with the ter(s and conditions of certificate of registration, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, fails to (a)e an application for listing of its sche(es as pro'ided for in the regulations
Substituted for 1a penalty not exceeding fi'e la)h rupees for e'ery such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1If any person, who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing to redress the grie'ances of in'estors, fails to redress such grie'ances, he shall be liable to a penalty not exceeding ten thousand rupees for each such failure2, by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding ten thousand rupees for each day during which he carries on any such collecti'e in'est(ent sche(e including (utual funds, or ten la)h rupees whiche'er is higher02 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for each day during which such failure continues or ten la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0
%%
go'erning such listing, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (d) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to despatch
unit certificates of any sche(e in the (anner pro'ided in the regulation go'erning such despatch, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (e) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to refund the application (onies paid by the in'estors within the period specified in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (f) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to in'est (oney collected by such collecti'e in'est(ent sche(es in the (anner or within the period specified in the regulations, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for f%il*re to o,!er+e r*le! % - re(*l%tio ! ,> % %!!et .% %(e.e t 'o.$% >. 15E. Khere any asset (anage(ent co(pany of a (utual fund registered under this Act, fails to co(ply with any of the regulations pro'iding for restrictions on the acti'ities of the asset (anage(ent co(panies, such asset (anage(ent co(pany shall be liable to "4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for -ef%*lt i '%!e of !to'6 ,ro6er!. 152. If any person, who is registered as a stoc) bro)er under this Act,(a) fails to issue contract notes in the for( and (anner specified by the stoc) exchange of which such bro)er is a (e(ber, he shall be liable to a penalty not exceeding fi'e ti(es the a(ount for which the contract note was re*uired to be issued by that bro)er3 (b) fails to deli'er any security or fails to (a)e pay(ent of the a(ount due to the in'estor in the (anner within the period specified in the regulations, he shall be liable to #4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3
Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues or fi'e la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding one thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%3
(c) charges an a(ount of bro)erage which is in excess of the bro)erage specified in the regulations, he shall be liable to 4a penalty of one la)h rupees: or fi'e ti(es the a(ount of bro)erage charged in excess of the specified bro)erage, whiche'er is higher0 4e %lt> for i !i-er tr%-i (. 15G. If any insider who,(i) either on his own behalf or on behalf of any other person, deals in securities of a body corporate listed on any stoc) exchange on the basis of any unpublished price+sensiti'e infor(ation3 or (ii) co((unicates any unpublished price+sensiti'e infor(ation to any person, with or without his re*uest for such infor(ation except as re*uired in the ordinary course of business or under any law3 or
(iii) counsels, or procures for any other person to deal in any securities of any body corporate on the basis of unpublished price+sensiti'e infor(ation, shall be liable to a penalty %4of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of insider trading, whiche'er is higher:0 4e %lt> for o 0-i!'lo!*re of %'7*i!itio of !h%re! % - t%6eo+er!. 15D. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder, fails to,(i) disclose the aggregate of his shareholding in the body corporate before he ac*uires any shares of that body corporate3 or (ii) (a)e a public announce(ent to ac*uire shares at a (ini(u( price3 or 34(iii) (a)e a public offer by sending letter of offer to the shareholders of the concerned co(pany3 or (iv) (a)e pay(ent of consideration to the shareholders who sold their shares pursuant to letter of offer,: he shall be liable to a penalty $4of twenty+fi'e crore rupees or three ti(es the a(ount of profits profits (ade out of such failure, whiche'er is higher:0 554e %lt> for fr%*-*le t % - * f%ir tr%-e $r%'ti'e!. 15DA. If any person indulges in fraudulent and unfair trade practices relating to securities, he shall be liable to a penalty of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of such practices, whiche'er is higher0
Substituted for 1a penalty not exceeding fi'e thousand rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00% 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00% %00% " Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00%0
%$
4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 15D;. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 4o/er to %-G*-i'%te. 150I. ( ) 6or the purpose of adDudging under sections "A, "8, "C, "9, "7, "6, "& 4, "I, "IA and "I8:, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in subsection ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> the %-G*-i'%ti ( offi'er. 15E. Khile adDudging *uantu( of penalty under section "+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade
as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 "5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 15EA. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: )5Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!. 15E;. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 11, !e'tio 11;, !e'tio 11D, !*,0!e'tio ()) of !e'tio 1" or !e'tio 150I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e- -ef%*lt!.
Substituted for 1and "I2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the S78I (A(end(ent) Act, %00%, S0 ! w0e0f0 %!+ 0+%00%0 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
% Inserted
%"
(") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't. ()) The !ettle.e t $ro'ee-i (! * -er thi! !e'tio !h%ll ,e 'o -*'te- i %''or-% 'e /ith the $ro'e-*re !$e'ifie- i the re(*l%tio ! .%-e * -er thi! A't. (3) No %$$e%l !h%ll lie * -er !e'tio 15T %(%i !t % > or-er $%!!e- ,> the ;o%r- or %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio . < CDA4TER II; ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL E!t%,li!h.e t of Se'*ritie! A$$ell%te Tri,* %l!. 15F. ( ) .he Central &o'ern(ent shall by notification, establish one or (ore Appellate .ribunals to be )nown as the Securities Appellate .ribunal to exercise the Durisdiction, powers and authority conferred on such .ribunal by or under this Act 4or any other law for the ti(e being in force:0 (%) .he Central &o'ern(ent shall also specify in the notification referred to in sub+section ( ) the (atters and places in relation to which the Securities Appellate .ribunal (ay exercise Durisdiction0 "5Co.$o!itio of Se'*ritie! A$$ell%te Tri,* %l. 15L. A Securities Appellate .ribunal shall consist of a <residing Cfficer and two other (e(bers, to be appointed, by notification, by the Central &o'ern(ent, 4ro+i-e- that the Securities Appellate .ribunal, consisting of one person only, established before the co((ence(ent of the Securities and 7xchange 8oard of India (A(end(ent) Act, %00%, shall continue to exercise the Durisdiction, powers and authority conferred on it by or under this Act or any other law for the ti(e being in force till two other ?e(bers are appointed under this section0 9*%lifi'%tio for %$$oi t.e t %! 4re!i-i ( Offi'er or @e.,er of Se'*ritie! A$$ell%te Tri,* %l.
Inserted by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for Sections "= and "? by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "= and "? read as under,+ 1 "+=0 Co(position of securities Appellate .ribunal0 5 A Securities Appellate .ribunal shall consist of
% Substituted
one person only (hereinafter referred to as the <residing Cfficer of the Securities Appellate .ribunal) to be appointed, by notification, by the central &o'ern(ent0 "?0 Qualifications for appoint(ent as <residing Cfficer of the Securities Appellate .ribunal0 5 A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he + (a) is, or has been, or is *ualified to be, a Mudge of a Iigh Court3 or (b) has been a (e(ber of the Indian =egal Ser'ice and has held a post in &rade I of that ser'ice for at least three years3 or (c) has held office as the <residing Cfficer of a tribunal for at least three years02
%#
15@. 15( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of the Securities Appellate .ribunal unless he + (a) is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court3 or (b) is a sitting or retired Mudge of a Iigh Court who has co(pleted not less than se'en years of ser'ice as a Mudge in a Iigh Court0 ( A) .he <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0: (%) A person shall not be *ualified for appoint(ent as (e(ber of a Securities Appellate .ribunal unless he is a person of ability, integrity and standing who has shown capacity in dealing with proble(s relating to securities (ar)et and has *ualification and experience of corporate law, securities laws, finance, econo(ics or accountancy, 4ro+i-e- that a (e(ber of the 8oard or any person holding a post at senior (anage(ent le'el e*ui'alent to 7xecuti'e 9irector in the 8oard shall not be appointed as <residing Cfficer or ?e(ber of a Securities Appellate .ribunal during his ser'ice or tenure as such with the 8oard or within two years fro( the date on which he ceases to hold office as such in the 8oard0: %4Te *re of offi'e of 4re!i-i ( Offi'er % - other @e.,er! of Se'*ritie! A$$ell%te Tri,* %l. 15N. .he <residing Cfficer and e'ery other ?e(ber of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office and shall be eligible for re+appoint(ent, 4ro+i-e- that no person shall hold office as the <residing Cfficer of the Securities Appellate .ribunal after he has attained the age of sixty+eight years, 4ro+i-e- f*rther that no person shall hold office as a ?e(ber of the Securities Appellate .ribunal after he has attained the age of sixty+two years0: S%l%r> % - %llo/% 'e! % - other ter.! % - 'o -itio ! of !er+i'e of 4re!i-i ( Offi'er!. 150O. .he salary and allowances payable to and the other ter(s and conditions of ser'ice including pension, gratuity and other retire(ent benefits of the 4<residing Cfficer and other ?e(bers: of a Securities Appellate .ribunal shall be such as (ay be prescribed,
Substituted for sub+section ( ) of Section "? by the S78I (A(end(ent) Crdinance, %0 3 w0e0f0 % 00 0%0 30 <rior to substitution, it read as under,+ ;( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court , 4ro+i-e- that the <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0; % Substituted for Section "E, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "E read as under,+ 1 "E0 .er( of office0+ .he <residing officer of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office or until he attains the age of sixtyfi'e years, whiche'er is earlier02
%/
4ro+i-e- that neither the salary and allowances nor the other ter(s and conditions of ser'ice of the %4<residing Cfficer and other ?e(bers of a Securities Appellate .ribunal: shall be 'aried to their disad'antage after appoint(ent0 2illi ( *$ of +%'% 'ie!. 154. If, for reason other than te(porary absence, any 'acancy occurs in the 34office of the <residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal, then the Central &o'ern(ent shall appoint another person in accordance with the pro'isions of this Act to fill the 'acancy and the proceedings (ay be continued before the Securities Appellate .ribunal fro( the stage at which the 'acancy is filled0 Re!i( %tio % - re.o+%l. 159. ( ) .he $4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal (ay, by notice in writing under his hand addressed to the Central &o'ern(ent, resign his office, 4ro+i-e- that "4the <residing Cfficer or any other ?e(ber: shall, unless he is per(itted by the Central &o'ern(ent to relin*uish his office sooner, continue to hold office, until the expiry of three (onths fro( the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his ter( of office, whiche'er is the earliest0 (%) .he #4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal shall not be re(o'ed fro( his office except by an order by the Central &o'ern(ent on the ground of pro'ed (isbeha'iour or incapacity after an in*uiry (ade by a Mudge of the Supre(e Court, in which the /4<residing Cfficer or any other ?e(ber: concerned has been infor(ed of the charges against hi( and gi'en a reasonable opportunity of being heard in respect of these charges0 (3) .he Central &o'ern(ent (ay, by rules, regulate the procedure for the in'estigation of (isbeha'iour or incapacity of the >4<residing Cfficer or any other ?e(ber:0 Or-er! 'o !tit*ti ( A$$ell%te Tri,* %l to ,e fi %l % - ot to i +%li-%te it! $ro'ee-i (!. 15R. Eo order of the Central &o'ern(ent appointing any person as the !4<residing Cfficer or a ?e(ber: of a Securities Appellate .ribunal shall be called in *uestion in any (anner, and no act or proceeding before a Securities Appellate .ribunal shall be called in *uestion in any (anner on the ground (erely of any defect in the constitution of a Securities Appellate .ribunal0
Substituted for 1<residing Cfficer of a Securities Appellate .ribunal2 by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 / Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 > Substituted for 1aforesaid <residing Cfficer2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 ! Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0
%>
St%ff of the Se'*ritie! A$$ell%te Tri,* %l. 15S. ( ) .he Central &o'ern(ent shall pro'ide the Securities Appellate .ribunal with such officers and e(ployees as that &o'ern(ent (ay thin) fit0 (%) .he officers and e(ployees of the Securities Appellate .ribunal shall discharge their functions under general superintendence of the <residing Cfficer0 (3) .he salaries and allowances and other conditions of ser'ice of the officers and e(ployees of the Securities Appellate .ribunal shall be such as (ay be prescribed0 A$$e%l to the Se'*ritie! A$$ell%te Tri,* %l. 15T. 4( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed,(a) by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws
(Second A(end(ent) Act, !!!, under this Act, or the rules or regulations (ade thereunder3 or (b) by an order (ade by an adDudicating officer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 "5(") ********< (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 348oard or the AdDudicating Cfficer, as the case case (ay be,: is recei'ed by hi( and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 ($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0
Substituted for Sub+sec ( ) R (%) by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, Sub+sections ( ) R (%) were read as under, 1( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by any order (ade by any AdDudicating Cfficer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 (%) Eo appeal shall lie to the Securities Appellate .ribunal fro( an order (ade by an AdDudicating Cfficer with the consent of the parties02 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , o.i!!io , S*,0!e'tio (") re%- %! * -er& J(") No %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-eO (a) ,> the ;o%r- o % - %fter the 'o..e 'e.e t of the Se'*ritie! L%/! (Se'o - A.e -.e t) A't, 1999H (b) ,> % %-G*-i'%ti ( offi'er, /ith the 'o !e t of the $%rtie!.2 3 Substituted for 1a copy of the order (ade by the adDudicating officer2 by S78I (A(end(ent) Act !!!, !!!, w0e0f0 #+ %+ !!!0
%!
(") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 48oard, the: parties to the appeal and to the concerned AdDudicating Cfficer0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of the Se'*ritie! A$$ell%te Tri,* %l. 15U. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act, and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purposes of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3
(e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte 3 (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0), and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 %4Ri(ht to le(%l re$re!e t%tio . 15I. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,Substituted for 1parties2, S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for S0 "B by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, S0 "B read as under,+ 1 "B0 .he appellant (ay either appear in person or authorise one or (ore legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal02
% Substituted
30
(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of subsection ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or any attorney of any Iigh Court, and includes a pleader in practice0: Li.it%tio . 15?. .he pro'isions of the =i(itation Act, !#3 (3# of !#3), shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 54re!i-i ( Offi'er, @e.,er! % - !t%ff of Se'*ritie! A$$ell%te Tri,* %l! to ,e $*,li' !er+% t!. 15A. .he <residing Cfficer, ?e(bers and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0: Ci+il Co*rt ot to h%+e G*ri!-i'tio . 15M. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which an adDudicating officer appointed under this Act or a Securities Appellate .ribunal constituted under this Act is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "5A$$e%l to S*$re.e Co*rt.
Substituted for S0 "A by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, it read as under, + 1 "A0 .he <residing Cfficer and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian penal Code( $" of >#0)20 % Substituted for S0 "S by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution , it
was read as under,+ 1 "S0 Appeal to Iigh Court0+ Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, <ro'ided that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
3
15N. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order , 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the applicant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: CDA4TER III @ISCELLANEOUS 4o/er of Ce tr%l Go+er .e t to i!!*e -ire'tio !. 18. ( ) Kithout preDudice to the foregoing pro'isions of this Act 4or the 9epositories Act, !!#:, the 8oard shall, in exercise of its powers or the perfor(ance of its functions under this Act, be bound by such directions on *uestions of policy as the Central &o'ern(ent (ay gi'e in writing to it fro( ti(e to ti(e , 4ro+i-e- that the 8oard shall, as far as practicable, be gi'en an opportunity to express its 'iews before any direction is gi'en under this sub+section0 (%) .he decision of the Central &o'ern(ent whether a *uestion is one of policy or not shall be final0 4o/er of Ce tr%l Go+er .e t to !*$er!e-e the ;o%r-. 17. ( ) If at any ti(e the Central &o'ern(ent is of opinion(a) that on account of gra'e e(ergency, the 8oard is unable to discharge the functions and duties i(posed on it by or under the pro'isions of this Act3 or (b) that the 8oard has persistently (ade default in co(plying with any direction issued by the Central &o'ern(ent under this Act or in the discharge of the functions and duties i(posed on it by or under the pro'isions of this Act and as a result of such default the financial position of the 8oard or the ad(inistration of the 8oard has deteriorated3 or (c) that circu(stances exist which render it necessary in the public interest so to do, the Central &o'ern(ent (ay, by notification, supersede the 8oard for such period, not exceeding six (onths, as (ay be specified in the notification0 (%) Hpon the publication of a notification under sub+section ( ) superseding the 8oard,(a) all the (e(bers shall, as fro( the date of supersession, 'acate their offices as such3 (b) all the powers, functions and duties which (ay, by or under the pro'isions of this Act, be exercised or discharged by or on behalf of the 8oard, shall until the 8oard is reconstituted under sub+section (3), be exercised and discharged by such person or persons as the Central &o'ern(ent (ay direct3 and (c) all property owned or controlled by the 8oard shall, until the 8oard is reconstituted under sub+section (3), 'est in the Central &o'ern(ent0
Substituted for 1this Act2 by the 9epositories Act !!#, w0r0e0f0 %0+!+ !!"0
3%
(3) Cn the expiration of the period of supersession specified in the notification issued under sub+section ( ), the Central &o'ern(ent (ay reconstitute the 8oard by a fresh appoint(ent
and in such case any person or persons who 'acated their offices under clause ( a) of subsection (%), shall not be dee(ed dis*ualified for appoint(ent , 4ro+i-e- that the Central &o'ern(ent (ay, at any ti(e, before the expiration of the period of supersession, ta)e action under this sub+section0 ($) .he Central &o'ern(ent shall cause a notification issued under sub+section ( ) and a full report of any action ta)en under this section and the circu(stances leading to such action to be laid before each Iouse of <arlia(ent at the earliest0 Ret*r ! % - re$ort!. 1:. ( ) .he 8oard shall furnish to the Central &o'ern(ent at such ti(e and in such for( and (anner as (ay be prescribed or as the Central &o'ern(ent (ay direct, such returns and state(ents and such particulars in regard to any proposed or existing progra((e for the pro(otion and de'elop(ent of the securities (ar)et, as the Central &o'ern(ent (ay, fro( ti(e to ti(e, re*uire0 (%) Kithout preDudice to the pro'isions of sub+section ( ), the 8oard shall, within 4ninety: days after the end of each financial year, sub(it to the Central &o'ern(ent a report in such for(, as (ay be prescribed, gi'ing a true and full account of its acti'ities, policy and progra((es during the pre'ious financial year0 (3) A copy of the report recei'ed under sub+section (%) shall be laid, as soon as (ay be after it is recei'ed, before each Iouse of <arlia(ent0 Dele(%tio . 19. .he 8oard (ay, by general or special order in writing delegate to any (e(ber, officer of the 8oard or any other person subDect to such conditions, if any, as (ay be specified in the order, such of its powers and functions under this Act (except the powers under section %!) as it (ay dee( necessary0 A$$e%l!. "=. ( ) Any person aggrie'ed by an order of the 8oard (ade %4, before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!,: under this Act, or the rules or regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor, 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0
Substituted for 1sixty days2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1an order of the 8oard (ade2 by Securities =aws (Second A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0
% Substituted
33
(3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed, 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 4;%r of G*ri!-i'tio . "=A. Eo order passed by the 8oard %4or the AdDudicating Cfficer: under this Act shall be appealable except as pro'ided in 34section ". or: section %0 and no ci'il court shall ha'e Durisdiction in respect of any (atter which the 8oard $4or the AdDudicating Cfficer: is e(powered by, or under, this Act to pass any order and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any order passed by the 8oard "4or the AdDudicating Cfficer: by, or under, this Act0: S%+i (!.
"1. Eothing in this Act shall exe(pt any person fro( any suit or other proceedings which (ight, apart fro( this Act, be brought against hi(0 @e.,er!, offi'er! % - e.$lo>ee! of the ;o%r- to ,e $*,li' !er+% t!. "". All (e(bers, officers and other e(ployees of the 8oard shall be dee(ed, when acting or purporting to act in pursuance of any of the pro'isions of this Act, to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0 4rote'tio of %'tio t%6e i (oo- f%ith. "). Eo suit, prosecution or other legal proceedings shall lie against the Central &o'ern(ent #4or 8oard: or any officer of the Central &o'ern(ent or any (e(ber, officer or other e(ployee of the 8oard for anything which is in good faith done or intended to be done under this Act or the rules or regulations (ade thereunder0 /4Offe 'e!. "3. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, he shall be punishable with
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 18oard2 by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 3 Substituted for 1Section %02, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 $ Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 " Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Substituted by for S0 %$, Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" && <rior to its substitution S0%$ read as under, 1%$0 <enalty0+ Khoe'er contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both02
% Substituted
3$
i(prison(ent for a ter( which (ay extend to 4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to %4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 34Co.$o!itio of 'ert%i offe 'e!. "3A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "3;. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of the alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation, 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0
(%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0:
Substituted for 1one year, or with fine, or with both2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%, for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both20 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3"
E#e.$tio fro. t%# o /e%lth % - i 'o.e. "5. Eotwithstanding anything contained in the Kealth+tax Act, !"/ (%/ of !"/), the Inco(etax Act, !# ($3 of !# ) or any other enact(ent for the ti(e being in force relating to tax on wealth, inco(e, profits or gains(a) the 8oard3 (b) the existing Securities and 7xchange 8oard fro( the date of its constitution to the date of establish(ent of the 8oard, shall not be liable to pay wealth+tax, inco(e+tax or any other tax in respect of their wealth, inco(e, profits or gains deri'ed0 Co( iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations (ade thereunder, sa'e on a co(plaint (ade by the 8oard 4G G G:0 "5(") *****< )5 E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
.he words 1with the pre'ious sanction of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to the o.i!!io , S*,0!e'tio (") re%- %! * -er& 1(") No 'o*rt i ferior to th%t of "5% Co*rt of Se!!io < !h%ll tr> % > offe 'e $* i!h%,le * -er thi!
A't.2 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3#
A$$e%l % - re+i!io "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e of Cri.i %l 4ro'e-*re, 197) to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< Offe 'e! ,> 'o.$% ie!. "7. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly, 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n , 6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and
3/
(b) 1director2, in relation to a fir(, (eans a partner in the fir(0 4o/er to e#e.$t. ":. 4GGGGGG: "5 Re'o+er> of %.o* t! ":A. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith %
-ire'tio of -i!(or(e.e t or-er i!!*e- * -er !e'tio 11; or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifiefor. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.et%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't.
C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Section %> read as under, 1%>0 8$.er t$ e)e"%t+ If the central go'ern(ent if of the opinion that it is necessary or expedient so to do in public interest, it (ay, by order published in the Cfficial gaFette, exe(pt any person or class of persons buying or selling securities or otherwise dealing with the securities (ar)et fro( the operation of sub+section ! ) of Section %02 % I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3>
"#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio 15T of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 11;, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% !
% > offi'er of the ;o%r- /ho .%> ,e %*thoriLe-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 4o/er to .%6e r*le!. "9. ( ) .he Central &o'ern(ent (ay, by notification, (a)e rules for carrying out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers under sub+section ( ) of section "3 (b) the additional functions that (ay be perfor(ed by the 8oard under section 3 (c) 4G G G: (d) the (anner in which the accounts of the 8oard shall be (aintained under section "3 %4(da) the (anner of in*uiry under sub+section ( ) of section "+I3 (db) the salaries and allowances and other ter(s and conditions of ser'ice of the 34<residing Cfficers, ?e(bers: and other officers and e(ployees of the Securities Appellate .ribunal under section "+C and sub+section (3) of section "S3 (dc) the procedure for the in'estigation of (isbeha'iour or incapacity of the 4<residing Cfficers, or other ?e(bers: of the Securities Appellate .ribunal under sub+section (3) of section "Q3
Clause (c) o(itted by Securities laws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, clause (c) it read as under, 1(c) the conditions subDect to which registration certificate is to be issued under sub+section ( ) of section %20 % Inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 3 Substituted for 1<residing Cfficers2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3!
(dd) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section ". and the fees payable in respect of such appeal3: (e) the for( and the (anner in which returns and report to be (ade to the Central &o'ern(ent under section >3 (f) any other (atter which is to be, or (ay be, prescribed, or in respect of which pro'ision is to be, or (ay be, (ade by rules0 4o/er to .%6e re(*l%tio !. )=. ( ) .he 8oard (ay, %4GGG: by notification, (a)e regulations consistent with this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ti(es and places of (eetings of the 8oard and the procedure to be followed at such (eetings under sub+section ( ) of section / including *uoru( necessary for the transaction of business3 (b) the ter(s and other conditions of ser'ice of officers and e(ployees of the 8oard under sub+section (%) of section !3 34(c) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto and the (anner in which such (atters shall be disclosed by the co(panies under section A3 35('%) the *tiliL%tio of the %.o* t 're-ite- * -er !*,0!e'tio (5) of !e'tio 11H (',) the f*lfill.e t of other 'o -itio ! rel%ti ( to 'olle'ti+e i +e!t.e t !'he.e * -er !*,0!e'tio ("A) of !e'tio 11AAH ('') the $ro'e-*re to ,e follo/e- ,> the %*thoriLe- offi'er for !e%r'h or !eiL*re * -er !*,0!e'tio (9) of !e'tio 11CH < (d) the conditions subDect to which certificate of registration is to be issued, the a(ount of
fee to be paid for certificate of registration and the (anner of suspension or cancellation of certificate of registration under section %0: 55(-%) the ter.! -eter.i e- ,> the ;o%r- for !ettle.e t of $ro'ee-i (! * -er !*,!e'tio (") % - the $ro'e-*re for 'o -*'ti ( of !ettle.e t $ro'ee-i (! * -er !*,!e'tio ()) of !e'tio 15E;H (-,) % > other .%tter /hi'h i! re7*ire- to ,e, or .%> ,e, !$e'ifie- ,> re(*l%tio ! or i re!$e't of /hi'h $ro+i!io i! to ,e .%-e ,> re(*l%tio !.< R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t.
Substituted for 1<residing Cfficers2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 words 1with the pre'ious appro'al of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 3 Substituted for the existing clause (c) by the Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 <rior to substitution this clause read as under, 1(c) the a(ount of fee to be paid for registration certificate and (anner of suspension or cancellation of registration certificate under sub+section (%) and (3) of section %02 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% .he
$0
)1. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. )". .he pro'isions of this Act shall be in addition to, and not in derogation of, the pro'isions of any other law for the ti(e being in force0 A.e -.e t of 'ert%i e %'t.e t!. )). 40e%ealed bF 0e%ealing H A"ending Act' 2001&: 4o/er to re.o+e -iffi'*ltie!. )3. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order, published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as (ay appear to be necessary for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of fi'e years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 Re$e%l % - !%+i (. )5. ( ) .he Securities and 7xchange 8oard of India Crdinance, !!% (Crd0 " of !!%), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 1@( /@(5A9( 4 ee section 33: A@END@ENT O2 CERTAIN ENACT@ENTS 40e%ealed bF 0e%ealing H A"ending Act' 2001:
*SECURITIES CONTRACTS (REGULATION) RULES, 1957
In exercise of the powers conferred by section 30 of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the Central &o'ern(ent hereby (a)es the following rules, the sa(e ha'ing been pre'iously published as re*uired by sub+section (3) of the said section, na(ely ,Short title. 1. .hese rules (ay be called the Securities Contracts (Regulation) Rules, !"/0 Defi itio !. ". In these rules, unless the context otherwise re*uires,(a) 1for(2 (eans a for( appended to these rules3 (b) 1the Act2 (eans the Securities Contracts (Regulation) Act, !"# ($% of !"#)3 (c) 1&o'ern(ent co(pany2 (eans a co(pany in which not less than fifty+one per cent of the share capital is held by the Central &o'ern(ent or by any State &o'ern(ent or &o'ern(ents or partly by the Central &o'ern(ent and partly by one or (ore State &o'ern(ents ; 4(d) 1public2 (eans persons other than 5 (i) the pro(oter and pro(oter group3 (ii) subsidiaries and associates of the co(pany0 E#$l% %tio & 6or the purpose of this clause the words 1pro(oter2 and 1pro(oter group2 shall ha'e the sa(e (eaning as assigned to the( under the Securities and 7xchange 8oard of India (Issue of Capital and 9isclosure Re*uire(ents) Regulations, %00!3: %4(da) ;public sector co(pany; (eans a body corporate constituted by an Act of <arlia(ent or any State =egislature and includes a go'ern(ent co(pany,: 4(e) 1public shareholding2 (eans e*uity shares of the co(pany held by public and shall exclude shares which are held by custodian against depository receipts issued o'erseas0: A$$li'%tio for re'o( itio . ). An application under section 3 of the Act for recognition of a stoc) exchange shall be (ade to the 34Securities and 7xchange 8oard of India: in 6or( A0
* The!e R*le! h%+e ,ee *$-%te- ,%!e- o the R*le! % - A.e -.e t! %+%il%,le o the /e,!ite of the De$%rt.e t of E'o o.i' Aff%ir!0 htt$&11fi .i . i'.i 1l%/1i -e#.%!$ % - %+%il%,le %.e -.e t otifi'%tio !. Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 % Inserted by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3 Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
2ee! for %$$li'%tio . 3. ( ) .here shall be paid in respect of e'ery application under rule 3 a fee of rupees fi'e hundred0 (%) .he a(ount of the fee shall be deposited in the nearest &o'ern(ent treasury or the nearest branch of the State 8an) of India, 4ro+i-e- that at 8o(bay, Calcutta, ?adras, 9elhi and @anpur, the a(ount shall be deposited in the Reser'e 8an) of India0 (3) .he a(ount of the fee so deposited shall be credited to the receipt head 1A=BI?iscellaneous-Cther fees, fines and forfeitures20 Do'*.e t! to ,e file- %lo ( /ith the %$$li'%tio % - $%rti'*l%r! it !ho*l- 'o t%i . 5. 7'ery application shall be acco(panied by four copies of the rules (including the (e(orandu( and articles of association where the applicant stoc) exchange is an
incorporated body) and bye+laws of the stoc) exchange applying for recognition as specified in section 3 of the Act and the receipt granted by the &o'ern(ent treasury, or as the case (ay be, the State 8an) of India or the Reser'e 8an) of India, in respect of the a(ount of the fee deposited and shall contain clear particulars as to the (atters specified in the Annexure to 6or( A0 $54o/er to .%6e i 7*irie! % - '%ll for i for.%tio . 5A. 8efore granting recognition to a stoc) exchange under section $ of the Act, the "4Securities and 7xchange 8oard of India: (ay (a)e such in*uiries and re*uire such further infor(ation to be furnished, as it dee(s necessary, relating to the infor(ation furnished by the stoc) exchange in the Annexure to its application in 6or( A0: 2or. of re'o( itio . 8. .he recognition granted to a stoc) exchange shall be in 6or( 8 and be subDect to the following conditions, na(ely ,(a) that the recognition unless granted on a per(anent basis, shall be for such period not less than one year as (ay be specified in the recognition3 (b) that the stoc) exchange shall co(ply with such conditions as are or (ay be prescribed or i(posed under the pro'isions of the Act and these rules fro( ti(e to ti(e0
$ Inserted
by &SR 0!# dated $00/0 !#/, w0e0f0 %%00/0 !#/ for 1Central &o'ern(ent2 by the Securities Contracts (Regulation)(A(end(ent )Rules, !!#, w0e0f0 %30 %0 !!#0
" Substituted
Re e/%l of re'o( itio . 7. ( ) .hree (onths before the expiry of the period of recognition, a recognised stoc) exchange desirous of renewal of such recognition (ay (a)e an application to the #4Securities and 7xchange 8oard of India: in 6or( A0 (%) .he pro'isions of rule 3, rule $, rule ", rule "A and rule # shall apply in relation to renewal of recognition as they apply in relation to grant of recognition except that the fee payable in respect of an application for renewal of recognition shall be rupees two hundred0 9*%lifi'%tio ! for .e.,er!hi$ of % re'o( i!e- !to'6 e#'h% (e. :. .he rules relating to ad(ission of (e(bers of a stoc) exchange see)ing recognition shall inter alia pro'ide that , (1) Eo person shall be eligible to be elected as a (e(ber if(a) he is less than twenty+one years of age3 (b) he is not a citiFen of India3 pro'ided that the go'erning body (ay in suitable cases relax this condition with the prior appro'al of the !4Securities and 7xchange 8oard of India:3 (c) he has been adDudged ban)rupt or a recei'ing order in ban)ruptcy has been (ade against hi( or he has been pro'ed to be insol'ent e'en though he has obtained his final discharge3 (d) he has co(pounded with his creditors unless he has paid sixteen annas in the rupee3 (e) he has been con'icted of an offence in'ol'ing fraud or dishonesty3 (f) he is engaged as principal or e(ployee in any business other than that of securities /4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability unless he underta)es on ad(ission to se'er his connection with such business ,
>44ro+i-e-
that no (e(ber (ay conduct business in co((odity deri'ati'es, except by setting up a separate co(pany which shall co(ply with the regulatory re*uire(ents, such as, networth, capital ade*uacy, (argins and exposure nor(s as (ay be specified by the 6orward ?ar)et Co((ission, fro( ti(e to ti(e ,
# Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, w0e0f0 %30 %0 !!#0 / Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 > Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 <rior to its substitution, the pro'iso as a(ended by Securities Contracts (Regulation) (A(end(ent) Rules, !!# w0e0f0 %30 %0 !!#, read as under, 1<ro'ided that the Securities and 7xchange 8oard of India (ay, for reasons sufficient in the opinion of the said 8oard, per(it a recogniFed stoc) exchange to suspend the enforce(ent of this clause for a specified period on condition that the applicant is not associated with or is a (e(ber of or subscriber to or shareholder or debenture holder in or connected through a partner or e(ployee with any other organisation, institution, association, co(pany or corporation in India where forward business of any )ind whether in goods or co((odities or otherwise is carried on or is not engaged as a principal or e(ployee ion any such business02
4ro+i-e- f*rther that nothing herein shall be applicable to any corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to ()) of the pro'iso to sub+rule ($)0:3 (g) !4GGG: (h) he has been at any ti(e expelled or declared a defaulter by any other stoc) exchange3 (i) he has been pre'iously refused ad(ission to (e(bership unless a period of one year has elapsed since the date of such reDection0 (2) Eo person eligible for ad(ission as a (e(ber under sub+rule ( ) shall be ad(itted as a (e(ber unless ,(a) he has wor)ed for not less than two years as a partner with, or an authorised assistant or authorised cler) or re(isier or apprentice to, a (e(ber3 or (b) he agrees to wor) for a (ini(u( period of two years as a partner or representati'e (e(ber with another (e(ber and to enter into bargains on the floor of the stoc) exchange and not in his own na(e but in the na(e of such other (e(ber 3 or (c) he succeeds to the established business of a deceased or retiring (e(ber who is his father, uncle, brother or any other person who is, in the opinion of the go'erning body, a close relati'e , 4ro+i-e- that the rules of the stoc) exchange (ay authorise the go'erning body to wai'e co(pliance with any of the foregoing conditions if the person see)ing ad(ission is in respect of (eans, position, integrity, )nowledge and experience of business in securities, considered by the go'erning body to be otherwise *ualified for (e(bership0 (3) Eo person who is a (e(ber at the ti(e of application for recognition or subse*uently ad(itted as a (e(ber shall continue as such if(a) he ceases to be a citiFen of India , 4ro+i-e- that nothing herein shall affect those who are not citiFens of India but who were (e(bers at the ti(e of such application or were ad(itted subse*uently under the pro'isions of clause (b) of sub+rule ( ) of this rule, subDect to their co(plying with all other re*uire(ents of this rule3
(b) he is adDudged ban)rupt or a recei'ing order in ban)ruptcy is (ade against hi( or he is pro'ed to be insol'ent3 (c) he is con'icted of an offence in'ol'ing fraud or dishonesty3 (d) 04G G G: (e) 4G G G: (f) he engages either as principal or e(ployee in any business other than that of securities %4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability, pro'ided that! C(itted 0 Ibid0
by &SR 0/0(7) dated "0
0 !>>
Ibid0
% Inserted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(i) the go'erning body (ay, for reasons, to be recorded in writing, per(it a (e(ber to engage hi(self as principal or e(ployee in any such business, if the (e(ber in *uestion ceases to carry on business on the stoc) exchange either as an indi'idual or as a partner in a fir(, (ii) in the case of those (e(bers who were under the rules in force at the ti(e of such application per(itted to engage in any such business and were actually so engaged on the date of such application, a period of three years fro( the date of the grant of recognition shall be allowed for se'ering their connection with any such business, 34(iii) nothing herein shall affect (e(bers of a recognised stoc) exchange which are corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to (k) of the pro'iso to sub+rule ($)0: (4) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section 3%% of the said Act3 (ii) a (aDority of the directors of such co(pany are shareholders of such co(pany and also (e(bers of that stoc) exchange3 and (iii) the directors of such co(pany, who are (e(bers of that stoc) exchange, ha'e ulti(ate liability in such co(pany , 4ro+i-e- that where the $4Securities and 7xchange 8oard of India: (a)es a reco((endation in this regard, the go'erning body of a stoc) exchange shall, in relaxation of the re*uire(ents of this clause, ad(it as (e(ber the following corporations "4,bodies corporate:, co(panies or institutions, na(ely ,(a) the Industrial 6inance Corporation, established under the Industrial 6inance Corporation Act, !$> ( " of !$>)3 (b) the Industrial 9e'elop(ent 8an) of India, established under the Industrial 9e'elop(ent 8an) Act, !#$ ( > of !#$)3 (c) the =ife Insurance Corporation of India, established under the =ife Insurance Corporation Act, !"# (3 of !"#)3 (d) the &eneral Insurance Corporation of India constituted under the &eneral Insurance Corporation (Eationalisation) Act, !/% ("/ of !/%)3 (e) the Hnit .rust of India, established under the Hnit .rust of India Act, !#3 ("% of !#3)3
3 Substituted, ibid0 <rior to its substitution, sub+clause (iii) read as under, 1(iii) nothing herein shall affect (e(bers of a recogniFed stoc) exchange per(itted under the pro'iso to clause (f) of sub+rule( ) to suspend the enforce(ent of the aforesaid clause, for so long as such suspension is effecti'e, except that no (e(ber of such exchange shall engage in forward business of any )ind whether in goods or co((odities or otherwise and , if actually so engaged on the date of such application , he shall se'er his connection with any such business within a period of three years fro( the date of the grant of recognition02 $ Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# " Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(f) the Industrial Credit and In'est(ent Corporation of India, a co(pany registered under the Co(panies Act, !"# ( of !"#)3 (g) the subsidiaries of any of the corporations or co(panies specified in (a) to (f) and any subsidiary of the State 8an) of India or any nationalised ban) set up for pro'iding (erchant ban)ing ser'ices, buying and selling securities and other si(ilar acti'ities0 #4(h) any ban) included in the Second Schedule to the Reser'e 8an) of India Act, !3$ (% of !3$)3 (i) the 7xport I(port 8an) of India, established under the 7xport I(port 8an) of India Act, !> (%> of !> )3 (j) the Eational 8an) for Agriculture and Rural 9e'elop(ent, established under the Eational 8an) for Agriculture and Rural 9e'elop(ent Act, !> (# of !> )3 and (k) the Eational Iousing 8an), established under the Eational Iousing 8an) Act, !>/ ("3 of !>/)0: (4A) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall also be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section % of the said Act3 (ii) such co(pany underta)es to co(ply with such financial re*uire(ents and nor(s as (ay be specified by the Securities and 7xchange 8oard of India for the registration of such co(pany under sub+section ( ) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (iii) /4G G G: (iv) the directors of the co(pany are not dis*ualified fro( being (e(bers of a stoc) exchange under >4clause ( ) 4except sub+clause (b) and sub+clause (f) thereof: or clause (3) 4except sub+clause (a) and sub+clause (f) thereof:: and the 9irectors of the co(pany had not held the offices of the 9irectors in any co(pany which had been a (e(ber of the stoc) exchange and had been declared defaulter or expelled by the stoc) exchange3 and (v) not less than two directors of the co(pany are persons who possess a (ini(u( two yearsJ experience , (a) in dealing in securities3 or (b) as portfolio (anagers3 or (c) as in'est(ent consultants0 (5) Khere any (e(ber of a stoc) exchange is a fir(, the pro'isions of sub+rules ( ), (3) and ($), shall, so far as they can, apply to the ad(ission or continuation of any partner in such fir(0
# Inserted, / C(itted
ibid0 by &SR /$! (7), dated %0 00 !!$ > Substituted by &SR /!0(7), dated 0/0 0 !!$
Co tr%'t! ,et/ee .e.,er! of re'o( i!e- !to'6 e#'h% (e. 9. All contracts between the (e(bers of a recognised stoc) exchange shall be confir(ed in writing and shall be enforced in accordance with the rules and bye+laws of the stoc) exchange of which they are (e(bers0 !5No.i ee! of the Se'*ritie! % - E#'h% (e ;o%r- of I -i%< o the (o+er i ( ,o-ie! of re'o( i!e- !to'6 e#'h% (e!. 1=. .he %04Securities and 7xchange 8oard of India: (ay no(inate one or (ore persons not exceeding three in nu(ber, as (e(ber or (e(bers of the go'erning body of e'ery recognised stoc) exchange0 Such (e(ber or (e(bers shall enDoy the sa(e status and powers as other (e(bers of the go'erning body0 O,li(%tio of the (o+er i ( ,o-> to t%6e -i!'i$li %r> %'tio %(%i !t % .e.,er if !o -ire'te- ,> the % 5Se'*ritie! % - E#'h% (e ;o%r- of I -i%<. 11. After recei'ing the report of the result of an en*uiry (ade under clause (b) of subsection (3) of section # of the Act, the % 4Securities and 7xchange 8oard of India: (ay ta)e such action as they dee( proper and, in particular, (ay direct the go'erning body of the stoc) exchange to ta)e such disciplinary action against the offending (e(ber, including fine, expulsion, suspension or any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney, as (ay be specified by the % 4Securities and 7xchange 8oard of India:3 notwithstanding anything to the contrary contained in the rules or bye+laws of the stoc) exchange concerned, the go'erning body shall gi'e effect to the directions of the % 4Securities and 7xchange 8oard of India: in this behalf and shall not in any (anner co((ute, re'o)e or (odify the action ta)en in pursuance of such directions, without the prior appro'al of the % 4Securities and 7xchange 8oard of India:0 .he % 4Securities and 7xchange 8oard of India: (ay, howe'er, either of its own (otion or on the representation of the (e(ber concerned, (odify or withdraw its direction to the go'erning body0 A*-it of %''o* t! of .e.,er!. 1". 7'ery (e(ber shall get his accounts audited by a chartered accountant whene'er such audit is re*uired by the % 4Securities and 7xchange 8oard of India:0 ?ith-r%/%l of re'o( itio . 1). .he written notice referred to in section " of the Act shall be in 6or( C0
! Substituted %0 Ibid0 %
by 60 Eo0 L3/LS7L!$, dated %#0 00 !!$0
Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> re'o( i!e- !to'6 e#'h% (e. 13. 7'ery recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years, (1) ?inute boo)s of the (eetings of(a) (e(bers3 (b) go'erning body3 (c) any standing co((ittee or co((ittees of the go'erning body or of the general body of (e(bers0
(2) Register of (e(bers showing their full na(es and addresses0 Khere any (e(ber of the stoc) exchange is a fir(, full na(es and addresses of all partners shall be shown0 (3) Register of authorised cler)s0 (4) Register of re(isiers of authorised assistants0 (5) Record of security deposits0 (6) ?argin deposits boo)0 (7) =edgers0 (8) Mournals0 (9) Cash boo)0 (10) 8an) pass+boo)0 ;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> .e.,er of % re'o( i!e- !to'6 e#'h% (e. 15. ( ) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years , (a) Register of transactions ( a!da boo))0 (b) ClientsJ ledger0 (c) &eneral ledger0 (d) Mournals0 (e) Cash boo)0 (f) 8an) pass+boo)0 (g) 9ocu(ents register showing full particulars of shares and securities recei'ed and deli'ered0 (2) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following docu(ents for a period of two years, (a) ?e(berJs contract boo)s showing details of all contracts entered into by hi( with other (e(bers of the sa(e exchange or counterfoils or duplicates of (e(os of confir(ation issued to such other (e(bers0 (b) Counterfoils or duplicates of contract notes issued to clients0 (c) Kritten consent of clients in respect of contracts entered into as principals0 @% er of i 7*ir> i rel%tio to the %ff%ir! of the (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e or the %ff%ir! of % > .e.,er of the !to'6 e#'h% (e i rel%tio to the !to'6 e#'h% (e. 18. ( )(a) .he person or persons appointed by the %%4Securities and 7xchange 8oard of India: to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act shall hereafter in this rule be referred to as the Nin*uiring authorityJ3 (b) where the in*uiring authority consists of two or (ore persons, one of the( shall be appointed as the chair(an or senior (e(ber thereof3 (c) the in*uiring authority shall hand o'er a state(ent of issues to be in*uired into to the go'erning body or the (e(ber concerned, as the case (ay be, who will be gi'en a reasonable opportunity to state their or his side of the case3 (d) if any witness is called for exa(ination, an opportunity shall be pro'ided to the go'erning body or the (e(ber whose affairs are being in*uired into, as the case (ay be, to cross+exa(ine such witness3 (e) where the in*uiring authority consists of (ore than one person, the 'iews of the (aDority shall be dee(ed to represent the findings of such authority and, in the e'ent of
an e*uality of 'otes, the chair(an or senior (e(ber shall ha'e a casting 'ote3 (f) the in*uiring authority shall sub(it its report in writing to the %%4Securities and 7xchange 8oard of India: within the period specified in the order of appoint(ent3 (g) te(porary absence fro( any hearing or hearings of any (e(ber of the in*uiring authority shall not 'itiate its proceedings0 (%) Khere the %%4Securities and 7xchange 8oard of India: has directed the go'erning body of a stoc) exchange to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act, the go'erning body concerned shall appoint one or (ore (e(bers thereof to (a)e the in*uiry and the pro'isions of sub+rule ( ) shall apply "!tati# "!tandi# to such in*uiry0 S*,.i!!io of % *%l re$ort. 17. ( ) 7'ery recognised stoc) exchange shall before the 3 st day of Manuary in each year or within such extended ti(e as the %34Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, allow, furnish the %34Securities and 7xchange 8oard of India: annually with a report about its acti'ities during the preceding calendar year, which shall inter alia contain detailed infor(ation about the following (atters , (a) changes in rules and bye+laws, if any3 (b) changes in the co(position of the go'erning body3 (c) any new sub+co((ittees set up and changes in the co(position of existing ones3
%% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# %3 Ibid0
(d) ad(issions, re+ad(issions, deaths or resignations of (e(bers3 (e) disciplinary action against (e(bers3 (f) arbitration of disputes (nature and nu(ber) between (e(bers and non+(e(bers3 (g) defaults3 (h) action ta)en to co(bat any e(ergency in trade3 (i) securities listed and de+listed3 and (j) securities brought on or re(o'ed fro( the forward list0 (%) 7'ery recognised stoc) exchange shall within one (onth of the date of the holding of its annual general (eeting, furnish the %$4Securities and 7xchange 8oard of India: with a copy of its audited balance+sheet and profit and loss account for its preceding financial year0 S*,.i!!io of $erio-i'%l ret*r !. 17A. 7'ery recognised stoc) exchange shall furnish the %$4Securities and 7xchange 8oard of India: periodical returns relating to(i) the official rates for the securities enlisted thereon3 (ii) the nu(ber of shares deli'ered through the clearing house3 (iii) the (a)ing+up prices3 (iv) the clearing house progra((es3 (v) the nu(ber of securities listed and de+listed during the pre'ious three (onths3 (vi) the nu(ber of securities brought on or re(o'ed fro( the forward list during the pre'ious three (onths3 and (vii) any other (atter as (ay be specified by the %$4Securities and 7xchange 8oard of India:0 @% er of $*,li'%tio of ,>e0l%/! for 'riti'i!.. 1:. .he bye+laws to be (ade, a(ended or re'ised under the Act shall be published for
criticis( in accordance with the pro'isions of section %3 of the &eneral Clauses Act, >!/ both in the &aFette of India and Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate0 Re7*ire.e t! /ith re!$e't to the li!ti ( of !e'*ritie! o % re'o( i!e- !to'6 e#'h% (e. 19. ( ) A public co(pany as defined under the Co(panies Act, !"#, desirous of getting its securities listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars ,
%$ Ibid0
(a) ?e(orandu( and articles of association and, in the case of a debenture issue, a copy of the trust deed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any securities for subscription or sale during the last fi'e years0 (d) Copies of balance+sheets and audited accounts for the last fi'e years, or in the case of new co(panies, for such shorter period for which accounts ha'e been (ade up0 (e) A state(ent showing(i) di'idends and cash bonuses, if any, paid during the last ten years (or such shorter period as the co(pany has been in existence, whether as a pri'ate or public co(pany), (ii) di'idends or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents with or between ,(i) 'endors andLor pro(oters, (ii) underwriters and sub+underwriters, (iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents with(i) (anaging agents and secretaries and treasurers, (ii) selling agents, (iii) (anaging directors and technical directors, (iv) general (anager, sales (anager, (anager or secretary0 (h) Certified copy of e'ery letter, report, balance+sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering securities for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents0 (j) A brief history of the co(pany since its incorporation gi'ing details of its acti'ities including any reorganisation, reconstruction or a(alga(ation, changes in its capital structure, (authorised, issued and subscribed) and debenture borrowings, if any0
(k) <articulars of shares and debentures issued-(i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s including an option for the issue of any )ind of the securities granted to any person0 (") Certified copies of%"4(i) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3: (ii) agree(ents, if any, with the Industrial 6inance Corporation, Industrial Credit and In'est(ent Corporation and si(ilar bodies0 (n) <articulars of shares forfeited0 ($) A list of highest ten holders of each class or )ind of securities of the co(pany as on the date of application along with particulars as to the nu(ber of shares or debentures held by and the address of each such holder0 (%) <articulars of shares or debentures for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0 (%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant co(pany shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer, (ii) that the fully paid shares will be free fro( all lien, while in the case of partly paid shares, the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such shares, (iii) that any a(ount paid+up in ad'ance of calls on any share (ay carry interest but shall not entitle the holder of the share to participate in respect thereof, in a di'idend subse*uently declared, (iv) there will be no forfeiture of unclai(ed di'idends before the clai( beco(es barred by law, (v) that option or right to call of shares shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the securities of a co(pany which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0
%" Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 <rior to its substitution, sub+clause (i), read as under, 1(i) letters of consent of the Controller of Capital Issues02
%#4(b)
(i) At least twenty fi'e per cent0 of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent3 or (ii) At least ten per cent of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent if the post issue capital of the
co(pany calculated at offer price is (ore than four thousand crore rupees, <ro'ided that the re*uire(ent of post issue capital being (ore than four thousand crore rupees shall not apply to a co(pany whose draft offer docu(ent is pending with the Securities and 7xchange 8oard of India on or before the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, if it satisfies the conditions prescribed in clause (b) of sub+rule % of rule ! of the Securities Contracts (Regulation) Rules, !"# as existed prior to the date of such co((ence(ent, %/4<ro'ided further that the co(pany, referred to in sub clause (ii), shall increase its public shareholding to at least twenty fi'e per cent, within a
%# Substituted
by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, clause (b) as a(ended by the A(end(ent Rules, %00 , w0e0f0 0/00#0%00 , read as under, 1(b) At least 0 per cent of each class or )ind of securities issued by a co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted subDect to the following conditions, (a) (ini(u( %0 la)h securities (excluding reser'ations, fir( allot(ent and pro(otersJ contribution) was offered to the public3 (b) the siFe of the offer to the public, i&e&' the offer price (ultiplied by the nu(ber of securities offered to the public was (ini(u( Rs0 00 crores3 and (c) the issue was (ade only through boo) building (ethod with allocation of #0 per cent of the issue siFe to the *ualified institutional buyers as specified by the Securities and 7xchange 8oard of India, 4ro+i-e- that if a co(pany does not fulfil the conditions, it shall offer at least %" per cent of each class or )ind of securities to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted, 4ro+i-e- f*rther that a recognised stoc) exchange (ay relax any of the conditions with the pre'ious appro'al of the Securities and 7xchange 8oard of India, in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#), and subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*6or the purpose of this clause, it is hereby clarified that where any part of the securities sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental 6ire and &eneral Insurance Co(pany =i(ited and the Hnited 6ire and &eneral Insurance Co(pany =i(ited or Hnit .rust of India, the total subscription to the securities, whether by one or (ore of such bodies, shall not for( part of the 0 per cent or %" per cent of the securities, as the case (ay be, to be offered to the public02 %/ Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 <rior to its substitution, second pro'iso, read as under, 1<ro'ided further that the co(pany, referred in sub+clause (ii), shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of atleast fi'e per
period of three years fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India0: %>4GGG:: %!4(c) Eotwithstanding anything contained in clause (b), a public sector co(pany, shall offer and allot at least ten per cent, of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares to public in ter(s of an offer docu(ent0: (3) A co(pany applying for listing shall, as a condition precedent, underta)e inter alia(a) (i) that letters of allot(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to
that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been posted, (ii) that letters of right will be issued si(ultaneously, (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the securities to which they relate, (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right, (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or di'idend on the securities will be calculated, (b) to issue, when so re*uired, receipts for all securities deposited with it whether for registration, sub+di'ision, exchange or for other purposes 3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of certificates and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (bb) to issue, when so re*uired, consolidation and renewal certificates in deno(inations of the (ar)et unit of trading to split certificates, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3
cent per annu( beginning fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India,2 %> C(itted, ibid <rior to its o(ission, third pro'iso, read as under, 1<ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase beings its public shareholding to the le'el of twenty fi'e per cent in that year02 %! Inserted, ibid0
(c) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders, and (ii) to 'erify when the co(pany is unable to issue certificates or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (d) on production of the necessary docu(ents by shareholders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or certificate of the Controller of 7state 9uty or si(ilar other docu(ent has been duly exhibited to
and registered by the co(pany3 (e) to issue certificates in respect of shares or debentures lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance certificates within the sa(e period where the transfer is acco(panied by a larger certificate3 (f) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a di'idend or the issue of right or bonus share will be considered3 (g) to reco((end or declare all di'idends andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all di'idends andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (h) to notify the stoc) exchange of any (aterial change in the general character or nature of the co(panyJs business3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (anaging agent or secretaries and treasurers, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued, copies of all other notices and circulars sent to the shareholders including proceedings of ordinary and extraordinary general (eetings of the co(pany and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the shareholders of any new issue of securities whether by way of right, pri'ilege bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited securities or the issue of securities held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of di'idend or issue of right or bonus shares or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s (or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its shareholders or debentureholders) and specifying the purpose or purposes for which the transfer boo)s are to be closed (or the record is to be ta)en)3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority subDect to which the issue is proposed to be (ade ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after each annual general (eeting of at least ten principal holders of each class of security of the co(pany along with particulars as to the nu(ber of shares or debentures held by,
and address of, each such holder3 (+) to grant to shareholders the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e not being less than four wee)s within which to record, exercise, or renounce such rights, pri'ileges and benefits and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3 (r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any securities listed on the exchange, (ii) of the intention to (a)e a drawing of such securities, inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing of the balance) for the drawing, (iii) of the a(ount of securities outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the shareholders to apprise the position of the co(pany and to a'oid the establish(ent of a false (ar)et in the shares of the co(pany3 (t) (t)that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 304($) An application for listing shall be necessary in respect of the following, (a) all new issues of any class or )ind of securities of a co(pany to be offered to the public3 (b) all further issues of any class or )ind of securities of a co(pany if such class or )ind of securities of the co(pany are already listed on a recognised stoc) exchange0: (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the securities of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 3 44ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any security, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and its orders shall be carried out by the stoc) exchange0: 3%4(#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore
or re+ad(it to dealings any securities suspended or withdrawn fro( the list0: 334(#A) 7xcept as otherwise pro'ided in these rules or per(itted by the Securities and 7xchange 8oard of India under sub+rule (/), all re*uire(ents with respect to listing
30 Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, sub+rule ($), read as under, 1($) A fresh application for listing will be necessary in respect of all new issues desired to be dealt in, pro'ided that, where such new securities are identical in all respects with those already listed, ad(ission to dealings will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new issues0 7xplanation, Shares are identical in all respects only if(a) they are of the sa(e no(inal 'alue and the sa(e a(ount per share has been called up3 (b) they are entitled to di'idend at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the di'idend payable on each share will a(ount to exactly the sa(e su(, net and gross3 and (c) they carry the sa(e rights in all other respects02 3 Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%0000 7arlier, the second pro'iso was a(ended by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 3% Substituted by the Securities Contracts (Regulation) (A(end(ent), %000, w0e0f0 0>00>0%0000 7arlier, subrule (#) was a(ended by the Securities Contracts (Regulation) (A(end(ent), !!#, w0e0f0 %30 %0 !!#0 33 Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!0>0%0 00 <rior to its substitution, sub+rule (#A) as a(ended by the Securities Contracts
prescribed by these rules shall, so far as they (ay be, also apply to a public sector co(pany0: 3$4GGG: (/) .he 3"4Securities and 7xchange 8oard of India: (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect to listing prescribed by these rules0 3#4Co ti *o*! Li!ti ( Re7*ire.e t. 19A. ( ) 7'ery listed co(pany 3/4other than public sector co(pany: shall (aintain public shareholding of at least twenty fi'e per cent0, 3>4<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent, on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall increase its public shareholding to at least twenty fi'e per cent, within a period of three years fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India0 7xplanation, 6or the purposes of this sub+rule, a co(pany whose securities has been listed pursuant to an offer and allot(ent (ade to public in ter(s of sub+clause (ii) of clause (b) of sub+rule (%) of rule !, shall (aintain (ini(u( twenty fi'e per cent, public shareholding fro( the date on which the public shareholding in the co(pany reaches the le'el of twenty fi'e percent in ter(s of said sub+clause0: (%) Khere the public shareholding in a listed co(pany falls below twenty fi'e per cent0 at any ti(e, such co(pany shall bring the public shareholding to twenty fi'e per cent0
(Regulations)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 and &SR % (7) w0e0f0 0!0030 !!", read as under, 1(#A) All the re*uire(ents with respect to listing and continuous listing prescribed by these rules, shall so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature ,2 3$ C(itted by the Securities Contracts (Regulation)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its o(ission, pro'iso, as substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# and inserted by &SR %! (7) dated %/0030 !!", read as under,
1<ro'ided that a recognised stoc) exchange (ay relax the re*uire(ent of offer to public for subscription of atleast twenty+fi'e percent of the each class or )ind of securities issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e02 3" Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent), Rules, !!#, w0e0f0 %30 %0 !!#0 3# Inserted by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 3/ Inserted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3> Substituted, ibid0 <rior to substitution, pro'isos, read as under, 1<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of at least fi'e per cent per annu( beginning fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India, <ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase brings its public shareholding to the le'el of twenty fi'e per cent in that year02
within a (axi(u( period of twel'e (onths fro( the date of such fall in the (anner specified by the Securities and 7xchange 8oard of India0: 3!4(3) Eotwithstanding anything contained in this rule, e'ery listed public sector co(pany shall (aintain public shareholding of at least ten per cent0, <ro'ided that a listed public sector co(pany+ (a) which has public shareholding below ten per cent, on the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of three years fro( the date of such co((ence(ent3 (b) whose public shareholding reduces below ten per cent, after the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of twel'e (onths fro( the date of such reduction,0: $04Re7*ire.e t! /ith re!$e't to the li!ti ( of * it! or % > other i !tr*.e t of % Colle'ti+e I +e!t.e t S'he.e o % re'o( i!e- !to'6 e#'h% (e. "=. ( ) A Collecti'e In'est(ent ?anage(ent Co(pany (CI?C) which is desirous of getting its any collecti'e in'est(ent sche(e listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars , (a) Certificate of incorporation, (e(orandu( and articles of association of the co(pany and the copy of the trust deed of the sche(e intended to be listed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any unit or other instru(ent for subscription or sale during the last fi'e years, or in the case of a new co(pany, such shorter period during which the co(pany has been in existence0 (d) Copies of balance sheets and audited accounts for the last fi'e years, or in the case of a new co(pany, for such co(pleted financial year for which accounts ha'e been (ade up0 (e) A state(ent showing,(i) returns and cash bonuses, if any, paid during the last ten years (or such
shorter period as the co(pany has been in existence whether as a pri'ate or public co(pany)3 (ii) returns or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents pertaining to each sche(e of the co(pany with or between,(i) 'endors andLor pro(oters3 (ii) underwriters and sub+underwriters3
3! Inserted $0 Inserted
by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 0 by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%000
(iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents pertaining to each sche(e of a co(pany with(i) selling agents and other ser'ice pro'iders3 (ii) (anaging directors and technical directors3 (iii) general (anager, sales (anager, (anager or secretary0 (h) Certified copies of e'ery letter, report, balance sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering units or any other instru(ents of the sche(e for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents pertaining to such sche(e0 (j) A brief history of the Co(pany since its incorporation gi'ing details of its acti'ities including any re+organisation, reconstruction or a(alga(ation, changes in its capital structure (authorised, issued and subscribed) and debenture borrowings, if any, and the perfor(ance of other collecti'e in'est(ent sche(es of the co(pany0 (k) <articulars of units of the sche(e andLor shares, debentures of the co(pany issued (i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s granted to any person pertaining to such sche(e0 (") Certified copies of(i) certificate of registration granted by the Securities and 7xchange 8oard of India3 (ii) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3 (iii) agree(ents, if any, with any public financial institution as specified in section $A of the Co(panies Act, !"# ( of !"#)0 (n) A list of the highest ten holders of units of each sche(e of the co(pany as on the date of application along with particulars as to the nu(ber of units held by and the address of each such holder0 ($) <articulars of units of the sche(e for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0
(%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer of units of a particular sche(e3 (ii) that the fully paid units issued under the sche(e will be free fro( all lien, while in the case of partly paid units the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such units3 (iii) that any a(ount paid+up in ad'ance of calls on any units (ay carry interest but shall not entitle the holder of the unit to participate in respect thereof, in a return subse*uently declared3 (iv) there will be no forfeiture of unclai(ed returns before the clai( beco(es barred by law3 (v) that option or right to call of units shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the units of a sche(e which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0 (b) At least twenty+fi'e per cent of the units or any other instru(ent of a sche(e issued by the co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and not (ore than ninety days, and that applications recei'ed in pursuance of such offer were allotted fairly and unconditionally , 4ro+i-e- that a recognised stoc) exchange (ay relax this re*uire(ent, with the pre'ious appro'al of the Securities and 7xchange 8oard of India in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#) and subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*Khere any part of the units or any other instru(ents sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely, the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental Insurance Co(pany =i(ited and the Hnited Insurance Co(pany =i(ited, or Hnit .rust of India, the total subscription to the units or any other instru(ent, whether by one or (ore of such bodies, shall not for( part of the twenty+fi'e per cent of the units or any other instru(ent to be offered to the public0 (3) A co(pany applying for listing of a sche(e shall, as a condition precedent, underta)e, inter alia,(a) (i) that letters of allot(ent of units or any other instru(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been
posted3 (ii) that letters of right will be issued si(ultaneously3 (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and, exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the units or any other instru(ent to which they relate3 (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right3 (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or return on the units or any other instru(ent will be calculated3 (b) to issue, when so re*uired, receipts for all units and any other instru(ent deposited with it whether for registration, sub+di'ision, exchange or for other purposes3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of units and any other instru(ent and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (c) to issue, when so re*uired, consolidation and renewal units or any other instru(ent in deno(inations of the (ar)et unit of trading, to split units or any other instru(ent, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3 (d) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders3 and (ii) to 'erify when the co(pany is unable to issue units or any other instru(ents or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (e) on production of the necessary docu(ents by unit holders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or si(ilar other docu(ent has been duly exhibited to and registered by the co(pany3 (f) to issue certificates in respect of units or any other instru(ent lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance units or any other instru(ent within the sa(e period where the transfer is acco(panied by a larger unit or any other instru(ent certificate3 (g) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a return or the issue or right or bonus units or
any other instru(ent will be considered3 (h) to reco((end or declare all returns andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all returns andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts of such sche(e as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued copies of all other notices and circulars sent to the unitLother instru(ent holders regarding any i(portant de'elop(ent or resolutions passed by the co(pany affecting the perfor(ance of the sche(e and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the unitLany other instru(ent holders, of any new issue of unitsLother instru(ents whether by way of right, pri'ilege, bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited unitsLother instru(ents or the issue of unitsLother instru(ents held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of unit capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of returns or issue of right or bonus unitsLany other instru(ents in the sche(e or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its unitLother instru(ent holders and specifying the purpose or purposes for which the transfer boo)s are to be closed or the record is to be ta)en3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority, subDect to which the issue is proposed to be (ade, ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after the preparation of annual accounts of at least ten principal holders of each class of unitsLany other instru(ents of the co(pany along with particulars as to the nu(ber of unitsLany other instru(ent held by, and address of, each such holder3 (+) to grant to unitLany other instru(ent holders of the sche(e the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e, not being less than four wee)s, within which to record, exercise, or renounce such rights, pri'ileges and benefits, and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3
(r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any unitLother instru(ent listed on the exchange3 (ii) of the intention to (a)e a drawing of such unitLother instru(ent inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing off the balance) for the drawing3 (iii) of the a(ount of unitsLother instru(ents outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the unitLany other instru(ent holders to appraise the position of the sche(e and to a'oid the establish(ent of a false (ar)et in the unitsLany other instru(ents of the co(pany3 (t) that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 ($) A fresh application for listing will be necessary in respect of all new sche(es desired to be dealt in , 4ro+i-e- that, where such new unitsLother instru(ents are identical in all respects with those already listed, ad(ission to dealing will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new sche(es0 ()%lanati$n0-HnitsLany other instru(ents are identical in all respects only if(a) they are issued under the sa(e sche(e3 (b) they are of the sa(e no(inal 'alue and the sa(e a(ount per unitLother instru(ents has been called up3 (c) they are entitled to returns at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the return payable on each unitLother issue will a(ount to exactly the sa(e su(, net and gross3 and (d) they carry the sa(e rights in all other respects0 (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the unitsLother instru(ents of a sche(e of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 4ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any unitLother instru(ent of a collecti'e in'est(ent sche(e, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an
opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and thereupon the orders of the Securities Appellate .ribunal shall be carried out by the stoc) exchange0 (#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore or read(it to dealings any unitsLother instru(ents suspended or withdrawn fro( the list0 (/) All the re*uire(ents with respect to listing prescribed by these rules, shall, so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature , 4ro+i-e- that a recognised stoc) exchange (ay relax the re*uire(ent of offer to the public for subscription of at least twenty+fi'e per cent of the units or any other instru(ent of a collecti'e in'est(ent sche(e issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 (>) .he Securities and 7xchange 8oard of India (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect of listing prescribed by these rules0: $ 4Deli!ti ( of !e'*ritie!. "1. A recogniFed stoc) exchange (ay, without preDudice to any other action that (ay be ta)en under the Act or under any other law for the ti(e being in force, delist any securities listed thereon on any of the following grounds in accordance with the regulations (ade by the Securities and 7xchange 8oard of India, na(ely,(a) the co(pany has incurred losses during the preceding three consecuti'e years and it has negati'e networth3 (b) trading in the securities of the co(pany has re(ained suspended for a period of (ore than six (onths3 (c) the securities of the co(pany ha'e re(ained infre*uently traded during the preceding three years3 (d) the co(pany or any of its pro(oters or any of its director has been con'icted for failure to co(ply with any of the pro'isions of the Act or the Securities and 7xchange 8oard of India Act, !!% or the 9epositories Act, !!# (%% of !!#) or rules, regulations, agree(ents (ade thereunder, as the case (ay be and awarded a penalty of not less than rupees one crore or i(prison(ent of not less than three years3 (e) the addresses of the co(pany or any of its pro(oter or any of its directors, are not )nown or false addresses ha'e been furnished or the co(pany has changed its registered office in contra'ention of the pro'isions of the Co(panies Act, !"# ( of !"#)3 or
$
Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %00>, w0e0f0 000#0%00!
(f) shareholding of the co(pany held by the public has co(e below the (ini(u( le'el applicable to the co(pany as per the listing agree(ent under the Act and the co(pany has failed to raise public holding to the re*uired le'el within the ti(e specified by the recogniFed stoc) exchange , 4ro+i-e- that no securities shall be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) If the securities is delisted under clause ( ),
(a) the co(pany, pro(oter and director of the co(pany shall be Dointly and se'erally liable to purchase the outstanding securities fro( those holders who wish to sell the( at a fair price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India, under the Act3 and (b) the said securities shall be delisted fro( all recogniFed stoc) exchanges0 (3) A recogniFed stoc) exchange (ay, on the re*uest of the co(pany, delist any securities listed thereon in accordance with the regulations (ade under the Act by Securities and 7xchange 8oard of India, subDect to the following conditions, na(ely ,(a) the securities of the co(pany ha'e been listed for a (ini(u( period of three years on the recogniFed stoc) exchange3 (b) the delisting of such securities has been appro'ed by the two+third of public shareholders3 and (c) the co(pany, pro(oter andLor the director of the co(pany purchase the outstanding securities fro( those holders who wish to sell the( at a price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India under the Act, 4ro+i-e- that the condition at (c) (ay be dispensed with by Securities and 7xchange 8oard of India if the securities re(ain listed at least on the Eational Stoc) 7xchange of India =i(ited or the 8o(bay Stoc) 7xchange =i(ited0: FORM A ( ee Rules 3 and /) A$$li'%tio for re'o( itio 1re e/%l of re'o( itio of % !to'6 e#'h% (e * -er !e'tio ) of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 .o 00000000000000000000000000000000000000 00000000000000000000000000000000000000 !bject,*A%%licati$n f$r rec$gniti$n-rene.al $f rec$gniti$n $f a #t$ck e)change !nder #ecti$n 3 $f the ec!ritie# /$ntract# (0eg!lati$n) Act' 1956& Sir, <ursuant to the $%4Securities and 7xchange 8oard of India: Eotification Eo0 00000000000000000000000000 00000000000000000 dated 000000000000000000000000000000000LCertificate of recognition dated0000000000000000000000000000000KeLI on behalf of 000000000000000000 (na(e and address of stoc) exchange) being a stoc) exchange as defined in section % of the Securities Contracts
$% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
(Regulation) Act, !"# hereby apply for recognitionLrenewal of recognition for the purposes of the said Act in respect of contracts in securities0 ". 6our copies of the rules, (e(orandu( and articles of association relating in general to the constitution and (anage(ent of the stoc) exchange and four copies of the bye+laws for the regulation and control contracts in securities are enclosed0 ). All the necessary infor(ation re*uired in the Annexure to this 6or( is enclosed0 Any additional infor(ation will be furnished as and when called for by the $34Securities and 7xchange 8oard of India:0 3. KeLI on behalf of the said stoc) exchange hereby underta)e to co(ply with the re*uire(ents of section $ of the said Act and such other conditions and ter(s as (ay be contained in the certificate of recognition or be prescribed or i(posed subse*uently0 5. .reasury Receipt Eo0 000000dated000000for Rs000000000000is attached0
Oours faithfully, Signature of applicant ANNEAURE TO 2OR@ BAC Part I - General 0 Ea(e of the applicant stoc) exchange0 %0 Address0 30 9ate of establish(ent0 $0 Is your exchange a Doint stoc) co(pany (state whether public or pri'ate) registered under the Indian Co(panies Act or an association for profit or otherwise P If it is organised on so(e other basis, this (ay be stated0 "0 &i'e details of your capital structure and attach three copies of the audited balance sheets and profit and loss account of the 7xchange for the preceding three years0 Part II - Membership #0 State the nu(ber of (e(bers at the ti(e of application0 Also specify how (any are inacti'e0 /0 State whether there is any pro'ision, resolution or con'ention for li(iting the nu(ber of (e(bers and whether in pursuance thereof you ha'e fixed a ceiling on the nu(ber of (e(bers that you would ta)e0 >0 9o you insist on any (ini(u( *ualifications and experience before enrolling new (e(bers P If so gi'e details0 !0 State the different classes of (e(bers, if any, the nu(ber thereof and the pri'ileges enDoyed by each class0 Khat is the procedure followed by your exchange for the ad(ission of different classes of new (e(bers P 00 Khat are the rates of your annual subscription in respect of the different classes of (e(bers P 0 9o you collect any security deposit fro( your (e(bers P If so, gi'e details and also state the (anner in which such deposits are utilised and the rate of interest allowed, if any0
$3 Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
%0 9o you collect any ad(ission or entrance fees fro( your (e(bers or fro( partners of fir(s who are (e(bers P If so, how (uch P 30 9o you insist on your (e(bers and partners of fir(s who are (e(bers di'esting the(sel'es of other acti'ities either as principal or as e(ployee P $0 9o your rules per(it fir(s to beco(e (e(bers P If so, is it incu(bent on (e(bers to see) the appro'al of the go'erning body before ad(itting new partners P State the conditions, if any, laid down in your rules for the ad(ission of such partners0 "0 If your rules do not per(it of fir(s being enrolled as (e(bers, do you per(it indi'idual (e(bers to for( a partnership P State the procedure followed for the recognition of such partnership0 #0 9o you per(it (e(bers to wor) in partnership with non+(e(bers P If so, how far such non+(e(bers subDect to the control of the stoc) exchange P Part III - Governing Body /0 Khat is the present strength of your go'erning body P &i'e details of the constitution, powers of (anage(ent, election and tenure of office of (e(bers of the go'erning body, and the (anner in which its business is transacted0 >0 Are any trade or co((ercial interest represented on your go'erning body P If so,
gi'e details of interests represented0 !0 9o you associate shareholders of in'estors associations with the (anage(ent of your exchange P If so, state the (anner in which it is done0 %00 Are there any &o'ern(ent representati'es on your go'erning body P If so, furnish their na(es0 % 0 9o your rules pro'ide for the direct election by (e(bers of any other bodies or co((ittees, apart fro( the go'erning body P If so, gi'e details of their constitution, tenure, powers and functions0 %%0 9o you ha'e any pro'ision for the appoint(ent of standing or ad h$c subco((ittees of the go'erning body P If so, furnish details of the (ethod of their appoint(ent, ter(s of office, powers and functions0 %30 &i'e the designations, powers and duties of principal office+bearers of your exchange0 Are any of these office+bearers in the pay of the stoc) exchange P If so, gi'e details as to the (ode of their appoint(ent, tenure of office and re(uneration0 Part IV - Trading %$0 9o you ha'e a trading ring P If not, how do you carry on the business P &i'e details0 %"0 State the different )inds of contracts in use on your exchange e&g&' spot, ready and forward0 State the period of deli'ery and pay(ent in each case0 %#0 &i'e details of business hours for each type of contract0 %/0 &i'e details of the scale of bro)erage and other charges, if any, prescribed by your exchange0 %>0 9o you prescribe standard for(s of contract for the use of your (e(bers P Attach three copies of each such contract for(0 %!0 9o you classify your (e(bers into bro)ers and Dobbers P If so, specify the bye+law under which this is done0 300 9o you ha'e a syste( of registration of re(isiers andLor authorised cler)s P If so, gi'e details as to their *ualifications, obligations and rights, etc0 3 0 9o you ha'e any regulations regarding dealings by (e(bers on their own account whether in the nature of 1aravani (day+to+day) or otherwise P 3%0 9o you ha'e any pro'isions for regulating the 'olu(e of business done by any indi'idual (e(ber other than through a syste( of (argins P If so, gi'e details0 330 Khat pro'isions ha'e you (ade for periodical settle(ent of contracts and differences thereunder, the deli'ery of, and pay(ent for securities and the passing of deli'ery orders P 3$0 9o you ha'e a clearing house for the settle(ent of contracts P If so, gi'e details of its organisation and (anage(ent0 3"0 If you ha'e clearing house, what returns do the (e(bers of your exchange sub(it regarding the transactions cleared through such clearing house P 9oes the exchange as) for any regular returns in respect of transactions settled outside the clearing house P Sub(it three copies of for(s used in this connection0 3#0 Iow do you fix, alter or postpone the dates of settle(ent P 3/0 Iow do you deter(ine and declare (a)ing+up prices P 3>0 9o you ha'e any arrange(ents for (a)ing or recording of bargains P 3!0 Ia'e you any arrange(ents for recording and publishing (ar)et rates including opening, closing, highest and lowest rates P $00 Khat pro'isions ha'e you (ade for regulating-(a) the entering into contracts, their
perfor(ance and rescission, including contracts , (i) between (e(bers, (ii) between a (e(ber and his constituent, and (iii) between a (e(ber and a non+(e(ber3 (b) the conse*uences of breach, default or insol'ency on the part of (e(bers whether acting as buyers, sellers or inter(ediaries 3 and (c) 2havala#3 and other (atters relating to conduct of business of (e(bers in the exchange P $ 0 9o you prescribe (argin re*uire(ents P If yes, gi'e details0 $%0 9o you prescribe (axi(u( and (ini(u( prices for securities P If so, how and under what conditions0 $30 9o you pro'ide any safeguards for the pre'ention of Nbulls*ueeFesJ and 3 NbearraidsJ and for (eeting e(ergencies in trade P &i'e details0 $$0 Khat are the (easures adopted by you to regulate or prohibit ad'ertising or issue of circulars by your (e(bers P $"0 Khat are the disciplinary power with the go'erning body to enforce due co(pliance by (e(bers of the rules and bye+laws of the exchange and generally to ensure proper standard of business conduct P $#0 9o you re*uire (e(bers to supply such infor(ation or explanation and to produce such boo)s relating to their business as your go'erning body (ay re*uire P $/0 9o you publish any statistics in regard to business done on the exchange including the transactions settled through the clearing house, if (aintained P In particular, ha'e you e'ol'ed any (achinery for co(puting the 'olu(e of transactions in the different )inds of contracts per(itted on your exchange P &i'e details0 $>0 9o you ha'e any bye+laws contra'ention of which (a)es a contract 'oid P Part V - Miscellaneo s $!0 9o you ha'e any (achinery for arbitration of disputes between (e(bers andLor between (e(bers and their constituents P &i'e details0 "00 Khat are the conditions subDect to which securities are listed for dealings on your exchange P " 0 Khat are your re*uire(ents for ad(itting securities to forward+trading P "%0 9o you ha'e the right to prohibit, withdraw or suspend dealings in a listed security P If so, under what circu(stances is this right exercised P "30 Khat pro'isions ha'e you (ade for the le'y and reco'ery of fees, fines and penalties P FORM B ( ee rules # and /) $$5The Se'*ritie! % - E#'h% (e ;o%r- of I -i%< 4e. 5elhi' the 20&&&&&&&&&&&&& Eo0 000000000000000000000000000000000000.he $"4Securities and 7xchange 8oard of India:, ha'ing considered the application for recognitionLrenewal of recognition (ade under section 3 of the Securities Contracts (Regulation) Act, !"# by000000000000000000000000000000 (na(e and address of exchange) and being satisfied that it would be in the interest of the trade and also in the public interest so to do, hereby grants, in exercise of the powers conferred by section $ of the Securities Contracts (Regulation) Act, !"# recognition to the said exchange under section $ of the said Act for 0000000000000000000 yearLyears ending 0000000000000000000000%0 0000000on a per(anent basis in respect of contracts in securities subDect to the conditions stated herein below or as (ay be prescribed or i(posed hereafter0 Seal of the $#48oard: Signature of Cfficer
Note&-Application for renewal of recognition shall be (ade so as to reach the Central &o'ern(ent not less than three (onths before the expiry of the period0 (.his certificate, will also ha'e to be published as a Eotification in the &aFette of India and also in the Cfficial &aFette of the State in which principal office of the recognised stoc) exchange is situate)0 $/5FORM ! ( ee rule 3) Noti'e to !ho/ '%*!e %(%i !t the /ith-r%/%l of re'o( itio .I7 S7CHRI.I7S AE9 7ACIAE&7 8CAR9 C6 IE9IA 6!"bai' the&&&&&&&&&&& .o 0000000000000000000000000000000000000000000000000000000000000000000000000000000000
$$ Substituted
for 1&o'ern(ent of India, ?inistry of 6inance2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 $" Substituted for 1Central &o'ern(ent2, ibid0 $# Substituted for 1?inistry2, ibid0 $/ Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#
0000000000000000000000000000000000000000000000000000000000000000000000000000000000 (na(e and address of the exchange) Oou are hereby called upon to show cause on or before 0000000000000000000000000000000000000 at the office of 0000000000000000000000000000000000000000000000000000 ( designation of the officer) why the recognition granted to you under the ?inistry of 6inanceLthe Securities and 7xchange 8oard of India, Eotification Eo0 0000000000000000000000000000 dated 000000000000000000000000000000000000000 and Certificate Eo0 00000000000000000000000000000 dated 000000000000000000000000000000 should not be withdrawn for the reasons gi'en in the annexure to this notice0 8y order and in the na(e of the Securities and 7xchange 8oard of India0 Seal of the Securities and 7xchange 8oard of India0 Notifi'%tio & 4$& 576' dated 217271957&
SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< SECTIONS
80(9:6:4A0; 1. Short title, extent and co((ence(ent ". 9efinitions 0(/<=4: (5 1</> (?/@A4=( ). Application for recognition of stoc) exchanges 3. &rant of recognition to stoc) exchanges0 3A. Corporatisation and de(utualisation of stoc) exchanges 3;. <rocedure for corporatisation and de(utualisation 5. Kithdrawal of recognition 8. <ower of Central &o'ern(ent to call for periodical returns or direct in*uiries to be (ade 7. Annual reports to be furnished to Central &o'ern(ent by stoc) exchanges 7A. <ower of recognised stoc) exchange to (a)e rules restricting 'oting rights, etc :. <ower of Central &o'ern(ent to direct rules to be (ade or to (a)e rules :A. Clearing corporation 9. <ower of recognised stoc) exchanges to (a)e bye+laws 1=. <ower of Securities and 7xchange 8oard of India to (a)e or a(end byelaws of recognised stoc) exchanges 11. <ower of Central &o'ern(ent to supersede go'erning body of a recognised stoc) exchange 1". <ower to suspend business of recognised stoc) exchanges0 1"A. <ower to issue directions 1). Contracts in notified areas illegal in certain circu(stances 1)A. Additional trading floor 13. Contracts in notified areas to be 'oid in certain circu(stances 15. ?e(bers (ay not act as principals in certain circu(stances 18. <ower to prohibit contracts in certain cases 17. =icensing of dealers in securities in certain areas 17A. <ublic issue and listing of securities referred to in sub+clause ( ie) of clause (h) of section % 1:. 7xclusion of spot deli'ery contracts fro( sections 3, $, " and / 1:A. Contracts in deri'ati'e 19. Stoc) exchanges other than recognised stoc) exchanges prohibited "=. <rohibition of options in securities "1. Conditions for listing "1A. 9elisting of securities "". Right of appeal against refusal of stoc) exchanges to list securities of public co(panies ""A. Right of appeal to Securities Appellate .ribunal against refusal of stoc) exchange to list securities of public co(panies "";. <rocedure and powers of Securities Appellate .ribunal ""C. Right to legal representation ""D. =i(itation ""E. Ci'il court not to ha'e Durisdiction
""2. Appeal to Supre(e Court 8(4A91:( A45 80</(5A0( "). <enalties ")A. <enalty for failure to furnish infor(ation, return, etc0 ");. <enalty for failure by any person to enter into an agree(ent with clients ")C. <enalty for failure to redress in'estorsJ grie'ances ")D. <enalty for failure to segregate securities or (oneys of client or clients ")E. <enalty for failure to co(ply with pro'ision of listing conditions or delisting conditions or grounds ")2. <enalty for excess de(aterialisation or deli'ery of unlisted securities ")G. <enalty for failure to furnish periodical returns, etc0 ")D. <enalty for contra'ention where no separate penalty has been pro'ided ")0I. <ower to adDudicate ")E. 6actors to be ta)en into account by adDudicating officer ")EA. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! ")E;. Re'o+er> of %.o* t! ")F. Crediting su(s realised by way of penalties to Consolidated 6und of India ")L. Appeal to Securities Appellate .ribunal ")@. Cffences ")N. Co(position of certain offences ")0O. <ower to grant i((unity "3. Cffences by co(panies "5. Certain offences to be cogniFable "8. CogniFance of offences by courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! 6: /(99A4(<A "7. .itle to di'idends "7A. Right to recei'e inco(e fro( collecti'e in'est(ent sche(e "7;. Right to recei'e inco(e fro( (utual fund ":. Act not to apply in certain cases "9. <rotection of action ta)en in good faith "9A. <ower to delegate )=. <ower to (a)e rules )1. <ower of Securities and 7xchange 8oard of India to (a)e regulations SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< 53th Se$te.,er, 1958< A A't to $re+e t * -e!ir%,le tr% !%'tio ! i !e'*ritie! ,> re(*l%ti ( the ,*!i e!! of -e%li ( therei , 14***: ,> $ro+i-i ( for 'ert%i other .%tter! 'o e'te- there/ith. 87 it enacted by <arlia(ent in the Se'enth Oear of the Republic of India as follows ,
80(9:6:4A0; Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities Contracts (Regulation) Act, !"#0 (%) It extends to the whole of India0
Kords 1by prohibiting options and2 o(itted by the Securities =aws (A(end(ent) Act, !!", Sec0 >, w0e0f0 %"+0 + !!".
(3) It shall co(e into force on such date% as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 Defi itio !. ". In this Act, unless the context otherwise re*uires,(a) 1contract2 (eans a contract for or relating to the purchase or sale of securities3 3 4(aa) 1corporatisation2 (eans the succession of a recognised stoc) exchange, being a body of indi'iduals or a society registered under the Societies Registration Act, >#0 (% of >#0), by another stoc) exchange, being a co(pany incorporated for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities carried on by such indi'iduals or society3 (ab) 1de(utualisation2 (eans the segregation of ownership and (anage(ent fro( the trading rights of the (e(bers of a recognised stoc) exchange in accordance with a sche(e appro'ed by the Securities and 7xchange 8oard of India3: $4"4(ac): 1deri'ati'e2 includes(A) a security deri'ed fro( a debt instru(ent, share, loan, whether secured or unsecured, ris) instru(ent or contract for differences or any other for( of security3 (B) a contract which deri'es its 'alue fro( the prices, or index of prices, of underlying securities3: (b) 1&o'ern(ent security2 (eans a security created and issued, whether before or after the co((ence(ent of this Act, by the Central &o'ern(ent or a State &o'ern(ent for the purpose of raising a public loan and ha'ing one of the for(s specified in clause (2) of section % of the <ublic 9ebt Act, !$$ ( > of !$$)3 (c) 1(e(ber2 (eans a (e(ber of a recognised stoc) exchange3 (d) 1option in securities2 (eans a contract for the purchase or sale of a right to buy or sell, or a right to buy and sell, securities in future, and includes a teji' a "andi' a teji "andi' a galli' a put, a call or a put and call in securities3 (e) 1prescribed2 (eans prescribed by rules (ade under this Act3
% %0+%+
!"/ vide SRC "%>, dated #+0%+ !"/, published in the &aFette of India, 7xtra0, <t0 II, Sec0 3, p0 "$!, dated #+0%+ !"/0 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 $ Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000 " Clause (aa) renu(bered as clause (ac) by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0
(f) 1recognised stoc) exchange2 (eans a stoc) exchange which is for the ti(e
being recognised by the Central &o'ern(ent under section $3 (g) 1rules2, with reference to the rules relating in general to the constitution and (anage(ent of a stoc) exchange, includes, in the case of a stoc) exchange which is an incorporated association, its (e(orandu( and articles of association3 64(ga) 1sche(e2 (eans a sche(e for corporatisation or de(utualisation of a recognised stoc) exchange which (ay pro'ide for(i) the issue of shares for a lawful consideration and pro'ision of trading rights in lieu of (e(bership cards of (e(bers of a recognised stoc) exchange3 (ii) the restrictions on 'oting rights3 (iii) the transfer of property, business, assets, rights, liabilities, recognitions, contracts of the recognised stoc) exchange, legal proceedings by, or against, the recognised stoc) exchange, whether in the na(e of the recognised stoc) exchange or any trustee or otherwise and any per(ission gi'en to, or by, the recognised stoc) exchange3 (iv) the transfer of e(ployees of a recognised stoc) exchange to another recognised stoc) exchange3 (v) any other (atter re*uired for the purpose of, or in connection with, the corporatisation or de(utualisation, as the case (ay be, of the recognised stoc) exchange3: /4>4(gb): 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (h) 1securities2 include(i) shares, scrips, stoc)s, bonds, debentures, debenture stoc) or other (ar)etable securities of a li)e nature in or of any incorporated co(pany or other body corporate3 !4(ia) deri'ati'e3 (ib) units or any other instru(ent issued by any collecti'e in'est(ent sche(e to the in'estors in such sche(es3:
# Inserted / Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (Second A(end(ent) Act, !!!, Sec %, w0e0f0 #+ %+ !!!0 > Clause (ga) renu(bered as clause (gb) by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 ! Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000
04(ic) security receipt as defined in clause ( Cg) of section % of the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%3: 114(id) units or any other such instru(ent issued to the in'estors under any (utual fund sche(e3: %47xplanation0-6or the re(o'al of doubts, it is hereby declared that ;securities; shall not include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(bined benefit ris) on the life of the persons and in'est(ent by such
persons and issued by an insurer referred to in clause (!) of section % of the Insurance Act, !3> ($ of !3>)3: 35(ie) any certificate or instru(ent (by whate'er na(e called), issued to an in'estor by any issuer being a special purpose distinct entity which possesses any debt or recei'able, including (ortgage debt, assigned to such entity, and ac)nowledging beneficial interest of such in'estor in such debt or recei'able, including (ortgage debt, as the case (ay be3 <
0 Inserted by the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%, Sec0 $ and Schedule, w0r0e0f0 % +#+%00%0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0e0f0 %+ 0+%00$0 % Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, Sec $, w0r0e0f0 0!+0$+%0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, read as under , ;CIA<.7R BI ?ISC7==AE7CHS #0 Dalidati$n&-Eotwithstanding anything contained in any Dudg(ent, decree or order of any Court, .ribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly, any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 0e%eal and #aving#&*( ) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0; 3 Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec %, w0e0f0 %>+"+ %00/0
$4(ii) &o'ern(ent securities3 (iia) such other instru(ents as (ay be declared by the Central &o'ern(ent to be securities3 and: (iii) rights or interest in securities3 "4(i) 1spot deli'ery contract2 (eans a contract which pro'ides for,(a) actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e
town or locality3 (b) transfer of the securities by the depository fro( the account of a beneficial owner to the account of another beneficial owner when such securities are dealt with by a depository3: #4(j) 1stoc) exchange2 (eans(a) any body of indi'iduals, whether incorporated or not, constituted before corporatisation and de(utualisation under sections $A and $8, or (b) a body corporate incorporated under the Co(panies Act, !"# ( of !"#) whether under a sche(e of corporatisation and de(utualisation or otherwise, for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0: /4I ter$ret%tio of 'ert%i /or-! % - e#$re!!io !. "A. Kords and expressions used herein and not defined in this Act but defined in the Co(panies Act, !"# ( of !"#) or the Securities and 7xchange 8oard of India
$ Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, for sub+clause (ii), w0r0e0f0 30+0 + !!%0 " Substituted by the 9epositories Act, !!#, Sec 30 and Schedule, <t0 III, w0r0e0f0 %0+0!+ !!" . <rior to its substitution, clause (i) read as under , N(i) 1spot deli'ery contract2 (eans a contract which pro'ides for the actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e town or locality3J # Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (j) read as under ,N(j) 1stoc) exchange2 (eans any body of indi'iduals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0J / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
Act, !!% ( " of !!%) or the 9epositories Act, !!# (%% of !!#) shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts0: 0(/<=4: (5 1</> (?/@A4=( A$$li'%tio for re'o( itio of !to'6 e#'h% (e!. ). ( ) Any stoc) exchange, which is desirous of being recognised for the purposes of this Act, (ay (a)e an application in the prescribed (anner to the Central &o'ern(ent01: (%) 7'ery application under sub+section ( ) shall contain such particulars as (ay be prescribed, and shall be acco(panied by a copy of the bye+laws of the stoc) exchange for the regulation and control of contracts and also a copy of the rules relating in general to the constitution of the stoc) exchange and in particular, to(a) the go'erning body of such stoc) exchange, its constitution and powers of (anage(ent and the (anner in which its business is to be transacted3 (b) the powers and duties of the office bearers of the stoc) exchange3 (c) the ad(ission into the stoc) exchange of 'arious classes of (e(bers, the *ualifications for (e(bership, and the exclusion, suspension, expulsion and
re+ad(ission of (e(bers therefro( or thereinto3 (d) the procedure for the registration of partnerships as (e(bers of the stoc) exchange in cases where the rules pro'ide for such (e(bership3 and the no(ination and appoint(ent of authorised representati'es and cler)s0 Gr% t of re'o( itio to !to'6 e#'h% (e!. 3. ( ) If the Central &o'ern(ent ! is satisfied, after (a)ing such in*uiry as (ay be necessary in this behalf and after obtaining such further infor(ation, if any, as it (ay re*uire,(a) that the rules and bye+laws of a stoc) exchange applying for registration are in confor(ity with such conditions as (ay be prescribed with a 'iew to ensure fair dealing and to protect in'estors3 (b) that the stoc) exchange is willing to co(ply with any other conditions (including conditions as to the nu(ber of (e(bers) which the Central &o'ern(ent, after consultation with the go'erning body of the stoc) exchange and ha'ing regard to the area ser'ed by the stoc) exchange and its standing and the nature of the securities dealt with by it, (ay i(pose for the purpose of carrying out the obDects of this Act3 and
> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 ! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
(c) that it would be in the interest of the trade and also in the public interest to grant recognition to the stoc) exchange3 it (ay grant recognition to the stoc) exchange subDect to the conditions i(posed upon it as aforesaid and in such for( as (ay be prescribed0 (%) .he conditions which the Central &o'ern(ent %0 (ay prescribe under clause (a) of sub+section ( ) for the grant of recognition to the stoc) exchanges (ay include, a(ong other (atters, conditions relating to,(i) the *ualifications for (e(bership of stoc) exchanges3 (ii) the (anner in which contracts shall be entered into and enforced as between (e(bers3 (iii) the representation of the Central &o'ern(ent on each of the stoc) exchange by such nu(ber of persons not exceeding three as the Central &o'ern(ent (ay no(inate in this behalf3 and (iv) the (aintenance of accounts of (e(bers and their audit by chartered accountants whene'er such audit is re*uired by the Central &o'ern(ent0 (3) 7'ery grant of recognition to a stoc) exchange under this section shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office as of the stoc) exchange is situate, and such recognition shall ha'e effect as fro( the date of its publication in the &aFette of India0 % ($) Eo application for the grant of recognition shall be refused except after gi'ing an opportunity to the stoc) exchange concerned to be heard in the (atter3 and the reasons for such refusal shall be co((unicated to the stoc) exchange in writing0 %% (") Eo rules of a recognised stoc) exchange relating to any of the (atters specified in sub+section (%) of section 3 shall be a(ended except with the appro'al of the
Central &o'ern(ent0%3 "35Cor$or%ti!%tio % - -e.*t*%li!%tio of !to'6 e#'h% (e!. 3A. Cn and fro( the appointed date, all recognised stoc) exchanges (if not corporatised and de(utualised before the appointed date) shall be corporatised and de(utualised in accordance with the pro'isions contained in section $8 ,
%0 <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 % <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %% <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %3 <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 %$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
4ro+i-e- that the Securities and 7xchange 8oard of India (ay, if it is satisfied that any recognised stoc) exchange was pre'ented by sufficient cause fro( being corporatised and de(utualised on or after the appointed date, specify another appointed date in respect of that recognised stoc) exchange and such recognised stoc) exchange (ay continue as such before such appointed date0 ()%lanati$n&*6or the purposes of this section, 1appointed date2 (eans the date which the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, appoint and different appointed dates (ay be appointed for different recognised stoc) exchanges0: "554ro'e-*re for 'or$or%ti!%tio % - -e.*t*%li!%tio . 3;. ( ) All recognised stoc) exchanges referred to in section $A shall, within such ti(e as (ay be specified by the Securities and 7xchange 8oard of India, sub(it a sche(e for corporatisation and de(utualisation for its appro'al , 4ro+i-e- that the Securities and 7xchange 8oard of India, (ay, by notification in the Cfficial &aFette, specify na(e of the recognised stoc) exchange, which had already been corporatised and de(utualised, and such stoc) exchange shall not be re*uired to sub(it the sche(e under this section0 (%) Cn receipt of the sche(e referred to in sub+section ( ), the Securities and 7xchange 8oard of India (ay, after (a)ing such en*uiry as (ay be necessary in this behalf and obtaining such further infor(ation, if any, as it (ay re*uire and if it is satisfied that it would be in the interest of the trade and also in the public interest, appro'e the sche(e with or without (odification0 (3) Eo sche(e under sub+section (%) shall be appro'ed by the Securities and 7xchange 8oard of India if the issue of shares for a lawful consideration or pro'ision of trading rights in lieu of (e(bership card of the (e(bers of a recognised stoc) exchange or pay(ent of di'idends to (e(bers ha'e been proposed out of any reser'es or assets of that stoc) exchange0 ($) Khere the sche(e is appro'ed under sub+section (%), the sche(e so appro'ed shall be published i((ediately by(a) the Securities and 7xchange 8oard of India in the Cfficial &aFette3 (b) the recognised stoc) exchange in such two daily newspapers circulating in India, as (ay be specified by the Securities and 7xchange 8oard of India,
and upon such publication, notwithstanding anything to the contrary contained in this Act or any other law for the ti(e being in force or any agree(ent, award, Dudg(ent, decree or other instru(ent for the ti(e being in force, the sche(e shall ha'e effect and be binding on all persons and authorities including all (e(bers, creditors, depositors and e(ployees of the recognised stoc) exchange and on all
%" Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
persons ha'ing any contract, right, power, obligation or liability with, against, o'er, to, or in connection with, the recognised stoc) exchange or its (e(bers0 (") Khere the Securities and 7xchange 8oard of India is satisfied that it would not be in the interest of the trade and also in the public interest to appro'e the sche(e under sub+section (%), it (ay, by an order, reDect the sche(e and such order of reDection shall be published by it in the Cfficial &aFette , 4ro+i-e- that the Securities and 7xchange 8oard of India shall gi'e a reasonable opportunity of being heard to all the persons concerned and the recognised stoc) exchange concerned before passing an order reDecting the sche(e0 (#) .he Securities and 7xchange 8oard of India (ay, while appro'ing the sche(e under sub+section (%), by an order in writing, restrict(a) the 'oting rights of the shareholders who are also stoc) bro)ers of the reognised stoc) exchange3 (b) the right of shareholders or a stoc) bro)er of the recognised stoc) exchange to appoint the representati'es on the go'erning board of the stoc) exchange3 (c) the (axi(u( nu(ber of representati'es of the stoc) bro)ers of the recognised stoc) exchange to be appointed on the go'erning board of the recognised stoc) exchange, which shall not exceed one+fourth of the total strength of the go'erning board0 (/) .he order (ade under sub+section (#) shall be published in the Cfficial &aFette and on the publication thereof, the order shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#), or any other law for the ti(e being in force, ha'e full effect0 (>) 7'ery recognised stoc) exchange, in respect of which the sche(e for corporatisation or de(utualisation has been appro'ed under sub+section (%), shall, either by fresh issue of e*uity shares to the public or in any other (anner as (ay be specified by the regulations (ade by the Securities and 7xchange 8oard of India %#, ensure that at least fifty+one per cent of its e*uity share capital is held, within twel'e (onths fro( the date of publication of the order under sub+section (/), by the public other than shareholders ha'ing trading rights , 4ro+i-e- that the Securities and 7xchange 8oard of India (ay, on sufficient cause being shown to it and in the public interest, extend the said period by another twel'e (onths0:
ee Securities Contracts (Regulation) (Stoc) 7xchanges and Clearing Corporations) Regulations, %0 %, w0e0f0 %0+0#+%0 % notified vide &aFette Eotification Eo0 =A9+ ERCL&EL%0 %+ 3L0/L 3"$#, 7xtra0, <t0 III, Section $, dtd %0+0#+%0 %0
%#
?ith-r%/%l of re'o( itio .
5. %/4( ): If the Central &o'ern(ent%> is of opinion that the recognition granted to a stoc) exchange under the pro'isions of this Act should, in the interest of the trade or in the public interest, be withdrawn, the Central &o'ern(ent (ay ser'e on the go'erning body of the stoc) exchange a written notice that the Central &o'ern(ent is considering the withdrawal of the recognition for the reasons stated in the notice and after gi'ing an opportunity to the go'erning body to be heard in the (atter, the Central &o'ern(ent (ay withdraw, by notification in the Cfficial &aFette, the recognition granted to the stoc) exchange , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Central &o'ern(ent (ay, after consultation with the stoc) exchange, (a)e such pro'ision as it dee(s fit in the notification of withdrawal or in any subse*uent notification si(ilarly published for the due perfor(ance of any contracts outstanding on that date0 %!4(%) Khere the recognised stoc) exchange has not been corporatised or de(utualised or it fails to sub(it the sche(e referred to in sub+section ( ) of section $8 within the specified ti(e therefor or the sche(e has been reDected by the Securities and 7xchange 8oard of India under sub+section (") of section $8, the recognition granted to such stoc) exchange under section $, shall, notwithstanding anything to the contrary contained in this Act, stand withdrawn and the Central &o'ern(ent shall publish, by notification in the Cfficial &aFette, such withdrawal of recognition , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Securities and 7xchange 8oard of India (ay, after consultation with the stoc) exchange, (a)e such pro'isions as it dee(s fit in the order reDecting the sche(e published in the Cfficial &aFette under sub+section (") of section $80: 4o/er of Ce tr%l Go+er .e t to '%ll for $erio-i'%l ret*r ! or -ire't i 7*irie! to ,e .%-e. 8. ( ) 7'ery recognised stoc) exchange shall furnish to the 304Securities and 7xchange 8oard of India: such periodical returns relating to its affairs as (ay be prescribed0
%/ Section
" renu(bered as sub+section ( ) by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 %> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 30 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(%) 7'ery recognised stoc) exchange and e'ery (e(ber thereof shall (aintain and preser'e for such periods not exceeding fi'e years such boo)s of account, and other docu(ents as the Central &o'ern(ent, after consultation with the stoc) exchange concerned, (ay prescribe in the interest of the trade or in the public interest, and such boo)s of account, and other docu(ents shall be subDect to inspection at all reasonable ti(es 3 4by the Securities and 7xchange 8oard of India:0 (3) Kithout preDudice to the pro'isions contained in sub+sections ( ) and (%), the
3%4Securities
and 7xchange 8oard of India:, if it is satisfied that it is in the interest of the trade or in the public interest so to do, (ay, by order in writing,(a) call upon a recognised stoc) exchange or any (e(ber thereof to furnish in writing such infor(ation or explanation relating to the affairs of the stoc) exchange or of the (e(ber in relation to the stoc) exchange as the 334Securities and 7xchange 8oard of India: (ay re*uire3 or (b) appoint one or (ore persons to (a)e an in*uiry in the prescribed (anner in relation to the affairs of the go'erning body of a stoc) exchange or the affairs of any of the (e(bers of the stoc) exchange in relation to the stoc) exchange and sub(it a report of the result of such in*uiry to the 3$4Securities and 7xchange 8oard of India: within such ti(e as (ay be specified in the order or, in the case of an in*uiry in relation to the affairs of any of the (e(bers of a stoc) exchange, direct the go'erning body to (a)e the in*uiry and sub(it its report to the 3"4Securities and 7xchange 8oard of India:0 ($) Khere an in*uiry in relation to the affairs of a recognised stoc) exchange or the affairs of any of its (e(bers in relation to the stoc) exchange has been underta)en under sub+section (3),(a) e'ery director, (anager, secretary or other officer of such stoc) exchange3 (b) e'ery (e(ber of such stoc) exchange3 (c) if the (e(ber of the stoc) exchange is a fir(, e'ery partner, (anager, secretary or other officer of the fir(3 and (d) e'ery other person or body of persons who has had dealings in the course of business with any of the persons (entioned in clauses ( a), (b) and (c), whether directly or indirectly3
Substituted for ;by the Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3% Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 33 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3" Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
3
shall be bound to produce before the authority (a)ing the in*uiry all such boo)s of account, and other docu(ents in his custody or power relating to or ha'ing a bearing on the subDect+(atter of such in*uiry and also to furnish the authorities within such ti(e as (ay be specified with any such state(ent or infor(ation relating thereto as (ay be re*uired of hi(0 )8A *%l re$ort! to ,e f*r i!he- to Ce tr%l Go+er .e t ,> !to'6 e#'h% (e!. 7. 7'ery recognised stoc) exchange shall furnish the Central &o'ern(ent with a copy of the annual report, and such annual report shall contain such particulars as (ay be prescribed0 )754o/er of re'o( i!e- !to'6 e#'h% (e to .%6e r*le! re!tri'ti ( +oti ( ri(ht!, et'. 7A. ( ) A recognised stoc) exchange (ay (a)e rules or a(end any rules (ade by it
to pro'ide for all or any of the following (atters, na(ely ,(a) the restriction of 'oting rights to (e(bers only in respect of any (atter placed before the stoc) exchange at any (eeting3 (b) the regulation of 'oting rights in respect of any (atter placed before the stoc) exchange at any (eeting so that each (e(ber (ay be entitled to ha'e one 'ote only, irrespecti'e of his share of the paid+up e*uity capital of the stoc) exchange3 (c) the restriction on the right of a (e(ber to appoint another person as his proxy to attend and 'ote at a (eeting of the stoc) exchange3 (d) such incidental, conse*uential and supple(entary (atters as (ay be necessary to gi'e effect to any of the (atters specified in clauses ( a), (b) and (c)0 (%) Eo rules of a recognised stoc) exchange (ade or a(ended in relation to any (atter referred to in clauses (a) to (d) of sub+section ( ) shall ha'e effect until they ha'e been appro'ed by the Central &o'ern(ent 3> and published by that &o'ern(ent in the Cfficial &aFette and, in appro'ing the rules so (ade or a(ended, the Central &o'ern(ent (ay (a)e such (odifications therein as it thin)s fit, and on such publication, the rules as appro'ed by the Central &o'ern(ent shall be dee(ed to ha'e been 'alidly (ade, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#)0:
3# <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 3/ Inserted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec %, w0e0f0 0>+ %+ !"!0 3> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
4o/er of Ce tr%l Go+er .e t )9 to -ire't r*le! to ,e .%-e or to .%6e r*le!. :. ( ) Khere, after consultation with the go'erning bodies of stoc) exchanges generally or with the go'erning body of any stoc) exchange in particular, the Central &o'ern(ent is of opinion that it is necessary or expedient so to do, it (ay, by order in writing together with a state(ent of the reasons therefor, direct recognised stoc) exchanges generally or any recognised stoc) exchange in particular, as the case (ay be, to (a)e any rules or to a(end any rules already (ade in respect of all or any of the (atters specified in sub+section (%) of section 3 within a period of $04two (onths: fro( the date of the order0 (%) If any recognised stoc) exchange fails or neglects to co(ply with any order (ade under sub+section ( ) within the period specified therein, the Central &o'ern(ent (ay (a)e the rules for, or a(end the rules (ade by, the recognised stoc) exchange, either in the for( proposed in the order or with such (odifications thereof as (ay be agreed to between the stoc) exchange and the Central &o'ern(ent0 (3) Khere in pursuance of this section any rules ha'e been (ade or a(ended, the rules so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette or &aFettes of the State or States in which the principal office or offices of the recognised stoc) exchange or exchanges is or are situate, and, on the publication thereof in the &aFette of India, the rules so (ade or a(ended shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# (
of !"#), or in any other law for the ti(e being in force, ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange or stoc) exchanges, as the case (ay be0 315Cle%ri ( 'or$or%tio . :A. ( ) A recognised stoc) exchange (ay, with the prior appro'al of the Securities and 7xchange 8oard of India, transfer the duties and functions of a clearing house to a clearing corporation, being a co(pany incorporated under the Co(panies Act, !"# ( of !"#), for the purpose of(a) the periodical settle(ent of contracts and differences thereunder3 (b) the deli'ery of, and pay(ent for, securities3 (c) any other (atter incidental to, or connected with, such transfer0 (%) 7'ery clearing corporation shall, for the purpose of transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( ),
3! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 $0 Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec !, w0e0f0 %"+ 0 + !!"0 $ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0
(a)e bye+laws and sub(it the sa(e to the Securities and 7xchange 8oard of India for its appro'al0 (3) .he Securities and 7xchange 8oard of India (ay, on being satisfied that it is in the interest of the trade and also in the public interest to transfer the duties and functions of a clearing house to a clearing corporation, grant appro'al to the byelaws sub(itted to it under sub+section (%) and appro'e the transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( )0 ($) .he pro'isions of sections $, ", #, /, >, !, 0, and % shall, as far as (ay be, apply to a clearing corporation referred to in sub+section ( ) as they apply in relation to a recognised stoc) exchange0: 4o/er of re'o( i!e- !to'6 e#'h% (e! to .%6e ,>e0l%/!. 9. ( ) Any recognised stoc) exchange (ay, subDect to the pre'ious appro'al of the $%4Securities and 7xchange 8oard of India:, (a)e bye+laws for the regulation and control of contracts0 (%) In particular, and without preDudice to the generality of the foregoing power, such bye+laws (ay pro'ide for , (a) the opening and closing of (ar)ets and the regulation of the hours of trade3 (b) a clearing house for the periodical settle(ent of contracts and differences thereunder, the deli'ery of and pay(ent for securities, the passing on of deli'ery orders and the regulation and (aintenance of such clearing house3 (c) the sub(ission to the $34Securities and 7xchange 8oard of India: by the clearing house as soon as (ay be after each periodical settle(ent of all or any of the following particulars as the $$4Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, re*uire, na(ely ,(i) the total nu(ber of each category of security carried o'er fro( one settle(ent period to another3 (ii) the total nu(ber of each category of security, contracts in respect of
which ha'e been s*uared up during the course of each settle(ent period3 (iii) the total nu(ber of each category of security actually deli'ered at each clearing3
$% Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(d) the publication by the clearing house of all or any of the particulars sub(itted to the $"4Securities and 7xchange 8oard of India: under clause ( c) subDect to the directions, if any, issued by the $#4Securities and 7xchange 8oard of India: in this behalf3 (e) the regulation or prohibition of blan) transfers3 (f) the nu(ber and classes of contracts in respect of which settle(ents shall be (ade or differences paid through the clearing house3 (g) the regulation, or prohibition of b!dla# or carry+o'er facilities3 (h) the fixing, altering or postponing of days for settle(ents3 (i) the deter(ination and declaration of (ar)et rates, including the opening, closing highest and lowest rates for securities3 (j) the ter(s, conditions and incidents of contracts, including the prescription of (argin re*uire(ents, if any, and conditions relating thereto, and the for(s of contracts in writing3 (k) the regulation of the entering into, (a)ing, perfor(ance, recession and ter(ination, of contracts, including contracts between (e(bers or between a (e(ber and his constituent or between a (e(ber and a person who is not a (e(ber, and the conse*uences of default or insol'ency on the part of a seller or buyer or inter(ediary, the conse*uences of a breach or o(ission by a seller or buyer, and the responsibility of (e(bers who are not parties to such contracts3 (l) the regulation of taravani business including the placing of li(itations thereon3 (") the listing of securities on the stoc) exchange, the inclusion of any security for the purpose of dealings and the suspension or withdrawal of any such securities, and the suspension or prohibition of trading in any specified securities3 (n) the (ethod and procedure for the settle(ent of clai(s or disputes, including settle(ent by arbitration3 ($) the le'y and reco'ery of fees, fines and penalties3 (%) the regulation of the course of business between parties to contracts in any capacity3 (+) the fixing of a scale of bro)erage and other charges3 (r) the (a)ing, co(paring, settling and closing of bargains3 (#) the e(ergencies in trade which (ay arise, whether as a result of pool or syndicated operations or cornering or otherwise, and the exercise of powers in
$" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%,
Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $# Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
such e(ergencies, including the power to fix (axi(u( and (ini(u( prices for securities3 (t) the regulation of dealings by (e(bers for their own account3 (!) the separation of the functions of Dobbers and bro)ers3 (v) the li(itations on the 'olu(e of trade done by any indi'idual (e(ber in exceptional circu(stances3 (.) the obligation of (e(bers to supply such infor(ation or explanation and to produce such docu(ents relating to the business as the go'erning body (ay re*uire0 (3) .he bye+laws (ade under this section (ay(a) specify the bye+laws the contra'ention of which shall (a)e a contract entered into otherwise than in accordance with the bye+laws 'oid under sub+section ( ) of section $3 (b) pro'ide that the contra'ention of any of the bye+laws shall render the (e(ber concerned liable to one or (ore of the following punish(ents, na(ely ,(i) fine, (ii) expulsion fro( (e(bership, (iii) suspension fro( (e(bership for a specified period, (iv) any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney0 ($) Any bye+laws (ade under this section shall be subDect to such conditions in regard to pre'ious publication as (ay be prescribed, and, when appro'ed by the $/4Securities and 7xchange 8oard of India:, shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and shall ha'e effect as fro( the date of its publication in the &aFette of India , 4ro+i-e- that if the $>4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+law should be (ade i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0
$/ Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $> Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4o/er of 395Se'*ritie! % - E#'h% (e ;o%r- of I -i%< to .%6e or %.e - ,>e0l%/! of re'o( i!e- !to'6 e#'h% (e!. 1=. ( ) .he "04Securities and 7xchange 8oard of India: (ay, either on a re*uest in writing recei'ed by it in this behalf fro( the go'erning body of a recognised stoc) exchange or on its own (otion, if it is satisfied after consultation with the go'erning body of the stoc) exchange that it is necessary or expedient so to do and after recording its reasons for so doing, (a)e bye+laws for all or any of the (atters specified in section ! or a(end any bye+laws (ade by such stoc) exchange under that section0
(%) Khere in pursuance of this section any bye+laws ha'e been (ade or a(ended the bye+laws so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and on the publication thereof in the &aFette of India, the bye+laws so (ade or a(ended shall ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange concerned0 (3) Eotwithstanding anything contained in this section, where the go'erning body of a recognised stoc) exchange obDects to any bye+laws (ade or a(ended under this section by the " 4Securities and 7xchange 8oard of India: on its own (otion, it (ay, within "%4two (onths: of the publication thereof in the &aFette of India under subsection (%), apply to the "34Securities and 7xchange 8oard of India: for re'ision thereof, and the "$4Securities and 7xchange 8oard of India: (ay, after gi'ing an opportunity to the go'erning body of the stoc) exchange to be heard in the (atter, re'ise the bye+laws so (ade or a(ended, anywhere any bye+laws so (ade or a(ended are re'ised as a result of any action ta)en under this sub+section, the byelaws so re'ised shall be published and shall beco(e effecti'e as pro'ided in subsection (%)0 ($) .he (a)ing or the a(end(ent or re'ision of any bye+laws under this section shall in all cases be subDect to the condition of pre'ious publication ,
$! Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "0 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 " Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "% Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec %0, w0e0f0 %"+ 0 + !!"0 "3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4ro+i-e- that if the ""4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+laws should be (ade, a(ended or re'ised i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0 4o/er of Ce tr%l Go+er .e t 58 to !*$er!e-e (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e. 11. ( ) Kithout preDudice to any other powers 'ested in the Central &o'ern(ent under this Act, where the Central &o'ern(ent is of opinion that the go'erning body of any recognised stoc) exchange should be superseded, then, notwithstanding anything contained in any other law for the ti(e being in force, in the Central &o'ern(ent (ay ser'e on the go'erning body a written notice that the Central &o'ern(ent is considering the supersession of the go'erning body for the reasons specified in the notice and after gi'ing an opportunity to the go'erning body to be
heard in the (atter, it (ay, by notification in the Cfficial &aFette, declare the go'erning body of such stoc) exchange to be superseded, and (ay appoint any person or persons to exercise and perfor( all the powers and duties of the go'erning body, and, where (ore persons than one are appointed, (ay appoint one of such persons to be the chair(an and another to be the 'ice+chair(an thereof0 (%) Cn the publication of a notification in the Cfficial &aFette under sub+section ( ), the following conse*uences shall ensue, na(ely,(a) the (e(bers of the go'erning body which has been superseded shall, as fro( the date of the notification of supersession, cease to hold office as such (e(bers3 (b) the person or persons appointed under sub+section ( ) (ay exercise and perfor( all the powers and duties of the go'erning body which has been superseded3 (c) all such property of the recognised stoc) exchange as the person or persons appointed under sub+section ( ) (ay, by order in writing, specify in this behalf as being necessary for the purpose of enabling hi( or the( to carry on the business of the stoc) exchange, shall 'est in such person or persons0 (3) Eotwithstanding anything to the contrary contained in any law or the rules or bye+laws of the recognised stoc) exchange the go'erning body of which is superseded under sub+section ( ), the person or persons appointed under that subsection shall hold office for such period as (ay be specified in the notification published under that sub+section and the Central &o'ern(ent (ay fro( ti(e to ti(e, by li)e notification, 'ary such period0
"" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "# <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0
($) .he Central &o'ern(ent (ay at any ti(e before the deter(ination of the period of office of any person or persons appointed under this section call upon the recognised stoc) exchange to re+constitute the go'erning body in accordance with its rules and on such re+constitution all the property of the recognised stoc) exchange which has 'ested in, or was in the possession of, the person or persons appointed under sub+section ( ), shall re+'est or 'est, as the case (ay be, in the go'erning body so re+constituted , 4ro+i-e- that until a go'erning body is so re+constituted, the person or persons appointed under sub+section ( ) shall continue to exercise and perfor( their powers and duties0 4o/er57 to !*!$e - ,*!i e!! of re'o( i!e- !to'6 e#'h% (e!. 1". If in the opinion of the Central &o'ern(ent an e(ergency has arisen and for the purpose of (eeting the e(ergency the Central &o'ern(ent considers it expedient so to do, it (ay, by notification in the Cfficial &aFette, for reasons to be set out therein, direct a recognised stoc) exchange to suspend such of its business for such period not exceeding se'en days and subDect to such conditions as (ay be specified in the notification, and, if, in the opinion of the Central &o'ern(ent, the interest of
the trade or the public interest re*uires that the period should be extended, (ay, by li)e notification extend the said period fro( ti(e to ti(e , 4ro+i-e- that where the period of suspension is to be extended beyond the first period, no notification extending the period of suspension shall be issued unless the go'erning body of the ">4recognised stoc) exchange: has been gi'en an opportunity of being heard in the (atter0 "!54o/er to i!!*e -ire'tio !. 1"A. If, after (a)ing or causing to be (ade an in*uiry, the Securities and 7xchange 8oard of India is satisfied that it is necessary(a) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (b) to pre'ent the affairs of any recognised stoc) exchange or clearing corporation, or such other agency or person, pro'iding trading or clearing or settle(ent facility in respect of securities, being conducted in a (anner detri(ental to the interests of in'estors or securities (ar)et3 or (c) to secure the proper (anage(ent of any such stoc) exchange or clearing corporation or agency or person, referred to in clause ( b),
"/ <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 "> Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 "! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0
it (ay issue such directions,(i) to any stoc) exchange or clearing corporation or agency or person referred to in clause (b) or any person or class of persons associated with the securities (ar)et3 or (ii) to any co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 8=5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< /<410A/1 A45 <81:<4 :4 (/A0:1:( Co tr%'t! i otifie- %re%! ille(%l i 'ert%i 'ir'*.!t% 'e!. 1). If the Central &o'ern(ent# is satisfied, ha'ing regard to the nature or the 'olu(e of transactions in securities in any #%4State or States or area: that it is necessary so to do, it (ay, by notification in the Cfficial &aFette, declared this section to apply to such #34State or States or area:, and thereupon e'ery contract in such #$4State or States or area: which is entered into after the date of the notification otherwise than #"4between (e(bers of a recognised stoc) exchange or recognised stoc) exchanges: in such ##4State or States or area: or through or with such (e(ber shall be illegal ,
#0 I #
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 #% Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #3 Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #$ Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$ for ;between (e(bers of a recognised stoc) exchange; & ## Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0
#/54ro+i-e-
that any contract entered into between (e(bers of two or (ore recognised stoc) exchanges in such State or States or area, shall(i) be subDect to such ter(s and conditions as (ay be stipulated by the respecti'e stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India3 (ii) re*uire prior per(ission fro( the respecti'e stoc) exchanges if so stipulated by the stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India0: #>4A--itio %l tr%-i ( floor. 1)A. A stoc) exchange (ay establish additional trading floor with the prior appro'al of the Securities and 7xchange 8oard of India in accordance with the ter(s and conditions stipulated by the said 8oard0 ()%lanati$n , 6or the purposes of this section, 1additional trading floor2 (eans a trading ring or trading facility offered by a recognised stoc) exchange outside its area of operation to enable the in'estors to buy and sell securities through such trading floor under the regulatory fra(ewor) of that stoc) exchange0: Co tr%'t! i otifie- %re%! to ,e +oi- i 'ert%i 'ir'*.!t% 'e!. 13. ( ) Any contract entered into in any State or area specified in the notification under section 3 which is in contra'ention of any of the bye+laws specified in that behalf under clause (a) of sub+section (3) of section ! shall be 'oid , (i) as respects the rights of any (e(ber of the recognised stoc) exchange who has entered into such contract in contra'ention of any such bye+law, and also (ii) as respects the rights of any other person who has )nowingly participated in the transaction entailing such contra'ention0 (%) Eothing in sub+section ( ) shall be construed to affect the right of any person other than a (e(ber of the recognised stoc) exchange to enforce any such contract or to reco'er any su( under or in respect of such contract if such person had no )nowledge that the transaction was in contra'ention of any of the bye+laws specified in clause (a) of sub+section (3) of section !0 @e.,er! .%> ot %'t %! $ri 'i$%l! i 'ert%i 'ir'*.!t% 'e!. 15. Eo (e(ber of a recognised stoc) exchange shall in respect of any securities enter into any contract as a principal with any person other than a (e(ber of a recognised stoc) exchange, unless he has secured the consent or authority of such
#/ Inserted #> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (A(end(ent) Act, !!", Sec % , w0e0f0 %"+0 + !!"0
person and discloses in the note, (e(orandu( or agree(ent of sale or purchase that he is acting as a principal , 4ro+i-e- that where the (e(ber has secured the consent or authority of such person otherwise than in writing he shall secure written confir(ation by such person or such consent or authority within three days fro( the date of the contract , 4ro+i-e- f*rther that no such written consent or authority of such person shall be necessary for closing out any outstanding contract entered into by such person in accordance with the bye+laws, if the (e(ber discloses in the note, (e(orandu( or agree(ent of sale or purchase in respect of such closing out that he is acting as a principal0 4o/er89 to $rohi,it 'o tr%'t! i 'ert%i '%!e!. 18. ( ) If the Central &o'ern(ent is of opinion that it is necessary to pre'ent undesirable speculation in specified securities in any State or area, it (ay, by notification in the Cfficial &aFette, declare that no person in the State or area specified in the notification shall, sa'e with the per(ission of the Central &o'ern(ent, enter into any contract for the sale or purchase of any security specified in the notification except to the extent and in the (anner, if any, specified therein0 (%) All contracts in contra'ention of the pro'isions of sub+section ( ) entered into after the date of notification issued thereunder shall be illegal0 Li'e !i ( of -e%ler! i !e'*ritie! i 'ert%i %re%!. 17. ( ) SubDect to the pro'isions of sub+section (3) and to the other pro'isions contained in this Act, no person shall carry on or purport to carry on, whether on his own behalf or on behalf of any other person, the business of dealing in securities in any State or area to which section 3 has not been declared to apply and to which the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, declare this section to apply, except under the authority of a /04licence granted by the Securities and 7xchange 8oard of India: in this behalf0 (%) Eo notification under sub+section ( ) shall be issued with respect to any State or area unless the Central &o'ern(ent is satisfied, ha'ing regard to the (anner in which securities are being dealt with in such State or area, that it is desirable or
#! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 <owers are exercisable by R8I also 'ide &o'ern(ent of India Eotification Eo0 >3 (7), 9ated 0 +03+%000 in relation to any contracts in go'ern(ent securities, (oney (ar)et securities etc0 /0 Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% for ;licence granted by the Central &o'ern(ent;0
expedient in the interest of the trade or in the public interest that such dealings should be regulated by a syste( of licensing0 (3) .he restrictions i(posed by sub+section ( ) in relation to dealings in securities shall not apply to the doing of anything by or on behalf of a (e(ber of any recognised stoc) exchange0
7154*,li'
i!!*e % - li!ti ( of !e'*ritie! referre- to i !*,0'l%*!e ( ie) of 'l%*!e (h)
of !e'tio ". 17A. ( ) Kithout preDudice to the pro'isions contained in this Act or any other law for the ti(e being in force, no securities of the nature referred to in sub+clause (ie) of clause (h) of section % shall be offered to the public or listed on any recognised stoc) exchange unless the issuer fulfils such eligibility criteria and co(plies with such other re*uire(ents as (ay be specified by regulations (ade by the Securities and 7xchange 8oard of India0 (%) 7'ery issuer referred to in sub+clause (ie) of clause (h) of section % intending to offer the certificates or instru(ents referred therein to the public shall (a)e an application, before issuing the offer docu(ent to the public, to one or (ore recognised stoc) exchanges for per(ission for such certificates or instru(ents to be listed on the stoc) exchange or each such stoc) exchange0 (3) Khere the per(ission applied for under sub+section (%) for listing has not been granted or refused by the recognised stoc) exchanges or any of the(, the issuer shall forthwith repay all (oneys, if any, recei'ed fro( applicants in pursuance of the offer docu(ent, and if any such (oney is not repaid within eight days after the issuer beco(es liable to repay it, the issuer and e'ery director or trustee thereof, as the case (ay be, who is in default shall, on and fro( the expiry of the eighth day, be Dointly and se'erally liable to repay that (oney with interest at the rate of fifteen per cent per annu(0 7xplanation0-In rec)oning the eighth day after another day, any inter'ening day which is a public holiday under the Eegotiable Instru(ents Act, >> (%# of >> ), shall be disregarded, and if the eighth day (as so rec)oned) is itself such a public holiday, there shall for the said purposes be substituted the first day thereafter which is not a holiday0 ($) All the pro'isions of this Act relating to listing of securities of a public co(pany on a recognised stoc) exchange shall, (utatis (utandis, apply to the listing of the securities of the nature referred to in sub+clause (ie) of clause (h) of section % by the issuer, being a special purpose distinct entity0 <
Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec 3, w0e0f0 %>+0"+ %00/0
/
E#'l*!io of !$ot -eli+er> 'o tr%'t! fro. !e'tio ! 1), 13, 15 % - 17. 1:. ( ) Eothing contained in sections 3, $, " and / shall apply to spot deli'ery contracts0 (%) Eotwithstanding anything contained in sub+section ( ), if the Central &o'ern(ent/% is of opinion that in the interest of the trade or in the public interest it is expedient to regulate and control the business of dealing in spot deli'ery contracts also in any State or area (whether section 3 has been declared to apply to that State or area or not), it (ay, by notification in the Cfficial &aFette, declare that the pro'isions of section / shall also apply to such State or area in respect of spot deli'ery contracts generally or in respect of spot deli'ery contracts for the sale or purchase of such securities as (ay be specified in the notification, and (ay also specify the (anner in which, and the extent to which, the pro'isions of that section
shall so apply0 /34Co tr%'t! i -eri+%ti+e. 1:A. Eotwithstanding anything contained in any other law for the ti(e being in force, contracts in deri'ati'e shall be legal and 'alid if such contracts are(a) traded on a recognised stoc) exchange3 (b) settled on the clearing house of the recognised stoc) exchange, in accordance with the rules and bye+laws of such stoc) exchange0: Sto'6 e#'h% (e! other th% re'o( i!e- !to'6 e#'h% (e! $rohi,ite-. 19. ( ) Eo person shall, except with the per(ission of the Central &o'ern(ent, organise or assist in organising or be a (e(ber of any stoc) exchange (other than a recognised stoc) exchange) for the purpose of assisting in, entering into or perfor(ing any contracts in securities0 (%) .his section shall co(e into force in any State or area on such date as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 4rohi,itio of o$tio ! i !e'*ritie!. "=. 734GGGGG:
/% <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 /3 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec 3, w0e0f0 %%+%+%0000 /$ C(itted by the Securities =aws (A(end(ent) Act, !!", Sec %%, w0e0f0 %"+0 + !!"0 <rior to o(ission, section %0 read as under , 1%00 8r$hibiti$n $f $%ti$n# in #ec!ritie#&-( ) Eotwithstanding anything contained in this Act or in any other law for the ti(e being in force, all options in securities entered into after the co((ence(ent of this Act shall be illegal0
9: 1:4= <E (/A0:1:( 754GGG: /#4Co -itio ! for li!ti (. "1. Khere securities are listed on the application of any person in any recognised stoc) exchange, such person shall co(ply with the conditions of the listing agree(ent with that stoc) exchange&: 775Deli!ti ( of !e'*ritie!. "1A. ( ) A recognised stoc) exchange (ay delist the securities, after recording the reasons therefor, fro( any recognised stoc) exchange on any of the ground or grounds as (ay be prescribed under this Act , 4ro+i-e- that the securities of a co(pany shall not be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) A listed co(pany or an aggrie'ed in'estor (ay file an appeal before the Securities Appellate .ribunal against the decision of the recognised stoc) exchange delisting the securities within fifteen days fro( the date of the decision of the recognised stoc) exchange delisting the securities and the pro'isions of sections %%8 to %%7 of this Act, shall apply, as far as (ay be, to such appeals , 4ro+i-e- that the Securities Appellate .ribunal (ay, if it is satisfied that the co(pany was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding one (onth0:
(%) Any option in securities which has been entered into before such co((ence(ent and which re(ains to be perfor(ed, whether wholly or in part, after such co((ence(ent shall, to that
extent, beco(e 'oid02 /" Kords 18O <H8=IC CC?<AEI7S2 o(itted by the Securities =aws (A(end(ent) Act, !!!, Sec $, w0e0f0 %%+0%+%0000 /# Substituted by the Securities =aws (A(end(ent) Act, !!", Sec 33, w0e0f0 %"+0 + !!" . <rior to substitution, section % read as under , 1% 0 8$.er t$ c$"%el li#ting $f #ec!ritie# bF %!blic c$"%anie#& -Eotwithstanding anything contained in any other law for the ti(e being in force, if the Securities and 7xchange 8oard of India is of opinion, ha'ing regard to the nature of the securities issued by any public co(pany as defined in the Co(panies Act, !"# ( of !"#), or to the dealings in the(, that it is necessary or expedient in the interest of the trade or in the public interest so to do, it (ay re*uire the co(pany, after gi'ing it an opportunity of being heard in the (atter, to co(ply with such re*uire(ents as (ay be prescribed with respect to the listing of its securities on any recognised stoc) exchange02 // Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec >, w0r0e0f0 %+ 0+%00$0
7:5Ri(ht
of %$$e%l %(%i !t ref*!%l of !to'6 e#'h% (e! to li!t !e'*ritie! of $*,li' 'o.$% ie!. 79"". Khere a recognised stoc) exchange acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any public co(pany >04or collecti'e in'est(ent sche(e:, the co(pany > 4or sche(e: shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( ) of section /3 of the Co(panies Act, !"# ( of !"#) (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Central &o'ern(ent (ay, on sufficient cause being shown, allow, appeal to the Central &o'ern(ent against such refusal, o(ission or failure, as the case (ay be, and thereupon the Central &o'ern(ent (ay, after gi'ing the stoc) exchange an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange, or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Central &o'ern(ent sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Central &o'ern(ent: , >%44ro+i-e- that no appeal shall be preferred against refusal, o(ission or failure, as the case (ay be, under this section on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!0: :)5Ri(ht of %$$e%l to Se'*ritie! A$$ell%te Tri,* %l %(%i !t ref*!%l of !to'6 e#'h% (e to li!t !e'*ritie! of $*,li' 'o.$% ie!.
/> Substituted
by .he Co(panies (A(end(ent) Act, !/$ (Act Eo0 $ of !/$), Sec $%, w0e0f0 0 + 0%+ !/"0 /! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the
&aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 >0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%00003 Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 > Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%0000 >% Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec $, w0e0f0 #+ %+ !!!0 >3 Sections %%A, %%8, %%C, %%9, %%7 and %%6 inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!!& 7arlier section %%A was inserted by .he
""A. ( ) Khere a recognised stoc) exchange, acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any co(pany, the co(pany shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( A) of section /3 of the Co(panies Act, !"# ( of !"#), (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Securities Appellate .ribunal (ay, on sufficient cause being shown, allow, appeal to the Securities Appellate .ribunal ha'ing Durisdiction in the (atter against such refusal, o(ission or failure, as the case (ay be, and thereupon the Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange, an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange3 or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Securities Appellate .ribunal sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Securities Appellate .ribunal0 (%) 7'ery appeal under sub+section ( ) shall be in such for( and be acco(panied by such fee as (ay be prescribed0 (3) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 ($) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: :354ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. "";. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of
Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec %, w0e0f0 /+ 0 + !>#, and o(itted by the 9epositories Act, !!#, Sec 30 and Sch0, <t0III, w0r0e0f0 %0+0!+ !!"0 >$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath 3 (b) re*uiring the disco'ery and production of docu(ents 3 (c) recei'ing e'idence on affida'its 3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents 3 (e) re'iewing its decisions 3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte ; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0: :55Ri(ht to le(%l re$re!e t%tio . ""C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of sub+section ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of subsection ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of
>" Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
!"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, vakil or an attorney of any Iigh Court, and includes a pleader in practice0: :85Li.it%tio . ""D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0: :75Ci+il 'o*rt ot to h%+e G*ri!-i'tio .
""E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0: ::5A$$e%l to S*$re.e Co*rt. ""2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order, 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: 8(4A91:( A45 80</(5A0( 4e %ltie!. "). ( ) Any person who+
># Inserted >/ Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & >> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec !, w0r0e0f0 %+ 0+%00$0 7arlier section %%6 as inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", read as under,+ 1""2. A$$e%l to Di(h Co*rt.+Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order , 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
(a) without reasonable excuse (the burden of pro'ing which shall be on hi() fails to co(ply with any re*uisition (ade under sub+section ($) of section #3 or (b) enters into any contract in contra'ention of any of the pro'isions contained in section 3 or section #3 or (c) contra'enes the pro'isions contained in >!5section / or section /A<, or section !3 or 90 4(d) enters into any contract in deri'ati'e in contra'ention of section >A or the rules (ade under section 303: (e) owns or )eeps a place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act and )nowingly per(its such place to be used for such purposes3 or (f) (anages, controls, or assists in )eeping any place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act or at which contracts are recorded or adDusted or rights or liabilities arising out of contracts are adDusted, regulated or enforced in any (anner whatsoe'er3 or (g) not being a (e(ber of a recognised stoc) exchange or his agent authorised as
such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section / wilfully represents to or induces any person to belie'e that contracts can be entered into or perfor(ed under this Act through hi(3 or (h) not being a (e(ber of a recognised stoc) exchange or his agent authorised as such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section /, can'asses, ad'ertises or touts in any (anner either for hi(self or on behalf of any other persons for any business connected with contracts in contra'ention of any of the pro'isions of this Act3 or (i) Doins, gathers or assists in gathering at any place other than the place of business specified in the bye+laws of a recognised stoc) exchange any person or persons for (a)ing bids or offers or for entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act3 ! 4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which
>! Inserted
by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec $, w0e0f0 %>+0"+ %00/ for ;section /;0 !0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec #, w0e0f0 %%+0%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 ! Substituted for 1shall, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0
(ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: (%) Any person who enters into any contract in contra'ention of the pro'isions contained in section " !%4or who fails to co(ply with the pro'isions of !34section % or section % A: or with the orders of: or section %% !$4or with the orders of the Securities Appellate .ribunal: !"4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 9854e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. ")A. Any person, who is re*uired under this Act or any rules (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to a recognised stoc) exchange, fails to furnish the sa(e within the ti(e specified therefor in the listing agree(ent or conditions or bye+laws of the recognised stoc) exchange, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to (aintain boo)s of account or records, as per the listing agree(ent or conditions, or bye+laws of a recognised stoc) exchange, fails to (aintain the sa(e, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0:
9754e
%lt> for f%il*re ,> % > $er!o to e ter i to % %(ree.e t /ith 'lie t!. ");. If any person, who is re*uired under this Act or any bye+laws of a recognised stoc) exchange (ade thereunder, to enter into an agree(ent with his client, fails to enter into such an agree(ent, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0:
!% Substituted
for 1or who fails to co(ply with the orders of the Securities and 7xchange 8oard of India under section % 2 by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 <rior to !!", ;Securities and 7xchange 8oard of India under section % or Central &o'ern(ent under section %%; were substituted for ;Central &o'ern(ent under section % or section %%; vide .he Schedule, <art II of Securities and 7xchange 8oard of India Act, !!%, w0e0f0 30+0 + !!%0 !3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec #, w0e0f0 #+ %+ !!!0 !" Substituted for 1shall, on con'iction, be punishable with fine which (ay extend to one thousand rupees2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !# Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$ & !/ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$0
9:54e
%lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. ")C. If any stoc) bro)er or sub+bro)er or a co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, after ha'ing been called upon by the Securities and 7xchange 8oard of India or a recognised stoc) exchange in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e stipulated by the Securities and 7xchange 8oard of India or a recognised stoc) exchange, he or it shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 9954e %lt> for f%il*re to !e(re(%te !e'*ritie! or .o e>! of 'lie t or 'lie t!. ")D. If any person, who is registered under section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%) as a stoc) bro)er or sub+bro)er, fails to segregate securities or (oneys of the client or clients or uses the securities or (oneys of a client or clients for self or for any other client, he shall be liable to a penalty not exceeding one crore rupees0: 1==54e %lt> for f%il*re to 'o.$l> /ith $ro+i!io of li!ti ( 'o -itio ! or -eli!ti ( 'o -itio ! or (ro* -!. ")E. If a co(pany or any person (anaging collecti'e in'est(ent sche(e or (utual fund, fails to co(ply with the listing conditions or delisting conditions or grounds or co((its a breach thereof, it or he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0: 1=154e %lt> for e#'e!! -e.%teri%li!%tio or -eli+er> of * li!te- !e'*ritie!. ")2. If any issuer de(aterialises securities (ore than the issued securities of a co(pany or deli'ers in the stoc) exchanges the securities which are not listed in the recognised stoc) exchange or deli'ers securities where no trading per(ission has been gi'en by the recognised stoc) exchange, he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0:
!> Inserted !! Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 00 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0
%+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0
1="54e
%lt> for f%il*re to f*r i!h $erio-i'%l ret*r !, et'. ")G. If a recognised stoc) exchange fails or neglects to furnish periodical returns to the Securities and 7xchange 8oard of India or fails or neglects to (a)e or a(end its rules or bye+laws as directed by the Securities and 7xchange 8oard of India or fails to co(ply with directions issued by the Securities and 7xchange 8oard of India, such recognised stoc) exchange shall be liable to a penalty which (ay extend to twenty+fi'e crore rupees0: 1=)54e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. ")D. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or articles or bye+ laws or the regulations of the recognised stoc) exchange or directions issued by the Securities and 7xchange 8oard of India for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 1=354o/er to %-G*-i'%te. ")0I. ( ) 6or the purpose of adDudging under sections %3A, %38, %3C, %39, %37, %36, %3& and %3I, the Securities and 7xchange 8oard of India shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0: 1=552%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. ")E. Khile adDudging the *uantu( of penalty under section %3+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3
0% Inserted 03 Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec 0$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0" Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 , w0r0e0f0 , w0r0e0f0 , w0r0e0f0
%+ %+ %+ %+
0+%00$0 0+%00$0 0+%00$0 0+%00$0
(b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0: 1=85 Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!.
")EA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 1"A or !e'tio ")0I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%tefor the %lle(e- -ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re %! !$e'ifie,> the ;o%r- * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")L %(%i !t % > or-er $%!!e- ,> the ;o%ror %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 1=75Re'o+er> of %.o* t!. ")E;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 1"A or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H
0# I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30"==7) 0/ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %!
.%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - ThirS'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")L of thi! A't. (") The re'o+er> offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ())Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 0'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 1"A, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1),(") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 1=:5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. ")F. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: 1=95A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")L. ( ) Any person aggrie'ed, by the order or decision of the recogniFed stoc) exchange or the adDudicating officer or any order (ade by the Securities and 7xchange 8oard of India under section $8, (ay prefer an appeal before the Securities Appellate .ribunal and the pro'isions of sections %%8, %%C, %%9 and %%7 of this Act, shall apply, as far as (ay be, to such appeals0 (%) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order or decision is recei'ed by the
appellant and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 (3) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 ($) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the parties to the appeal and to the concerned adDudicating officer0 (") .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: 11=5Offe 'e!. ")@. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws
0> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 0! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
(ade thereunder, for which no punish(ent is pro'ided elsewhere in this Act, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 1115Co.$o!itio of 'ert%i offe 'e!. ")N. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0: 11"54o/er to (r% t i..* it>. ")0O. ( ) .he Central &o'ern(ent (ay, on reco((endation by the Securities and 7xchange 8oard of India, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation,
4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that the reco((endation of the Securities and 7xchange 8oard of India under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under
% Inserted
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
this Act to which such person would ha'e been liable, had not such i((unity been granted0: Offe 'e! ,> 'o.$% ie!. "3. ( ) Khere an offence has been co((itted by a co(pany, e'ery person who, at the ti(e when the offence was co((itted, was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence, and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any gross negligence on the part of any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer of the co(pany, shall also be dee(ed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n0-6or the purpose of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals, and 34(b) 1director2, in relation to(i) a fir(, (eans a partner in the fir(3 (ii) any association of persons or a body of indi'iduals, (eans any (e(ber controlling the affairs thereof0: $4(3) .he pro'isions of this section shall be in addition to, and not in derogation of, the pro'isions of section %%A0: Cert%i offe 'e! to ,e 'o( iL%,le. "5. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, >!> (" of >!>) ", any offence punishable under #4GGG: section %3 shall be dee(ed to be a
cogniFable offence within the (eaning of that Code0
3 Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec /, w0e0f0 %%+%+%0000 <rior to its substitution, sub+clause (b) read as under, N(b) 1director2, in relation to a fir(, (eans a partner in the fir(0J $ Inserted by .he Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec 3, w0e0f0 /+0 + !>#0
iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central &o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or a recognised stoc) exchange or by any person0 >5(")********< 1195E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
ee now the Code of Cri(inal <rocedure, !/3 (% of !/$) 1sub+section ( ) of2 o(itted by the Securities =aws (A(end(ent) Act, %00$, w0e0f0 %+ 0+%00$0 / Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$ & <rior to its substitution section %# read as under ,1%#0 G!ri#dicti$n t$ trF $ffence# !nder thi# Act&-Eo court inferior to that of a presidency (agistrate or a (agistrate of the first class shall ta)e cogniFance of or try any offence punishable under this Act02 > O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JEo court inferior to that of a Court of Session shall try any offence punishable under this Act .K ! I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
" # Kords
/4Co(
A$$e%l % - Re+i!io . "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt. "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel% $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io !. "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< 6: /(99A4(<A Title to -i+i-e -!. "7. ( ) It shall be lawful for the holder of any security whose na(e appears on the boo)s of the co(pany issuing the said security to recei'e and retain any di'idend declared by the co(pany in respect thereof for any year, notwithstanding that the said security has already been transferred by hi( for consideration, unless the transferee who clai(s the di'idend fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the co(pany with the co(pany for being registered in his na(e within fifteen days of the date on which the di'idend beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the di'idend3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security and other docu(ents relating to
the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a co(pany to pay any di'idend which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the co(pany as the holder of the security in respect of which the di'idend has beco(e due3 or (b) the right of the transferee of any security to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security in the na(e of the transferee0 %04Ri(ht to re'ei+e i 'o.e fro. 'olle'ti+e i +e!t.e t !'he.e. "7A. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, whose na(e appears on the boo)s of the collecti'e in'est(ent sche(e issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e declared by the collecti'e in'est(ent sche(e in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e fro( the transfer or has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the collecti'e in'est(ent sche(e with the collecti'e in'est(ent sche(e for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec >, w0e0f0 %%+%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the collecti'e in'est(ent sche(e3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a collecti'e in'est(ent sche(e to pay any inco(e fro( units or other instru(ents issued by the collecti'e in'est(ent sche(e which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the collecti'e in'est(ent sche(e as the holder of the security being
units or other instru(ents issued by the collecti'e in'est(ent sche(e in respect of which the inco(e in respect of units or other instru(ents issued by the collecti'e sche(e has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security being units or other instru(ents issued by the collecti'e in'est(ent sche(e in the na(e of the transferee0: % 4Ri(ht to re'ei+e i 'o.e fro. .*t*%l f* -. "7;. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by any (utual fund, whose na(e appears on the boo)s of the (utual fund issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the (utual fund declared by the (utual fund in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the (utual fund, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the (utual fund fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the (utual fund with the (utual fund for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the (utual fund beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the (utual fund3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the (utual fund, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a (utual fund to pay any inco(e fro( units or other instru(ents issued by the (utual fund which has beco(e due to any person, whose na(e is for the ti(e being registered in the boo)s of the (utual fund as the holder of the security being units or other instru(ents issued by the (utual fund in respect of which the inco(e in respect of units or other instru(ents issued by the (utual fund has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the (utual fund, to enforce against the transferor or any other person, his rights, if any, in relation to the transfer in any case where the (utual fund has refused to register the transfer of the security being units or other instru(ents issued by the (utual fund in the na(e of the transferee0:
1""5A't
ot to %$$l> i 'ert%i '%!e!. ":. ( ) .he pro'isions of this Act shall not apply to(a) the &o'ern(ent, the Reser'e 8an) of India, any local authority or any corporation set up by a special law or any person who has effected any transaction with or through the agency of any such authority as is referred to in this clause3 (b) any con'ertible bond or share warrant or any option or right in relation thereto, in so far as it entitles the person in whose fa'our any of the foregoing has been issued to obtain at his option fro( the co(pany or other body corporate, issuing the sa(e or fro( any of its shareholders or duly appointed agentsJ shares of the co(pany or other body corporate, whether by con'ersion of the bond or warrant or otherwise, on the basis of the price agreed upon when the sa(e was issued0 (%) Kithout preDudice to the pro'isions contained in sub+section ( ), if the Central &o'ern(ent %3 is satisfied that in the interests of trade and co((erce or the
%% Substituted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec 3, w0e0f0 0>+ %+ !"!0
econo(ic de'elop(ent of the country it is necessary or expedient so to do, it (ay, by notification in the Cfficial &aFette, specify any class of contracts as contracts to which this Act or any pro'ision contained therein shall not apply, and also the conditions, li(itations or restrictions, if any, subDect to which it shall not so apply0: 4rote'tio of %'tio t%6e i (oo- f%ith. "9. Eo suit, prosecution or other legal proceeding whatsoe'er shall lie in any court against the go'erning body or any (e(ber, office bearer or ser'ant of any recognised stoc) exchange or against any person or persons appointed under subsection ( ) of section for anything which is in good faith done or intended to be done in pursuance of this Act or of any rules or bye+laws (ade thereunder0 %$44o/er to -ele(%te. "9A. .he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers (except the power under section 30) exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India or the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)0: 4o/er to .%6e r*le!. )=. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for the purpose of carrying into effect the obDects of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for,(a) the (anner in which applications (ay be (ade, the particulars which they should contain and the le'y of a fee in respect of such applications 3 (b) the (anner in which any in*uiry for the purpose of recognising any stoc) exchange (ay be (ade, the conditions which (ay be i(posed for the grant of such recognition, including conditions as to the ad(ission of (e(bers if the
%3 <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %$ Inserted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% and Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec !, w0e0f0 %%+0%+%0000 <rior to its substitution, section %!A read as under , 1%!A0 8$.er t$ delegate&*.he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India02
stoc) exchange concerned is to be the only recognised stoc) exchange in the area3 and the for( in which such recognition shall be granted3 (c) the particulars which should be contained in the periodical returns and annual reports to be furnished to the Central &o'ern(ent3 (d) the docu(ents which should be (aintained and preser'ed under section # and the periods for which they should be preser'ed3 (e) the (anner in which any in*uiry by the go'erning body of a stoc) exchange shall be (ade under section #3 (f) the (anner in which the bye+laws to be (ade or a(ended under this Act shall before being so (ade or a(ended be published for criticis(3 (g) the (anner in which applications (ay be (ade by dealers in securities for licences under section /, the fee payable in respect thereof and the period of such licences, the conditions subDect to which licences (ay be granted, including conditions relating to the for(s which (ay be used in (a)ing contracts, the docu(ents to be (aintained by licensed dealers and the furnishing of periodical infor(ation to such authority as (ay be specified and the re'ocation of licences for breach of conditions3 %"4(h) the re*uire(ents which shall be co(plied with(A) by public co(panies for the purpose of getting their securities listed on any stoc) exchange3 (B) by collecti'e in'est(ent sche(e for the purpose of getting their units listed on any stoc) exchange3: %#4GGG: %/4(ha) the grounds on which the securities of a co(pany (ay be delisted fro( any recognised stoc) exchange under sub+section ( ) of section % A3 (hb) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under sub+section (%) of section % A and the fees payable in respect of such appeal3 (hc) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3
%" Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec 0, w0e0f0 %%+0%+%0000 <rior to its substitution, clause (h) read as under , 1(h) the re*uire(ents which shall be co(plied with by public co(panies for the purpose of getting their securities listed on any stoc) exchange32 %# .he word ;and; o(itted by .he Securities Contracts (Regulation) A(end(ent Act, !>", Sec $, w0e0f0 /+0 + !>#0 %/ Substituted for clause (ha) by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 7arlier clause (ha), as a(ended by the Securities =aws (A(end(ent) Act, !!!, read as
under ,1(ha) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3 and2
(hd) the (anner of in*uiry under sub+section ( ) of section %3+I3 (he) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3= and the fees payable in respect of such appeal3: (i) any other (atter which is to be or (ay be prescribed0 %>4(3) 7'ery rule (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule0: 1"954o/er of Se'*ritie! % - E#'h% (e ;o%r- of I -i% to .%6e re(*l%tio !. )1. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 305(%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,%> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 <rior to its substitution, sub+section (3), as a(ended by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!", read as under , 1(3) 7'ery rule (ade under this section shall, as soon as (ay be, after its publication in the Cfficial &aFette, be laid before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e session aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule02 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0 7arlier it was repealed by the Repealing and A(ending Act, !#0, Sec % and 6irst Sch0 w0e0f0 %>+ %+ !#00 30 Substituted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec ", w0e0f0 %>+ 0"+%00/0 <rior to substitution it read as under , 1(%) In particular and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for the (anner in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section02
(a) the (anner, in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of
publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section3 (b) the eligibility criteria and other re*uire(ents under section /A0 < (3) 7'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the regulation or both Iouses agree that the regulation should not be (ade, the regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that regulation0:
DE4OSITORIES ACT, 1998 SECTIONS /@A81(0 : 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS ). Certificate of co((ence(ent of business by depositories /@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS 3. Agree(ent between depository and participant 5. Ser'ices of depository 8. Surrender of certificate of security 7. Registration of transfer of securities with depositories :. Cptions to recei'e security certificate or hold securities with depository 9. Securities in depositories to be in fungible for( 1=. Rights of depositories and beneficial owner 11. Register of beneficial owner 1". <ledge or hypothecation of securities held in a depository 1). 6urnishing of infor(ation and records by depository and issuer 13. Cption to opt out in respect of any security 15. Act > of >! to apply to depositories 18. 9epositories to inde(nify loss in certain cases 17. Rights and obligations of depositories, etc0 /@A81(0 :: EN9UIRM AND INS4ECTION 1:. <ower of 8oard to call for infor(ation and en*uiry 19. <ower of 8oard to gi'e directions in certain cases 19A. <enalty for failure to furnish infor(ation, return, etc0 19;. <enalty for failure to enter into an agree(ent 19C. <enalty for failure to redress in'estorsJ grie'ances
19D. <enalty for delay in de(aterialisation or issue of certificate of securities 19E. <enalty for failure to reconcile records 192. <enalty for failure to co(ply with directions issued by 8oard under section ! of the Act 19G. <enalty for contra'ention where no separate penalty has been pro'ided 19D. <ower to adDudicate 190I. 6actors to be ta)en into account by adDudicating officer 190IA. Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (! 190I;. Re'o+er> of %.o* t! 190E. Crediting su(s realised by way of penalties to Consolidated 6und of India /@A81(0 D 4ENALTM "=. Cffences "1. Cffences by co(panies /@A81(0 D: @ISCELLANEOUS "". CogniFance of offences by courts ""A. Co(position of certain offences "";. <ower to grant i((unity ""C. E!t%,li!h.e t of S$e'i%l Co*rt! ""D. Offe 'e! tri%,le ,> S$e'i%l Co*rt! ""E. A$$e%l % - re+i!io ""2. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""G. Tr% !itio %l 4ro+i!io ! "). Appeals ")A. Appeal to Securities Appellate .ribunal ")A. Appeal to Securities Appellate .ribunal ");. <rocedure and powers of Securities Appellate .ribunal ")C. Right to =egal Representation ")D. =i(itation ")E. Ci'il court not to ha'e Durisdiction ")2. Appeal to Supre(e Court "3. <ower of Central &o'ern(ent to (a)e rules "5. <ower of 8oard to (a)e regulations "8. <ower of depositories to (a)e bye+laws "7. Rules and regulations to be laid before <arlia(ent ":. Application of other laws not barred "9. Re(o'al of difficulties )=. A(end(ents to certain enact(ents )1. Repeal and sa'ing /@(5A9( A?7E9?7E. .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0: DE4OSITORIES ACT, 1998 5"" O2 1998< 51=th A*(*!t, 1998< An Act to provide $or reg lation o$ depositories in sec rities and $or matters connected there%ith or incidental thereto& B( it enacted bF 8arlia"ent in the E$rtF7#eventh ;ear $f the 0e%!blic $f :ndia a# f$ll$.# ,*
/@A81(0 : 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the 9epositories Act, !!#0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the %0th day of Septe(ber, !!"0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 1beneficial owner2 (eans a person whose na(e is recorded as such with a depository3 (b) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 3 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (c) 1bye+laws2 (eans bye+laws (ade by a depository under section %#3 (d) 1Co(pany =aw 8oard2 (eans the 8oard of Co(pany =aw Ad(inistration constituted under section 07 of the Co(panies Act, !"# ( of !"#)3 (e) 1depository2 (eans a co(pany for(ed and registered under the Co(panies Act, !"# ( of !"#), and which has been granted a certificate of registration under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (f) 1issuer2 (eans any person (a)ing an issue of securities3 (g) 1participant2 (eans a person registered as such under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (h) 1prescribed2 (eans prescribed by rules (ade under this Act3 (i) 1record2 includes the records (aintained in the for( of boo)s or stored in a co(puter or in such other for( as (ay be deter(ined by regulations3 (j) 1registered owner2 (eans a depository whose na(e is entered as such in the register of the issuer3 (k) 1regulations2 (eans the regulations (ade by the 8oard3 4(ka) 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (l) 1security2 (eans such security as (ay be specified by the 8oard3 (") 1ser'ice2 (eans any ser'ice connected with recording of allot(ent of securities or transfer of ownership of securities in the record of a depository0 (%) Kords and expressions used herein and not defined but defined in the Co(panies Act, !"# ( of !"#), or the Securities Contracts (Regulation) Act, !"# ($% of !"#), or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), shall ha'e the (eanings respecti'ely assigned to the( in those Acts0 /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS Certifi'%te of 'o..e 'e.e t of ,*!i e!! ,> -e$o!itorie!. ). ( ) Eo depository shall act as a depository unless it obtains a certificate of co((ence(ent of business fro( the 8oard0 (%) A certificate granted under sub+section ( ) shall be in such for( as (ay be specified by the regulations0 (3) .he 8oard shall not grant a certificate under sub+section ( ) unless it is satisfied that the depository has ade*uate syste(s and safeguards to pre'ent (anipulation of records and transactions , 4ro+i-e- that no certificate shall be refused under this section unless the depository concerned has been gi'en a reasonable opportunity of being heard0
Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
/@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS A(ree.e t ,et/ee -e$o!itor> % - $%rti'i$% t. 3. ( ) A depository shall enter into an agree(ent with one or (ore participants as its agent0 (%) 7'ery agree(ent under sub+section ( ) shall be in such for( as (ay be specified by the bye+laws0 Ser+i'e! of -e$o!itor>. 5. Any person, through a participant, (ay enter into an agree(ent, in such for( as (ay be specified by the bye+laws, with any depository for a'ailing its ser'ices0 S*rre -er of 'ertifi'%te of !e'*rit>. 8. ( ) Any person who has entered into an agree(ent under section " shall surrender the certificate of security, for which he see)s to a'ail the ser'ices of a depository, to the issuer in such (anner as (ay be specified by the regulations0 (%) .he issuer, on receipt of certificate of security under sub+section ( ), shall cancel the certificate of security and substitute in its records the na(e of the depository as a registered owner in respect of that security and infor( the depository accordingly0 (3) A depository shall, on receipt of infor(ation under sub+section (%), enter the na(e of the person referred to in sub+section ( ) in its records, as the beneficial owner0 Re(i!tr%tio of tr% !fer of !e'*ritie! /ith -e$o!itor>. 7. ( ) 7'ery depository shall, on receipt of inti(ation fro( a participant, register the transfer of security in the na(e of the transferee0 (%) If a beneficial owner or a transferee of any security see)s to ha'e custody of such security the depository shall infor( the issuer accordingly0 O$tio ! to re'ei+e !e'*rit> 'ertifi'%te or hol- !e'*ritie! /ith -e$o!itor>. :. ( ) 7'ery person subscribing to securities offered by an issuer shall ha'e the option either to recei'e the security certificates or hold securities with a depository0 (%) Khere a person opts to hold a security with a depository, the issuer shall inti(ate such depository the details of allot(ent of the security, and on receipt of such infor(ation the depository shall enter in its records the na(e of the allottee as the beneficial owner of that security0 Se'*ritie! i -e$o!itorie! to ,e i f* (i,le for.. 9. ( ) All securities held by a depository shall be de(aterialised and shall be in a fungible for(0 %4(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#), shall apply to a depository in respect of securities held by it on behalf of the beneficial owners&: Ri(ht! of -e$o!itorie! % - ,e efi'i%l o/ er. 1=. ( ) Eotwithstanding anything contained in any other law for the ti(e being in force, a depository shall be dee(ed to be the registered owner for the purposes of effecting transfer of ownership of security on behalf of a beneficial owner0 (%) Sa'e as otherwise pro'ided in sub+section ( ), the depository as a registered owner shall not ha'e any 'oting rights or any other rights in respect of securities held by it0 (3) .he beneficial owner shall be entitled to all the rights and benefits and be subDected to all the liabilities in respect of his securities held by a depository0 Re(i!ter of ,e efi'i%l o/ er. 11. 7'ery depository shall (aintain a register and an index of beneficial owners in the
(anner pro'ided in sections "0, " and "% of the Co(panies Act, !"# ( of !"#)0 4le-(e or h>$othe'%tio of !e'*ritie! hel- i % -e$o!itor>. 1". ( ) SubDect to such regulations and bye+laws, as (ay be (ade in this behalf, a beneficial owner (ay with the pre'ious appro'al of the depository create a pledge or hypothecation in respect of a security owned by hi( through a depository0 (%) 7'ery beneficial owner shall gi'e inti(ation of such pledge or hypothecation to the depository and such depository shall thereupon (a)e entries in its records accordingly0 (3) Any entry in the records of a depository under sub+section (%) shall be e'idence of a pledge or hypothecation0 2*r i!hi ( of i for.%tio % - re'or-! ,> -e$o!itor> % - i!!*er. 1). ( ) 7'ery depository shall furnish to the issuer infor(ation about the transfer of securities in the na(e of beneficial owners at such inter'als and in such (anner as (ay be specified by the bye+laws0 (%) 7'ery issuer shall (a)e a'ailable to the depository copies of the rele'ant records in respect of securities held by such depository0 O$tio to o$t o*t i re!$e't of % > !e'*rit>.
% Substituted
by the 9epositories Related =aws (A(end(ent) Act, !!/, Sec %%, w0e0f0 "+0 + !!/0 <rior to its substitution sub+section (%) read as under , 1(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#) shall apply to the securities held by a depository on behalf of the beneficial owners02
13. ( ) If a beneficial owner see)s to opt out of a depository in respect of any security he shall infor( the depository accordingly0 (%) .he depository shall on receipt of inti(ation under sub+section ( ) (a)e appropriate entries in its records and shall infor( the issuer0 (3) 7'ery issuer shall, within thirty days of the receipt of inti(ation fro( the depository and on fulfil(ent of such conditions and on pay(ent of such fees as (ay be specified by the regulations, issue the certificate of securities to the beneficial owner or the transferee, as the case (ay be0 A't 1: of 1:91 to %$$l> to -e$o!itorie!. 15. .he 8an)ersJ 8oo)s 7'idence Act, >! shall apply in relation to a depository as if it were a ban) as defined in section % of that Act0 De$o!itorie! to i -e. if> lo!! i 'ert%i '%!e!. 18. ( ) Kithout preDudice to the pro'isions of any other law for the ti(e being in force, any loss caused to the beneficial owner due to the negligence of the depository or the participant, the depository shall inde(nify such beneficial owner0 (%) Khere the loss due to the negligence of the participant under sub+section ( ) is inde(nified by the depository, the depository shall ha'e the right to reco'er the sa(e fro( such participant0 Ri(ht! % - o,li(%tio ! of -e$o!itorie!, et'. 17. ( ) SubDect to the pro'isions of this Act, the rights and obligations of the depositories, participants and the issuers whose securities are dealt with by a depository shall be specified by the regulations0 (%) .he eligibility criteria for ad(ission of securities into the depository shall be specified by the regulations0 /@A81(0 :D EN9UIRM AND INS4ECTION 4o/er of ;o%r- to '%ll for i for.%tio % - e 7*ir>. 1:. ( ) .he 8oard, on being satisfied that it is necessary in the public interest or in the interest of in'estors so to do, (ay, by order in writing,-
(a) call upon any issuer, depository, participant or beneficial owner to furnish in writing such infor(ation relating to the securities held in a depository as it (ay re*uire3 or (b) authorise any person to (a)e an en*uiry or inspection in relation to the affairs of the issuer, beneficial owner, depository or participant, who shall sub(it a report of such en*uiry or inspection to it within such period as (ay be specified in the order0 (%) 7'ery director, (anager, partner, secretary, officer or e(ployee of the depository or issuer or the participant or beneficial owner shall on de(and produce before the person (a)ing the en*uiry or inspection all infor(ation or such records and other docu(ents in his custody ha'ing a bearing on the subDect+(atter of such en*uiry or inspection0 4o/er of ;o%r- to (i+e -ire'tio ! i 'ert%i '%!e!. 19. Sa'e as pro'ided in this Act, if after (a)ing or causing to be (ade an en*uiry or inspection, the 8oard is satisfied that it is necessary(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any depository or participant being conducted in the (anner detri(ental to the interests of in'estors or securities (ar)et, it (ay issue such directions,(a) to any depository or participant or any person associated with the securities (ar)et3 or (b) to any issuer, as (ay be appropriate in the interest of in'estors or the securities (ar)et0 )5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< $44e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 19A. Any person, who is re*uired under this Act or any rules or regulations or bye+laws (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to the 8oard, fails to furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations or bye+laws, fails to file return or furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0
3I $ Inserted
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the Securities =aws (A(end(ent) Act, %00$, Sec0 /, w0r0e0f0 %+ 0+%00$0
4e %lt> for f%il*re to e ter i to % %(ree.e t. 19;. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and is re*uired under this Act or any rules or regulations (ade thereunder, to enter into an agree(ent, fails to enter into such agree(ent, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0
4e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 19C. If any depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such depository or participant or issuer or its agents or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for -el%> i -e.%teri%li!%tio or i!!*e of 'ertifi'%te of !e'*ritie!. 19D. If any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to de(aterialise or issue the certificate of securities on opting out of a depository by the in'estors, within the ti(e specified under this Act or regulations or bye+laws (ade thereunder or abets in delaying the process of de(aterialisation or issue the certificate of securities on opting out of a depository of securities, such issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to re'o 'ile re'or-!. 19E. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to reconcile the records of de(aterialised securities with all the securities issued by the issuer as specified in the regulations, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to 'o.$l> /ith -ire'tio ! i!!*e- ,> ;o%r- * -er !e'tio 19 of the A't. 192. If any person fails to co(ply with the directions issued by the 8oard under section !, within the ti(e specified by it, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 19G. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations or bye+laws (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0 4o/er to %-G*-i'%te. 19D. ( ) 6or the purpose of adDudging under sections !A, !8, !C, !9, !7, !6 and !&, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the
sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. 190I. Khile adDudging the *uantu( of penalty under section !I, the adDudicating officer shall ha'e due regard to the following factors, na(ely,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 55 Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (!. 190IA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 19, !e'tio 19D, %! the '%!e .%> ,e, .%> file % %$$li'%tio i /riti ( to the ;o%r$ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e-ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h
"I
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re !$e'ifie- ,> the ;o%r* -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")A %(%i !t % > or-er $%!!e- ,> the ;o%r- or the %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 85 Re'o+er> of %.o* t!. 190I;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 19 or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6
%''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hilor !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C!
#I
!erte- ,> The Se'*ritie! L%/! (A.e- .e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
.o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")A of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 19, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 19E. All su(s realiFed by way of penalties under this Act shall be credited to the Consolidated 6und of India0: /@A81(0 D 4ENALTM /4Offe 'e!. "=. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws (ade thereunder, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0
/ Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 >, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %0 read as under,1%00 <ffence#0- Khoe'er contran'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or any regulations or bye+laws (ade thereunder shall be punishable with i(prison(ent for a ter( which (ay extend to fi'e years, or with fine or with both02
(%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with
fine, which (ay extend to twenty+fi'e crore rupees, or with both0: Offe 'e! ,> 'o.$% ie!. "1. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n&-6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and (b) 1director2, in relation to a fir(, (eans a partner in the fir(0 /@A81(0 D: @ISCELLANEOUS >4Co( iL% 'e of offe 'e! ,> 'o*rt!. "". ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central
> Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 !, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %% read as under,1%%0 /$gniCance $f $ffence# bF c$!rt#&*( ) Eo Court shall ta)e cogniFance of any offence punishable under this Act or any regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the 8oard0 (%) Eo court inferior to that of a ?etropolitan ?agistrate or a Dudicial ?agistrate of the first class shall try any offence punishable under this Act02
&o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or by any person0 !5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < Co.$o!itio of 'ert%i offe 'e!. ""A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "";. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any
penalty under this Act with respect to the alleged 'iolation , 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity , 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0: 1=5 E!t%,li!h.e t of S$e'i%l Co*rt!. ""C. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>.
! <rior
to o(ission, Sub+section(%) read 1Eo court inferior to that of a Court of Session shall try any offence punishable under this Act02 0 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. ""D. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-. A$$e%l % - Re+i!io ""E. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""2. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197).
(") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erioof ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! ""G. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< A$$e%l!. "). ( ) Any person aggrie'ed by an order of the 8oard (ade 4before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!: under this Act, or the regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor , 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0 (3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed , 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 %4A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")A. ( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!, under this Act, or the regulations (ade thereunder, 34or by an order (ade by an adDudicating officer under this Act: (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 $5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 8oard is recei'ed by the person referred to in sub+section ( ) and it shall be in such for( and be acco(panied by such fee as (ay be prescribed ,
Substituted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 $, w0e0f0 #+ %+ !!! for ;an order of the 8oard (ade;0 % Sections %3A to %36 inserted by the Securities =aws (Second A(end(ent) Act, !!! , Sec0 ", w0e0f0 #+ %+ !!!& 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %0, w0r0e0f0 %+ 0+%00$0 $ 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JNo %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-e ,> the ;o%r- /ith the 'o !e t of the $%rtie!.K
4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0
($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 (") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. ");. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3 (e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte; (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 Ri(ht to le(%l re$re!e t%tio . ")C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or an attorney of any Iigh Court, and
includes a pleader in practice0 Li.it%tio . ")D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 Ci+il 'o*rt ot to h%+e G*ri!-i'tio . ")E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "4A$$e%l to S*$re.e Co*rt. ")2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order ,
" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 % , w0r0e0f0 %+ 0+%00$0 <rior to its substitution, Section %36, as inserted by Securities =aws (Second A(end(ent) Act, !!!, w0e0f0 #+ %+ !!!, read as under,1%360 A%%eal t$ @igh /$!rt&-Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0:: 4o/er of Ce tr%l Go+er .e t to .%6e r*le!. "3. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for carrying out the pro'isions of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,164(a) the (anner of in*uiry under sub+section ( ) of section !I3 (aa) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %33: (b) the for( in which an appeal (ay be preferred under sub+section (3) of section %3 and the fees payable in respect of such appeal 3 (c) the procedure for disposing of an appeal under sub+section ($) of section %33 /4(d) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3A and the fees payable in respect of such appeal0: 4o/er of ;o%r- to .%6e re(*l%tio !. "5. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the 8oard (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for(a) the for( in which record is to be (aintained under clause ( i) of sub+section ( ) of section %3 (b) the for( in which the certificate of co((ence(ent of business shall be issued under
sub+section (%) of section 33 (c) the (anner in which the certificate of security shall be surrendered under sub+section ( ) of section #3 (d) the (anner of creating a pledge or hypothecation in respect of security owned by a beneficial owner under sub+section ( ) of section %3 (e) the conditions and the fees payable with respect to the issue of certificate of securities under sub+section (3) of section $3
# Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %%, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (a) read as under,1(a) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %332 / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 #, w0e0f0 #+ %+ !!!0
(f) the rights and obligations of the depositories, participants and the issuers under subsection ( ) of section /3 (g) the eligibility criteria for ad(ission of securities into the depository under sub+section (%) of section /0 4o/er of -e$o!itorie! to .%6e ,>e0l%/!. "8. ( ) A depository shall, with the pre'ious appro'al of the 8oard, (a)e bye+laws consistent with the pro'isions of this Act and the regulations0 (%) In particular, and without preDudice to the generality of the foregoing power, such byelaws shall pro'ide for(a) the eligibility criteria for ad(ission and re(o'al of securities in the depository3 (b) the conditions subDect to which the securities shall be dealt with3 (c) the eligibility criteria for ad(ission of any person as a participant3 (d) the (anner and procedure for de(aterialisation of securities3 (e) the procedure for transactions within the depository3 (f) the (anner in which securities shall be dealt with or withdrawn fro( a depository3 (g) the procedure for ensuring safeguards to protect the interests of participants and beneficial owners3 (h) the conditions of ad(ission into and withdrawal fro( a participant by a beneficial owner3 (i) the procedure for con'eying infor(ation to the participants and beneficial owners on di'idend declaration, shareholder (eetings and other (atters of interest to the beneficial owners3 (j) the (anner of distribution of di'idends, interest and (onetary benefits recei'ed fro( the co(pany a(ong beneficial owners3 (k) the (anner of creating pledge or hypothecation in respect of securities held with a depository3 (l) inter #e rights and obligations a(ong the depository, issuer, participants, and beneficial owners3 (") the (anner and the periodicity of furnishing infor(ation to the 8oard, issuer and other persons3 (n) the procedure for resol'ing disputes in'ol'ing depository, issuer, co(pany or a beneficial owner3 ($) the procedure for proceeding against the participant co((itting breach of the regulations and pro'isions for suspension and expulsion of participants fro( the depository and cancellation of agree(ents entered with the depository3 (%) the internal control standards including procedure for auditing, re'iewing and (onitoring0
(3) Khere the 8oard considers it expedient so to do, it (ay, by order in writing, direct a depository to (a)e any bye+laws or to a(end or re'o)e any bye+laws already (ade within such period as it (ay specify in this behalf0 ($) If the depository fails or neglects to co(ply with such order within the specified period, the 8oard (ay (a)e the bye+laws or a(end or re'o)e the bye+laws (ade either in the for( specified in the order or with such (odifications thereof as the 8oard thin)s fit0 R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t. "7. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. ":. .he pro'isions of this Act shall be in addition to, and not in derogation of, any other law for the ti(e being in force relating to the holding and transfer of securities0 Re.o+%l of -iffi'*ltie!. "9. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as appear to it to be necessary or expedient for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of a period of two years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 A.e -.e t! to 'ert%i e %'t.e t!. )=. 40e%ealed bF 0e%ealing H A"ending Act' 20010: Re$e%l % - !%+i (. )1. ( ) .he 9epositories (.hird) Crdinance, !!# (Crd0 %> of !!#), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 /@(5A9( 4 ee section 30: A?7E9?7E.S .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0:
SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 SECTIONS !'APT"R I 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions !'APT"R II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA
). 7stablish(ent and incorporation of 8oard 3. ?anage(ent of the 8oard 5. .er( of office and conditions of ser'ice of Chair(an and (e(bers of the 8oard 8. Re(o'al of (e(ber fro( office 7. ?eetings 7A. ?e(ber not to participate in (eetings in certain cases :. Bacancies, etc0, not to in'alidate proceedings of 8oard 9. Cfficers and e(ployees of the 8oard !'APT"R III TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD 1=. .ransfer of assets, liabilities, etc0, of existing Securities and 7xchange 8oard to the 8oard !'APT"R IV 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 11. 6unctions of 8oard 11A. 8oard to regulate or prohibit issue of prospectus, offer docu(ent or ad'ertise(ent soliciting (oney for issue of securities 11AA. Collecti'e in'est(ent sche(e 11;. <ower to issue directions 11C. In'estigation 11D. Cease and desist proceedings !'APT"R V REGISTRATION CERTI2ICATE 1". Registration of stoc) bro)ers, sub+bro)ers, share transfer agents, etc0
%
!'APT"R VA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 1"A. <rohibition of (anipulati'e and decepti'e de'ices, insider trading and substantial ac*uisition of securities or control !'APT"R VI 2INANCE, ACCOUNTS AND AUDIT 1). &rants by the Central &o'ern(ent 13. 6und 15. Accounts and audit !'APT"R VIA 4ENALTIES AND ADEUDICATION 15A. <enalty for failure to furnish infor(ation, return, etc & 15;. <enalty for failure by any person to enter into agree(ent with clients 15C. <enalty for failure to redress in'estorsJ grie'ances 15D. <enalty for certain defaults in case of (utual funds 15E. <enalty for failure to obser'e rules and regulations by an asset (anage(ent co(pany 152. <enalty for default in case of stoc) bro)ers 15G. <enalty for insider trading 15D. <enalty for non+disclosure of ac*uisition of shares and ta)eo'ers 15DA. <enalty for fraudulent and unfair trade practices 15D;. <enalty for contra'ention where no separate penalty has been pro'ided
150I. <ower to adDudicate 15E. 6actors to be ta)en into account by the AdDudicating Cfficer 15EA. Crediting su(s realised by way of penalties to Consolidated 6und of India 15E;. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! !'APT"R VIB ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL 15F. 7stablish(ent of Securities Appellate .ribunals 15L. Co(position of Securities Appellate .ribunal 15@. Qualification for appoint(ent as <residing Cfficer or ?e(ber of Securities Appellate .ribunal
3
15N. .enure of office of <residing Cfficer and other (e(bers of Securities Appellate .ribunal 150O. Salary and allowances and other ter(s and conditions of ser'ice of <residing Cfficers 154. 6illing up of 'acancies 159. Resignation and re(o'al 15R. Crders constituting Appellate .ribunal to be final and not to in'alidate its proceedings 15S. Staff of the Securities Appellate .ribunal 15T. Appeal to the Securities Appellate .ribunal 15U. <rocedure and powers of the Securities Appellate .ribunal 15I. Right to legal representation 15?. =i(itation 15A. <residing Cfficer, (e(bers and staff of Securities Appellate .ribunals to be public ser'ants 15M. Ci'il Court not to ha'e Durisdiction 15N. Appeal to Supre(e Court !'APT"R VII @ISCELLANEOUS 18. <ower of Central &o'ern(ent to issue directions 17. <ower of Central &o'ern(ent to supersede the 8oard 1:. Returns and reports 19. 9elegation "=. Appeals "=A. 8ar of Durisdiction "1. Sa'ings "". ?e(bers, officers and e(ployees of the 8oard to be public ser'ants "). <rotection of action ta)en in good faith "3. Cffences "3A. Co(position of certain offences "3;. <ower to grant i((unity "5. 7xe(ption fro( tax on wealth and inco(e "8. CogniFance of offences by Courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! "7. Cffences by co(panies
":. 4C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!":
$
":A. Re'o+er> of %.o* t! "9. <ower to (a)e rules )=. <ower to (a)e regulations )1. Rules and regulations to be laid before <arlia(ent )". Application of other laws not barred )). 4Repealed by Repealing R A(ending Act, %00 : )3. <ower to re(o'e difficulties )5. Repeal and sa'ing .I7 SCI79H=7 4Repealed by Repealing R A(ending Act, %00 : SECURITIES AND EACDANGE ;OARD O2 INDIA ACT, 199" 515 O2 199"< 53th A$ril, 199"< A A't to $ro+i-e for the e!t%,li!h.e t of % ;o%r- to $rote't the i tere!t! of i +e!tor! i !e'*ritie! % - to $ro.ote the -e+elo$.e t of, % - to re(*l%te, the !e'*ritie! .%r6et % - for .%tter! 'o e'te- there/ith or i 'i-e t%l thereto B( it enacted bF 8arlia"ent in the E$rtF7third ;ear $f the 0e%!blic $f :ndia a# f$ll$.# , CDA4TER I 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities and 7xchange 8oard of India Act, !!%0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the 30th day of Manuary, !!%0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 33 (b) 1Chair(an2 (eans the Chair(an of the 8oard3 4(ba) 1collecti'e in'est(ent sche(e2 (eans any sche(e or arrange(ent which satisfies the conditions specified in section AA3: (c) 1existing Securities and 7xchange 8oard2 (eans the Securities and 7xchange 8oard of India constituted under the Resolution of the &o'ern(ent of India in the 9epart(ent of 7cono(ic Affairs Eo0 ($$) S7L>#, dated the %th day of April, !>>3 (d) 16und2 (eans the 6und constituted under section $3 (e) 1(e(ber2 (eans a (e(ber of the 8oard and includes the Chair(an3 (f) 1notification2 (eans a notification published in the Cfficial &aFette3 (g) 1prescribed2 (eans prescribed by rules (ade under this Act3
Inserted by the Securities =aws (A(end(ent) Act, !!!, w0e0f0 %%+%+%0000
"
(h) 1regulations2 (eans the regulations (ade by the 8oard under this Act3 4(ha) 1Reser'e 8an)2 (eans the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)3: (i) 1securities2 has the (eaning assigned to it in section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#)0 %4(%) Kords and expressions used and not defined in this Act but defined in the Securities Contracts (Regulation) Act, !"# ($% of !"#) 34or the 9epositories Act, !!#:, shall ha'e the (eanings respecti'ely assigned to the( in that Act:0 CDA4TER II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA E!t%,li!h.e t % - i 'or$or%tio of ;o%r-.
). ( ) Kith effect fro( such date as the Central &o'ern(ent (ay, by notification, appoint, there shall be established, for the purposes of this Act, a 8oard by the na(e of the Securities and 7xchange 8oard of India0 (%) .he 8oard shall be a body corporate by the na(e aforesaid, ha'ing perpetual succession and a co((on seal, with power subDect to the pro'isions of this Act, to ac*uire, hold and dispose of property, both (o'able and i((o'able, and to contract, and shall, by the said na(e, sue or be sued0 (3) .he head office of the 8oard shall be at 8o(bay0 ($) .he 8oard (ay establish offices at other places in India0 @% %(e.e t of the ;o%r-. 3. ( ) .he 8oard shall consist of the following (e(bers, na(ely,(a) a Chair(an3 (b) two (e(bers fro( a(ongst the officials of the $4?inistry: of the Central &o'ern(ent dealing with 6inance "4and ad(inistration of the Co(panies Act, !"# ( of !"#):3 (c) one (e(ber fro( a(ongst the officials of #4the Reser'e 8an):3 /4(d) fi'e other (e(bers of who( at least three shall be the whole+ti(e (e(bers,: to be appointed by the Central &o'ern(ent0
Inserted by the Securities =aws (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0 <rior to its substitution, sub+section (%) reads as under, 1(%) Kords and expressions used and not defined in this Act but defined in the Capital Issues (Control) Act, !$/ or the Securities Contracts Regulation Act, !"# shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts02 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 $ Substituted for 1?inistries2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1and law2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act !3$ (% of !3$)2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 / Substituted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, clause (d) read as, 1(d) two other (e(bers20
% Substituted
#
(%) .he general superintendence, direction and (anage(ent of the affairs of the 8oard shall 'est in a 8oard of (e(bers, which (ay exercise all powers and do all acts and things which (ay be exercised or done by the 8oard0 (3) Sa'e as otherwise deter(ined by regulations, the Chair(an shall also ha'e powers of general superintendence and direction of the affairs of the 8oard and (ay also exercise all powers and do all acts and things which (ay be exercised or done by that 8oard0 ($) .he Chair(an and (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be appointed by the Central &o'ern(ent and the (e(bers referred to in clauses ( b) and (c) of that sub+section shall be no(inated by the Central &o'ern(ent and the 4Reser'e 8an): respecti'ely0 (") .he Chair(an and the other (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be persons of ability, integrity and standing who ha'e shown capacity in dealing with proble(s relating to securities (ar)et or ha'e special )nowledge or experience of law, finance, econo(ics, accountancy, ad(inistration or in any other discipline which, in the opinion of the Central &o'ern(ent, shall be useful to the 8oard0 Ter. of offi'e % - 'o -itio ! of !er+i'e of Ch%ir.% % - .e.,er! of the ;o%r-. 5. ( ) .he ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers referred to in clause (d) of sub+section ( ) of section $ shall be such as (ay be prescribed0 (%) Eotwithstanding anything contained in sub+section ( ), the Central &o'ern(ent shall ha'e the right to ter(inate the ser'ices of the Chair(an or a (e(ber appointed under clause ( d) of
sub+section ( ) of section $, at any ti(e before the expiry of the period prescribed under subsection ( ), by gi'ing hi( notice of not less than three (onths in writing or three (onthsJ salary and allowances in lieu thereof, and the Chair(an or a (e(ber, as the case (ay be, shall also ha'e the right to relin*uish his office, at any ti(e before the expiry of the period prescribed under sub+section ( ), by gi'ing to the Central &o'ern(ent notice of not less than three (onths in writing0 Re.o+%l of .e.,er fro. offi'e. 8. %4G G G: .he Central &o'ern(ent shall re(o'e a (e(ber fro( office if he(a) is, or at any ti(e has been, adDudicated as insol'ent3 (b) is of unsound (ind and stands so declared by a co(petent court3 (c) has been con'icted of an offence which, in the opinion of the Central &o'ern(ent, in'ol'es a (oral turpitude3 (d) 34G G G: (e) has, in the opinion of the Central &o'ern(ent, so abused his position as to render his continuation in office detri(ental to the public interest , 4ro+i-e- that no (e(ber shall be re(o'ed under this clause unless he has been gi'en a reasonable opportunity of being heard in the (atter0
Substituted for 1Reser'e 8an) of India2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 )2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 C(itted, by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to o(ission clause (d) read read as, 1(d) is appointed as a director of a co(pany20
% 1(
/
@eeti (!. 7. ( ) .he 8oard shall (eet at such ti(es and places, and shall obser'e such rules of procedure in regard to the transaction of business at its (eetings (including *uoru( at such (eetings) as (ay be pro'ided by regulations0 (%) .he Chair(an or, if for any reason, he is unable to attend a (eeting of the 8oard, any other (e(ber chosen by the (e(bers present fro( a(ongst the(sel'es at the (eeting shall preside at the (eeting0 (3) All *uestions which co(e up before any (eeting of the 8oard shall be decided by a (aDority 'otes of the (e(bers present and 'oting, and, in the e'ent of an e*uality of 'otes, the Chair(an, or in his absence, the person presiding, shall ha'e a second or casting 'ote0 4@e.,er ot to $%rti'i$%te i .eeti (! i 'ert%i '%!e!. 7A. Any (e(ber, who is a director of a co(pany and who as such director has any direct or indirect pecuniary interest in any (atter co(ing up for consideration at a (eeting of the 8oard, shall, as soon as possible after rele'ant circu(stances ha'e co(e to his )nowledge, disclose the nature of his interest at such (eeting and such disclosure shall be recorded in the proceedings of the 8oard, and the (e(ber shall not ta)e any part in any deliberation or decision of the 8oard with respect to that (atter0: I%'% 'ie!, et'., ot to i +%li-%te $ro'ee-i (! of ;o%r-. :. Eo act or proceeding of the 8oard shall be in'alid (erely by reason of(a) any 'acancy in, or any defect in the constitution of, the 8oard3 or (b) any defect in the appoint(ent of a person acting as a (e(ber of the 8oard3 or (c) any irregularity in the procedure of the 8oard not affecting the (erits of the case0 Offi'er! % - e.$lo>ee! of the ;o%r-. 9. ( ) .he 8oard (ay appoint such other officers and e(ployees as it considers necessary for the efficient discharge of its functions under this Act0 (%) .he ter( and other conditions of ser'ice of officers and e(ployees of the 8oard appointed under sub+section ( ) shall be such as (ay be deter(ined by regulations0 CDA4TER III
TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD Tr% !fer of %!!et!, li%,ilitie!, et'., of e#i!ti ( Se'*ritie! % - E#'h% (e ;o%r- to the ;o%r-. 1=. ( ) Cn and fro( the date of establish(ent of the 8oard,(a) any reference to the existing Securities and 7xchange 8oard in any law other than this Act or in any contract or other instru(ent shall be dee(ed as a reference to the 8oard3 (b) all properties and assets, (o'able and i((o'able, of, or belonging to, the existing Securities and 7xchange 8oard, shall 'est in the 8oard3
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
>
(c) all rights and liabilities of the existing Securities and 7xchange 8oard shall be transferred to, and be the rights and liabilities of, the 8oard3 (d) without preDudice to the pro'isions of clause (c), all debts, obligations and liabilities incurred, all contracts entered into and all (atters and things engaged to be done by, with or for the existing Securities and 7xchange 8oard i((ediately before that date, for or in connection with the purpose of the said existing 8oard shall be dee(ed to ha'e been incurred, entered into, or engaged to be done by, with or for, the 8oard3 (e) all su(s of (oney due to the existing Securities and 7xchange 8oard i((ediately before that date shall be dee(ed to be due to the 8oard3 (f) all suits and other legal proceedings instituted or which could ha'e been instituted by or against the existing Securities and 7xchange 8oard i((ediately before that date (ay be continued or (ay be instituted by or against the 8oard3 and (g) e'ery e(ployee holding any office under the existing Securities and 7xchange 8oard i((ediately before that date shall hold his office in the 8oard by the sa(e tenure and upon the sa(e ter(s and conditions of ser'ice as respects re(uneration, lea'e, pro'ident fund, retire(ent and other ter(inal benefits as he would ha'e held such office if the 8oard had not been established and shall continue to do so as an e(ployee of the 8oard or until the expiry of the period of six (onths fro( that date if such e(ployee opts not to be the e(ployee of the 8oard within such period0 (%) Eotwithstanding anything contained in the Industrial 9isputes Act, !$/ ( $ of !$/), or in any other law for the ti(e being in force, absorption of any e(ployee by the 8oard in its regular ser'ice under this section shall not entitle such e(ployee to any co(pensation under that Act or other law and no such clai( shall be entertained by any court, tribunal or other authority0 CDA4TER II 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 2* 'tio ! of ;o%r-. 11. ( ) SubDect to the pro'isions of this Act, it shall be the duty of the 8oard to protect the interests of in'estors in securities and to pro(ote the de'elop(ent of, and to regulate the securities (ar)et, by such (easures as it thin)s fit0 (%) Kithout preDudice to the generality of the foregoing pro'isions, the (easures referred to therein (ay pro'ide for(a) regulating the business in stoc) exchanges and any other securities (ar)ets3 (b) registering and regulating the wor)ing of stoc) bro)ers, sub+bro)ers, share transfer agents, ban)ers to an issue, trustees of trust deeds, registrars to an issue, (erchant ban)ers, underwriters, portfolio (anagers, in'est(ent ad'isers and such other inter(ediaries who (ay be associated with securities (ar)ets in any (anner3 4(ba) registering and regulating the wor)ing of the depositories, %4participants:, custodians of securities, foreign institutional in'estors, credit rating agencies and such other inter(ediaries as the 8oard (ay, by notification, specify in this behalf3: (c) registering and regulating the wor)ing of 4'enture capital funds and collecti'e
in'est(ent sche(es:, including (utual funds3
% Inserted
Inserted by Securities =aws (A(end(ent) Act !!", w0r0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+!+ !!"0
!
(d) pro(oting and regulating self+regulatory organisations3 (e) prohibiting fraudulent and unfair trade practices relating to securities (ar)ets3 (f) pro(oting in'estorsJ education and training of inter(ediaries of securities (ar)ets3 (g) prohibiting insider trading in securities3 (h) regulating substantial ac*uisition of shares and ta)e o'er of co(panies3 (i) calling for infor(ation fro(, underta)ing inspection, conducting in*uiries and audits of the %4stoc) exchanges, (utual funds, other persons associated with the securities (ar)et:, inter(ediaries and self+regulatory organisations in the securities (ar)et3 34(ia) '%lli ( for i for.%tio % - re'or-! fro. % > $er!o i 'l*-i ( % > ,% 6 or % > other %*thorit> or ,o%r- or 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l or St%te A't /hi'h, i the o$i io of the ;o%r-, !h%ll ,e rele+% t to % > i +e!ti(%tio or i 7*ir> ,> the ;o%r- i re!$e't of % > tr% !%'tio i !e'*ritie! 3: $5(i,) '%lli ( for i for.%tio fro., or f*r i!hi ( i for.%tio to, other %*thoritie!, /hether i I -i% or o*t!i-e I -i%, h%+i ( f* 'tio ! !i.il%r to tho!e of the ;o%r-, i the .%tter! rel%ti ( to the $re+e tio or -ete'tio of +iol%tio ! i re!$e't of !e'*ritie! l%/!, !*,Ge't to the $ro+i!io ! of other l%/! for the ti.e ,ei ( i for'e i thi! re(%r-& 4ro+i-e- th%t the ;o%r-, for the $*r$o!e of f*r i!hi ( % > i for.%tio to % > %*thorit> o*t!i-e I -i%, .%> e ter i to % %rr% (e.e t or %(ree.e t or * -er!t% -i ( /ith !*'h %*thorit> /ith the $rior %$$ro+%l of the Ce tr%l Go+er .e tH< (j) perfor(ing such functions and exercising such powers under the pro'isions of "4G G G: the Securities Contracts (Regulation) Act, !"# ($% of !"#), as (ay be delegated to it by the Central &o'ern(ent3 (k) le'ying fees or other charges for carrying out the purposes of this section3 (l) conducting research for the abo'e purposes3 #4(la) calling fro( or furnishing to any such agencies, as (ay be specified by the 8oard, such infor(ation as (ay be considered necessary by it for the efficient discharge of its functions3: (") perfor(ing such other functions as (ay be prescribed0 /4(%A) Kithout preDudice to the pro'isions contained in sub+section (%), the 8oard (ay ta)e (easures to underta)e inspection of any boo), or register, or other docu(ent or record of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard
Substituted for 1collecti'e in'est(ent sche(es2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % Substituted for 1stoc) exchanges and2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 S*,!tit*te- for J'%lli ( for i for.%tio % - re'or- fro. % > ,% 6 or % > other %*thorit> or ,o%ror 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l, St%te or 4ro+i 'i%l A't i re!$e't of % > tr% !%'tio i !e'*ritie! /hi'h i! * -er i +e!ti(%tio or i 7*ir> ,> the ;o%r-K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). E%rlier Se'tio 11(")(i%) /%! i !erte- ,> the SE;I (A.e -.e t) A't, "==" /.e.f. "901=0"=="0 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. =80=)0 199:) " .he words 1the Capital Issues (Control) Act, !$/ (%! of !$/) and2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
0
has reasonable grounds to belie'e that such co(pany has been indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et0: 4(3) Eotwithstanding anything contained in any other law for the ti(e being in force while exercising the powers under %4clause (i) or clause (ia) of sub+section (%) or sub+ section (2A):, the 8oard shall ha'e the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(i) the disco'ery and production of boo)s of account and other docu(ents, at such place and such ti(e as (ay be specified by the 8oard3 (ii) su((oning and enforcing the attendance of persons and exa(ining the( on oath3 (iii) inspection of any boo)s, registers and other docu(ents of any person referred to in section %, at any place3: 34(iv) inspection of any boo), or register, or other docu(ent or record of the co(pany referred to in sub+section (%A)3 (v) issuing co((issions for the exa(ination of witnesses or docu(ents0: $4($) Kithout preDudice to the pro'isions contained in sub+sections ( ), (%), (%A) and (3) and section 8, the 8oard (ay, by an order, for reasons to be recorded in writing, in the interests of in'estors or securities (ar)et, ta)e any of the following (easures, either pending in'estigation or in*uiry or on co(pletion of such in'estigation or in*uiry, na(ely,(a) suspend the trading of any security in a recognised stoc) exchange3 (b) restrain persons fro( accessing the securities (ar)et and prohibit any person associated with securities (ar)et to buy, sell or deal in securities3 (c) suspend any office+bearer of any stoc) exchange or self+regulatory organisation fro( holding such position3 (d) i(pound and retain the proceeds or securities in respect of any transaction which is under in'estigation3 (e) attach, after passing of an order on an application (ade for appro'al by the Mudicial ?agistrate of the first class ha'ing Durisdiction, for a period not exceeding one (onth, one or (ore ban) account or accounts of any inter(ediary or any person associated with the securities (ar)et in any (anner in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder , 4ro+i-e- that only the ban) account or accounts or any transaction entered therein, so far as it relates to the proceeds actually in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder shall be allowed to be attached3 (f) direct any inter(ediary or any person associated with the securities (ar)et in any (anner not to dispose of or alienate an asset for(ing part of any transaction which is under in'estigation , 4ro+i-e- that the 8oard (ay, without preDudice to the pro'isions contained in sub+section (%) or sub+section (%A), ta)e any of the (easures specified in clause ( d) or clause (e) or clause (f), in respect of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard has reasonable grounds to belie'e that such co(pany has been
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1clause (i) of sub+section (%)2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 3 Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 $ Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
% Substituted
indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et , 4ro+i-e- f*rther that the 8oard shall, either before or after passing such orders, gi'e an
opportunity of hearing to such inter(ediaries or persons concerned0: 15(5) The %.o* t -i!(or(e-, $*r!*% t to % -ire'tio i!!*e- * -er !e'tio 11; or !e'tio 1"A of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 or !e'tio 19 of the De$o!itorie! A't, 1998, %! the '%!e .%> ,e, !h%ll ,e 're-ite- to the I +e!tor 4rote'tio % - E-*'%tio 2* e!t%,li!he- ,> the ;o%r- % - !*'h %.o* t !h%ll ,e *tiliLe- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< %4;o%r- to re(*l%te or $rohi,it i!!*e of $ro!$e't*!, offer -o'*.e t or %-+erti!e.e t !oli'iti ( .o e> for i!!*e of !e'*ritie!. 11A. ( ) Kithout preDudice to the pro'isions of the Co(panies Act, !"# ( of !"#), the 8oard (ay, for the protection of in'estors,(a) specify, by regulations(i) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (ii) the (anner in which such (atters shall be disclosed by the co(panies3 (b) by general or special orders(i) prohibit any co(pany fro( issuing prospectus, any offer docu(ent, or ad'ertise(ent soliciting (oney fro( the public for the issue of securities3 (ii) specify the conditions subDect to which the prospectus, such offer docu(ent or ad'ertise(ent, if not prohibited, (ay be issued0 (%) Kithout preDudice to the pro'isions of section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the 8oard (ay specify the re*uire(ents for listing and transfer of securities and other (atters incidental thereto0: 34Colle'ti+e i +e!t.e t !'he.e. 11AA. ( ) Any sche(e or arrange(ent which satisfies the conditions referred to in subsection (%) $5or !*,0!e'tio ("A)< shall be a collecti'e in'est(ent sche(e0 "44ro+i-e- th%t % > $ooli ( of f* -! * -er % > !'he.e or %rr% (e.e t, /hi'h i! ot re(i!tere- /ith the ;o%r- or i! ot 'o+ere- * -er !*,0!e'tio ()), i +ol+i ( %
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 7arlier S0 A was inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" for S0 A0 <rior to its substitution, S0 A read as under,+ 1 A0 ?atters to be disclosed by the co(panies0+ Kithout <reDudice to the <ro'isions of the Co(panies Act , !"# ( of !"#), the board (ay , for the protection of in'estors, specify, by regulations,+ (a) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (b) the (anner in which such (atters, shall be disclosed by the co(panies02 3 Inserted by S78I (A(end(ent) Act !!!, w0e0f0 %%+%+%0000 $I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% Substituted
%
'or$*! %.o* t of o e h* -re- 'rore r*$ee! or .ore !h%ll ,e -ee.e- to ,e % 'olle'ti+e i +e!t.e t !'he.e.< (%) Any sche(e or arrange(ent (ade or offered by any 5$er!o < under which,(i) the contributions, or pay(ents (ade by the in'estors, by whate'er na(e called, are pooled and utiliFed for the purposes of the sche(e or arrange(ent3 (ii) the contributions or pay(ents are (ade to such sche(e or arrange(ent by the in'estors with a 'iew to recei'e profits, inco(e, produce or property, whether (o'able or i((o'able, fro( such sche(e or arrange(ent3 (iii) the property, contribution or in'est(ent for(ing part of sche(e or arrange(ent, whether identifiable or not, is (anaged on behalf of the in'estors3
(iv) the in'estors do not ha'e day+to+day control o'er the (anage(ent and operation of the sche(e or arrange(ent0 "5("A)< A > !'he.e or %rr% (e.e t .%-e or offere- ,> % > $er!o !%ti!f>i ( the 'o -itio ! %! .%> ,e !$e'ifie- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< (3) Eotwithstanding anything contained in sub+section (%) 35or !*,0!e'tio ("A)<, any sche(e or arrange(ent(i) (ade or offered by a co+operati'e society registered under the Co+operati'e Societies Act, ! % (% of ! %) or a society being a society registered or dee(ed to be registered under any law relating to co+operati'e societies for the ti(e being in force in any State3 (ii) under which deposits are accepted by non+ban)ing financial co(panies as defined in clause (f) of section $"+I of the Reser'e 8an) of India Act, !3$ (% of !3$)3 (iii) being a contract of insurance to which the Insurance Act, !3> ($ of !3>), applies3 (iv) pro'iding for any Sche(e, <ension Sche(e or the Insurance Sche(e fra(ed under the 7(ployees <ro'ident 6und and ?iscellaneous <ro'isions Act, !"% ( ! of !"%)3 (v) under which deposits are accepted under section ">A of the Co(panies Act, !"# ( of !"#)3 (vi) under which deposits are accepted by a co(pany declared as a Eidhi or a (utual benefit society under section #%0A of the Co(panies Act, !"# ( of !"#)3 (vii) falling within the (eaning of Chit business as defined in clause ( d) of section % of the Chit 6und Act, !>% ($0 of !>%)3 (viii) under which contributions (ade are in the nature of subscription to a (utual fund3 35(i#) !*'h other !'he.e or %rr% (e.e t /hi'h the Ce tr%l Go+er .e t .%>, i 'o !*lt%tio /ith the ;o%r-, otif>H< shall not be a collecti'e in'est(ent sche(e0: "54o/er to i!!*e -ire'tio !. 11;. Sa'e as otherwise pro'ided in section , if after (a)ing or causing to be (ade an en*uiry, the 8oard is satisfied that it is necessary,S*,!tit*te- for J'o.$% >K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) 3I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
%I
3
(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any inter(ediary or other persons referred to in section % being conducted in a (anner detri(ental to the interest of in'estors or securities (ar)et3 or (iii) to secure the proper (anage(ent of any such inter(ediary or person, it (ay issue such directions,(a) to any person or class of persons referred to in section %, or associated with the securities (ar)et3 or (b) to any co(pany in respect of (atters specified in section A, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 15E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< %4I +e!ti(%tio . 11C. ( ) Khere the 8oard has reasonable ground to belie'e that-
(a) the transactions in securities are being dealt with in a (anner detri(ental to the in'estors or the securities (ar)et3 or (b) any inter(ediary or any person associated with the securities (ar)et has 'iolated any of the pro'isions of this Act or the rules or the regulations (ade or directions issued by the 8oard thereunder, it (ay, at any ti(e by order in writing, direct any person (hereafter in this section referred to as the In'estigating Authority) specified in the order to in'estigate the affairs of such inter(ediary or persons associated with the securities (ar)et and to report thereon to the 8oard0 (%) Kithout preDudice to the pro'isions of sections %3" to %$ of the Co(panies Act, !"# ( of !"#), it shall be the duty of e'ery (anager, (anaging director, officer and other e(ployee of the co(pany and e'ery inter(ediary referred to in section % or e'ery person associated with the securities (ar)et to preser'e and to produce to the In'estigating Authority or any person authorised by it in this behalf, all the boo)s, registers, other docu(ents and record of, or relating to, the co(pany or, as the case (ay be, of or relating to, the inter(ediary or such person, which are in their custody or power0 (3) .he In'estigating Authority (ay re*uire any inter(ediary or any person associated with securities (ar)et in any (anner to furnish such infor(ation to, or produce such boo)s, or registers, or other docu(ents, or record before hi( or any person authorised by it in this behalf as it (ay consider necessary if the furnishing of such infor(ation or the production of such boo)s, or registers, or other docu(ents, or record is rele'ant or necessary for the purposes of its in'estigation0 ($) .he In'estigating Authority (ay )eep in its custody any boo)s, registers, other docu(ents and record produced under sub+section (%) or sub+section (3) for six (onths and thereafter
% Inserted
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
$
shall return the sa(e to any inter(ediary or any person associated with securities (ar)et by who( or on whose behalf the boo)s, registers, other docu(ents and record are produced , 4ro+i-e- that the In'estigating Authority (ay call for any boo), register, other docu(ent and record if they are needed again , 4ro+i-e- f*rther that if the person on whose behalf the boo)s, registers, other docu(ents and record are produced re*uires certified copies of the boo)s, registers, other docu(ents and record produced before the In'estigating Authority, it shall gi'e certified copies of such boo)s, registers, other docu(ents and record to such person or on whose behalf the boo)s, registers, other docu(ents and record were produced0 (") Any person, directed to (a)e an in'estigation under sub+section ( ), (ay exa(ine on oath, any (anager, (anaging director, officer and other e(ployee of any inter(ediary or any person associated with securities (ar)et in any (anner, in relation to the affairs of his business and (ay ad(inister an oath accordingly and for that purpose (ay re*uire any of those persons to appear before it personally0 (#) If any person fails without reasonable cause or refuses(a) to produce to the In'estigating Authority or any person authorised by it in this behalf any boo), register, other docu(ent and record which is his duty under sub+section (%) or sub+section (3) to produce3 or (b) to furnish any infor(ation which is his duty under sub+section (3) to furnish3 or (c) to appear before the In'estigating Authority personally when re*uired to do so under sub+section (") or to answer any *uestion which is put to hi( by the In'estigating Authority in pursuance of that sub+section3 or (d) to sign the notes of any exa(ination referred to in sub+section (/), he shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with
fine, which (ay extend to one crore rupees, or with both, and also with a further fine which (ay extend to fi'e la)h rupees for e'ery day after the first during which the failure or refusal continues0 (/) Eotes of any exa(ination under sub+section (") shall be ta)en down in writing and shall be read o'er to, or by, and signed by, the person exa(ined, and (ay thereafter be used in e'idence against hi(0 4(:) ?here i the 'o*r!e of % i +e!ti(%tio , the I +e!ti(%ti ( A*thorit> h%! re%!o to ,elie+e th%t % > $er!o or e ter$ri!e, %! the '%!e .%> ,e, to /ho. % oti'e * -er !*,!e'tio ()) h%! ,ee i!!*e- or .i(ht ,e i!!*e-, 0 (%) h%! o.itte- or f%ile- to $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! %! re7*irei the oti'eH or (,) /o*l- ot $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! /hi'h !h%ll ,e *!ef*l for, or rele+% t to, the i +e!ti(%tio H or (') /o*l- -e!tro>, .*til%te, %lter, f%l!if> or !e'rete the i for.%tio or -o'*.e t! *!ef*l for, or rele+% t to, the i +e!ti(%tio ,
S*,!tit*te- for JKhere in the course of in'estigation, the In'estigating Authority has reasonable ground to belie'e that the boo)s, registers, other docu(ents and record of, or relating to, any inter(ediary or any person associated with securities (ar)et in any (anner, (ay be destroyed, (utilated, altered, falsified or secreted, the In'estigating Authority (ay (a)e an application to the Mudicial ?agistrate of the first class ha'ing Durisdiction for an order for the seiFure of such boo)s, registers, other docu(ents and record K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
"
the , the Ch%ir.% .%>, %fter ,ei ( !%ti!fie- th%t it i! e'e!!%r> to -o !o, %*thoriLe the I +e!ti(%ti ( A*thorit> or % > other offi'er of the ;o%r- (the offi'er !o %*thoriLe- i %ll '%!e! ,ei ( herei %fter referre- to %! the %*thori!e- offi'er), to0 (i) e ter % - !e%r'h, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft /here !*'h i for.%tio or -o'*.e t! %re e#$e'te- or ,elie+e- to ,e 6e$tH (ii) ,re%6 o$e the lo'6 of % > -oor, ,o#, lo'6er, !%fe, %l.ir%h or other re'e$t%'le for e#er'i!i ( the $o/er! 'o ferre- ,> !*,0'l%*!e (i), /here the 6e>! thereof %re ot %+%il%,leH (iii) !e%r'h % > $er!o /ho h%! (ot o*t of, or i! %,o*t to (et i to, or i! i , the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft, if the %*thoriLe- offi'er h%! re%!o to !*!$e't th%t !*'h $er!o h%! !e'rete- %,o*t hi! $er!o % > !*'h ,oo6! of %''o* t or other -o'*.e t!H (i+) re7*ire % > $er!o /ho i! fo* - to ,e i $o!!e!!io or 'o trol of % > ,oo6! of %''o* t or other -o'*.e t!, .%i t%i e- i the for. of ele'tro i' re'or-, to $ro+i-e the %*thori!e- offi'er the e'e!!%r> f%'ilit> to i !$e't !*'h ,oo6! of %''o* t or other -o'*.e t!. "#planation0 2or the $*r$o!e of thi! !*,0'l%*!e, the e#$re!!io Jele'tro i' re'or-K !h%ll h%+e the .e% i ( %!!i( e- to it i 'l%*!e (t) of !*,0!e'tio (1) of !e'tio " of the I for.%tio Te'h olo(> A't, "===. (+) !eiLe % > !*'h ,oo6! of %''o* t or other -o'*.e t! fo* - %! % re!*lt of !*'h !e%r'hH (+i) $l%'e .%r6! of i-e tifi'%tio o % > ,oo6! of %''o* t or other -o'*.e t! or .%6e or '%*!e to ,e .%-e e#tr%'t! or 'o$ie! therefro.H (+ii) re'or- o o%th the !t%te.e t of % > $er!o /ho i! fo* - to ,e i $o!!e!!io or i 'o trol of the i for.%tio or -o'*.e t! referre- to i !*,0'l%*!e! (i), (iii) % - (i+).< 4(9) The ;o%r- .%> .%6e re(*l%tio ! i rel%tio to % > !e%r'h or !eiL*re * -er thi! !e'tio H % - i $%rti'*l%r, /itho*t $reG*-i'e to the (e er%lit> of the fore(oi ( $o/er, !*'h re(*l%tio ! .%> $ro+i-e for the $ro'e-*re to ,e follo/e- ,> the %*thori!e- offi'er0
(%) for o,t%i i ( i (re!! i to % > ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft to ,e !e%r'he- /here free i (re!! thereto i! ot %+%il%,leH
1 S*,!tit*te-
,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) for the follo/i (& JAfter 'o !i-eri ( the %$$li'%tio % - he%ri ( the I +e!ti(%ti ( A*thorit>, if e'e!!%r>, the @%(i!tr%te .%>, ,> or-er, %*thori!e the I +e!ti(%ti ( A*thorit>O (a) to e ter, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the $l%'e or $l%'e! /here !*'h ,oo6!, re(i!ter!, other -o'*.e t! % - re'or- %re 6e$tH (b) to !e%r'h th%t $l%'e or tho!e $l%'e! i the .% er !$e'ifie- i the or-erH % (c) to !eiLe ,oo6!, re(i!ter!, other -o'*.e t! % - re'or-, it 'o !i-er! e'e!!%r> for the $*r$o!e! of the i +e!ti(%tio & 4ro+i-e- th%t the @%(i!tr%te !h%ll ot %*thori!e !eiL*re of ,oo6!, re(i!ter!, other -o'*.e t! % re'or-, of % > li!te- $*,li' 'o.$% > or % $*,li' 'o.$% > ( ot ,ei ( the i ter.e-i%rie! !$e'ifie* -er !e'tio 1") /hi'h i te -! to (et it! !e'*ritie! li!te- o % > re'o( i!e- !to'6 e#'h% (e * le!! !*'h 'o.$% > i -*l(e! i i !i-er tr%-i ( or .%r6et .% i$*l%tio .K
#
(,) for e !*ri ( !%fe '*!to-> of % > ,oo6! of %''o* t or other -o'*.e t! or %!!et! !eiLe-.< ( 0) .he In'estigating Authority shall )eep in its custody the boo)s, registers, other docu(ents and record seiFed under this section for such period not later than the conclusion of the in'estigation as it considers necessary and thereafter shall return the sa(e to the co(pany or the other body corporate, or, as the case (ay be, to the (anaging director or the (anager or any other person, fro( whose custody or power they were seiFed 5***<, 4ro+i-e- that the In'estigating Authority (ay, before returning such boo)s, registers, other docu(ents and record as aforesaid, place identification (ar)s on the( or any part thereof0 ( ) Sa'e as otherwise pro'ided in this section, e'ery search or seiFure (ade under this section shall be carried out in accordance with the pro'isions of the Code of Cri(inal <rocedure, !/3 (% of !/$) relating to searches or seiFures (ade under that Code0 Ce%!e % - -e!i!t $ro'ee-i (!. 11D. If the 8oard finds, after causing an in*uiry to be (ade, that any person has 'iolated, or is li)ely to 'iolate, any pro'isions of this Act, or any rules or regulations (ade thereunder, it (ay pass an order re*uiring such person to cease and desist fro( co((itting or causing such 'iolation, 4ro+i-e- that the 8oard shall not pass such order in respect of any listed public co(pany or a public co(pany (other than the inter(ediaries specified under section %) which intends to get its securities listed on any recognised stoc) exchange unless the 8oard has reasonable grounds to belie'e that such co(pany has indulged in insider trading or (ar)et (anipulation0: CDA4TER I REGISTRATION CERTI2ICATE Re(i!tr%tio of !to'6 ,ro6er!, !*,0,ro6er!, !h%re tr% !fer %(e t!, et'. 1". ( ) Eo stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et shall buy, sell or deal in securities except under, and in accordance with, the conditions of a certificate of registration obtained fro( the 8oard in accordance with the %4regulations: (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et i((ediately before the establish(ent of the 8oard for which no registration certificate was
necessary prior to such establish(ent, (ay continue to do so for a period of three (onths fro( such establish(ent or, if he has (ade an application for such registration within the said period of three (onths, till the disposal of such application,
The /or-! P% - i for. the @%(i!tr%te of !*'h ret*r P, o.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) % Substituted for 1rules2 by Securities =aw (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0
/
44ro+i-e- f*rther that any certificate of registration, obtained i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", shall be dee(ed to ha'e been obtained fro( the 8oard in accordance with the regulations pro'iding for such registration0 ( A) Eo depository, %4participant,: custodian of securities, foreign institutional in'estor, credit rating agency, or any other inter(ediary associated with the securities (ar)et as the 8oard (ay by notification in this behalf specify, shall buy or sell or deal in securities except under and in accordance with the conditions of a certificate of registration obtained fro( the 8oard in accordance with the regulations (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a depository, 34participant,: custodian of securities, foreign institutional in'estor or credit rating agency i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to buy or sell securities or otherwise deal with the securities (ar)et until such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300 ( 8) Eo person shall sponsor or cause to be sponsored or carry on or caused to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es including (utual funds, unless he obtains a certificate of registration fro( the 8oard in accordance with the regulations, 4ro+i-e- that any person sponsoring or causing to be sponsored, carrying or causing to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es operating in the securities (ar)et i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to operate till such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300:
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0
% Inserted
>
4()%lanati$n7 6or the re(o'al of doubts, it is hereby declared that, for purposes of this section, a collecti'e in'est(ent sche(e or (utual fund shall not be include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(ponent of in'est(ent besides the co(ponent of insurance issued by the insurer0: (%) 7'ery application for registration shall be in such (anner and on pay(ent of such fees as (ay be deter(ined by regulations0 (3) .he 8oard (ay, by order, suspend or cancel a certificate of registration in such (anner as (ay be deter(ined by regulations, 4ro+i-e- that no order under this sub+section shall be (ade unless the person concerned has been gi'en a reasonable opportunity of being heard0 %4CIA<.7R BA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 4rohi,itio of .% i$*l%ti+e % - -e'e$ti+e -e+i'e!, i !i-er tr%-i ( % - !*,!t% ti%l %'7*i!itio of !e'*ritie! or 'o trol.
1"A. Eo person shall directly or indirectly(a) use or e(ploy, in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recogniFed stoc) exchange, any (anipulati'e or decepti'e de'ice or contri'ance in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3
Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, w0r0e0f !+$+ %0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, reads as under, /@A81(0 D: ?ISC7==AE7CHS #0 Balidation+ Eotwithstanding anything contained in any Dudg(ent, decree or order of any court, tribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 Repeal and sa'ings + (1) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (2) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0 % Chapter BA inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
!
(b) e(ploy any de'ice, sche(e or artifice to defraud in connection with issue or dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange3 (c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange, in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (d) engage in insider trading3 (e) deal in securities while in possession of (aterial or non+public infor(ation or co((unicate such (aterial or non+public infor(ation to any other person, in a (anner which is in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (f) ac*uire control of any co(pany or securities (ore than the percentage of e*uity share capital of a co(pany whose securities are listed or proposed to be listed on a recognised stoc) exchange in contra'ention of the regulations (ade under this Act0: CDA4TER II 2INANCE, ACCOUNTS AND AUDIT Gr% t! ,> the Ce tr%l Go+er .e t. 1). .he Central &o'ern(ent (ay, after due appropriation (ade by <arlia(ent by law in this behalf, (a)e to the 8oard grants of such su(s of (oney as that &o'ern(ent (ay thin) fit for being utiliFed for the purposes of this Act0 2* -. 13. ( ) .here shall be constituted a 6und to be called the Securities and 7xchange 8oard of
India &eneral 6und and there shall be credited thereto(a) all grants, fees and charges recei'ed by the 8oard under this Act3 4G G G: (aa) %4G G G: (b) all su(s recei'ed by the 8oard fro( such other sources as (ay be decided upon by the Central &o'ern(ent0 (%) .he 6und shall be applied for (eeting(a) the salaries, allowances and other re(uneration of the (e(bers, officers and other e(ployees of the 8oard3 (b) the expenses of the 8oard in the discharge of its functions under section 3 (c) the expenses on obDects and for purposes authorised by this Act0
.he word 1and2 o(itted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 (aa) o(itted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 It was inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Clause (aa) reads as under,+ 1(aa) all su(s realiFed by way of <enalties under this Act3 and20
% Clause
%0
A''o* t! % - %*-it. 15. ( ) .he 8oard shall (aintain proper accounts and other rele'ant records and prepare an annual state(ent of accounts in such for( as (ay be prescribed by the Central &o'ern(ent in consultation with the Co(ptroller and Auditor+&eneral of India0 (%) .he accounts of the 8oard shall be audited by the Co(ptroller and Auditor+&eneral of India at such inter'als as (ay be specified by hi( and any expenditure incurred in connection with such audit shall be payable by the 8oard to the Co(ptroller and Auditor+&eneral of India0 (3) .he Co(ptroller and Auditor+&eneral of India and any other person appointed by hi( in connection with the audit of the accounts of the 8oard shall ha'e the sa(e rights and pri'ileges and authority in connection with such audit as the Co(ptroller and Auditor+ &eneral generally has in connection with the audit of the &o'ern(ent accounts and, in particular, shall ha'e the right to de(and the production of boo)s, accounts, connected 'ouchers and other docu(ents and papers and to inspect any of the offices of the 8oard0 ($) .he accounts of the 8oard as certified by the Co(ptroller and Auditor+&eneral of India or any other person appointed by hi( in this behalf together with the audit report thereon shall be forwarded annually to the Central &o'ern(ent and that &o'ern(ent shall cause the sa(e to be laid before each Iouse of <arlia(ent0 5CDA4TER IIA 4ENALTIES AND ADEUDICATION 4e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 15A. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder,(a) to furnish any docu(ent, return or report to the 8oard, fails to furnish the sa(e, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations, fails to file return or furnish the sa(e within the ti(e specified therefor in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0
Chapters BI A and BI 8 containing Ss0 "A to "M and "@ to "S respecti'ely, inserted by Securities =aws (A(end(ent) Act, !!" w0e0f0 %"+ + !!"0 % Substituted for 1a penalty not exceeding one la)h and fifty thousand rupees for each such failure2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding fi'e thousand rupees for e'ery day during which such failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for e'ery day during which the failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%
4e %lt> for f%il*re ,> % > $er!o to e ter i to %(ree.e t /ith 'lie t!. 15;. If any person, who is registered as an inter(ediary and is re*uired under this Act or any rules or regulations (ade thereunder to enter into an agree(ent with his client, fails to enter into such agree(ent, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 %54e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 15C. If any listed co(pany or any person who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such co(pany or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 4e %lt> for 'ert%i -ef%*lt! i '%!e of .*t*%l f* -!. 15D. If any person, who is(a) re*uired under this Act or any rules or regulations (ade thereunder to obtain a certificate of registration fro( the 8oard for sponsoring or carrying on any collecti'e in'est(ent sche(e, including (utual funds, sponsors or carries on any collecti'e in'est(ent sche(e, including (utual funds, without obtaining such certificate of registration, he shall be liable to 34a penalty of one la)h rupees for each day during which he sponsors or carries on any such collecti'e in'est(ent sche(e including (utual funds, or one crore rupees, whiche'er is less:3 (b) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, for sponsoring or carrying on any in'est(ent sche(e, fails to co(ply with the ter(s and conditions of certificate of registration, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, fails to (a)e an application for listing of its sche(es as pro'ided for in the regulations
Substituted for 1a penalty not exceeding fi'e la)h rupees for e'ery such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1If any person, who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing to redress the grie'ances of in'estors, fails to redress such grie'ances, he shall be liable to a penalty not exceeding ten thousand rupees for each such failure2, by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding ten thousand rupees for each day during which he carries on any such collecti'e in'est(ent sche(e including (utual funds, or ten la)h rupees whiche'er is higher02 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for each day during which such failure continues or ten la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0
%%
go'erning such listing, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (d) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to despatch
unit certificates of any sche(e in the (anner pro'ided in the regulation go'erning such despatch, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (e) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to refund the application (onies paid by the in'estors within the period specified in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (f) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to in'est (oney collected by such collecti'e in'est(ent sche(es in the (anner or within the period specified in the regulations, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for f%il*re to o,!er+e r*le! % - re(*l%tio ! ,> % %!!et .% %(e.e t 'o.$% >. 15E. Khere any asset (anage(ent co(pany of a (utual fund registered under this Act, fails to co(ply with any of the regulations pro'iding for restrictions on the acti'ities of the asset (anage(ent co(panies, such asset (anage(ent co(pany shall be liable to "4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for -ef%*lt i '%!e of !to'6 ,ro6er!. 152. If any person, who is registered as a stoc) bro)er under this Act,(a) fails to issue contract notes in the for( and (anner specified by the stoc) exchange of which such bro)er is a (e(ber, he shall be liable to a penalty not exceeding fi'e ti(es the a(ount for which the contract note was re*uired to be issued by that bro)er3 (b) fails to deli'er any security or fails to (a)e pay(ent of the a(ount due to the in'estor in the (anner within the period specified in the regulations, he shall be liable to #4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3
Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues or fi'e la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding one thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%3
(c) charges an a(ount of bro)erage which is in excess of the bro)erage specified in the regulations, he shall be liable to 4a penalty of one la)h rupees: or fi'e ti(es the a(ount of bro)erage charged in excess of the specified bro)erage, whiche'er is higher0 4e %lt> for i !i-er tr%-i (. 15G. If any insider who,(i) either on his own behalf or on behalf of any other person, deals in securities of a body corporate listed on any stoc) exchange on the basis of any unpublished price+sensiti'e infor(ation3 or (ii) co((unicates any unpublished price+sensiti'e infor(ation to any person, with or without his re*uest for such infor(ation except as re*uired in the ordinary course of business or under any law3 or
(iii) counsels, or procures for any other person to deal in any securities of any body corporate on the basis of unpublished price+sensiti'e infor(ation, shall be liable to a penalty %4of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of insider trading, whiche'er is higher:0 4e %lt> for o 0-i!'lo!*re of %'7*i!itio of !h%re! % - t%6eo+er!. 15D. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder, fails to,(i) disclose the aggregate of his shareholding in the body corporate before he ac*uires any shares of that body corporate3 or (ii) (a)e a public announce(ent to ac*uire shares at a (ini(u( price3 or 34(iii) (a)e a public offer by sending letter of offer to the shareholders of the concerned co(pany3 or (iv) (a)e pay(ent of consideration to the shareholders who sold their shares pursuant to letter of offer,: he shall be liable to a penalty $4of twenty+fi'e crore rupees or three ti(es the a(ount of profits profits (ade out of such failure, whiche'er is higher:0 554e %lt> for fr%*-*le t % - * f%ir tr%-e $r%'ti'e!. 15DA. If any person indulges in fraudulent and unfair trade practices relating to securities, he shall be liable to a penalty of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of such practices, whiche'er is higher0
Substituted for 1a penalty not exceeding fi'e thousand rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00% 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00% %00% " Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00%0
%$
4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 15D;. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 4o/er to %-G*-i'%te. 150I. ( ) 6or the purpose of adDudging under sections "A, "8, "C, "9, "7, "6, "& 4, "I, "IA and "I8:, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in subsection ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> the %-G*-i'%ti ( offi'er. 15E. Khile adDudging *uantu( of penalty under section "+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade
as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 "5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 15EA. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: )5Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!. 15E;. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 11, !e'tio 11;, !e'tio 11D, !*,0!e'tio ()) of !e'tio 1" or !e'tio 150I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e- -ef%*lt!.
Substituted for 1and "I2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the S78I (A(end(ent) Act, %00%, S0 ! w0e0f0 %!+ 0+%00%0 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
% Inserted
%"
(") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't. ()) The !ettle.e t $ro'ee-i (! * -er thi! !e'tio !h%ll ,e 'o -*'te- i %''or-% 'e /ith the $ro'e-*re !$e'ifie- i the re(*l%tio ! .%-e * -er thi! A't. (3) No %$$e%l !h%ll lie * -er !e'tio 15T %(%i !t % > or-er $%!!e- ,> the ;o%r- or %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio . < CDA4TER II; ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL E!t%,li!h.e t of Se'*ritie! A$$ell%te Tri,* %l!. 15F. ( ) .he Central &o'ern(ent shall by notification, establish one or (ore Appellate .ribunals to be )nown as the Securities Appellate .ribunal to exercise the Durisdiction, powers and authority conferred on such .ribunal by or under this Act 4or any other law for the ti(e being in force:0 (%) .he Central &o'ern(ent shall also specify in the notification referred to in sub+section ( ) the (atters and places in relation to which the Securities Appellate .ribunal (ay exercise Durisdiction0 "5Co.$o!itio of Se'*ritie! A$$ell%te Tri,* %l. 15L. A Securities Appellate .ribunal shall consist of a <residing Cfficer and two other (e(bers, to be appointed, by notification, by the Central &o'ern(ent, 4ro+i-e- that the Securities Appellate .ribunal, consisting of one person only, established before the co((ence(ent of the Securities and 7xchange 8oard of India (A(end(ent) Act, %00%, shall continue to exercise the Durisdiction, powers and authority conferred on it by or under this Act or any other law for the ti(e being in force till two other ?e(bers are appointed under this section0 9*%lifi'%tio for %$$oi t.e t %! 4re!i-i ( Offi'er or @e.,er of Se'*ritie! A$$ell%te Tri,* %l.
Inserted by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for Sections "= and "? by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "= and "? read as under,+ 1 "+=0 Co(position of securities Appellate .ribunal0 5 A Securities Appellate .ribunal shall consist of
% Substituted
one person only (hereinafter referred to as the <residing Cfficer of the Securities Appellate .ribunal) to be appointed, by notification, by the central &o'ern(ent0 "?0 Qualifications for appoint(ent as <residing Cfficer of the Securities Appellate .ribunal0 5 A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he + (a) is, or has been, or is *ualified to be, a Mudge of a Iigh Court3 or (b) has been a (e(ber of the Indian =egal Ser'ice and has held a post in &rade I of that ser'ice for at least three years3 or (c) has held office as the <residing Cfficer of a tribunal for at least three years02
%#
15@. 15( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of the Securities Appellate .ribunal unless he + (a) is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court3 or (b) is a sitting or retired Mudge of a Iigh Court who has co(pleted not less than se'en years of ser'ice as a Mudge in a Iigh Court0 ( A) .he <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0: (%) A person shall not be *ualified for appoint(ent as (e(ber of a Securities Appellate .ribunal unless he is a person of ability, integrity and standing who has shown capacity in dealing with proble(s relating to securities (ar)et and has *ualification and experience of corporate law, securities laws, finance, econo(ics or accountancy, 4ro+i-e- that a (e(ber of the 8oard or any person holding a post at senior (anage(ent le'el e*ui'alent to 7xecuti'e 9irector in the 8oard shall not be appointed as <residing Cfficer or ?e(ber of a Securities Appellate .ribunal during his ser'ice or tenure as such with the 8oard or within two years fro( the date on which he ceases to hold office as such in the 8oard0: %4Te *re of offi'e of 4re!i-i ( Offi'er % - other @e.,er! of Se'*ritie! A$$ell%te Tri,* %l. 15N. .he <residing Cfficer and e'ery other ?e(ber of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office and shall be eligible for re+appoint(ent, 4ro+i-e- that no person shall hold office as the <residing Cfficer of the Securities Appellate .ribunal after he has attained the age of sixty+eight years, 4ro+i-e- f*rther that no person shall hold office as a ?e(ber of the Securities Appellate .ribunal after he has attained the age of sixty+two years0: S%l%r> % - %llo/% 'e! % - other ter.! % - 'o -itio ! of !er+i'e of 4re!i-i ( Offi'er!. 150O. .he salary and allowances payable to and the other ter(s and conditions of ser'ice including pension, gratuity and other retire(ent benefits of the 4<residing Cfficer and other ?e(bers: of a Securities Appellate .ribunal shall be such as (ay be prescribed,
Substituted for sub+section ( ) of Section "? by the S78I (A(end(ent) Crdinance, %0 3 w0e0f0 % 00 0%0 30 <rior to substitution, it read as under,+ ;( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court , 4ro+i-e- that the <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0; % Substituted for Section "E, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "E read as under,+ 1 "E0 .er( of office0+ .he <residing officer of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office or until he attains the age of sixtyfi'e years, whiche'er is earlier02
%/
4ro+i-e- that neither the salary and allowances nor the other ter(s and conditions of ser'ice of the %4<residing Cfficer and other ?e(bers of a Securities Appellate .ribunal: shall be 'aried to their disad'antage after appoint(ent0 2illi ( *$ of +%'% 'ie!. 154. If, for reason other than te(porary absence, any 'acancy occurs in the 34office of the <residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal, then the Central &o'ern(ent shall appoint another person in accordance with the pro'isions of this Act to fill the 'acancy and the proceedings (ay be continued before the Securities Appellate .ribunal fro( the stage at which the 'acancy is filled0 Re!i( %tio % - re.o+%l. 159. ( ) .he $4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal (ay, by notice in writing under his hand addressed to the Central &o'ern(ent, resign his office, 4ro+i-e- that "4the <residing Cfficer or any other ?e(ber: shall, unless he is per(itted by the Central &o'ern(ent to relin*uish his office sooner, continue to hold office, until the expiry of three (onths fro( the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his ter( of office, whiche'er is the earliest0 (%) .he #4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal shall not be re(o'ed fro( his office except by an order by the Central &o'ern(ent on the ground of pro'ed (isbeha'iour or incapacity after an in*uiry (ade by a Mudge of the Supre(e Court, in which the /4<residing Cfficer or any other ?e(ber: concerned has been infor(ed of the charges against hi( and gi'en a reasonable opportunity of being heard in respect of these charges0 (3) .he Central &o'ern(ent (ay, by rules, regulate the procedure for the in'estigation of (isbeha'iour or incapacity of the >4<residing Cfficer or any other ?e(ber:0 Or-er! 'o !tit*ti ( A$$ell%te Tri,* %l to ,e fi %l % - ot to i +%li-%te it! $ro'ee-i (!. 15R. Eo order of the Central &o'ern(ent appointing any person as the !4<residing Cfficer or a ?e(ber: of a Securities Appellate .ribunal shall be called in *uestion in any (anner, and no act or proceeding before a Securities Appellate .ribunal shall be called in *uestion in any (anner on the ground (erely of any defect in the constitution of a Securities Appellate .ribunal0
Substituted for 1<residing Cfficer of a Securities Appellate .ribunal2 by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 / Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 > Substituted for 1aforesaid <residing Cfficer2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 ! Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0
%>
St%ff of the Se'*ritie! A$$ell%te Tri,* %l. 15S. ( ) .he Central &o'ern(ent shall pro'ide the Securities Appellate .ribunal with such officers and e(ployees as that &o'ern(ent (ay thin) fit0 (%) .he officers and e(ployees of the Securities Appellate .ribunal shall discharge their functions under general superintendence of the <residing Cfficer0 (3) .he salaries and allowances and other conditions of ser'ice of the officers and e(ployees of the Securities Appellate .ribunal shall be such as (ay be prescribed0 A$$e%l to the Se'*ritie! A$$ell%te Tri,* %l. 15T. 4( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed,(a) by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws
(Second A(end(ent) Act, !!!, under this Act, or the rules or regulations (ade thereunder3 or (b) by an order (ade by an adDudicating officer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 "5(") ********< (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 348oard or the AdDudicating Cfficer, as the case case (ay be,: is recei'ed by hi( and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 ($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0
Substituted for Sub+sec ( ) R (%) by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, Sub+sections ( ) R (%) were read as under, 1( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by any order (ade by any AdDudicating Cfficer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 (%) Eo appeal shall lie to the Securities Appellate .ribunal fro( an order (ade by an AdDudicating Cfficer with the consent of the parties02 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , o.i!!io , S*,0!e'tio (") re%- %! * -er& J(") No %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-eO (a) ,> the ;o%r- o % - %fter the 'o..e 'e.e t of the Se'*ritie! L%/! (Se'o - A.e -.e t) A't, 1999H (b) ,> % %-G*-i'%ti ( offi'er, /ith the 'o !e t of the $%rtie!.2 3 Substituted for 1a copy of the order (ade by the adDudicating officer2 by S78I (A(end(ent) Act !!!, !!!, w0e0f0 #+ %+ !!!0
%!
(") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 48oard, the: parties to the appeal and to the concerned AdDudicating Cfficer0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of the Se'*ritie! A$$ell%te Tri,* %l. 15U. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act, and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purposes of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3
(e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte 3 (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0), and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 %4Ri(ht to le(%l re$re!e t%tio . 15I. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,Substituted for 1parties2, S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for S0 "B by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, S0 "B read as under,+ 1 "B0 .he appellant (ay either appear in person or authorise one or (ore legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal02
% Substituted
30
(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of subsection ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or any attorney of any Iigh Court, and includes a pleader in practice0: Li.it%tio . 15?. .he pro'isions of the =i(itation Act, !#3 (3# of !#3), shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 54re!i-i ( Offi'er, @e.,er! % - !t%ff of Se'*ritie! A$$ell%te Tri,* %l! to ,e $*,li' !er+% t!. 15A. .he <residing Cfficer, ?e(bers and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0: Ci+il Co*rt ot to h%+e G*ri!-i'tio . 15M. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which an adDudicating officer appointed under this Act or a Securities Appellate .ribunal constituted under this Act is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "5A$$e%l to S*$re.e Co*rt.
Substituted for S0 "A by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, it read as under, + 1 "A0 .he <residing Cfficer and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian penal Code( $" of >#0)20 % Substituted for S0 "S by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution , it
was read as under,+ 1 "S0 Appeal to Iigh Court0+ Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, <ro'ided that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
3
15N. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order , 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the applicant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: CDA4TER III @ISCELLANEOUS 4o/er of Ce tr%l Go+er .e t to i!!*e -ire'tio !. 18. ( ) Kithout preDudice to the foregoing pro'isions of this Act 4or the 9epositories Act, !!#:, the 8oard shall, in exercise of its powers or the perfor(ance of its functions under this Act, be bound by such directions on *uestions of policy as the Central &o'ern(ent (ay gi'e in writing to it fro( ti(e to ti(e , 4ro+i-e- that the 8oard shall, as far as practicable, be gi'en an opportunity to express its 'iews before any direction is gi'en under this sub+section0 (%) .he decision of the Central &o'ern(ent whether a *uestion is one of policy or not shall be final0 4o/er of Ce tr%l Go+er .e t to !*$er!e-e the ;o%r-. 17. ( ) If at any ti(e the Central &o'ern(ent is of opinion(a) that on account of gra'e e(ergency, the 8oard is unable to discharge the functions and duties i(posed on it by or under the pro'isions of this Act3 or (b) that the 8oard has persistently (ade default in co(plying with any direction issued by the Central &o'ern(ent under this Act or in the discharge of the functions and duties i(posed on it by or under the pro'isions of this Act and as a result of such default the financial position of the 8oard or the ad(inistration of the 8oard has deteriorated3 or (c) that circu(stances exist which render it necessary in the public interest so to do, the Central &o'ern(ent (ay, by notification, supersede the 8oard for such period, not exceeding six (onths, as (ay be specified in the notification0 (%) Hpon the publication of a notification under sub+section ( ) superseding the 8oard,(a) all the (e(bers shall, as fro( the date of supersession, 'acate their offices as such3 (b) all the powers, functions and duties which (ay, by or under the pro'isions of this Act, be exercised or discharged by or on behalf of the 8oard, shall until the 8oard is reconstituted under sub+section (3), be exercised and discharged by such person or persons as the Central &o'ern(ent (ay direct3 and (c) all property owned or controlled by the 8oard shall, until the 8oard is reconstituted under sub+section (3), 'est in the Central &o'ern(ent0
Substituted for 1this Act2 by the 9epositories Act !!#, w0r0e0f0 %0+!+ !!"0
3%
(3) Cn the expiration of the period of supersession specified in the notification issued under sub+section ( ), the Central &o'ern(ent (ay reconstitute the 8oard by a fresh appoint(ent
and in such case any person or persons who 'acated their offices under clause ( a) of subsection (%), shall not be dee(ed dis*ualified for appoint(ent , 4ro+i-e- that the Central &o'ern(ent (ay, at any ti(e, before the expiration of the period of supersession, ta)e action under this sub+section0 ($) .he Central &o'ern(ent shall cause a notification issued under sub+section ( ) and a full report of any action ta)en under this section and the circu(stances leading to such action to be laid before each Iouse of <arlia(ent at the earliest0 Ret*r ! % - re$ort!. 1:. ( ) .he 8oard shall furnish to the Central &o'ern(ent at such ti(e and in such for( and (anner as (ay be prescribed or as the Central &o'ern(ent (ay direct, such returns and state(ents and such particulars in regard to any proposed or existing progra((e for the pro(otion and de'elop(ent of the securities (ar)et, as the Central &o'ern(ent (ay, fro( ti(e to ti(e, re*uire0 (%) Kithout preDudice to the pro'isions of sub+section ( ), the 8oard shall, within 4ninety: days after the end of each financial year, sub(it to the Central &o'ern(ent a report in such for(, as (ay be prescribed, gi'ing a true and full account of its acti'ities, policy and progra((es during the pre'ious financial year0 (3) A copy of the report recei'ed under sub+section (%) shall be laid, as soon as (ay be after it is recei'ed, before each Iouse of <arlia(ent0 Dele(%tio . 19. .he 8oard (ay, by general or special order in writing delegate to any (e(ber, officer of the 8oard or any other person subDect to such conditions, if any, as (ay be specified in the order, such of its powers and functions under this Act (except the powers under section %!) as it (ay dee( necessary0 A$$e%l!. "=. ( ) Any person aggrie'ed by an order of the 8oard (ade %4, before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!,: under this Act, or the rules or regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor, 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0
Substituted for 1sixty days2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1an order of the 8oard (ade2 by Securities =aws (Second A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0
% Substituted
33
(3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed, 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 4;%r of G*ri!-i'tio . "=A. Eo order passed by the 8oard %4or the AdDudicating Cfficer: under this Act shall be appealable except as pro'ided in 34section ". or: section %0 and no ci'il court shall ha'e Durisdiction in respect of any (atter which the 8oard $4or the AdDudicating Cfficer: is e(powered by, or under, this Act to pass any order and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any order passed by the 8oard "4or the AdDudicating Cfficer: by, or under, this Act0: S%+i (!.
"1. Eothing in this Act shall exe(pt any person fro( any suit or other proceedings which (ight, apart fro( this Act, be brought against hi(0 @e.,er!, offi'er! % - e.$lo>ee! of the ;o%r- to ,e $*,li' !er+% t!. "". All (e(bers, officers and other e(ployees of the 8oard shall be dee(ed, when acting or purporting to act in pursuance of any of the pro'isions of this Act, to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0 4rote'tio of %'tio t%6e i (oo- f%ith. "). Eo suit, prosecution or other legal proceedings shall lie against the Central &o'ern(ent #4or 8oard: or any officer of the Central &o'ern(ent or any (e(ber, officer or other e(ployee of the 8oard for anything which is in good faith done or intended to be done under this Act or the rules or regulations (ade thereunder0 /4Offe 'e!. "3. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, he shall be punishable with
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 18oard2 by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 3 Substituted for 1Section %02, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 $ Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 " Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Substituted by for S0 %$, Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" && <rior to its substitution S0%$ read as under, 1%$0 <enalty0+ Khoe'er contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both02
% Substituted
3$
i(prison(ent for a ter( which (ay extend to 4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to %4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 34Co.$o!itio of 'ert%i offe 'e!. "3A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "3;. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of the alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation, 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0
(%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0:
Substituted for 1one year, or with fine, or with both2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%, for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both20 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3"
E#e.$tio fro. t%# o /e%lth % - i 'o.e. "5. Eotwithstanding anything contained in the Kealth+tax Act, !"/ (%/ of !"/), the Inco(etax Act, !# ($3 of !# ) or any other enact(ent for the ti(e being in force relating to tax on wealth, inco(e, profits or gains(a) the 8oard3 (b) the existing Securities and 7xchange 8oard fro( the date of its constitution to the date of establish(ent of the 8oard, shall not be liable to pay wealth+tax, inco(e+tax or any other tax in respect of their wealth, inco(e, profits or gains deri'ed0 Co( iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations (ade thereunder, sa'e on a co(plaint (ade by the 8oard 4G G G:0 "5(") *****< )5 E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
.he words 1with the pre'ious sanction of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to the o.i!!io , S*,0!e'tio (") re%- %! * -er& 1(") No 'o*rt i ferior to th%t of "5% Co*rt of Se!!io < !h%ll tr> % > offe 'e $* i!h%,le * -er thi!
A't.2 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3#
A$$e%l % - re+i!io "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e of Cri.i %l 4ro'e-*re, 197) to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< Offe 'e! ,> 'o.$% ie!. "7. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly, 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n , 6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and
3/
(b) 1director2, in relation to a fir(, (eans a partner in the fir(0 4o/er to e#e.$t. ":. 4GGGGGG: "5 Re'o+er> of %.o* t! ":A. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith %
-ire'tio of -i!(or(e.e t or-er i!!*e- * -er !e'tio 11; or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifiefor. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.et%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't.
C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Section %> read as under, 1%>0 8$.er t$ e)e"%t+ If the central go'ern(ent if of the opinion that it is necessary or expedient so to do in public interest, it (ay, by order published in the Cfficial gaFette, exe(pt any person or class of persons buying or selling securities or otherwise dealing with the securities (ar)et fro( the operation of sub+section ! ) of Section %02 % I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3>
"#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio 15T of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 11;, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% !
% > offi'er of the ;o%r- /ho .%> ,e %*thoriLe-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 4o/er to .%6e r*le!. "9. ( ) .he Central &o'ern(ent (ay, by notification, (a)e rules for carrying out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers under sub+section ( ) of section "3 (b) the additional functions that (ay be perfor(ed by the 8oard under section 3 (c) 4G G G: (d) the (anner in which the accounts of the 8oard shall be (aintained under section "3 %4(da) the (anner of in*uiry under sub+section ( ) of section "+I3 (db) the salaries and allowances and other ter(s and conditions of ser'ice of the 34<residing Cfficers, ?e(bers: and other officers and e(ployees of the Securities Appellate .ribunal under section "+C and sub+section (3) of section "S3 (dc) the procedure for the in'estigation of (isbeha'iour or incapacity of the 4<residing Cfficers, or other ?e(bers: of the Securities Appellate .ribunal under sub+section (3) of section "Q3
Clause (c) o(itted by Securities laws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, clause (c) it read as under, 1(c) the conditions subDect to which registration certificate is to be issued under sub+section ( ) of section %20 % Inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 3 Substituted for 1<residing Cfficers2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3!
(dd) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section ". and the fees payable in respect of such appeal3: (e) the for( and the (anner in which returns and report to be (ade to the Central &o'ern(ent under section >3 (f) any other (atter which is to be, or (ay be, prescribed, or in respect of which pro'ision is to be, or (ay be, (ade by rules0 4o/er to .%6e re(*l%tio !. )=. ( ) .he 8oard (ay, %4GGG: by notification, (a)e regulations consistent with this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ti(es and places of (eetings of the 8oard and the procedure to be followed at such (eetings under sub+section ( ) of section / including *uoru( necessary for the transaction of business3 (b) the ter(s and other conditions of ser'ice of officers and e(ployees of the 8oard under sub+section (%) of section !3 34(c) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto and the (anner in which such (atters shall be disclosed by the co(panies under section A3 35('%) the *tiliL%tio of the %.o* t 're-ite- * -er !*,0!e'tio (5) of !e'tio 11H (',) the f*lfill.e t of other 'o -itio ! rel%ti ( to 'olle'ti+e i +e!t.e t !'he.e * -er !*,0!e'tio ("A) of !e'tio 11AAH ('') the $ro'e-*re to ,e follo/e- ,> the %*thoriLe- offi'er for !e%r'h or !eiL*re * -er !*,0!e'tio (9) of !e'tio 11CH < (d) the conditions subDect to which certificate of registration is to be issued, the a(ount of
fee to be paid for certificate of registration and the (anner of suspension or cancellation of certificate of registration under section %0: 55(-%) the ter.! -eter.i e- ,> the ;o%r- for !ettle.e t of $ro'ee-i (! * -er !*,!e'tio (") % - the $ro'e-*re for 'o -*'ti ( of !ettle.e t $ro'ee-i (! * -er !*,!e'tio ()) of !e'tio 15E;H (-,) % > other .%tter /hi'h i! re7*ire- to ,e, or .%> ,e, !$e'ifie- ,> re(*l%tio ! or i re!$e't of /hi'h $ro+i!io i! to ,e .%-e ,> re(*l%tio !.< R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t.
Substituted for 1<residing Cfficers2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 words 1with the pre'ious appro'al of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 3 Substituted for the existing clause (c) by the Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 <rior to substitution this clause read as under, 1(c) the a(ount of fee to be paid for registration certificate and (anner of suspension or cancellation of registration certificate under sub+section (%) and (3) of section %02 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% .he
$0
)1. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. )". .he pro'isions of this Act shall be in addition to, and not in derogation of, the pro'isions of any other law for the ti(e being in force0 A.e -.e t of 'ert%i e %'t.e t!. )). 40e%ealed bF 0e%ealing H A"ending Act' 2001&: 4o/er to re.o+e -iffi'*ltie!. )3. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order, published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as (ay appear to be necessary for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of fi'e years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 Re$e%l % - !%+i (. )5. ( ) .he Securities and 7xchange 8oard of India Crdinance, !!% (Crd0 " of !!%), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 1@( /@(5A9( 4 ee section 33: A@END@ENT O2 CERTAIN ENACT@ENTS 40e%ealed bF 0e%ealing H A"ending Act' 2001:
*SECURITIES CONTRACTS (REGULATION) RULES, 1957
In exercise of the powers conferred by section 30 of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the Central &o'ern(ent hereby (a)es the following rules, the sa(e ha'ing been pre'iously published as re*uired by sub+section (3) of the said section, na(ely ,Short title. 1. .hese rules (ay be called the Securities Contracts (Regulation) Rules, !"/0 Defi itio !. ". In these rules, unless the context otherwise re*uires,(a) 1for(2 (eans a for( appended to these rules3 (b) 1the Act2 (eans the Securities Contracts (Regulation) Act, !"# ($% of !"#)3 (c) 1&o'ern(ent co(pany2 (eans a co(pany in which not less than fifty+one per cent of the share capital is held by the Central &o'ern(ent or by any State &o'ern(ent or &o'ern(ents or partly by the Central &o'ern(ent and partly by one or (ore State &o'ern(ents ; 4(d) 1public2 (eans persons other than 5 (i) the pro(oter and pro(oter group3 (ii) subsidiaries and associates of the co(pany0 E#$l% %tio & 6or the purpose of this clause the words 1pro(oter2 and 1pro(oter group2 shall ha'e the sa(e (eaning as assigned to the( under the Securities and 7xchange 8oard of India (Issue of Capital and 9isclosure Re*uire(ents) Regulations, %00!3: %4(da) ;public sector co(pany; (eans a body corporate constituted by an Act of <arlia(ent or any State =egislature and includes a go'ern(ent co(pany,: 4(e) 1public shareholding2 (eans e*uity shares of the co(pany held by public and shall exclude shares which are held by custodian against depository receipts issued o'erseas0: A$$li'%tio for re'o( itio . ). An application under section 3 of the Act for recognition of a stoc) exchange shall be (ade to the 34Securities and 7xchange 8oard of India: in 6or( A0
* The!e R*le! h%+e ,ee *$-%te- ,%!e- o the R*le! % - A.e -.e t! %+%il%,le o the /e,!ite of the De$%rt.e t of E'o o.i' Aff%ir!0 htt$&11fi .i . i'.i 1l%/1i -e#.%!$ % - %+%il%,le %.e -.e t otifi'%tio !. Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 % Inserted by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3 Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
2ee! for %$$li'%tio . 3. ( ) .here shall be paid in respect of e'ery application under rule 3 a fee of rupees fi'e hundred0 (%) .he a(ount of the fee shall be deposited in the nearest &o'ern(ent treasury or the nearest branch of the State 8an) of India, 4ro+i-e- that at 8o(bay, Calcutta, ?adras, 9elhi and @anpur, the a(ount shall be deposited in the Reser'e 8an) of India0 (3) .he a(ount of the fee so deposited shall be credited to the receipt head 1A=BI?iscellaneous-Cther fees, fines and forfeitures20 Do'*.e t! to ,e file- %lo ( /ith the %$$li'%tio % - $%rti'*l%r! it !ho*l- 'o t%i . 5. 7'ery application shall be acco(panied by four copies of the rules (including the (e(orandu( and articles of association where the applicant stoc) exchange is an
incorporated body) and bye+laws of the stoc) exchange applying for recognition as specified in section 3 of the Act and the receipt granted by the &o'ern(ent treasury, or as the case (ay be, the State 8an) of India or the Reser'e 8an) of India, in respect of the a(ount of the fee deposited and shall contain clear particulars as to the (atters specified in the Annexure to 6or( A0 $54o/er to .%6e i 7*irie! % - '%ll for i for.%tio . 5A. 8efore granting recognition to a stoc) exchange under section $ of the Act, the "4Securities and 7xchange 8oard of India: (ay (a)e such in*uiries and re*uire such further infor(ation to be furnished, as it dee(s necessary, relating to the infor(ation furnished by the stoc) exchange in the Annexure to its application in 6or( A0: 2or. of re'o( itio . 8. .he recognition granted to a stoc) exchange shall be in 6or( 8 and be subDect to the following conditions, na(ely ,(a) that the recognition unless granted on a per(anent basis, shall be for such period not less than one year as (ay be specified in the recognition3 (b) that the stoc) exchange shall co(ply with such conditions as are or (ay be prescribed or i(posed under the pro'isions of the Act and these rules fro( ti(e to ti(e0
$ Inserted
by &SR 0!# dated $00/0 !#/, w0e0f0 %%00/0 !#/ for 1Central &o'ern(ent2 by the Securities Contracts (Regulation)(A(end(ent )Rules, !!#, w0e0f0 %30 %0 !!#0
" Substituted
Re e/%l of re'o( itio . 7. ( ) .hree (onths before the expiry of the period of recognition, a recognised stoc) exchange desirous of renewal of such recognition (ay (a)e an application to the #4Securities and 7xchange 8oard of India: in 6or( A0 (%) .he pro'isions of rule 3, rule $, rule ", rule "A and rule # shall apply in relation to renewal of recognition as they apply in relation to grant of recognition except that the fee payable in respect of an application for renewal of recognition shall be rupees two hundred0 9*%lifi'%tio ! for .e.,er!hi$ of % re'o( i!e- !to'6 e#'h% (e. :. .he rules relating to ad(ission of (e(bers of a stoc) exchange see)ing recognition shall inter alia pro'ide that , (1) Eo person shall be eligible to be elected as a (e(ber if(a) he is less than twenty+one years of age3 (b) he is not a citiFen of India3 pro'ided that the go'erning body (ay in suitable cases relax this condition with the prior appro'al of the !4Securities and 7xchange 8oard of India:3 (c) he has been adDudged ban)rupt or a recei'ing order in ban)ruptcy has been (ade against hi( or he has been pro'ed to be insol'ent e'en though he has obtained his final discharge3 (d) he has co(pounded with his creditors unless he has paid sixteen annas in the rupee3 (e) he has been con'icted of an offence in'ol'ing fraud or dishonesty3 (f) he is engaged as principal or e(ployee in any business other than that of securities /4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability unless he underta)es on ad(ission to se'er his connection with such business ,
>44ro+i-e-
that no (e(ber (ay conduct business in co((odity deri'ati'es, except by setting up a separate co(pany which shall co(ply with the regulatory re*uire(ents, such as, networth, capital ade*uacy, (argins and exposure nor(s as (ay be specified by the 6orward ?ar)et Co((ission, fro( ti(e to ti(e ,
# Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, w0e0f0 %30 %0 !!#0 / Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 > Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 <rior to its substitution, the pro'iso as a(ended by Securities Contracts (Regulation) (A(end(ent) Rules, !!# w0e0f0 %30 %0 !!#, read as under, 1<ro'ided that the Securities and 7xchange 8oard of India (ay, for reasons sufficient in the opinion of the said 8oard, per(it a recogniFed stoc) exchange to suspend the enforce(ent of this clause for a specified period on condition that the applicant is not associated with or is a (e(ber of or subscriber to or shareholder or debenture holder in or connected through a partner or e(ployee with any other organisation, institution, association, co(pany or corporation in India where forward business of any )ind whether in goods or co((odities or otherwise is carried on or is not engaged as a principal or e(ployee ion any such business02
4ro+i-e- f*rther that nothing herein shall be applicable to any corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to ()) of the pro'iso to sub+rule ($)0:3 (g) !4GGG: (h) he has been at any ti(e expelled or declared a defaulter by any other stoc) exchange3 (i) he has been pre'iously refused ad(ission to (e(bership unless a period of one year has elapsed since the date of such reDection0 (2) Eo person eligible for ad(ission as a (e(ber under sub+rule ( ) shall be ad(itted as a (e(ber unless ,(a) he has wor)ed for not less than two years as a partner with, or an authorised assistant or authorised cler) or re(isier or apprentice to, a (e(ber3 or (b) he agrees to wor) for a (ini(u( period of two years as a partner or representati'e (e(ber with another (e(ber and to enter into bargains on the floor of the stoc) exchange and not in his own na(e but in the na(e of such other (e(ber 3 or (c) he succeeds to the established business of a deceased or retiring (e(ber who is his father, uncle, brother or any other person who is, in the opinion of the go'erning body, a close relati'e , 4ro+i-e- that the rules of the stoc) exchange (ay authorise the go'erning body to wai'e co(pliance with any of the foregoing conditions if the person see)ing ad(ission is in respect of (eans, position, integrity, )nowledge and experience of business in securities, considered by the go'erning body to be otherwise *ualified for (e(bership0 (3) Eo person who is a (e(ber at the ti(e of application for recognition or subse*uently ad(itted as a (e(ber shall continue as such if(a) he ceases to be a citiFen of India , 4ro+i-e- that nothing herein shall affect those who are not citiFens of India but who were (e(bers at the ti(e of such application or were ad(itted subse*uently under the pro'isions of clause (b) of sub+rule ( ) of this rule, subDect to their co(plying with all other re*uire(ents of this rule3
(b) he is adDudged ban)rupt or a recei'ing order in ban)ruptcy is (ade against hi( or he is pro'ed to be insol'ent3 (c) he is con'icted of an offence in'ol'ing fraud or dishonesty3 (d) 04G G G: (e) 4G G G: (f) he engages either as principal or e(ployee in any business other than that of securities %4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability, pro'ided that! C(itted 0 Ibid0
by &SR 0/0(7) dated "0
0 !>>
Ibid0
% Inserted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(i) the go'erning body (ay, for reasons, to be recorded in writing, per(it a (e(ber to engage hi(self as principal or e(ployee in any such business, if the (e(ber in *uestion ceases to carry on business on the stoc) exchange either as an indi'idual or as a partner in a fir(, (ii) in the case of those (e(bers who were under the rules in force at the ti(e of such application per(itted to engage in any such business and were actually so engaged on the date of such application, a period of three years fro( the date of the grant of recognition shall be allowed for se'ering their connection with any such business, 34(iii) nothing herein shall affect (e(bers of a recognised stoc) exchange which are corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to (k) of the pro'iso to sub+rule ($)0: (4) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section 3%% of the said Act3 (ii) a (aDority of the directors of such co(pany are shareholders of such co(pany and also (e(bers of that stoc) exchange3 and (iii) the directors of such co(pany, who are (e(bers of that stoc) exchange, ha'e ulti(ate liability in such co(pany , 4ro+i-e- that where the $4Securities and 7xchange 8oard of India: (a)es a reco((endation in this regard, the go'erning body of a stoc) exchange shall, in relaxation of the re*uire(ents of this clause, ad(it as (e(ber the following corporations "4,bodies corporate:, co(panies or institutions, na(ely ,(a) the Industrial 6inance Corporation, established under the Industrial 6inance Corporation Act, !$> ( " of !$>)3 (b) the Industrial 9e'elop(ent 8an) of India, established under the Industrial 9e'elop(ent 8an) Act, !#$ ( > of !#$)3 (c) the =ife Insurance Corporation of India, established under the =ife Insurance Corporation Act, !"# (3 of !"#)3 (d) the &eneral Insurance Corporation of India constituted under the &eneral Insurance Corporation (Eationalisation) Act, !/% ("/ of !/%)3 (e) the Hnit .rust of India, established under the Hnit .rust of India Act, !#3 ("% of !#3)3
3 Substituted, ibid0 <rior to its substitution, sub+clause (iii) read as under, 1(iii) nothing herein shall affect (e(bers of a recogniFed stoc) exchange per(itted under the pro'iso to clause (f) of sub+rule( ) to suspend the enforce(ent of the aforesaid clause, for so long as such suspension is effecti'e, except that no (e(ber of such exchange shall engage in forward business of any )ind whether in goods or co((odities or otherwise and , if actually so engaged on the date of such application , he shall se'er his connection with any such business within a period of three years fro( the date of the grant of recognition02 $ Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# " Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(f) the Industrial Credit and In'est(ent Corporation of India, a co(pany registered under the Co(panies Act, !"# ( of !"#)3 (g) the subsidiaries of any of the corporations or co(panies specified in (a) to (f) and any subsidiary of the State 8an) of India or any nationalised ban) set up for pro'iding (erchant ban)ing ser'ices, buying and selling securities and other si(ilar acti'ities0 #4(h) any ban) included in the Second Schedule to the Reser'e 8an) of India Act, !3$ (% of !3$)3 (i) the 7xport I(port 8an) of India, established under the 7xport I(port 8an) of India Act, !> (%> of !> )3 (j) the Eational 8an) for Agriculture and Rural 9e'elop(ent, established under the Eational 8an) for Agriculture and Rural 9e'elop(ent Act, !> (# of !> )3 and (k) the Eational Iousing 8an), established under the Eational Iousing 8an) Act, !>/ ("3 of !>/)0: (4A) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall also be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section % of the said Act3 (ii) such co(pany underta)es to co(ply with such financial re*uire(ents and nor(s as (ay be specified by the Securities and 7xchange 8oard of India for the registration of such co(pany under sub+section ( ) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (iii) /4G G G: (iv) the directors of the co(pany are not dis*ualified fro( being (e(bers of a stoc) exchange under >4clause ( ) 4except sub+clause (b) and sub+clause (f) thereof: or clause (3) 4except sub+clause (a) and sub+clause (f) thereof:: and the 9irectors of the co(pany had not held the offices of the 9irectors in any co(pany which had been a (e(ber of the stoc) exchange and had been declared defaulter or expelled by the stoc) exchange3 and (v) not less than two directors of the co(pany are persons who possess a (ini(u( two yearsJ experience , (a) in dealing in securities3 or (b) as portfolio (anagers3 or (c) as in'est(ent consultants0 (5) Khere any (e(ber of a stoc) exchange is a fir(, the pro'isions of sub+rules ( ), (3) and ($), shall, so far as they can, apply to the ad(ission or continuation of any partner in such fir(0
# Inserted, / C(itted
ibid0 by &SR /$! (7), dated %0 00 !!$ > Substituted by &SR /!0(7), dated 0/0 0 !!$
Co tr%'t! ,et/ee .e.,er! of re'o( i!e- !to'6 e#'h% (e. 9. All contracts between the (e(bers of a recognised stoc) exchange shall be confir(ed in writing and shall be enforced in accordance with the rules and bye+laws of the stoc) exchange of which they are (e(bers0 !5No.i ee! of the Se'*ritie! % - E#'h% (e ;o%r- of I -i%< o the (o+er i ( ,o-ie! of re'o( i!e- !to'6 e#'h% (e!. 1=. .he %04Securities and 7xchange 8oard of India: (ay no(inate one or (ore persons not exceeding three in nu(ber, as (e(ber or (e(bers of the go'erning body of e'ery recognised stoc) exchange0 Such (e(ber or (e(bers shall enDoy the sa(e status and powers as other (e(bers of the go'erning body0 O,li(%tio of the (o+er i ( ,o-> to t%6e -i!'i$li %r> %'tio %(%i !t % .e.,er if !o -ire'te- ,> the % 5Se'*ritie! % - E#'h% (e ;o%r- of I -i%<. 11. After recei'ing the report of the result of an en*uiry (ade under clause (b) of subsection (3) of section # of the Act, the % 4Securities and 7xchange 8oard of India: (ay ta)e such action as they dee( proper and, in particular, (ay direct the go'erning body of the stoc) exchange to ta)e such disciplinary action against the offending (e(ber, including fine, expulsion, suspension or any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney, as (ay be specified by the % 4Securities and 7xchange 8oard of India:3 notwithstanding anything to the contrary contained in the rules or bye+laws of the stoc) exchange concerned, the go'erning body shall gi'e effect to the directions of the % 4Securities and 7xchange 8oard of India: in this behalf and shall not in any (anner co((ute, re'o)e or (odify the action ta)en in pursuance of such directions, without the prior appro'al of the % 4Securities and 7xchange 8oard of India:0 .he % 4Securities and 7xchange 8oard of India: (ay, howe'er, either of its own (otion or on the representation of the (e(ber concerned, (odify or withdraw its direction to the go'erning body0 A*-it of %''o* t! of .e.,er!. 1". 7'ery (e(ber shall get his accounts audited by a chartered accountant whene'er such audit is re*uired by the % 4Securities and 7xchange 8oard of India:0 ?ith-r%/%l of re'o( itio . 1). .he written notice referred to in section " of the Act shall be in 6or( C0
! Substituted %0 Ibid0 %
by 60 Eo0 L3/LS7L!$, dated %#0 00 !!$0
Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> re'o( i!e- !to'6 e#'h% (e. 13. 7'ery recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years, (1) ?inute boo)s of the (eetings of(a) (e(bers3 (b) go'erning body3 (c) any standing co((ittee or co((ittees of the go'erning body or of the general body of (e(bers0
(2) Register of (e(bers showing their full na(es and addresses0 Khere any (e(ber of the stoc) exchange is a fir(, full na(es and addresses of all partners shall be shown0 (3) Register of authorised cler)s0 (4) Register of re(isiers of authorised assistants0 (5) Record of security deposits0 (6) ?argin deposits boo)0 (7) =edgers0 (8) Mournals0 (9) Cash boo)0 (10) 8an) pass+boo)0 ;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> .e.,er of % re'o( i!e- !to'6 e#'h% (e. 15. ( ) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years , (a) Register of transactions ( a!da boo))0 (b) ClientsJ ledger0 (c) &eneral ledger0 (d) Mournals0 (e) Cash boo)0 (f) 8an) pass+boo)0 (g) 9ocu(ents register showing full particulars of shares and securities recei'ed and deli'ered0 (2) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following docu(ents for a period of two years, (a) ?e(berJs contract boo)s showing details of all contracts entered into by hi( with other (e(bers of the sa(e exchange or counterfoils or duplicates of (e(os of confir(ation issued to such other (e(bers0 (b) Counterfoils or duplicates of contract notes issued to clients0 (c) Kritten consent of clients in respect of contracts entered into as principals0 @% er of i 7*ir> i rel%tio to the %ff%ir! of the (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e or the %ff%ir! of % > .e.,er of the !to'6 e#'h% (e i rel%tio to the !to'6 e#'h% (e. 18. ( )(a) .he person or persons appointed by the %%4Securities and 7xchange 8oard of India: to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act shall hereafter in this rule be referred to as the Nin*uiring authorityJ3 (b) where the in*uiring authority consists of two or (ore persons, one of the( shall be appointed as the chair(an or senior (e(ber thereof3 (c) the in*uiring authority shall hand o'er a state(ent of issues to be in*uired into to the go'erning body or the (e(ber concerned, as the case (ay be, who will be gi'en a reasonable opportunity to state their or his side of the case3 (d) if any witness is called for exa(ination, an opportunity shall be pro'ided to the go'erning body or the (e(ber whose affairs are being in*uired into, as the case (ay be, to cross+exa(ine such witness3 (e) where the in*uiring authority consists of (ore than one person, the 'iews of the (aDority shall be dee(ed to represent the findings of such authority and, in the e'ent of
an e*uality of 'otes, the chair(an or senior (e(ber shall ha'e a casting 'ote3 (f) the in*uiring authority shall sub(it its report in writing to the %%4Securities and 7xchange 8oard of India: within the period specified in the order of appoint(ent3 (g) te(porary absence fro( any hearing or hearings of any (e(ber of the in*uiring authority shall not 'itiate its proceedings0 (%) Khere the %%4Securities and 7xchange 8oard of India: has directed the go'erning body of a stoc) exchange to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act, the go'erning body concerned shall appoint one or (ore (e(bers thereof to (a)e the in*uiry and the pro'isions of sub+rule ( ) shall apply "!tati# "!tandi# to such in*uiry0 S*,.i!!io of % *%l re$ort. 17. ( ) 7'ery recognised stoc) exchange shall before the 3 st day of Manuary in each year or within such extended ti(e as the %34Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, allow, furnish the %34Securities and 7xchange 8oard of India: annually with a report about its acti'ities during the preceding calendar year, which shall inter alia contain detailed infor(ation about the following (atters , (a) changes in rules and bye+laws, if any3 (b) changes in the co(position of the go'erning body3 (c) any new sub+co((ittees set up and changes in the co(position of existing ones3
%% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# %3 Ibid0
(d) ad(issions, re+ad(issions, deaths or resignations of (e(bers3 (e) disciplinary action against (e(bers3 (f) arbitration of disputes (nature and nu(ber) between (e(bers and non+(e(bers3 (g) defaults3 (h) action ta)en to co(bat any e(ergency in trade3 (i) securities listed and de+listed3 and (j) securities brought on or re(o'ed fro( the forward list0 (%) 7'ery recognised stoc) exchange shall within one (onth of the date of the holding of its annual general (eeting, furnish the %$4Securities and 7xchange 8oard of India: with a copy of its audited balance+sheet and profit and loss account for its preceding financial year0 S*,.i!!io of $erio-i'%l ret*r !. 17A. 7'ery recognised stoc) exchange shall furnish the %$4Securities and 7xchange 8oard of India: periodical returns relating to(i) the official rates for the securities enlisted thereon3 (ii) the nu(ber of shares deli'ered through the clearing house3 (iii) the (a)ing+up prices3 (iv) the clearing house progra((es3 (v) the nu(ber of securities listed and de+listed during the pre'ious three (onths3 (vi) the nu(ber of securities brought on or re(o'ed fro( the forward list during the pre'ious three (onths3 and (vii) any other (atter as (ay be specified by the %$4Securities and 7xchange 8oard of India:0 @% er of $*,li'%tio of ,>e0l%/! for 'riti'i!.. 1:. .he bye+laws to be (ade, a(ended or re'ised under the Act shall be published for
criticis( in accordance with the pro'isions of section %3 of the &eneral Clauses Act, >!/ both in the &aFette of India and Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate0 Re7*ire.e t! /ith re!$e't to the li!ti ( of !e'*ritie! o % re'o( i!e- !to'6 e#'h% (e. 19. ( ) A public co(pany as defined under the Co(panies Act, !"#, desirous of getting its securities listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars ,
%$ Ibid0
(a) ?e(orandu( and articles of association and, in the case of a debenture issue, a copy of the trust deed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any securities for subscription or sale during the last fi'e years0 (d) Copies of balance+sheets and audited accounts for the last fi'e years, or in the case of new co(panies, for such shorter period for which accounts ha'e been (ade up0 (e) A state(ent showing(i) di'idends and cash bonuses, if any, paid during the last ten years (or such shorter period as the co(pany has been in existence, whether as a pri'ate or public co(pany), (ii) di'idends or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents with or between ,(i) 'endors andLor pro(oters, (ii) underwriters and sub+underwriters, (iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents with(i) (anaging agents and secretaries and treasurers, (ii) selling agents, (iii) (anaging directors and technical directors, (iv) general (anager, sales (anager, (anager or secretary0 (h) Certified copy of e'ery letter, report, balance+sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering securities for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents0 (j) A brief history of the co(pany since its incorporation gi'ing details of its acti'ities including any reorganisation, reconstruction or a(alga(ation, changes in its capital structure, (authorised, issued and subscribed) and debenture borrowings, if any0
(k) <articulars of shares and debentures issued-(i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s including an option for the issue of any )ind of the securities granted to any person0 (") Certified copies of%"4(i) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3: (ii) agree(ents, if any, with the Industrial 6inance Corporation, Industrial Credit and In'est(ent Corporation and si(ilar bodies0 (n) <articulars of shares forfeited0 ($) A list of highest ten holders of each class or )ind of securities of the co(pany as on the date of application along with particulars as to the nu(ber of shares or debentures held by and the address of each such holder0 (%) <articulars of shares or debentures for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0 (%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant co(pany shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer, (ii) that the fully paid shares will be free fro( all lien, while in the case of partly paid shares, the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such shares, (iii) that any a(ount paid+up in ad'ance of calls on any share (ay carry interest but shall not entitle the holder of the share to participate in respect thereof, in a di'idend subse*uently declared, (iv) there will be no forfeiture of unclai(ed di'idends before the clai( beco(es barred by law, (v) that option or right to call of shares shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the securities of a co(pany which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0
%" Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 <rior to its substitution, sub+clause (i), read as under, 1(i) letters of consent of the Controller of Capital Issues02
%#4(b)
(i) At least twenty fi'e per cent0 of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent3 or (ii) At least ten per cent of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent if the post issue capital of the
co(pany calculated at offer price is (ore than four thousand crore rupees, <ro'ided that the re*uire(ent of post issue capital being (ore than four thousand crore rupees shall not apply to a co(pany whose draft offer docu(ent is pending with the Securities and 7xchange 8oard of India on or before the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, if it satisfies the conditions prescribed in clause (b) of sub+rule % of rule ! of the Securities Contracts (Regulation) Rules, !"# as existed prior to the date of such co((ence(ent, %/4<ro'ided further that the co(pany, referred to in sub clause (ii), shall increase its public shareholding to at least twenty fi'e per cent, within a
%# Substituted
by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, clause (b) as a(ended by the A(end(ent Rules, %00 , w0e0f0 0/00#0%00 , read as under, 1(b) At least 0 per cent of each class or )ind of securities issued by a co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted subDect to the following conditions, (a) (ini(u( %0 la)h securities (excluding reser'ations, fir( allot(ent and pro(otersJ contribution) was offered to the public3 (b) the siFe of the offer to the public, i&e&' the offer price (ultiplied by the nu(ber of securities offered to the public was (ini(u( Rs0 00 crores3 and (c) the issue was (ade only through boo) building (ethod with allocation of #0 per cent of the issue siFe to the *ualified institutional buyers as specified by the Securities and 7xchange 8oard of India, 4ro+i-e- that if a co(pany does not fulfil the conditions, it shall offer at least %" per cent of each class or )ind of securities to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted, 4ro+i-e- f*rther that a recognised stoc) exchange (ay relax any of the conditions with the pre'ious appro'al of the Securities and 7xchange 8oard of India, in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#), and subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*6or the purpose of this clause, it is hereby clarified that where any part of the securities sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental 6ire and &eneral Insurance Co(pany =i(ited and the Hnited 6ire and &eneral Insurance Co(pany =i(ited or Hnit .rust of India, the total subscription to the securities, whether by one or (ore of such bodies, shall not for( part of the 0 per cent or %" per cent of the securities, as the case (ay be, to be offered to the public02 %/ Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 <rior to its substitution, second pro'iso, read as under, 1<ro'ided further that the co(pany, referred in sub+clause (ii), shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of atleast fi'e per
period of three years fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India0: %>4GGG:: %!4(c) Eotwithstanding anything contained in clause (b), a public sector co(pany, shall offer and allot at least ten per cent, of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares to public in ter(s of an offer docu(ent0: (3) A co(pany applying for listing shall, as a condition precedent, underta)e inter alia(a) (i) that letters of allot(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to
that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been posted, (ii) that letters of right will be issued si(ultaneously, (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the securities to which they relate, (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right, (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or di'idend on the securities will be calculated, (b) to issue, when so re*uired, receipts for all securities deposited with it whether for registration, sub+di'ision, exchange or for other purposes 3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of certificates and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (bb) to issue, when so re*uired, consolidation and renewal certificates in deno(inations of the (ar)et unit of trading to split certificates, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3
cent per annu( beginning fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India,2 %> C(itted, ibid <rior to its o(ission, third pro'iso, read as under, 1<ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase beings its public shareholding to the le'el of twenty fi'e per cent in that year02 %! Inserted, ibid0
(c) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders, and (ii) to 'erify when the co(pany is unable to issue certificates or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (d) on production of the necessary docu(ents by shareholders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or certificate of the Controller of 7state 9uty or si(ilar other docu(ent has been duly exhibited to
and registered by the co(pany3 (e) to issue certificates in respect of shares or debentures lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance certificates within the sa(e period where the transfer is acco(panied by a larger certificate3 (f) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a di'idend or the issue of right or bonus share will be considered3 (g) to reco((end or declare all di'idends andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all di'idends andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (h) to notify the stoc) exchange of any (aterial change in the general character or nature of the co(panyJs business3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (anaging agent or secretaries and treasurers, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued, copies of all other notices and circulars sent to the shareholders including proceedings of ordinary and extraordinary general (eetings of the co(pany and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the shareholders of any new issue of securities whether by way of right, pri'ilege bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited securities or the issue of securities held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of di'idend or issue of right or bonus shares or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s (or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its shareholders or debentureholders) and specifying the purpose or purposes for which the transfer boo)s are to be closed (or the record is to be ta)en)3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority subDect to which the issue is proposed to be (ade ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after each annual general (eeting of at least ten principal holders of each class of security of the co(pany along with particulars as to the nu(ber of shares or debentures held by,
and address of, each such holder3 (+) to grant to shareholders the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e not being less than four wee)s within which to record, exercise, or renounce such rights, pri'ileges and benefits and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3 (r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any securities listed on the exchange, (ii) of the intention to (a)e a drawing of such securities, inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing of the balance) for the drawing, (iii) of the a(ount of securities outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the shareholders to apprise the position of the co(pany and to a'oid the establish(ent of a false (ar)et in the shares of the co(pany3 (t) (t)that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 304($) An application for listing shall be necessary in respect of the following, (a) all new issues of any class or )ind of securities of a co(pany to be offered to the public3 (b) all further issues of any class or )ind of securities of a co(pany if such class or )ind of securities of the co(pany are already listed on a recognised stoc) exchange0: (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the securities of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 3 44ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any security, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and its orders shall be carried out by the stoc) exchange0: 3%4(#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore
or re+ad(it to dealings any securities suspended or withdrawn fro( the list0: 334(#A) 7xcept as otherwise pro'ided in these rules or per(itted by the Securities and 7xchange 8oard of India under sub+rule (/), all re*uire(ents with respect to listing
30 Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, sub+rule ($), read as under, 1($) A fresh application for listing will be necessary in respect of all new issues desired to be dealt in, pro'ided that, where such new securities are identical in all respects with those already listed, ad(ission to dealings will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new issues0 7xplanation, Shares are identical in all respects only if(a) they are of the sa(e no(inal 'alue and the sa(e a(ount per share has been called up3 (b) they are entitled to di'idend at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the di'idend payable on each share will a(ount to exactly the sa(e su(, net and gross3 and (c) they carry the sa(e rights in all other respects02 3 Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%0000 7arlier, the second pro'iso was a(ended by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 3% Substituted by the Securities Contracts (Regulation) (A(end(ent), %000, w0e0f0 0>00>0%0000 7arlier, subrule (#) was a(ended by the Securities Contracts (Regulation) (A(end(ent), !!#, w0e0f0 %30 %0 !!#0 33 Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!0>0%0 00 <rior to its substitution, sub+rule (#A) as a(ended by the Securities Contracts
prescribed by these rules shall, so far as they (ay be, also apply to a public sector co(pany0: 3$4GGG: (/) .he 3"4Securities and 7xchange 8oard of India: (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect to listing prescribed by these rules0 3#4Co ti *o*! Li!ti ( Re7*ire.e t. 19A. ( ) 7'ery listed co(pany 3/4other than public sector co(pany: shall (aintain public shareholding of at least twenty fi'e per cent0, 3>4<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent, on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall increase its public shareholding to at least twenty fi'e per cent, within a period of three years fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India0 7xplanation, 6or the purposes of this sub+rule, a co(pany whose securities has been listed pursuant to an offer and allot(ent (ade to public in ter(s of sub+clause (ii) of clause (b) of sub+rule (%) of rule !, shall (aintain (ini(u( twenty fi'e per cent, public shareholding fro( the date on which the public shareholding in the co(pany reaches the le'el of twenty fi'e percent in ter(s of said sub+clause0: (%) Khere the public shareholding in a listed co(pany falls below twenty fi'e per cent0 at any ti(e, such co(pany shall bring the public shareholding to twenty fi'e per cent0
(Regulations)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 and &SR % (7) w0e0f0 0!0030 !!", read as under, 1(#A) All the re*uire(ents with respect to listing and continuous listing prescribed by these rules, shall so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature ,2 3$ C(itted by the Securities Contracts (Regulation)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its o(ission, pro'iso, as substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# and inserted by &SR %! (7) dated %/0030 !!", read as under,
1<ro'ided that a recognised stoc) exchange (ay relax the re*uire(ent of offer to public for subscription of atleast twenty+fi'e percent of the each class or )ind of securities issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e02 3" Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent), Rules, !!#, w0e0f0 %30 %0 !!#0 3# Inserted by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 3/ Inserted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3> Substituted, ibid0 <rior to substitution, pro'isos, read as under, 1<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of at least fi'e per cent per annu( beginning fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India, <ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase brings its public shareholding to the le'el of twenty fi'e per cent in that year02
within a (axi(u( period of twel'e (onths fro( the date of such fall in the (anner specified by the Securities and 7xchange 8oard of India0: 3!4(3) Eotwithstanding anything contained in this rule, e'ery listed public sector co(pany shall (aintain public shareholding of at least ten per cent0, <ro'ided that a listed public sector co(pany+ (a) which has public shareholding below ten per cent, on the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of three years fro( the date of such co((ence(ent3 (b) whose public shareholding reduces below ten per cent, after the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of twel'e (onths fro( the date of such reduction,0: $04Re7*ire.e t! /ith re!$e't to the li!ti ( of * it! or % > other i !tr*.e t of % Colle'ti+e I +e!t.e t S'he.e o % re'o( i!e- !to'6 e#'h% (e. "=. ( ) A Collecti'e In'est(ent ?anage(ent Co(pany (CI?C) which is desirous of getting its any collecti'e in'est(ent sche(e listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars , (a) Certificate of incorporation, (e(orandu( and articles of association of the co(pany and the copy of the trust deed of the sche(e intended to be listed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any unit or other instru(ent for subscription or sale during the last fi'e years, or in the case of a new co(pany, such shorter period during which the co(pany has been in existence0 (d) Copies of balance sheets and audited accounts for the last fi'e years, or in the case of a new co(pany, for such co(pleted financial year for which accounts ha'e been (ade up0 (e) A state(ent showing,(i) returns and cash bonuses, if any, paid during the last ten years (or such
shorter period as the co(pany has been in existence whether as a pri'ate or public co(pany)3 (ii) returns or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents pertaining to each sche(e of the co(pany with or between,(i) 'endors andLor pro(oters3 (ii) underwriters and sub+underwriters3
3! Inserted $0 Inserted
by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 0 by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%000
(iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents pertaining to each sche(e of a co(pany with(i) selling agents and other ser'ice pro'iders3 (ii) (anaging directors and technical directors3 (iii) general (anager, sales (anager, (anager or secretary0 (h) Certified copies of e'ery letter, report, balance sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering units or any other instru(ents of the sche(e for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents pertaining to such sche(e0 (j) A brief history of the Co(pany since its incorporation gi'ing details of its acti'ities including any re+organisation, reconstruction or a(alga(ation, changes in its capital structure (authorised, issued and subscribed) and debenture borrowings, if any, and the perfor(ance of other collecti'e in'est(ent sche(es of the co(pany0 (k) <articulars of units of the sche(e andLor shares, debentures of the co(pany issued (i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s granted to any person pertaining to such sche(e0 (") Certified copies of(i) certificate of registration granted by the Securities and 7xchange 8oard of India3 (ii) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3 (iii) agree(ents, if any, with any public financial institution as specified in section $A of the Co(panies Act, !"# ( of !"#)0 (n) A list of the highest ten holders of units of each sche(e of the co(pany as on the date of application along with particulars as to the nu(ber of units held by and the address of each such holder0 ($) <articulars of units of the sche(e for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0
(%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer of units of a particular sche(e3 (ii) that the fully paid units issued under the sche(e will be free fro( all lien, while in the case of partly paid units the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such units3 (iii) that any a(ount paid+up in ad'ance of calls on any units (ay carry interest but shall not entitle the holder of the unit to participate in respect thereof, in a return subse*uently declared3 (iv) there will be no forfeiture of unclai(ed returns before the clai( beco(es barred by law3 (v) that option or right to call of units shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the units of a sche(e which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0 (b) At least twenty+fi'e per cent of the units or any other instru(ent of a sche(e issued by the co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and not (ore than ninety days, and that applications recei'ed in pursuance of such offer were allotted fairly and unconditionally , 4ro+i-e- that a recognised stoc) exchange (ay relax this re*uire(ent, with the pre'ious appro'al of the Securities and 7xchange 8oard of India in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#) and subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*Khere any part of the units or any other instru(ents sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely, the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental Insurance Co(pany =i(ited and the Hnited Insurance Co(pany =i(ited, or Hnit .rust of India, the total subscription to the units or any other instru(ent, whether by one or (ore of such bodies, shall not for( part of the twenty+fi'e per cent of the units or any other instru(ent to be offered to the public0 (3) A co(pany applying for listing of a sche(e shall, as a condition precedent, underta)e, inter alia,(a) (i) that letters of allot(ent of units or any other instru(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been
posted3 (ii) that letters of right will be issued si(ultaneously3 (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and, exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the units or any other instru(ent to which they relate3 (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right3 (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or return on the units or any other instru(ent will be calculated3 (b) to issue, when so re*uired, receipts for all units and any other instru(ent deposited with it whether for registration, sub+di'ision, exchange or for other purposes3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of units and any other instru(ent and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (c) to issue, when so re*uired, consolidation and renewal units or any other instru(ent in deno(inations of the (ar)et unit of trading, to split units or any other instru(ent, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3 (d) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders3 and (ii) to 'erify when the co(pany is unable to issue units or any other instru(ents or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (e) on production of the necessary docu(ents by unit holders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or si(ilar other docu(ent has been duly exhibited to and registered by the co(pany3 (f) to issue certificates in respect of units or any other instru(ent lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance units or any other instru(ent within the sa(e period where the transfer is acco(panied by a larger unit or any other instru(ent certificate3 (g) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a return or the issue or right or bonus units or
any other instru(ent will be considered3 (h) to reco((end or declare all returns andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all returns andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts of such sche(e as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued copies of all other notices and circulars sent to the unitLother instru(ent holders regarding any i(portant de'elop(ent or resolutions passed by the co(pany affecting the perfor(ance of the sche(e and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the unitLany other instru(ent holders, of any new issue of unitsLother instru(ents whether by way of right, pri'ilege, bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited unitsLother instru(ents or the issue of unitsLother instru(ents held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of unit capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of returns or issue of right or bonus unitsLany other instru(ents in the sche(e or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its unitLother instru(ent holders and specifying the purpose or purposes for which the transfer boo)s are to be closed or the record is to be ta)en3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority, subDect to which the issue is proposed to be (ade, ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after the preparation of annual accounts of at least ten principal holders of each class of unitsLany other instru(ents of the co(pany along with particulars as to the nu(ber of unitsLany other instru(ent held by, and address of, each such holder3 (+) to grant to unitLany other instru(ent holders of the sche(e the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e, not being less than four wee)s, within which to record, exercise, or renounce such rights, pri'ileges and benefits, and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3
(r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any unitLother instru(ent listed on the exchange3 (ii) of the intention to (a)e a drawing of such unitLother instru(ent inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing off the balance) for the drawing3 (iii) of the a(ount of unitsLother instru(ents outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the unitLany other instru(ent holders to appraise the position of the sche(e and to a'oid the establish(ent of a false (ar)et in the unitsLany other instru(ents of the co(pany3 (t) that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 ($) A fresh application for listing will be necessary in respect of all new sche(es desired to be dealt in , 4ro+i-e- that, where such new unitsLother instru(ents are identical in all respects with those already listed, ad(ission to dealing will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new sche(es0 ()%lanati$n0-HnitsLany other instru(ents are identical in all respects only if(a) they are issued under the sa(e sche(e3 (b) they are of the sa(e no(inal 'alue and the sa(e a(ount per unitLother instru(ents has been called up3 (c) they are entitled to returns at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the return payable on each unitLother issue will a(ount to exactly the sa(e su(, net and gross3 and (d) they carry the sa(e rights in all other respects0 (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the unitsLother instru(ents of a sche(e of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 4ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any unitLother instru(ent of a collecti'e in'est(ent sche(e, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an
opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and thereupon the orders of the Securities Appellate .ribunal shall be carried out by the stoc) exchange0 (#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore or read(it to dealings any unitsLother instru(ents suspended or withdrawn fro( the list0 (/) All the re*uire(ents with respect to listing prescribed by these rules, shall, so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature , 4ro+i-e- that a recognised stoc) exchange (ay relax the re*uire(ent of offer to the public for subscription of at least twenty+fi'e per cent of the units or any other instru(ent of a collecti'e in'est(ent sche(e issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 (>) .he Securities and 7xchange 8oard of India (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect of listing prescribed by these rules0: $ 4Deli!ti ( of !e'*ritie!. "1. A recogniFed stoc) exchange (ay, without preDudice to any other action that (ay be ta)en under the Act or under any other law for the ti(e being in force, delist any securities listed thereon on any of the following grounds in accordance with the regulations (ade by the Securities and 7xchange 8oard of India, na(ely,(a) the co(pany has incurred losses during the preceding three consecuti'e years and it has negati'e networth3 (b) trading in the securities of the co(pany has re(ained suspended for a period of (ore than six (onths3 (c) the securities of the co(pany ha'e re(ained infre*uently traded during the preceding three years3 (d) the co(pany or any of its pro(oters or any of its director has been con'icted for failure to co(ply with any of the pro'isions of the Act or the Securities and 7xchange 8oard of India Act, !!% or the 9epositories Act, !!# (%% of !!#) or rules, regulations, agree(ents (ade thereunder, as the case (ay be and awarded a penalty of not less than rupees one crore or i(prison(ent of not less than three years3 (e) the addresses of the co(pany or any of its pro(oter or any of its directors, are not )nown or false addresses ha'e been furnished or the co(pany has changed its registered office in contra'ention of the pro'isions of the Co(panies Act, !"# ( of !"#)3 or
$
Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %00>, w0e0f0 000#0%00!
(f) shareholding of the co(pany held by the public has co(e below the (ini(u( le'el applicable to the co(pany as per the listing agree(ent under the Act and the co(pany has failed to raise public holding to the re*uired le'el within the ti(e specified by the recogniFed stoc) exchange , 4ro+i-e- that no securities shall be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) If the securities is delisted under clause ( ),
(a) the co(pany, pro(oter and director of the co(pany shall be Dointly and se'erally liable to purchase the outstanding securities fro( those holders who wish to sell the( at a fair price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India, under the Act3 and (b) the said securities shall be delisted fro( all recogniFed stoc) exchanges0 (3) A recogniFed stoc) exchange (ay, on the re*uest of the co(pany, delist any securities listed thereon in accordance with the regulations (ade under the Act by Securities and 7xchange 8oard of India, subDect to the following conditions, na(ely ,(a) the securities of the co(pany ha'e been listed for a (ini(u( period of three years on the recogniFed stoc) exchange3 (b) the delisting of such securities has been appro'ed by the two+third of public shareholders3 and (c) the co(pany, pro(oter andLor the director of the co(pany purchase the outstanding securities fro( those holders who wish to sell the( at a price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India under the Act, 4ro+i-e- that the condition at (c) (ay be dispensed with by Securities and 7xchange 8oard of India if the securities re(ain listed at least on the Eational Stoc) 7xchange of India =i(ited or the 8o(bay Stoc) 7xchange =i(ited0: FORM A ( ee Rules 3 and /) A$$li'%tio for re'o( itio 1re e/%l of re'o( itio of % !to'6 e#'h% (e * -er !e'tio ) of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 .o 00000000000000000000000000000000000000 00000000000000000000000000000000000000 !bject,*A%%licati$n f$r rec$gniti$n-rene.al $f rec$gniti$n $f a #t$ck e)change !nder #ecti$n 3 $f the ec!ritie# /$ntract# (0eg!lati$n) Act' 1956& Sir, <ursuant to the $%4Securities and 7xchange 8oard of India: Eotification Eo0 00000000000000000000000000 00000000000000000 dated 000000000000000000000000000000000LCertificate of recognition dated0000000000000000000000000000000KeLI on behalf of 000000000000000000 (na(e and address of stoc) exchange) being a stoc) exchange as defined in section % of the Securities Contracts
$% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
(Regulation) Act, !"# hereby apply for recognitionLrenewal of recognition for the purposes of the said Act in respect of contracts in securities0 ". 6our copies of the rules, (e(orandu( and articles of association relating in general to the constitution and (anage(ent of the stoc) exchange and four copies of the bye+laws for the regulation and control contracts in securities are enclosed0 ). All the necessary infor(ation re*uired in the Annexure to this 6or( is enclosed0 Any additional infor(ation will be furnished as and when called for by the $34Securities and 7xchange 8oard of India:0 3. KeLI on behalf of the said stoc) exchange hereby underta)e to co(ply with the re*uire(ents of section $ of the said Act and such other conditions and ter(s as (ay be contained in the certificate of recognition or be prescribed or i(posed subse*uently0 5. .reasury Receipt Eo0 000000dated000000for Rs000000000000is attached0
Oours faithfully, Signature of applicant ANNEAURE TO 2OR@ BAC Part I - General 0 Ea(e of the applicant stoc) exchange0 %0 Address0 30 9ate of establish(ent0 $0 Is your exchange a Doint stoc) co(pany (state whether public or pri'ate) registered under the Indian Co(panies Act or an association for profit or otherwise P If it is organised on so(e other basis, this (ay be stated0 "0 &i'e details of your capital structure and attach three copies of the audited balance sheets and profit and loss account of the 7xchange for the preceding three years0 Part II - Membership #0 State the nu(ber of (e(bers at the ti(e of application0 Also specify how (any are inacti'e0 /0 State whether there is any pro'ision, resolution or con'ention for li(iting the nu(ber of (e(bers and whether in pursuance thereof you ha'e fixed a ceiling on the nu(ber of (e(bers that you would ta)e0 >0 9o you insist on any (ini(u( *ualifications and experience before enrolling new (e(bers P If so gi'e details0 !0 State the different classes of (e(bers, if any, the nu(ber thereof and the pri'ileges enDoyed by each class0 Khat is the procedure followed by your exchange for the ad(ission of different classes of new (e(bers P 00 Khat are the rates of your annual subscription in respect of the different classes of (e(bers P 0 9o you collect any security deposit fro( your (e(bers P If so, gi'e details and also state the (anner in which such deposits are utilised and the rate of interest allowed, if any0
$3 Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
%0 9o you collect any ad(ission or entrance fees fro( your (e(bers or fro( partners of fir(s who are (e(bers P If so, how (uch P 30 9o you insist on your (e(bers and partners of fir(s who are (e(bers di'esting the(sel'es of other acti'ities either as principal or as e(ployee P $0 9o your rules per(it fir(s to beco(e (e(bers P If so, is it incu(bent on (e(bers to see) the appro'al of the go'erning body before ad(itting new partners P State the conditions, if any, laid down in your rules for the ad(ission of such partners0 "0 If your rules do not per(it of fir(s being enrolled as (e(bers, do you per(it indi'idual (e(bers to for( a partnership P State the procedure followed for the recognition of such partnership0 #0 9o you per(it (e(bers to wor) in partnership with non+(e(bers P If so, how far such non+(e(bers subDect to the control of the stoc) exchange P Part III - Governing Body /0 Khat is the present strength of your go'erning body P &i'e details of the constitution, powers of (anage(ent, election and tenure of office of (e(bers of the go'erning body, and the (anner in which its business is transacted0 >0 Are any trade or co((ercial interest represented on your go'erning body P If so,
gi'e details of interests represented0 !0 9o you associate shareholders of in'estors associations with the (anage(ent of your exchange P If so, state the (anner in which it is done0 %00 Are there any &o'ern(ent representati'es on your go'erning body P If so, furnish their na(es0 % 0 9o your rules pro'ide for the direct election by (e(bers of any other bodies or co((ittees, apart fro( the go'erning body P If so, gi'e details of their constitution, tenure, powers and functions0 %%0 9o you ha'e any pro'ision for the appoint(ent of standing or ad h$c subco((ittees of the go'erning body P If so, furnish details of the (ethod of their appoint(ent, ter(s of office, powers and functions0 %30 &i'e the designations, powers and duties of principal office+bearers of your exchange0 Are any of these office+bearers in the pay of the stoc) exchange P If so, gi'e details as to the (ode of their appoint(ent, tenure of office and re(uneration0 Part IV - Trading %$0 9o you ha'e a trading ring P If not, how do you carry on the business P &i'e details0 %"0 State the different )inds of contracts in use on your exchange e&g&' spot, ready and forward0 State the period of deli'ery and pay(ent in each case0 %#0 &i'e details of business hours for each type of contract0 %/0 &i'e details of the scale of bro)erage and other charges, if any, prescribed by your exchange0 %>0 9o you prescribe standard for(s of contract for the use of your (e(bers P Attach three copies of each such contract for(0 %!0 9o you classify your (e(bers into bro)ers and Dobbers P If so, specify the bye+law under which this is done0 300 9o you ha'e a syste( of registration of re(isiers andLor authorised cler)s P If so, gi'e details as to their *ualifications, obligations and rights, etc0 3 0 9o you ha'e any regulations regarding dealings by (e(bers on their own account whether in the nature of 1aravani (day+to+day) or otherwise P 3%0 9o you ha'e any pro'isions for regulating the 'olu(e of business done by any indi'idual (e(ber other than through a syste( of (argins P If so, gi'e details0 330 Khat pro'isions ha'e you (ade for periodical settle(ent of contracts and differences thereunder, the deli'ery of, and pay(ent for securities and the passing of deli'ery orders P 3$0 9o you ha'e a clearing house for the settle(ent of contracts P If so, gi'e details of its organisation and (anage(ent0 3"0 If you ha'e clearing house, what returns do the (e(bers of your exchange sub(it regarding the transactions cleared through such clearing house P 9oes the exchange as) for any regular returns in respect of transactions settled outside the clearing house P Sub(it three copies of for(s used in this connection0 3#0 Iow do you fix, alter or postpone the dates of settle(ent P 3/0 Iow do you deter(ine and declare (a)ing+up prices P 3>0 9o you ha'e any arrange(ents for (a)ing or recording of bargains P 3!0 Ia'e you any arrange(ents for recording and publishing (ar)et rates including opening, closing, highest and lowest rates P $00 Khat pro'isions ha'e you (ade for regulating-(a) the entering into contracts, their
perfor(ance and rescission, including contracts , (i) between (e(bers, (ii) between a (e(ber and his constituent, and (iii) between a (e(ber and a non+(e(ber3 (b) the conse*uences of breach, default or insol'ency on the part of (e(bers whether acting as buyers, sellers or inter(ediaries 3 and (c) 2havala#3 and other (atters relating to conduct of business of (e(bers in the exchange P $ 0 9o you prescribe (argin re*uire(ents P If yes, gi'e details0 $%0 9o you prescribe (axi(u( and (ini(u( prices for securities P If so, how and under what conditions0 $30 9o you pro'ide any safeguards for the pre'ention of Nbulls*ueeFesJ and 3 NbearraidsJ and for (eeting e(ergencies in trade P &i'e details0 $$0 Khat are the (easures adopted by you to regulate or prohibit ad'ertising or issue of circulars by your (e(bers P $"0 Khat are the disciplinary power with the go'erning body to enforce due co(pliance by (e(bers of the rules and bye+laws of the exchange and generally to ensure proper standard of business conduct P $#0 9o you re*uire (e(bers to supply such infor(ation or explanation and to produce such boo)s relating to their business as your go'erning body (ay re*uire P $/0 9o you publish any statistics in regard to business done on the exchange including the transactions settled through the clearing house, if (aintained P In particular, ha'e you e'ol'ed any (achinery for co(puting the 'olu(e of transactions in the different )inds of contracts per(itted on your exchange P &i'e details0 $>0 9o you ha'e any bye+laws contra'ention of which (a)es a contract 'oid P Part V - Miscellaneo s $!0 9o you ha'e any (achinery for arbitration of disputes between (e(bers andLor between (e(bers and their constituents P &i'e details0 "00 Khat are the conditions subDect to which securities are listed for dealings on your exchange P " 0 Khat are your re*uire(ents for ad(itting securities to forward+trading P "%0 9o you ha'e the right to prohibit, withdraw or suspend dealings in a listed security P If so, under what circu(stances is this right exercised P "30 Khat pro'isions ha'e you (ade for the le'y and reco'ery of fees, fines and penalties P FORM B ( ee rules # and /) $$5The Se'*ritie! % - E#'h% (e ;o%r- of I -i%< 4e. 5elhi' the 20&&&&&&&&&&&&& Eo0 000000000000000000000000000000000000.he $"4Securities and 7xchange 8oard of India:, ha'ing considered the application for recognitionLrenewal of recognition (ade under section 3 of the Securities Contracts (Regulation) Act, !"# by000000000000000000000000000000 (na(e and address of exchange) and being satisfied that it would be in the interest of the trade and also in the public interest so to do, hereby grants, in exercise of the powers conferred by section $ of the Securities Contracts (Regulation) Act, !"# recognition to the said exchange under section $ of the said Act for 0000000000000000000 yearLyears ending 0000000000000000000000%0 0000000on a per(anent basis in respect of contracts in securities subDect to the conditions stated herein below or as (ay be prescribed or i(posed hereafter0 Seal of the $#48oard: Signature of Cfficer
Note&-Application for renewal of recognition shall be (ade so as to reach the Central &o'ern(ent not less than three (onths before the expiry of the period0 (.his certificate, will also ha'e to be published as a Eotification in the &aFette of India and also in the Cfficial &aFette of the State in which principal office of the recognised stoc) exchange is situate)0 $/5FORM ! ( ee rule 3) Noti'e to !ho/ '%*!e %(%i !t the /ith-r%/%l of re'o( itio .I7 S7CHRI.I7S AE9 7ACIAE&7 8CAR9 C6 IE9IA 6!"bai' the&&&&&&&&&&& .o 0000000000000000000000000000000000000000000000000000000000000000000000000000000000
$$ Substituted
for 1&o'ern(ent of India, ?inistry of 6inance2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 $" Substituted for 1Central &o'ern(ent2, ibid0 $# Substituted for 1?inistry2, ibid0 $/ Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#
0000000000000000000000000000000000000000000000000000000000000000000000000000000000 (na(e and address of the exchange) Oou are hereby called upon to show cause on or before 0000000000000000000000000000000000000 at the office of 0000000000000000000000000000000000000000000000000000 ( designation of the officer) why the recognition granted to you under the ?inistry of 6inanceLthe Securities and 7xchange 8oard of India, Eotification Eo0 0000000000000000000000000000 dated 000000000000000000000000000000000000000 and Certificate Eo0 00000000000000000000000000000 dated 000000000000000000000000000000 should not be withdrawn for the reasons gi'en in the annexure to this notice0 8y order and in the na(e of the Securities and 7xchange 8oard of India0 Seal of the Securities and 7xchange 8oard of India0 Notifi'%tio & 4$& 576' dated 217271957&
SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< SECTIONS
80(9:6:4A0; 1. Short title, extent and co((ence(ent ". 9efinitions 0(/<=4: (5 1</> (?/@A4=( ). Application for recognition of stoc) exchanges 3. &rant of recognition to stoc) exchanges0 3A. Corporatisation and de(utualisation of stoc) exchanges 3;. <rocedure for corporatisation and de(utualisation 5. Kithdrawal of recognition 8. <ower of Central &o'ern(ent to call for periodical returns or direct in*uiries to be (ade 7. Annual reports to be furnished to Central &o'ern(ent by stoc) exchanges 7A. <ower of recognised stoc) exchange to (a)e rules restricting 'oting rights, etc :. <ower of Central &o'ern(ent to direct rules to be (ade or to (a)e rules :A. Clearing corporation 9. <ower of recognised stoc) exchanges to (a)e bye+laws 1=. <ower of Securities and 7xchange 8oard of India to (a)e or a(end byelaws of recognised stoc) exchanges 11. <ower of Central &o'ern(ent to supersede go'erning body of a recognised stoc) exchange 1". <ower to suspend business of recognised stoc) exchanges0 1"A. <ower to issue directions 1). Contracts in notified areas illegal in certain circu(stances 1)A. Additional trading floor 13. Contracts in notified areas to be 'oid in certain circu(stances 15. ?e(bers (ay not act as principals in certain circu(stances 18. <ower to prohibit contracts in certain cases 17. =icensing of dealers in securities in certain areas 17A. <ublic issue and listing of securities referred to in sub+clause ( ie) of clause (h) of section % 1:. 7xclusion of spot deli'ery contracts fro( sections 3, $, " and / 1:A. Contracts in deri'ati'e 19. Stoc) exchanges other than recognised stoc) exchanges prohibited "=. <rohibition of options in securities "1. Conditions for listing "1A. 9elisting of securities "". Right of appeal against refusal of stoc) exchanges to list securities of public co(panies ""A. Right of appeal to Securities Appellate .ribunal against refusal of stoc) exchange to list securities of public co(panies "";. <rocedure and powers of Securities Appellate .ribunal ""C. Right to legal representation ""D. =i(itation ""E. Ci'il court not to ha'e Durisdiction
""2. Appeal to Supre(e Court 8(4A91:( A45 80</(5A0( "). <enalties ")A. <enalty for failure to furnish infor(ation, return, etc0 ");. <enalty for failure by any person to enter into an agree(ent with clients ")C. <enalty for failure to redress in'estorsJ grie'ances ")D. <enalty for failure to segregate securities or (oneys of client or clients ")E. <enalty for failure to co(ply with pro'ision of listing conditions or delisting conditions or grounds ")2. <enalty for excess de(aterialisation or deli'ery of unlisted securities ")G. <enalty for failure to furnish periodical returns, etc0 ")D. <enalty for contra'ention where no separate penalty has been pro'ided ")0I. <ower to adDudicate ")E. 6actors to be ta)en into account by adDudicating officer ")EA. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! ")E;. Re'o+er> of %.o* t! ")F. Crediting su(s realised by way of penalties to Consolidated 6und of India ")L. Appeal to Securities Appellate .ribunal ")@. Cffences ")N. Co(position of certain offences ")0O. <ower to grant i((unity "3. Cffences by co(panies "5. Certain offences to be cogniFable "8. CogniFance of offences by courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! 6: /(99A4(<A "7. .itle to di'idends "7A. Right to recei'e inco(e fro( collecti'e in'est(ent sche(e "7;. Right to recei'e inco(e fro( (utual fund ":. Act not to apply in certain cases "9. <rotection of action ta)en in good faith "9A. <ower to delegate )=. <ower to (a)e rules )1. <ower of Securities and 7xchange 8oard of India to (a)e regulations SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< 53th Se$te.,er, 1958< A A't to $re+e t * -e!ir%,le tr% !%'tio ! i !e'*ritie! ,> re(*l%ti ( the ,*!i e!! of -e%li ( therei , 14***: ,> $ro+i-i ( for 'ert%i other .%tter! 'o e'te- there/ith. 87 it enacted by <arlia(ent in the Se'enth Oear of the Republic of India as follows ,
80(9:6:4A0; Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities Contracts (Regulation) Act, !"#0 (%) It extends to the whole of India0
Kords 1by prohibiting options and2 o(itted by the Securities =aws (A(end(ent) Act, !!", Sec0 >, w0e0f0 %"+0 + !!".
(3) It shall co(e into force on such date% as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 Defi itio !. ". In this Act, unless the context otherwise re*uires,(a) 1contract2 (eans a contract for or relating to the purchase or sale of securities3 3 4(aa) 1corporatisation2 (eans the succession of a recognised stoc) exchange, being a body of indi'iduals or a society registered under the Societies Registration Act, >#0 (% of >#0), by another stoc) exchange, being a co(pany incorporated for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities carried on by such indi'iduals or society3 (ab) 1de(utualisation2 (eans the segregation of ownership and (anage(ent fro( the trading rights of the (e(bers of a recognised stoc) exchange in accordance with a sche(e appro'ed by the Securities and 7xchange 8oard of India3: $4"4(ac): 1deri'ati'e2 includes(A) a security deri'ed fro( a debt instru(ent, share, loan, whether secured or unsecured, ris) instru(ent or contract for differences or any other for( of security3 (B) a contract which deri'es its 'alue fro( the prices, or index of prices, of underlying securities3: (b) 1&o'ern(ent security2 (eans a security created and issued, whether before or after the co((ence(ent of this Act, by the Central &o'ern(ent or a State &o'ern(ent for the purpose of raising a public loan and ha'ing one of the for(s specified in clause (2) of section % of the <ublic 9ebt Act, !$$ ( > of !$$)3 (c) 1(e(ber2 (eans a (e(ber of a recognised stoc) exchange3 (d) 1option in securities2 (eans a contract for the purchase or sale of a right to buy or sell, or a right to buy and sell, securities in future, and includes a teji' a "andi' a teji "andi' a galli' a put, a call or a put and call in securities3 (e) 1prescribed2 (eans prescribed by rules (ade under this Act3
% %0+%+
!"/ vide SRC "%>, dated #+0%+ !"/, published in the &aFette of India, 7xtra0, <t0 II, Sec0 3, p0 "$!, dated #+0%+ !"/0 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 $ Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000 " Clause (aa) renu(bered as clause (ac) by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0
(f) 1recognised stoc) exchange2 (eans a stoc) exchange which is for the ti(e
being recognised by the Central &o'ern(ent under section $3 (g) 1rules2, with reference to the rules relating in general to the constitution and (anage(ent of a stoc) exchange, includes, in the case of a stoc) exchange which is an incorporated association, its (e(orandu( and articles of association3 64(ga) 1sche(e2 (eans a sche(e for corporatisation or de(utualisation of a recognised stoc) exchange which (ay pro'ide for(i) the issue of shares for a lawful consideration and pro'ision of trading rights in lieu of (e(bership cards of (e(bers of a recognised stoc) exchange3 (ii) the restrictions on 'oting rights3 (iii) the transfer of property, business, assets, rights, liabilities, recognitions, contracts of the recognised stoc) exchange, legal proceedings by, or against, the recognised stoc) exchange, whether in the na(e of the recognised stoc) exchange or any trustee or otherwise and any per(ission gi'en to, or by, the recognised stoc) exchange3 (iv) the transfer of e(ployees of a recognised stoc) exchange to another recognised stoc) exchange3 (v) any other (atter re*uired for the purpose of, or in connection with, the corporatisation or de(utualisation, as the case (ay be, of the recognised stoc) exchange3: /4>4(gb): 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (h) 1securities2 include(i) shares, scrips, stoc)s, bonds, debentures, debenture stoc) or other (ar)etable securities of a li)e nature in or of any incorporated co(pany or other body corporate3 !4(ia) deri'ati'e3 (ib) units or any other instru(ent issued by any collecti'e in'est(ent sche(e to the in'estors in such sche(es3:
# Inserted / Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (Second A(end(ent) Act, !!!, Sec %, w0e0f0 #+ %+ !!!0 > Clause (ga) renu(bered as clause (gb) by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 ! Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000
04(ic) security receipt as defined in clause ( Cg) of section % of the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%3: 114(id) units or any other such instru(ent issued to the in'estors under any (utual fund sche(e3: %47xplanation0-6or the re(o'al of doubts, it is hereby declared that ;securities; shall not include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(bined benefit ris) on the life of the persons and in'est(ent by such
persons and issued by an insurer referred to in clause (!) of section % of the Insurance Act, !3> ($ of !3>)3: 35(ie) any certificate or instru(ent (by whate'er na(e called), issued to an in'estor by any issuer being a special purpose distinct entity which possesses any debt or recei'able, including (ortgage debt, assigned to such entity, and ac)nowledging beneficial interest of such in'estor in such debt or recei'able, including (ortgage debt, as the case (ay be3 <
0 Inserted by the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%, Sec0 $ and Schedule, w0r0e0f0 % +#+%00%0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0e0f0 %+ 0+%00$0 % Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, Sec $, w0r0e0f0 0!+0$+%0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, read as under , ;CIA<.7R BI ?ISC7==AE7CHS #0 Dalidati$n&-Eotwithstanding anything contained in any Dudg(ent, decree or order of any Court, .ribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly, any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 0e%eal and #aving#&*( ) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0; 3 Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec %, w0e0f0 %>+"+ %00/0
$4(ii) &o'ern(ent securities3 (iia) such other instru(ents as (ay be declared by the Central &o'ern(ent to be securities3 and: (iii) rights or interest in securities3 "4(i) 1spot deli'ery contract2 (eans a contract which pro'ides for,(a) actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e
town or locality3 (b) transfer of the securities by the depository fro( the account of a beneficial owner to the account of another beneficial owner when such securities are dealt with by a depository3: #4(j) 1stoc) exchange2 (eans(a) any body of indi'iduals, whether incorporated or not, constituted before corporatisation and de(utualisation under sections $A and $8, or (b) a body corporate incorporated under the Co(panies Act, !"# ( of !"#) whether under a sche(e of corporatisation and de(utualisation or otherwise, for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0: /4I ter$ret%tio of 'ert%i /or-! % - e#$re!!io !. "A. Kords and expressions used herein and not defined in this Act but defined in the Co(panies Act, !"# ( of !"#) or the Securities and 7xchange 8oard of India
$ Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, for sub+clause (ii), w0r0e0f0 30+0 + !!%0 " Substituted by the 9epositories Act, !!#, Sec 30 and Schedule, <t0 III, w0r0e0f0 %0+0!+ !!" . <rior to its substitution, clause (i) read as under , N(i) 1spot deli'ery contract2 (eans a contract which pro'ides for the actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e town or locality3J # Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (j) read as under ,N(j) 1stoc) exchange2 (eans any body of indi'iduals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0J / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
Act, !!% ( " of !!%) or the 9epositories Act, !!# (%% of !!#) shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts0: 0(/<=4: (5 1</> (?/@A4=( A$$li'%tio for re'o( itio of !to'6 e#'h% (e!. ). ( ) Any stoc) exchange, which is desirous of being recognised for the purposes of this Act, (ay (a)e an application in the prescribed (anner to the Central &o'ern(ent01: (%) 7'ery application under sub+section ( ) shall contain such particulars as (ay be prescribed, and shall be acco(panied by a copy of the bye+laws of the stoc) exchange for the regulation and control of contracts and also a copy of the rules relating in general to the constitution of the stoc) exchange and in particular, to(a) the go'erning body of such stoc) exchange, its constitution and powers of (anage(ent and the (anner in which its business is to be transacted3 (b) the powers and duties of the office bearers of the stoc) exchange3 (c) the ad(ission into the stoc) exchange of 'arious classes of (e(bers, the *ualifications for (e(bership, and the exclusion, suspension, expulsion and
re+ad(ission of (e(bers therefro( or thereinto3 (d) the procedure for the registration of partnerships as (e(bers of the stoc) exchange in cases where the rules pro'ide for such (e(bership3 and the no(ination and appoint(ent of authorised representati'es and cler)s0 Gr% t of re'o( itio to !to'6 e#'h% (e!. 3. ( ) If the Central &o'ern(ent ! is satisfied, after (a)ing such in*uiry as (ay be necessary in this behalf and after obtaining such further infor(ation, if any, as it (ay re*uire,(a) that the rules and bye+laws of a stoc) exchange applying for registration are in confor(ity with such conditions as (ay be prescribed with a 'iew to ensure fair dealing and to protect in'estors3 (b) that the stoc) exchange is willing to co(ply with any other conditions (including conditions as to the nu(ber of (e(bers) which the Central &o'ern(ent, after consultation with the go'erning body of the stoc) exchange and ha'ing regard to the area ser'ed by the stoc) exchange and its standing and the nature of the securities dealt with by it, (ay i(pose for the purpose of carrying out the obDects of this Act3 and
> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 ! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
(c) that it would be in the interest of the trade and also in the public interest to grant recognition to the stoc) exchange3 it (ay grant recognition to the stoc) exchange subDect to the conditions i(posed upon it as aforesaid and in such for( as (ay be prescribed0 (%) .he conditions which the Central &o'ern(ent %0 (ay prescribe under clause (a) of sub+section ( ) for the grant of recognition to the stoc) exchanges (ay include, a(ong other (atters, conditions relating to,(i) the *ualifications for (e(bership of stoc) exchanges3 (ii) the (anner in which contracts shall be entered into and enforced as between (e(bers3 (iii) the representation of the Central &o'ern(ent on each of the stoc) exchange by such nu(ber of persons not exceeding three as the Central &o'ern(ent (ay no(inate in this behalf3 and (iv) the (aintenance of accounts of (e(bers and their audit by chartered accountants whene'er such audit is re*uired by the Central &o'ern(ent0 (3) 7'ery grant of recognition to a stoc) exchange under this section shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office as of the stoc) exchange is situate, and such recognition shall ha'e effect as fro( the date of its publication in the &aFette of India0 % ($) Eo application for the grant of recognition shall be refused except after gi'ing an opportunity to the stoc) exchange concerned to be heard in the (atter3 and the reasons for such refusal shall be co((unicated to the stoc) exchange in writing0 %% (") Eo rules of a recognised stoc) exchange relating to any of the (atters specified in sub+section (%) of section 3 shall be a(ended except with the appro'al of the
Central &o'ern(ent0%3 "35Cor$or%ti!%tio % - -e.*t*%li!%tio of !to'6 e#'h% (e!. 3A. Cn and fro( the appointed date, all recognised stoc) exchanges (if not corporatised and de(utualised before the appointed date) shall be corporatised and de(utualised in accordance with the pro'isions contained in section $8 ,
%0 <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 % <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %% <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %3 <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 %$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
4ro+i-e- that the Securities and 7xchange 8oard of India (ay, if it is satisfied that any recognised stoc) exchange was pre'ented by sufficient cause fro( being corporatised and de(utualised on or after the appointed date, specify another appointed date in respect of that recognised stoc) exchange and such recognised stoc) exchange (ay continue as such before such appointed date0 ()%lanati$n&*6or the purposes of this section, 1appointed date2 (eans the date which the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, appoint and different appointed dates (ay be appointed for different recognised stoc) exchanges0: "554ro'e-*re for 'or$or%ti!%tio % - -e.*t*%li!%tio . 3;. ( ) All recognised stoc) exchanges referred to in section $A shall, within such ti(e as (ay be specified by the Securities and 7xchange 8oard of India, sub(it a sche(e for corporatisation and de(utualisation for its appro'al , 4ro+i-e- that the Securities and 7xchange 8oard of India, (ay, by notification in the Cfficial &aFette, specify na(e of the recognised stoc) exchange, which had already been corporatised and de(utualised, and such stoc) exchange shall not be re*uired to sub(it the sche(e under this section0 (%) Cn receipt of the sche(e referred to in sub+section ( ), the Securities and 7xchange 8oard of India (ay, after (a)ing such en*uiry as (ay be necessary in this behalf and obtaining such further infor(ation, if any, as it (ay re*uire and if it is satisfied that it would be in the interest of the trade and also in the public interest, appro'e the sche(e with or without (odification0 (3) Eo sche(e under sub+section (%) shall be appro'ed by the Securities and 7xchange 8oard of India if the issue of shares for a lawful consideration or pro'ision of trading rights in lieu of (e(bership card of the (e(bers of a recognised stoc) exchange or pay(ent of di'idends to (e(bers ha'e been proposed out of any reser'es or assets of that stoc) exchange0 ($) Khere the sche(e is appro'ed under sub+section (%), the sche(e so appro'ed shall be published i((ediately by(a) the Securities and 7xchange 8oard of India in the Cfficial &aFette3 (b) the recognised stoc) exchange in such two daily newspapers circulating in India, as (ay be specified by the Securities and 7xchange 8oard of India,
and upon such publication, notwithstanding anything to the contrary contained in this Act or any other law for the ti(e being in force or any agree(ent, award, Dudg(ent, decree or other instru(ent for the ti(e being in force, the sche(e shall ha'e effect and be binding on all persons and authorities including all (e(bers, creditors, depositors and e(ployees of the recognised stoc) exchange and on all
%" Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
persons ha'ing any contract, right, power, obligation or liability with, against, o'er, to, or in connection with, the recognised stoc) exchange or its (e(bers0 (") Khere the Securities and 7xchange 8oard of India is satisfied that it would not be in the interest of the trade and also in the public interest to appro'e the sche(e under sub+section (%), it (ay, by an order, reDect the sche(e and such order of reDection shall be published by it in the Cfficial &aFette , 4ro+i-e- that the Securities and 7xchange 8oard of India shall gi'e a reasonable opportunity of being heard to all the persons concerned and the recognised stoc) exchange concerned before passing an order reDecting the sche(e0 (#) .he Securities and 7xchange 8oard of India (ay, while appro'ing the sche(e under sub+section (%), by an order in writing, restrict(a) the 'oting rights of the shareholders who are also stoc) bro)ers of the reognised stoc) exchange3 (b) the right of shareholders or a stoc) bro)er of the recognised stoc) exchange to appoint the representati'es on the go'erning board of the stoc) exchange3 (c) the (axi(u( nu(ber of representati'es of the stoc) bro)ers of the recognised stoc) exchange to be appointed on the go'erning board of the recognised stoc) exchange, which shall not exceed one+fourth of the total strength of the go'erning board0 (/) .he order (ade under sub+section (#) shall be published in the Cfficial &aFette and on the publication thereof, the order shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#), or any other law for the ti(e being in force, ha'e full effect0 (>) 7'ery recognised stoc) exchange, in respect of which the sche(e for corporatisation or de(utualisation has been appro'ed under sub+section (%), shall, either by fresh issue of e*uity shares to the public or in any other (anner as (ay be specified by the regulations (ade by the Securities and 7xchange 8oard of India %#, ensure that at least fifty+one per cent of its e*uity share capital is held, within twel'e (onths fro( the date of publication of the order under sub+section (/), by the public other than shareholders ha'ing trading rights , 4ro+i-e- that the Securities and 7xchange 8oard of India (ay, on sufficient cause being shown to it and in the public interest, extend the said period by another twel'e (onths0:
ee Securities Contracts (Regulation) (Stoc) 7xchanges and Clearing Corporations) Regulations, %0 %, w0e0f0 %0+0#+%0 % notified vide &aFette Eotification Eo0 =A9+ ERCL&EL%0 %+ 3L0/L 3"$#, 7xtra0, <t0 III, Section $, dtd %0+0#+%0 %0
%#
?ith-r%/%l of re'o( itio .
5. %/4( ): If the Central &o'ern(ent%> is of opinion that the recognition granted to a stoc) exchange under the pro'isions of this Act should, in the interest of the trade or in the public interest, be withdrawn, the Central &o'ern(ent (ay ser'e on the go'erning body of the stoc) exchange a written notice that the Central &o'ern(ent is considering the withdrawal of the recognition for the reasons stated in the notice and after gi'ing an opportunity to the go'erning body to be heard in the (atter, the Central &o'ern(ent (ay withdraw, by notification in the Cfficial &aFette, the recognition granted to the stoc) exchange , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Central &o'ern(ent (ay, after consultation with the stoc) exchange, (a)e such pro'ision as it dee(s fit in the notification of withdrawal or in any subse*uent notification si(ilarly published for the due perfor(ance of any contracts outstanding on that date0 %!4(%) Khere the recognised stoc) exchange has not been corporatised or de(utualised or it fails to sub(it the sche(e referred to in sub+section ( ) of section $8 within the specified ti(e therefor or the sche(e has been reDected by the Securities and 7xchange 8oard of India under sub+section (") of section $8, the recognition granted to such stoc) exchange under section $, shall, notwithstanding anything to the contrary contained in this Act, stand withdrawn and the Central &o'ern(ent shall publish, by notification in the Cfficial &aFette, such withdrawal of recognition , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Securities and 7xchange 8oard of India (ay, after consultation with the stoc) exchange, (a)e such pro'isions as it dee(s fit in the order reDecting the sche(e published in the Cfficial &aFette under sub+section (") of section $80: 4o/er of Ce tr%l Go+er .e t to '%ll for $erio-i'%l ret*r ! or -ire't i 7*irie! to ,e .%-e. 8. ( ) 7'ery recognised stoc) exchange shall furnish to the 304Securities and 7xchange 8oard of India: such periodical returns relating to its affairs as (ay be prescribed0
%/ Section
" renu(bered as sub+section ( ) by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 %> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 30 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(%) 7'ery recognised stoc) exchange and e'ery (e(ber thereof shall (aintain and preser'e for such periods not exceeding fi'e years such boo)s of account, and other docu(ents as the Central &o'ern(ent, after consultation with the stoc) exchange concerned, (ay prescribe in the interest of the trade or in the public interest, and such boo)s of account, and other docu(ents shall be subDect to inspection at all reasonable ti(es 3 4by the Securities and 7xchange 8oard of India:0 (3) Kithout preDudice to the pro'isions contained in sub+sections ( ) and (%), the
3%4Securities
and 7xchange 8oard of India:, if it is satisfied that it is in the interest of the trade or in the public interest so to do, (ay, by order in writing,(a) call upon a recognised stoc) exchange or any (e(ber thereof to furnish in writing such infor(ation or explanation relating to the affairs of the stoc) exchange or of the (e(ber in relation to the stoc) exchange as the 334Securities and 7xchange 8oard of India: (ay re*uire3 or (b) appoint one or (ore persons to (a)e an in*uiry in the prescribed (anner in relation to the affairs of the go'erning body of a stoc) exchange or the affairs of any of the (e(bers of the stoc) exchange in relation to the stoc) exchange and sub(it a report of the result of such in*uiry to the 3$4Securities and 7xchange 8oard of India: within such ti(e as (ay be specified in the order or, in the case of an in*uiry in relation to the affairs of any of the (e(bers of a stoc) exchange, direct the go'erning body to (a)e the in*uiry and sub(it its report to the 3"4Securities and 7xchange 8oard of India:0 ($) Khere an in*uiry in relation to the affairs of a recognised stoc) exchange or the affairs of any of its (e(bers in relation to the stoc) exchange has been underta)en under sub+section (3),(a) e'ery director, (anager, secretary or other officer of such stoc) exchange3 (b) e'ery (e(ber of such stoc) exchange3 (c) if the (e(ber of the stoc) exchange is a fir(, e'ery partner, (anager, secretary or other officer of the fir(3 and (d) e'ery other person or body of persons who has had dealings in the course of business with any of the persons (entioned in clauses ( a), (b) and (c), whether directly or indirectly3
Substituted for ;by the Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3% Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 33 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3" Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
3
shall be bound to produce before the authority (a)ing the in*uiry all such boo)s of account, and other docu(ents in his custody or power relating to or ha'ing a bearing on the subDect+(atter of such in*uiry and also to furnish the authorities within such ti(e as (ay be specified with any such state(ent or infor(ation relating thereto as (ay be re*uired of hi(0 )8A *%l re$ort! to ,e f*r i!he- to Ce tr%l Go+er .e t ,> !to'6 e#'h% (e!. 7. 7'ery recognised stoc) exchange shall furnish the Central &o'ern(ent with a copy of the annual report, and such annual report shall contain such particulars as (ay be prescribed0 )754o/er of re'o( i!e- !to'6 e#'h% (e to .%6e r*le! re!tri'ti ( +oti ( ri(ht!, et'. 7A. ( ) A recognised stoc) exchange (ay (a)e rules or a(end any rules (ade by it
to pro'ide for all or any of the following (atters, na(ely ,(a) the restriction of 'oting rights to (e(bers only in respect of any (atter placed before the stoc) exchange at any (eeting3 (b) the regulation of 'oting rights in respect of any (atter placed before the stoc) exchange at any (eeting so that each (e(ber (ay be entitled to ha'e one 'ote only, irrespecti'e of his share of the paid+up e*uity capital of the stoc) exchange3 (c) the restriction on the right of a (e(ber to appoint another person as his proxy to attend and 'ote at a (eeting of the stoc) exchange3 (d) such incidental, conse*uential and supple(entary (atters as (ay be necessary to gi'e effect to any of the (atters specified in clauses ( a), (b) and (c)0 (%) Eo rules of a recognised stoc) exchange (ade or a(ended in relation to any (atter referred to in clauses (a) to (d) of sub+section ( ) shall ha'e effect until they ha'e been appro'ed by the Central &o'ern(ent 3> and published by that &o'ern(ent in the Cfficial &aFette and, in appro'ing the rules so (ade or a(ended, the Central &o'ern(ent (ay (a)e such (odifications therein as it thin)s fit, and on such publication, the rules as appro'ed by the Central &o'ern(ent shall be dee(ed to ha'e been 'alidly (ade, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#)0:
3# <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 3/ Inserted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec %, w0e0f0 0>+ %+ !"!0 3> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
4o/er of Ce tr%l Go+er .e t )9 to -ire't r*le! to ,e .%-e or to .%6e r*le!. :. ( ) Khere, after consultation with the go'erning bodies of stoc) exchanges generally or with the go'erning body of any stoc) exchange in particular, the Central &o'ern(ent is of opinion that it is necessary or expedient so to do, it (ay, by order in writing together with a state(ent of the reasons therefor, direct recognised stoc) exchanges generally or any recognised stoc) exchange in particular, as the case (ay be, to (a)e any rules or to a(end any rules already (ade in respect of all or any of the (atters specified in sub+section (%) of section 3 within a period of $04two (onths: fro( the date of the order0 (%) If any recognised stoc) exchange fails or neglects to co(ply with any order (ade under sub+section ( ) within the period specified therein, the Central &o'ern(ent (ay (a)e the rules for, or a(end the rules (ade by, the recognised stoc) exchange, either in the for( proposed in the order or with such (odifications thereof as (ay be agreed to between the stoc) exchange and the Central &o'ern(ent0 (3) Khere in pursuance of this section any rules ha'e been (ade or a(ended, the rules so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette or &aFettes of the State or States in which the principal office or offices of the recognised stoc) exchange or exchanges is or are situate, and, on the publication thereof in the &aFette of India, the rules so (ade or a(ended shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# (
of !"#), or in any other law for the ti(e being in force, ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange or stoc) exchanges, as the case (ay be0 315Cle%ri ( 'or$or%tio . :A. ( ) A recognised stoc) exchange (ay, with the prior appro'al of the Securities and 7xchange 8oard of India, transfer the duties and functions of a clearing house to a clearing corporation, being a co(pany incorporated under the Co(panies Act, !"# ( of !"#), for the purpose of(a) the periodical settle(ent of contracts and differences thereunder3 (b) the deli'ery of, and pay(ent for, securities3 (c) any other (atter incidental to, or connected with, such transfer0 (%) 7'ery clearing corporation shall, for the purpose of transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( ),
3! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 $0 Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec !, w0e0f0 %"+ 0 + !!"0 $ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0
(a)e bye+laws and sub(it the sa(e to the Securities and 7xchange 8oard of India for its appro'al0 (3) .he Securities and 7xchange 8oard of India (ay, on being satisfied that it is in the interest of the trade and also in the public interest to transfer the duties and functions of a clearing house to a clearing corporation, grant appro'al to the byelaws sub(itted to it under sub+section (%) and appro'e the transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( )0 ($) .he pro'isions of sections $, ", #, /, >, !, 0, and % shall, as far as (ay be, apply to a clearing corporation referred to in sub+section ( ) as they apply in relation to a recognised stoc) exchange0: 4o/er of re'o( i!e- !to'6 e#'h% (e! to .%6e ,>e0l%/!. 9. ( ) Any recognised stoc) exchange (ay, subDect to the pre'ious appro'al of the $%4Securities and 7xchange 8oard of India:, (a)e bye+laws for the regulation and control of contracts0 (%) In particular, and without preDudice to the generality of the foregoing power, such bye+laws (ay pro'ide for , (a) the opening and closing of (ar)ets and the regulation of the hours of trade3 (b) a clearing house for the periodical settle(ent of contracts and differences thereunder, the deli'ery of and pay(ent for securities, the passing on of deli'ery orders and the regulation and (aintenance of such clearing house3 (c) the sub(ission to the $34Securities and 7xchange 8oard of India: by the clearing house as soon as (ay be after each periodical settle(ent of all or any of the following particulars as the $$4Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, re*uire, na(ely ,(i) the total nu(ber of each category of security carried o'er fro( one settle(ent period to another3 (ii) the total nu(ber of each category of security, contracts in respect of
which ha'e been s*uared up during the course of each settle(ent period3 (iii) the total nu(ber of each category of security actually deli'ered at each clearing3
$% Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(d) the publication by the clearing house of all or any of the particulars sub(itted to the $"4Securities and 7xchange 8oard of India: under clause ( c) subDect to the directions, if any, issued by the $#4Securities and 7xchange 8oard of India: in this behalf3 (e) the regulation or prohibition of blan) transfers3 (f) the nu(ber and classes of contracts in respect of which settle(ents shall be (ade or differences paid through the clearing house3 (g) the regulation, or prohibition of b!dla# or carry+o'er facilities3 (h) the fixing, altering or postponing of days for settle(ents3 (i) the deter(ination and declaration of (ar)et rates, including the opening, closing highest and lowest rates for securities3 (j) the ter(s, conditions and incidents of contracts, including the prescription of (argin re*uire(ents, if any, and conditions relating thereto, and the for(s of contracts in writing3 (k) the regulation of the entering into, (a)ing, perfor(ance, recession and ter(ination, of contracts, including contracts between (e(bers or between a (e(ber and his constituent or between a (e(ber and a person who is not a (e(ber, and the conse*uences of default or insol'ency on the part of a seller or buyer or inter(ediary, the conse*uences of a breach or o(ission by a seller or buyer, and the responsibility of (e(bers who are not parties to such contracts3 (l) the regulation of taravani business including the placing of li(itations thereon3 (") the listing of securities on the stoc) exchange, the inclusion of any security for the purpose of dealings and the suspension or withdrawal of any such securities, and the suspension or prohibition of trading in any specified securities3 (n) the (ethod and procedure for the settle(ent of clai(s or disputes, including settle(ent by arbitration3 ($) the le'y and reco'ery of fees, fines and penalties3 (%) the regulation of the course of business between parties to contracts in any capacity3 (+) the fixing of a scale of bro)erage and other charges3 (r) the (a)ing, co(paring, settling and closing of bargains3 (#) the e(ergencies in trade which (ay arise, whether as a result of pool or syndicated operations or cornering or otherwise, and the exercise of powers in
$" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%,
Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $# Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
such e(ergencies, including the power to fix (axi(u( and (ini(u( prices for securities3 (t) the regulation of dealings by (e(bers for their own account3 (!) the separation of the functions of Dobbers and bro)ers3 (v) the li(itations on the 'olu(e of trade done by any indi'idual (e(ber in exceptional circu(stances3 (.) the obligation of (e(bers to supply such infor(ation or explanation and to produce such docu(ents relating to the business as the go'erning body (ay re*uire0 (3) .he bye+laws (ade under this section (ay(a) specify the bye+laws the contra'ention of which shall (a)e a contract entered into otherwise than in accordance with the bye+laws 'oid under sub+section ( ) of section $3 (b) pro'ide that the contra'ention of any of the bye+laws shall render the (e(ber concerned liable to one or (ore of the following punish(ents, na(ely ,(i) fine, (ii) expulsion fro( (e(bership, (iii) suspension fro( (e(bership for a specified period, (iv) any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney0 ($) Any bye+laws (ade under this section shall be subDect to such conditions in regard to pre'ious publication as (ay be prescribed, and, when appro'ed by the $/4Securities and 7xchange 8oard of India:, shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and shall ha'e effect as fro( the date of its publication in the &aFette of India , 4ro+i-e- that if the $>4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+law should be (ade i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0
$/ Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $> Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4o/er of 395Se'*ritie! % - E#'h% (e ;o%r- of I -i%< to .%6e or %.e - ,>e0l%/! of re'o( i!e- !to'6 e#'h% (e!. 1=. ( ) .he "04Securities and 7xchange 8oard of India: (ay, either on a re*uest in writing recei'ed by it in this behalf fro( the go'erning body of a recognised stoc) exchange or on its own (otion, if it is satisfied after consultation with the go'erning body of the stoc) exchange that it is necessary or expedient so to do and after recording its reasons for so doing, (a)e bye+laws for all or any of the (atters specified in section ! or a(end any bye+laws (ade by such stoc) exchange under that section0
(%) Khere in pursuance of this section any bye+laws ha'e been (ade or a(ended the bye+laws so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and on the publication thereof in the &aFette of India, the bye+laws so (ade or a(ended shall ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange concerned0 (3) Eotwithstanding anything contained in this section, where the go'erning body of a recognised stoc) exchange obDects to any bye+laws (ade or a(ended under this section by the " 4Securities and 7xchange 8oard of India: on its own (otion, it (ay, within "%4two (onths: of the publication thereof in the &aFette of India under subsection (%), apply to the "34Securities and 7xchange 8oard of India: for re'ision thereof, and the "$4Securities and 7xchange 8oard of India: (ay, after gi'ing an opportunity to the go'erning body of the stoc) exchange to be heard in the (atter, re'ise the bye+laws so (ade or a(ended, anywhere any bye+laws so (ade or a(ended are re'ised as a result of any action ta)en under this sub+section, the byelaws so re'ised shall be published and shall beco(e effecti'e as pro'ided in subsection (%)0 ($) .he (a)ing or the a(end(ent or re'ision of any bye+laws under this section shall in all cases be subDect to the condition of pre'ious publication ,
$! Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "0 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 " Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "% Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec %0, w0e0f0 %"+ 0 + !!"0 "3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4ro+i-e- that if the ""4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+laws should be (ade, a(ended or re'ised i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0 4o/er of Ce tr%l Go+er .e t 58 to !*$er!e-e (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e. 11. ( ) Kithout preDudice to any other powers 'ested in the Central &o'ern(ent under this Act, where the Central &o'ern(ent is of opinion that the go'erning body of any recognised stoc) exchange should be superseded, then, notwithstanding anything contained in any other law for the ti(e being in force, in the Central &o'ern(ent (ay ser'e on the go'erning body a written notice that the Central &o'ern(ent is considering the supersession of the go'erning body for the reasons specified in the notice and after gi'ing an opportunity to the go'erning body to be
heard in the (atter, it (ay, by notification in the Cfficial &aFette, declare the go'erning body of such stoc) exchange to be superseded, and (ay appoint any person or persons to exercise and perfor( all the powers and duties of the go'erning body, and, where (ore persons than one are appointed, (ay appoint one of such persons to be the chair(an and another to be the 'ice+chair(an thereof0 (%) Cn the publication of a notification in the Cfficial &aFette under sub+section ( ), the following conse*uences shall ensue, na(ely,(a) the (e(bers of the go'erning body which has been superseded shall, as fro( the date of the notification of supersession, cease to hold office as such (e(bers3 (b) the person or persons appointed under sub+section ( ) (ay exercise and perfor( all the powers and duties of the go'erning body which has been superseded3 (c) all such property of the recognised stoc) exchange as the person or persons appointed under sub+section ( ) (ay, by order in writing, specify in this behalf as being necessary for the purpose of enabling hi( or the( to carry on the business of the stoc) exchange, shall 'est in such person or persons0 (3) Eotwithstanding anything to the contrary contained in any law or the rules or bye+laws of the recognised stoc) exchange the go'erning body of which is superseded under sub+section ( ), the person or persons appointed under that subsection shall hold office for such period as (ay be specified in the notification published under that sub+section and the Central &o'ern(ent (ay fro( ti(e to ti(e, by li)e notification, 'ary such period0
"" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "# <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0
($) .he Central &o'ern(ent (ay at any ti(e before the deter(ination of the period of office of any person or persons appointed under this section call upon the recognised stoc) exchange to re+constitute the go'erning body in accordance with its rules and on such re+constitution all the property of the recognised stoc) exchange which has 'ested in, or was in the possession of, the person or persons appointed under sub+section ( ), shall re+'est or 'est, as the case (ay be, in the go'erning body so re+constituted , 4ro+i-e- that until a go'erning body is so re+constituted, the person or persons appointed under sub+section ( ) shall continue to exercise and perfor( their powers and duties0 4o/er57 to !*!$e - ,*!i e!! of re'o( i!e- !to'6 e#'h% (e!. 1". If in the opinion of the Central &o'ern(ent an e(ergency has arisen and for the purpose of (eeting the e(ergency the Central &o'ern(ent considers it expedient so to do, it (ay, by notification in the Cfficial &aFette, for reasons to be set out therein, direct a recognised stoc) exchange to suspend such of its business for such period not exceeding se'en days and subDect to such conditions as (ay be specified in the notification, and, if, in the opinion of the Central &o'ern(ent, the interest of
the trade or the public interest re*uires that the period should be extended, (ay, by li)e notification extend the said period fro( ti(e to ti(e , 4ro+i-e- that where the period of suspension is to be extended beyond the first period, no notification extending the period of suspension shall be issued unless the go'erning body of the ">4recognised stoc) exchange: has been gi'en an opportunity of being heard in the (atter0 "!54o/er to i!!*e -ire'tio !. 1"A. If, after (a)ing or causing to be (ade an in*uiry, the Securities and 7xchange 8oard of India is satisfied that it is necessary(a) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (b) to pre'ent the affairs of any recognised stoc) exchange or clearing corporation, or such other agency or person, pro'iding trading or clearing or settle(ent facility in respect of securities, being conducted in a (anner detri(ental to the interests of in'estors or securities (ar)et3 or (c) to secure the proper (anage(ent of any such stoc) exchange or clearing corporation or agency or person, referred to in clause ( b),
"/ <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 "> Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 "! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0
it (ay issue such directions,(i) to any stoc) exchange or clearing corporation or agency or person referred to in clause (b) or any person or class of persons associated with the securities (ar)et3 or (ii) to any co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 8=5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< /<410A/1 A45 <81:<4 :4 (/A0:1:( Co tr%'t! i otifie- %re%! ille(%l i 'ert%i 'ir'*.!t% 'e!. 1). If the Central &o'ern(ent# is satisfied, ha'ing regard to the nature or the 'olu(e of transactions in securities in any #%4State or States or area: that it is necessary so to do, it (ay, by notification in the Cfficial &aFette, declared this section to apply to such #34State or States or area:, and thereupon e'ery contract in such #$4State or States or area: which is entered into after the date of the notification otherwise than #"4between (e(bers of a recognised stoc) exchange or recognised stoc) exchanges: in such ##4State or States or area: or through or with such (e(ber shall be illegal ,
#0 I #
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 #% Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #3 Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #$ Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$ for ;between (e(bers of a recognised stoc) exchange; & ## Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0
#/54ro+i-e-
that any contract entered into between (e(bers of two or (ore recognised stoc) exchanges in such State or States or area, shall(i) be subDect to such ter(s and conditions as (ay be stipulated by the respecti'e stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India3 (ii) re*uire prior per(ission fro( the respecti'e stoc) exchanges if so stipulated by the stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India0: #>4A--itio %l tr%-i ( floor. 1)A. A stoc) exchange (ay establish additional trading floor with the prior appro'al of the Securities and 7xchange 8oard of India in accordance with the ter(s and conditions stipulated by the said 8oard0 ()%lanati$n , 6or the purposes of this section, 1additional trading floor2 (eans a trading ring or trading facility offered by a recognised stoc) exchange outside its area of operation to enable the in'estors to buy and sell securities through such trading floor under the regulatory fra(ewor) of that stoc) exchange0: Co tr%'t! i otifie- %re%! to ,e +oi- i 'ert%i 'ir'*.!t% 'e!. 13. ( ) Any contract entered into in any State or area specified in the notification under section 3 which is in contra'ention of any of the bye+laws specified in that behalf under clause (a) of sub+section (3) of section ! shall be 'oid , (i) as respects the rights of any (e(ber of the recognised stoc) exchange who has entered into such contract in contra'ention of any such bye+law, and also (ii) as respects the rights of any other person who has )nowingly participated in the transaction entailing such contra'ention0 (%) Eothing in sub+section ( ) shall be construed to affect the right of any person other than a (e(ber of the recognised stoc) exchange to enforce any such contract or to reco'er any su( under or in respect of such contract if such person had no )nowledge that the transaction was in contra'ention of any of the bye+laws specified in clause (a) of sub+section (3) of section !0 @e.,er! .%> ot %'t %! $ri 'i$%l! i 'ert%i 'ir'*.!t% 'e!. 15. Eo (e(ber of a recognised stoc) exchange shall in respect of any securities enter into any contract as a principal with any person other than a (e(ber of a recognised stoc) exchange, unless he has secured the consent or authority of such
#/ Inserted #> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (A(end(ent) Act, !!", Sec % , w0e0f0 %"+0 + !!"0
person and discloses in the note, (e(orandu( or agree(ent of sale or purchase that he is acting as a principal , 4ro+i-e- that where the (e(ber has secured the consent or authority of such person otherwise than in writing he shall secure written confir(ation by such person or such consent or authority within three days fro( the date of the contract , 4ro+i-e- f*rther that no such written consent or authority of such person shall be necessary for closing out any outstanding contract entered into by such person in accordance with the bye+laws, if the (e(ber discloses in the note, (e(orandu( or agree(ent of sale or purchase in respect of such closing out that he is acting as a principal0 4o/er89 to $rohi,it 'o tr%'t! i 'ert%i '%!e!. 18. ( ) If the Central &o'ern(ent is of opinion that it is necessary to pre'ent undesirable speculation in specified securities in any State or area, it (ay, by notification in the Cfficial &aFette, declare that no person in the State or area specified in the notification shall, sa'e with the per(ission of the Central &o'ern(ent, enter into any contract for the sale or purchase of any security specified in the notification except to the extent and in the (anner, if any, specified therein0 (%) All contracts in contra'ention of the pro'isions of sub+section ( ) entered into after the date of notification issued thereunder shall be illegal0 Li'e !i ( of -e%ler! i !e'*ritie! i 'ert%i %re%!. 17. ( ) SubDect to the pro'isions of sub+section (3) and to the other pro'isions contained in this Act, no person shall carry on or purport to carry on, whether on his own behalf or on behalf of any other person, the business of dealing in securities in any State or area to which section 3 has not been declared to apply and to which the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, declare this section to apply, except under the authority of a /04licence granted by the Securities and 7xchange 8oard of India: in this behalf0 (%) Eo notification under sub+section ( ) shall be issued with respect to any State or area unless the Central &o'ern(ent is satisfied, ha'ing regard to the (anner in which securities are being dealt with in such State or area, that it is desirable or
#! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 <owers are exercisable by R8I also 'ide &o'ern(ent of India Eotification Eo0 >3 (7), 9ated 0 +03+%000 in relation to any contracts in go'ern(ent securities, (oney (ar)et securities etc0 /0 Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% for ;licence granted by the Central &o'ern(ent;0
expedient in the interest of the trade or in the public interest that such dealings should be regulated by a syste( of licensing0 (3) .he restrictions i(posed by sub+section ( ) in relation to dealings in securities shall not apply to the doing of anything by or on behalf of a (e(ber of any recognised stoc) exchange0
7154*,li'
i!!*e % - li!ti ( of !e'*ritie! referre- to i !*,0'l%*!e ( ie) of 'l%*!e (h)
of !e'tio ". 17A. ( ) Kithout preDudice to the pro'isions contained in this Act or any other law for the ti(e being in force, no securities of the nature referred to in sub+clause (ie) of clause (h) of section % shall be offered to the public or listed on any recognised stoc) exchange unless the issuer fulfils such eligibility criteria and co(plies with such other re*uire(ents as (ay be specified by regulations (ade by the Securities and 7xchange 8oard of India0 (%) 7'ery issuer referred to in sub+clause (ie) of clause (h) of section % intending to offer the certificates or instru(ents referred therein to the public shall (a)e an application, before issuing the offer docu(ent to the public, to one or (ore recognised stoc) exchanges for per(ission for such certificates or instru(ents to be listed on the stoc) exchange or each such stoc) exchange0 (3) Khere the per(ission applied for under sub+section (%) for listing has not been granted or refused by the recognised stoc) exchanges or any of the(, the issuer shall forthwith repay all (oneys, if any, recei'ed fro( applicants in pursuance of the offer docu(ent, and if any such (oney is not repaid within eight days after the issuer beco(es liable to repay it, the issuer and e'ery director or trustee thereof, as the case (ay be, who is in default shall, on and fro( the expiry of the eighth day, be Dointly and se'erally liable to repay that (oney with interest at the rate of fifteen per cent per annu(0 7xplanation0-In rec)oning the eighth day after another day, any inter'ening day which is a public holiday under the Eegotiable Instru(ents Act, >> (%# of >> ), shall be disregarded, and if the eighth day (as so rec)oned) is itself such a public holiday, there shall for the said purposes be substituted the first day thereafter which is not a holiday0 ($) All the pro'isions of this Act relating to listing of securities of a public co(pany on a recognised stoc) exchange shall, (utatis (utandis, apply to the listing of the securities of the nature referred to in sub+clause (ie) of clause (h) of section % by the issuer, being a special purpose distinct entity0 <
Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec 3, w0e0f0 %>+0"+ %00/0
/
E#'l*!io of !$ot -eli+er> 'o tr%'t! fro. !e'tio ! 1), 13, 15 % - 17. 1:. ( ) Eothing contained in sections 3, $, " and / shall apply to spot deli'ery contracts0 (%) Eotwithstanding anything contained in sub+section ( ), if the Central &o'ern(ent/% is of opinion that in the interest of the trade or in the public interest it is expedient to regulate and control the business of dealing in spot deli'ery contracts also in any State or area (whether section 3 has been declared to apply to that State or area or not), it (ay, by notification in the Cfficial &aFette, declare that the pro'isions of section / shall also apply to such State or area in respect of spot deli'ery contracts generally or in respect of spot deli'ery contracts for the sale or purchase of such securities as (ay be specified in the notification, and (ay also specify the (anner in which, and the extent to which, the pro'isions of that section
shall so apply0 /34Co tr%'t! i -eri+%ti+e. 1:A. Eotwithstanding anything contained in any other law for the ti(e being in force, contracts in deri'ati'e shall be legal and 'alid if such contracts are(a) traded on a recognised stoc) exchange3 (b) settled on the clearing house of the recognised stoc) exchange, in accordance with the rules and bye+laws of such stoc) exchange0: Sto'6 e#'h% (e! other th% re'o( i!e- !to'6 e#'h% (e! $rohi,ite-. 19. ( ) Eo person shall, except with the per(ission of the Central &o'ern(ent, organise or assist in organising or be a (e(ber of any stoc) exchange (other than a recognised stoc) exchange) for the purpose of assisting in, entering into or perfor(ing any contracts in securities0 (%) .his section shall co(e into force in any State or area on such date as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 4rohi,itio of o$tio ! i !e'*ritie!. "=. 734GGGGG:
/% <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 /3 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec 3, w0e0f0 %%+%+%0000 /$ C(itted by the Securities =aws (A(end(ent) Act, !!", Sec %%, w0e0f0 %"+0 + !!"0 <rior to o(ission, section %0 read as under , 1%00 8r$hibiti$n $f $%ti$n# in #ec!ritie#&-( ) Eotwithstanding anything contained in this Act or in any other law for the ti(e being in force, all options in securities entered into after the co((ence(ent of this Act shall be illegal0
9: 1:4= <E (/A0:1:( 754GGG: /#4Co -itio ! for li!ti (. "1. Khere securities are listed on the application of any person in any recognised stoc) exchange, such person shall co(ply with the conditions of the listing agree(ent with that stoc) exchange&: 775Deli!ti ( of !e'*ritie!. "1A. ( ) A recognised stoc) exchange (ay delist the securities, after recording the reasons therefor, fro( any recognised stoc) exchange on any of the ground or grounds as (ay be prescribed under this Act , 4ro+i-e- that the securities of a co(pany shall not be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) A listed co(pany or an aggrie'ed in'estor (ay file an appeal before the Securities Appellate .ribunal against the decision of the recognised stoc) exchange delisting the securities within fifteen days fro( the date of the decision of the recognised stoc) exchange delisting the securities and the pro'isions of sections %%8 to %%7 of this Act, shall apply, as far as (ay be, to such appeals , 4ro+i-e- that the Securities Appellate .ribunal (ay, if it is satisfied that the co(pany was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding one (onth0:
(%) Any option in securities which has been entered into before such co((ence(ent and which re(ains to be perfor(ed, whether wholly or in part, after such co((ence(ent shall, to that
extent, beco(e 'oid02 /" Kords 18O <H8=IC CC?<AEI7S2 o(itted by the Securities =aws (A(end(ent) Act, !!!, Sec $, w0e0f0 %%+0%+%0000 /# Substituted by the Securities =aws (A(end(ent) Act, !!", Sec 33, w0e0f0 %"+0 + !!" . <rior to substitution, section % read as under , 1% 0 8$.er t$ c$"%el li#ting $f #ec!ritie# bF %!blic c$"%anie#& -Eotwithstanding anything contained in any other law for the ti(e being in force, if the Securities and 7xchange 8oard of India is of opinion, ha'ing regard to the nature of the securities issued by any public co(pany as defined in the Co(panies Act, !"# ( of !"#), or to the dealings in the(, that it is necessary or expedient in the interest of the trade or in the public interest so to do, it (ay re*uire the co(pany, after gi'ing it an opportunity of being heard in the (atter, to co(ply with such re*uire(ents as (ay be prescribed with respect to the listing of its securities on any recognised stoc) exchange02 // Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec >, w0r0e0f0 %+ 0+%00$0
7:5Ri(ht
of %$$e%l %(%i !t ref*!%l of !to'6 e#'h% (e! to li!t !e'*ritie! of $*,li' 'o.$% ie!. 79"". Khere a recognised stoc) exchange acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any public co(pany >04or collecti'e in'est(ent sche(e:, the co(pany > 4or sche(e: shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( ) of section /3 of the Co(panies Act, !"# ( of !"#) (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Central &o'ern(ent (ay, on sufficient cause being shown, allow, appeal to the Central &o'ern(ent against such refusal, o(ission or failure, as the case (ay be, and thereupon the Central &o'ern(ent (ay, after gi'ing the stoc) exchange an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange, or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Central &o'ern(ent sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Central &o'ern(ent: , >%44ro+i-e- that no appeal shall be preferred against refusal, o(ission or failure, as the case (ay be, under this section on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!0: :)5Ri(ht of %$$e%l to Se'*ritie! A$$ell%te Tri,* %l %(%i !t ref*!%l of !to'6 e#'h% (e to li!t !e'*ritie! of $*,li' 'o.$% ie!.
/> Substituted
by .he Co(panies (A(end(ent) Act, !/$ (Act Eo0 $ of !/$), Sec $%, w0e0f0 0 + 0%+ !/"0 /! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the
&aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 >0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%00003 Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 > Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%0000 >% Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec $, w0e0f0 #+ %+ !!!0 >3 Sections %%A, %%8, %%C, %%9, %%7 and %%6 inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!!& 7arlier section %%A was inserted by .he
""A. ( ) Khere a recognised stoc) exchange, acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any co(pany, the co(pany shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( A) of section /3 of the Co(panies Act, !"# ( of !"#), (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Securities Appellate .ribunal (ay, on sufficient cause being shown, allow, appeal to the Securities Appellate .ribunal ha'ing Durisdiction in the (atter against such refusal, o(ission or failure, as the case (ay be, and thereupon the Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange, an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange3 or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Securities Appellate .ribunal sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Securities Appellate .ribunal0 (%) 7'ery appeal under sub+section ( ) shall be in such for( and be acco(panied by such fee as (ay be prescribed0 (3) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 ($) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: :354ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. "";. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of
Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec %, w0e0f0 /+ 0 + !>#, and o(itted by the 9epositories Act, !!#, Sec 30 and Sch0, <t0III, w0r0e0f0 %0+0!+ !!"0 >$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath 3 (b) re*uiring the disco'ery and production of docu(ents 3 (c) recei'ing e'idence on affida'its 3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents 3 (e) re'iewing its decisions 3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte ; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0: :55Ri(ht to le(%l re$re!e t%tio . ""C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of sub+section ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of subsection ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of
>" Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
!"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, vakil or an attorney of any Iigh Court, and includes a pleader in practice0: :85Li.it%tio . ""D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0: :75Ci+il 'o*rt ot to h%+e G*ri!-i'tio .
""E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0: ::5A$$e%l to S*$re.e Co*rt. ""2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order, 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: 8(4A91:( A45 80</(5A0( 4e %ltie!. "). ( ) Any person who+
># Inserted >/ Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & >> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec !, w0r0e0f0 %+ 0+%00$0 7arlier section %%6 as inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", read as under,+ 1""2. A$$e%l to Di(h Co*rt.+Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order , 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
(a) without reasonable excuse (the burden of pro'ing which shall be on hi() fails to co(ply with any re*uisition (ade under sub+section ($) of section #3 or (b) enters into any contract in contra'ention of any of the pro'isions contained in section 3 or section #3 or (c) contra'enes the pro'isions contained in >!5section / or section /A<, or section !3 or 90 4(d) enters into any contract in deri'ati'e in contra'ention of section >A or the rules (ade under section 303: (e) owns or )eeps a place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act and )nowingly per(its such place to be used for such purposes3 or (f) (anages, controls, or assists in )eeping any place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act or at which contracts are recorded or adDusted or rights or liabilities arising out of contracts are adDusted, regulated or enforced in any (anner whatsoe'er3 or (g) not being a (e(ber of a recognised stoc) exchange or his agent authorised as
such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section / wilfully represents to or induces any person to belie'e that contracts can be entered into or perfor(ed under this Act through hi(3 or (h) not being a (e(ber of a recognised stoc) exchange or his agent authorised as such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section /, can'asses, ad'ertises or touts in any (anner either for hi(self or on behalf of any other persons for any business connected with contracts in contra'ention of any of the pro'isions of this Act3 or (i) Doins, gathers or assists in gathering at any place other than the place of business specified in the bye+laws of a recognised stoc) exchange any person or persons for (a)ing bids or offers or for entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act3 ! 4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which
>! Inserted
by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec $, w0e0f0 %>+0"+ %00/ for ;section /;0 !0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec #, w0e0f0 %%+0%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 ! Substituted for 1shall, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0
(ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: (%) Any person who enters into any contract in contra'ention of the pro'isions contained in section " !%4or who fails to co(ply with the pro'isions of !34section % or section % A: or with the orders of: or section %% !$4or with the orders of the Securities Appellate .ribunal: !"4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 9854e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. ")A. Any person, who is re*uired under this Act or any rules (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to a recognised stoc) exchange, fails to furnish the sa(e within the ti(e specified therefor in the listing agree(ent or conditions or bye+laws of the recognised stoc) exchange, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to (aintain boo)s of account or records, as per the listing agree(ent or conditions, or bye+laws of a recognised stoc) exchange, fails to (aintain the sa(e, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0:
9754e
%lt> for f%il*re ,> % > $er!o to e ter i to % %(ree.e t /ith 'lie t!. ");. If any person, who is re*uired under this Act or any bye+laws of a recognised stoc) exchange (ade thereunder, to enter into an agree(ent with his client, fails to enter into such an agree(ent, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0:
!% Substituted
for 1or who fails to co(ply with the orders of the Securities and 7xchange 8oard of India under section % 2 by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 <rior to !!", ;Securities and 7xchange 8oard of India under section % or Central &o'ern(ent under section %%; were substituted for ;Central &o'ern(ent under section % or section %%; vide .he Schedule, <art II of Securities and 7xchange 8oard of India Act, !!%, w0e0f0 30+0 + !!%0 !3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec #, w0e0f0 #+ %+ !!!0 !" Substituted for 1shall, on con'iction, be punishable with fine which (ay extend to one thousand rupees2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !# Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$ & !/ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$0
9:54e
%lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. ")C. If any stoc) bro)er or sub+bro)er or a co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, after ha'ing been called upon by the Securities and 7xchange 8oard of India or a recognised stoc) exchange in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e stipulated by the Securities and 7xchange 8oard of India or a recognised stoc) exchange, he or it shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 9954e %lt> for f%il*re to !e(re(%te !e'*ritie! or .o e>! of 'lie t or 'lie t!. ")D. If any person, who is registered under section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%) as a stoc) bro)er or sub+bro)er, fails to segregate securities or (oneys of the client or clients or uses the securities or (oneys of a client or clients for self or for any other client, he shall be liable to a penalty not exceeding one crore rupees0: 1==54e %lt> for f%il*re to 'o.$l> /ith $ro+i!io of li!ti ( 'o -itio ! or -eli!ti ( 'o -itio ! or (ro* -!. ")E. If a co(pany or any person (anaging collecti'e in'est(ent sche(e or (utual fund, fails to co(ply with the listing conditions or delisting conditions or grounds or co((its a breach thereof, it or he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0: 1=154e %lt> for e#'e!! -e.%teri%li!%tio or -eli+er> of * li!te- !e'*ritie!. ")2. If any issuer de(aterialises securities (ore than the issued securities of a co(pany or deli'ers in the stoc) exchanges the securities which are not listed in the recognised stoc) exchange or deli'ers securities where no trading per(ission has been gi'en by the recognised stoc) exchange, he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0:
!> Inserted !! Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 00 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0
%+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0
1="54e
%lt> for f%il*re to f*r i!h $erio-i'%l ret*r !, et'. ")G. If a recognised stoc) exchange fails or neglects to furnish periodical returns to the Securities and 7xchange 8oard of India or fails or neglects to (a)e or a(end its rules or bye+laws as directed by the Securities and 7xchange 8oard of India or fails to co(ply with directions issued by the Securities and 7xchange 8oard of India, such recognised stoc) exchange shall be liable to a penalty which (ay extend to twenty+fi'e crore rupees0: 1=)54e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. ")D. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or articles or bye+ laws or the regulations of the recognised stoc) exchange or directions issued by the Securities and 7xchange 8oard of India for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 1=354o/er to %-G*-i'%te. ")0I. ( ) 6or the purpose of adDudging under sections %3A, %38, %3C, %39, %37, %36, %3& and %3I, the Securities and 7xchange 8oard of India shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0: 1=552%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. ")E. Khile adDudging the *uantu( of penalty under section %3+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3
0% Inserted 03 Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec 0$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0" Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 , w0r0e0f0 , w0r0e0f0 , w0r0e0f0
%+ %+ %+ %+
0+%00$0 0+%00$0 0+%00$0 0+%00$0
(b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0: 1=85 Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!.
")EA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 1"A or !e'tio ")0I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%tefor the %lle(e- -ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re %! !$e'ifie,> the ;o%r- * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")L %(%i !t % > or-er $%!!e- ,> the ;o%ror %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 1=75Re'o+er> of %.o* t!. ")E;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 1"A or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H
0# I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30"==7) 0/ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %!
.%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - ThirS'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")L of thi! A't. (") The re'o+er> offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ())Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 0'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 1"A, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1),(") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 1=:5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. ")F. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: 1=95A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")L. ( ) Any person aggrie'ed, by the order or decision of the recogniFed stoc) exchange or the adDudicating officer or any order (ade by the Securities and 7xchange 8oard of India under section $8, (ay prefer an appeal before the Securities Appellate .ribunal and the pro'isions of sections %%8, %%C, %%9 and %%7 of this Act, shall apply, as far as (ay be, to such appeals0 (%) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order or decision is recei'ed by the
appellant and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 (3) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 ($) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the parties to the appeal and to the concerned adDudicating officer0 (") .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: 11=5Offe 'e!. ")@. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws
0> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 0! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
(ade thereunder, for which no punish(ent is pro'ided elsewhere in this Act, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 1115Co.$o!itio of 'ert%i offe 'e!. ")N. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0: 11"54o/er to (r% t i..* it>. ")0O. ( ) .he Central &o'ern(ent (ay, on reco((endation by the Securities and 7xchange 8oard of India, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation,
4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that the reco((endation of the Securities and 7xchange 8oard of India under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under
% Inserted
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
this Act to which such person would ha'e been liable, had not such i((unity been granted0: Offe 'e! ,> 'o.$% ie!. "3. ( ) Khere an offence has been co((itted by a co(pany, e'ery person who, at the ti(e when the offence was co((itted, was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence, and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any gross negligence on the part of any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer of the co(pany, shall also be dee(ed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n0-6or the purpose of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals, and 34(b) 1director2, in relation to(i) a fir(, (eans a partner in the fir(3 (ii) any association of persons or a body of indi'iduals, (eans any (e(ber controlling the affairs thereof0: $4(3) .he pro'isions of this section shall be in addition to, and not in derogation of, the pro'isions of section %%A0: Cert%i offe 'e! to ,e 'o( iL%,le. "5. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, >!> (" of >!>) ", any offence punishable under #4GGG: section %3 shall be dee(ed to be a
cogniFable offence within the (eaning of that Code0
3 Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec /, w0e0f0 %%+%+%0000 <rior to its substitution, sub+clause (b) read as under, N(b) 1director2, in relation to a fir(, (eans a partner in the fir(0J $ Inserted by .he Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec 3, w0e0f0 /+0 + !>#0
iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central &o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or a recognised stoc) exchange or by any person0 >5(")********< 1195E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
ee now the Code of Cri(inal <rocedure, !/3 (% of !/$) 1sub+section ( ) of2 o(itted by the Securities =aws (A(end(ent) Act, %00$, w0e0f0 %+ 0+%00$0 / Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$ & <rior to its substitution section %# read as under ,1%#0 G!ri#dicti$n t$ trF $ffence# !nder thi# Act&-Eo court inferior to that of a presidency (agistrate or a (agistrate of the first class shall ta)e cogniFance of or try any offence punishable under this Act02 > O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JEo court inferior to that of a Court of Session shall try any offence punishable under this Act .K ! I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
" # Kords
/4Co(
A$$e%l % - Re+i!io . "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt. "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel% $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io !. "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< 6: /(99A4(<A Title to -i+i-e -!. "7. ( ) It shall be lawful for the holder of any security whose na(e appears on the boo)s of the co(pany issuing the said security to recei'e and retain any di'idend declared by the co(pany in respect thereof for any year, notwithstanding that the said security has already been transferred by hi( for consideration, unless the transferee who clai(s the di'idend fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the co(pany with the co(pany for being registered in his na(e within fifteen days of the date on which the di'idend beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the di'idend3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security and other docu(ents relating to
the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a co(pany to pay any di'idend which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the co(pany as the holder of the security in respect of which the di'idend has beco(e due3 or (b) the right of the transferee of any security to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security in the na(e of the transferee0 %04Ri(ht to re'ei+e i 'o.e fro. 'olle'ti+e i +e!t.e t !'he.e. "7A. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, whose na(e appears on the boo)s of the collecti'e in'est(ent sche(e issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e declared by the collecti'e in'est(ent sche(e in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e fro( the transfer or has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the collecti'e in'est(ent sche(e with the collecti'e in'est(ent sche(e for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec >, w0e0f0 %%+%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the collecti'e in'est(ent sche(e3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a collecti'e in'est(ent sche(e to pay any inco(e fro( units or other instru(ents issued by the collecti'e in'est(ent sche(e which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the collecti'e in'est(ent sche(e as the holder of the security being
units or other instru(ents issued by the collecti'e in'est(ent sche(e in respect of which the inco(e in respect of units or other instru(ents issued by the collecti'e sche(e has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security being units or other instru(ents issued by the collecti'e in'est(ent sche(e in the na(e of the transferee0: % 4Ri(ht to re'ei+e i 'o.e fro. .*t*%l f* -. "7;. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by any (utual fund, whose na(e appears on the boo)s of the (utual fund issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the (utual fund declared by the (utual fund in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the (utual fund, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the (utual fund fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the (utual fund with the (utual fund for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the (utual fund beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the (utual fund3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the (utual fund, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a (utual fund to pay any inco(e fro( units or other instru(ents issued by the (utual fund which has beco(e due to any person, whose na(e is for the ti(e being registered in the boo)s of the (utual fund as the holder of the security being units or other instru(ents issued by the (utual fund in respect of which the inco(e in respect of units or other instru(ents issued by the (utual fund has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the (utual fund, to enforce against the transferor or any other person, his rights, if any, in relation to the transfer in any case where the (utual fund has refused to register the transfer of the security being units or other instru(ents issued by the (utual fund in the na(e of the transferee0:
1""5A't
ot to %$$l> i 'ert%i '%!e!. ":. ( ) .he pro'isions of this Act shall not apply to(a) the &o'ern(ent, the Reser'e 8an) of India, any local authority or any corporation set up by a special law or any person who has effected any transaction with or through the agency of any such authority as is referred to in this clause3 (b) any con'ertible bond or share warrant or any option or right in relation thereto, in so far as it entitles the person in whose fa'our any of the foregoing has been issued to obtain at his option fro( the co(pany or other body corporate, issuing the sa(e or fro( any of its shareholders or duly appointed agentsJ shares of the co(pany or other body corporate, whether by con'ersion of the bond or warrant or otherwise, on the basis of the price agreed upon when the sa(e was issued0 (%) Kithout preDudice to the pro'isions contained in sub+section ( ), if the Central &o'ern(ent %3 is satisfied that in the interests of trade and co((erce or the
%% Substituted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec 3, w0e0f0 0>+ %+ !"!0
econo(ic de'elop(ent of the country it is necessary or expedient so to do, it (ay, by notification in the Cfficial &aFette, specify any class of contracts as contracts to which this Act or any pro'ision contained therein shall not apply, and also the conditions, li(itations or restrictions, if any, subDect to which it shall not so apply0: 4rote'tio of %'tio t%6e i (oo- f%ith. "9. Eo suit, prosecution or other legal proceeding whatsoe'er shall lie in any court against the go'erning body or any (e(ber, office bearer or ser'ant of any recognised stoc) exchange or against any person or persons appointed under subsection ( ) of section for anything which is in good faith done or intended to be done in pursuance of this Act or of any rules or bye+laws (ade thereunder0 %$44o/er to -ele(%te. "9A. .he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers (except the power under section 30) exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India or the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)0: 4o/er to .%6e r*le!. )=. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for the purpose of carrying into effect the obDects of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for,(a) the (anner in which applications (ay be (ade, the particulars which they should contain and the le'y of a fee in respect of such applications 3 (b) the (anner in which any in*uiry for the purpose of recognising any stoc) exchange (ay be (ade, the conditions which (ay be i(posed for the grant of such recognition, including conditions as to the ad(ission of (e(bers if the
%3 <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %$ Inserted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% and Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec !, w0e0f0 %%+0%+%0000 <rior to its substitution, section %!A read as under , 1%!A0 8$.er t$ delegate&*.he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India02
stoc) exchange concerned is to be the only recognised stoc) exchange in the area3 and the for( in which such recognition shall be granted3 (c) the particulars which should be contained in the periodical returns and annual reports to be furnished to the Central &o'ern(ent3 (d) the docu(ents which should be (aintained and preser'ed under section # and the periods for which they should be preser'ed3 (e) the (anner in which any in*uiry by the go'erning body of a stoc) exchange shall be (ade under section #3 (f) the (anner in which the bye+laws to be (ade or a(ended under this Act shall before being so (ade or a(ended be published for criticis(3 (g) the (anner in which applications (ay be (ade by dealers in securities for licences under section /, the fee payable in respect thereof and the period of such licences, the conditions subDect to which licences (ay be granted, including conditions relating to the for(s which (ay be used in (a)ing contracts, the docu(ents to be (aintained by licensed dealers and the furnishing of periodical infor(ation to such authority as (ay be specified and the re'ocation of licences for breach of conditions3 %"4(h) the re*uire(ents which shall be co(plied with(A) by public co(panies for the purpose of getting their securities listed on any stoc) exchange3 (B) by collecti'e in'est(ent sche(e for the purpose of getting their units listed on any stoc) exchange3: %#4GGG: %/4(ha) the grounds on which the securities of a co(pany (ay be delisted fro( any recognised stoc) exchange under sub+section ( ) of section % A3 (hb) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under sub+section (%) of section % A and the fees payable in respect of such appeal3 (hc) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3
%" Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec 0, w0e0f0 %%+0%+%0000 <rior to its substitution, clause (h) read as under , 1(h) the re*uire(ents which shall be co(plied with by public co(panies for the purpose of getting their securities listed on any stoc) exchange32 %# .he word ;and; o(itted by .he Securities Contracts (Regulation) A(end(ent Act, !>", Sec $, w0e0f0 /+0 + !>#0 %/ Substituted for clause (ha) by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 7arlier clause (ha), as a(ended by the Securities =aws (A(end(ent) Act, !!!, read as
under ,1(ha) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3 and2
(hd) the (anner of in*uiry under sub+section ( ) of section %3+I3 (he) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3= and the fees payable in respect of such appeal3: (i) any other (atter which is to be or (ay be prescribed0 %>4(3) 7'ery rule (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule0: 1"954o/er of Se'*ritie! % - E#'h% (e ;o%r- of I -i% to .%6e re(*l%tio !. )1. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 305(%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,%> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 <rior to its substitution, sub+section (3), as a(ended by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!", read as under , 1(3) 7'ery rule (ade under this section shall, as soon as (ay be, after its publication in the Cfficial &aFette, be laid before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e session aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule02 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0 7arlier it was repealed by the Repealing and A(ending Act, !#0, Sec % and 6irst Sch0 w0e0f0 %>+ %+ !#00 30 Substituted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec ", w0e0f0 %>+ 0"+%00/0 <rior to substitution it read as under , 1(%) In particular and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for the (anner in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section02
(a) the (anner, in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of
publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section3 (b) the eligibility criteria and other re*uire(ents under section /A0 < (3) 7'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the regulation or both Iouses agree that the regulation should not be (ade, the regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that regulation0:
DE4OSITORIES ACT, 1998 SECTIONS /@A81(0 : 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS ). Certificate of co((ence(ent of business by depositories /@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS 3. Agree(ent between depository and participant 5. Ser'ices of depository 8. Surrender of certificate of security 7. Registration of transfer of securities with depositories :. Cptions to recei'e security certificate or hold securities with depository 9. Securities in depositories to be in fungible for( 1=. Rights of depositories and beneficial owner 11. Register of beneficial owner 1". <ledge or hypothecation of securities held in a depository 1). 6urnishing of infor(ation and records by depository and issuer 13. Cption to opt out in respect of any security 15. Act > of >! to apply to depositories 18. 9epositories to inde(nify loss in certain cases 17. Rights and obligations of depositories, etc0 /@A81(0 :: EN9UIRM AND INS4ECTION 1:. <ower of 8oard to call for infor(ation and en*uiry 19. <ower of 8oard to gi'e directions in certain cases 19A. <enalty for failure to furnish infor(ation, return, etc0 19;. <enalty for failure to enter into an agree(ent 19C. <enalty for failure to redress in'estorsJ grie'ances
19D. <enalty for delay in de(aterialisation or issue of certificate of securities 19E. <enalty for failure to reconcile records 192. <enalty for failure to co(ply with directions issued by 8oard under section ! of the Act 19G. <enalty for contra'ention where no separate penalty has been pro'ided 19D. <ower to adDudicate 190I. 6actors to be ta)en into account by adDudicating officer 190IA. Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (! 190I;. Re'o+er> of %.o* t! 190E. Crediting su(s realised by way of penalties to Consolidated 6und of India /@A81(0 D 4ENALTM "=. Cffences "1. Cffences by co(panies /@A81(0 D: @ISCELLANEOUS "". CogniFance of offences by courts ""A. Co(position of certain offences "";. <ower to grant i((unity ""C. E!t%,li!h.e t of S$e'i%l Co*rt! ""D. Offe 'e! tri%,le ,> S$e'i%l Co*rt! ""E. A$$e%l % - re+i!io ""2. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""G. Tr% !itio %l 4ro+i!io ! "). Appeals ")A. Appeal to Securities Appellate .ribunal ")A. Appeal to Securities Appellate .ribunal ");. <rocedure and powers of Securities Appellate .ribunal ")C. Right to =egal Representation ")D. =i(itation ")E. Ci'il court not to ha'e Durisdiction ")2. Appeal to Supre(e Court "3. <ower of Central &o'ern(ent to (a)e rules "5. <ower of 8oard to (a)e regulations "8. <ower of depositories to (a)e bye+laws "7. Rules and regulations to be laid before <arlia(ent ":. Application of other laws not barred "9. Re(o'al of difficulties )=. A(end(ents to certain enact(ents )1. Repeal and sa'ing /@(5A9( A?7E9?7E. .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0: DE4OSITORIES ACT, 1998 5"" O2 1998< 51=th A*(*!t, 1998< An Act to provide $or reg lation o$ depositories in sec rities and $or matters connected there%ith or incidental thereto& B( it enacted bF 8arlia"ent in the E$rtF7#eventh ;ear $f the 0e%!blic $f :ndia a# f$ll$.# ,*
/@A81(0 : 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the 9epositories Act, !!#0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the %0th day of Septe(ber, !!"0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 1beneficial owner2 (eans a person whose na(e is recorded as such with a depository3 (b) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 3 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (c) 1bye+laws2 (eans bye+laws (ade by a depository under section %#3 (d) 1Co(pany =aw 8oard2 (eans the 8oard of Co(pany =aw Ad(inistration constituted under section 07 of the Co(panies Act, !"# ( of !"#)3 (e) 1depository2 (eans a co(pany for(ed and registered under the Co(panies Act, !"# ( of !"#), and which has been granted a certificate of registration under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (f) 1issuer2 (eans any person (a)ing an issue of securities3 (g) 1participant2 (eans a person registered as such under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (h) 1prescribed2 (eans prescribed by rules (ade under this Act3 (i) 1record2 includes the records (aintained in the for( of boo)s or stored in a co(puter or in such other for( as (ay be deter(ined by regulations3 (j) 1registered owner2 (eans a depository whose na(e is entered as such in the register of the issuer3 (k) 1regulations2 (eans the regulations (ade by the 8oard3 4(ka) 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (l) 1security2 (eans such security as (ay be specified by the 8oard3 (") 1ser'ice2 (eans any ser'ice connected with recording of allot(ent of securities or transfer of ownership of securities in the record of a depository0 (%) Kords and expressions used herein and not defined but defined in the Co(panies Act, !"# ( of !"#), or the Securities Contracts (Regulation) Act, !"# ($% of !"#), or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), shall ha'e the (eanings respecti'ely assigned to the( in those Acts0 /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS Certifi'%te of 'o..e 'e.e t of ,*!i e!! ,> -e$o!itorie!. ). ( ) Eo depository shall act as a depository unless it obtains a certificate of co((ence(ent of business fro( the 8oard0 (%) A certificate granted under sub+section ( ) shall be in such for( as (ay be specified by the regulations0 (3) .he 8oard shall not grant a certificate under sub+section ( ) unless it is satisfied that the depository has ade*uate syste(s and safeguards to pre'ent (anipulation of records and transactions , 4ro+i-e- that no certificate shall be refused under this section unless the depository concerned has been gi'en a reasonable opportunity of being heard0
Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
/@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS A(ree.e t ,et/ee -e$o!itor> % - $%rti'i$% t. 3. ( ) A depository shall enter into an agree(ent with one or (ore participants as its agent0 (%) 7'ery agree(ent under sub+section ( ) shall be in such for( as (ay be specified by the bye+laws0 Ser+i'e! of -e$o!itor>. 5. Any person, through a participant, (ay enter into an agree(ent, in such for( as (ay be specified by the bye+laws, with any depository for a'ailing its ser'ices0 S*rre -er of 'ertifi'%te of !e'*rit>. 8. ( ) Any person who has entered into an agree(ent under section " shall surrender the certificate of security, for which he see)s to a'ail the ser'ices of a depository, to the issuer in such (anner as (ay be specified by the regulations0 (%) .he issuer, on receipt of certificate of security under sub+section ( ), shall cancel the certificate of security and substitute in its records the na(e of the depository as a registered owner in respect of that security and infor( the depository accordingly0 (3) A depository shall, on receipt of infor(ation under sub+section (%), enter the na(e of the person referred to in sub+section ( ) in its records, as the beneficial owner0 Re(i!tr%tio of tr% !fer of !e'*ritie! /ith -e$o!itor>. 7. ( ) 7'ery depository shall, on receipt of inti(ation fro( a participant, register the transfer of security in the na(e of the transferee0 (%) If a beneficial owner or a transferee of any security see)s to ha'e custody of such security the depository shall infor( the issuer accordingly0 O$tio ! to re'ei+e !e'*rit> 'ertifi'%te or hol- !e'*ritie! /ith -e$o!itor>. :. ( ) 7'ery person subscribing to securities offered by an issuer shall ha'e the option either to recei'e the security certificates or hold securities with a depository0 (%) Khere a person opts to hold a security with a depository, the issuer shall inti(ate such depository the details of allot(ent of the security, and on receipt of such infor(ation the depository shall enter in its records the na(e of the allottee as the beneficial owner of that security0 Se'*ritie! i -e$o!itorie! to ,e i f* (i,le for.. 9. ( ) All securities held by a depository shall be de(aterialised and shall be in a fungible for(0 %4(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#), shall apply to a depository in respect of securities held by it on behalf of the beneficial owners&: Ri(ht! of -e$o!itorie! % - ,e efi'i%l o/ er. 1=. ( ) Eotwithstanding anything contained in any other law for the ti(e being in force, a depository shall be dee(ed to be the registered owner for the purposes of effecting transfer of ownership of security on behalf of a beneficial owner0 (%) Sa'e as otherwise pro'ided in sub+section ( ), the depository as a registered owner shall not ha'e any 'oting rights or any other rights in respect of securities held by it0 (3) .he beneficial owner shall be entitled to all the rights and benefits and be subDected to all the liabilities in respect of his securities held by a depository0 Re(i!ter of ,e efi'i%l o/ er. 11. 7'ery depository shall (aintain a register and an index of beneficial owners in the
(anner pro'ided in sections "0, " and "% of the Co(panies Act, !"# ( of !"#)0 4le-(e or h>$othe'%tio of !e'*ritie! hel- i % -e$o!itor>. 1". ( ) SubDect to such regulations and bye+laws, as (ay be (ade in this behalf, a beneficial owner (ay with the pre'ious appro'al of the depository create a pledge or hypothecation in respect of a security owned by hi( through a depository0 (%) 7'ery beneficial owner shall gi'e inti(ation of such pledge or hypothecation to the depository and such depository shall thereupon (a)e entries in its records accordingly0 (3) Any entry in the records of a depository under sub+section (%) shall be e'idence of a pledge or hypothecation0 2*r i!hi ( of i for.%tio % - re'or-! ,> -e$o!itor> % - i!!*er. 1). ( ) 7'ery depository shall furnish to the issuer infor(ation about the transfer of securities in the na(e of beneficial owners at such inter'als and in such (anner as (ay be specified by the bye+laws0 (%) 7'ery issuer shall (a)e a'ailable to the depository copies of the rele'ant records in respect of securities held by such depository0 O$tio to o$t o*t i re!$e't of % > !e'*rit>.
% Substituted
by the 9epositories Related =aws (A(end(ent) Act, !!/, Sec %%, w0e0f0 "+0 + !!/0 <rior to its substitution sub+section (%) read as under , 1(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#) shall apply to the securities held by a depository on behalf of the beneficial owners02
13. ( ) If a beneficial owner see)s to opt out of a depository in respect of any security he shall infor( the depository accordingly0 (%) .he depository shall on receipt of inti(ation under sub+section ( ) (a)e appropriate entries in its records and shall infor( the issuer0 (3) 7'ery issuer shall, within thirty days of the receipt of inti(ation fro( the depository and on fulfil(ent of such conditions and on pay(ent of such fees as (ay be specified by the regulations, issue the certificate of securities to the beneficial owner or the transferee, as the case (ay be0 A't 1: of 1:91 to %$$l> to -e$o!itorie!. 15. .he 8an)ersJ 8oo)s 7'idence Act, >! shall apply in relation to a depository as if it were a ban) as defined in section % of that Act0 De$o!itorie! to i -e. if> lo!! i 'ert%i '%!e!. 18. ( ) Kithout preDudice to the pro'isions of any other law for the ti(e being in force, any loss caused to the beneficial owner due to the negligence of the depository or the participant, the depository shall inde(nify such beneficial owner0 (%) Khere the loss due to the negligence of the participant under sub+section ( ) is inde(nified by the depository, the depository shall ha'e the right to reco'er the sa(e fro( such participant0 Ri(ht! % - o,li(%tio ! of -e$o!itorie!, et'. 17. ( ) SubDect to the pro'isions of this Act, the rights and obligations of the depositories, participants and the issuers whose securities are dealt with by a depository shall be specified by the regulations0 (%) .he eligibility criteria for ad(ission of securities into the depository shall be specified by the regulations0 /@A81(0 :D EN9UIRM AND INS4ECTION 4o/er of ;o%r- to '%ll for i for.%tio % - e 7*ir>. 1:. ( ) .he 8oard, on being satisfied that it is necessary in the public interest or in the interest of in'estors so to do, (ay, by order in writing,-
(a) call upon any issuer, depository, participant or beneficial owner to furnish in writing such infor(ation relating to the securities held in a depository as it (ay re*uire3 or (b) authorise any person to (a)e an en*uiry or inspection in relation to the affairs of the issuer, beneficial owner, depository or participant, who shall sub(it a report of such en*uiry or inspection to it within such period as (ay be specified in the order0 (%) 7'ery director, (anager, partner, secretary, officer or e(ployee of the depository or issuer or the participant or beneficial owner shall on de(and produce before the person (a)ing the en*uiry or inspection all infor(ation or such records and other docu(ents in his custody ha'ing a bearing on the subDect+(atter of such en*uiry or inspection0 4o/er of ;o%r- to (i+e -ire'tio ! i 'ert%i '%!e!. 19. Sa'e as pro'ided in this Act, if after (a)ing or causing to be (ade an en*uiry or inspection, the 8oard is satisfied that it is necessary(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any depository or participant being conducted in the (anner detri(ental to the interests of in'estors or securities (ar)et, it (ay issue such directions,(a) to any depository or participant or any person associated with the securities (ar)et3 or (b) to any issuer, as (ay be appropriate in the interest of in'estors or the securities (ar)et0 )5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< $44e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 19A. Any person, who is re*uired under this Act or any rules or regulations or bye+laws (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to the 8oard, fails to furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations or bye+laws, fails to file return or furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0
3I $ Inserted
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the Securities =aws (A(end(ent) Act, %00$, Sec0 /, w0r0e0f0 %+ 0+%00$0
4e %lt> for f%il*re to e ter i to % %(ree.e t. 19;. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and is re*uired under this Act or any rules or regulations (ade thereunder, to enter into an agree(ent, fails to enter into such agree(ent, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0
4e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 19C. If any depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such depository or participant or issuer or its agents or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for -el%> i -e.%teri%li!%tio or i!!*e of 'ertifi'%te of !e'*ritie!. 19D. If any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to de(aterialise or issue the certificate of securities on opting out of a depository by the in'estors, within the ti(e specified under this Act or regulations or bye+laws (ade thereunder or abets in delaying the process of de(aterialisation or issue the certificate of securities on opting out of a depository of securities, such issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to re'o 'ile re'or-!. 19E. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to reconcile the records of de(aterialised securities with all the securities issued by the issuer as specified in the regulations, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to 'o.$l> /ith -ire'tio ! i!!*e- ,> ;o%r- * -er !e'tio 19 of the A't. 192. If any person fails to co(ply with the directions issued by the 8oard under section !, within the ti(e specified by it, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 19G. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations or bye+laws (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0 4o/er to %-G*-i'%te. 19D. ( ) 6or the purpose of adDudging under sections !A, !8, !C, !9, !7, !6 and !&, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the
sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. 190I. Khile adDudging the *uantu( of penalty under section !I, the adDudicating officer shall ha'e due regard to the following factors, na(ely,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 55 Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (!. 190IA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 19, !e'tio 19D, %! the '%!e .%> ,e, .%> file % %$$li'%tio i /riti ( to the ;o%r$ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e-ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h
"I
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re !$e'ifie- ,> the ;o%r* -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")A %(%i !t % > or-er $%!!e- ,> the ;o%r- or the %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 85 Re'o+er> of %.o* t!. 190I;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 19 or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6
%''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hilor !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C!
#I
!erte- ,> The Se'*ritie! L%/! (A.e- .e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
.o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")A of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 19, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 19E. All su(s realiFed by way of penalties under this Act shall be credited to the Consolidated 6und of India0: /@A81(0 D 4ENALTM /4Offe 'e!. "=. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws (ade thereunder, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0
/ Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 >, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %0 read as under,1%00 <ffence#0- Khoe'er contran'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or any regulations or bye+laws (ade thereunder shall be punishable with i(prison(ent for a ter( which (ay extend to fi'e years, or with fine or with both02
(%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with
fine, which (ay extend to twenty+fi'e crore rupees, or with both0: Offe 'e! ,> 'o.$% ie!. "1. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n&-6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and (b) 1director2, in relation to a fir(, (eans a partner in the fir(0 /@A81(0 D: @ISCELLANEOUS >4Co( iL% 'e of offe 'e! ,> 'o*rt!. "". ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central
> Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 !, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %% read as under,1%%0 /$gniCance $f $ffence# bF c$!rt#&*( ) Eo Court shall ta)e cogniFance of any offence punishable under this Act or any regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the 8oard0 (%) Eo court inferior to that of a ?etropolitan ?agistrate or a Dudicial ?agistrate of the first class shall try any offence punishable under this Act02
&o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or by any person0 !5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < Co.$o!itio of 'ert%i offe 'e!. ""A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "";. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any
penalty under this Act with respect to the alleged 'iolation , 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity , 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0: 1=5 E!t%,li!h.e t of S$e'i%l Co*rt!. ""C. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>.
! <rior
to o(ission, Sub+section(%) read 1Eo court inferior to that of a Court of Session shall try any offence punishable under this Act02 0 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. ""D. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-. A$$e%l % - Re+i!io ""E. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""2. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197).
(") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erioof ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! ""G. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< A$$e%l!. "). ( ) Any person aggrie'ed by an order of the 8oard (ade 4before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!: under this Act, or the regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor , 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0 (3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed , 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 %4A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")A. ( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!, under this Act, or the regulations (ade thereunder, 34or by an order (ade by an adDudicating officer under this Act: (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 $5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 8oard is recei'ed by the person referred to in sub+section ( ) and it shall be in such for( and be acco(panied by such fee as (ay be prescribed ,
Substituted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 $, w0e0f0 #+ %+ !!! for ;an order of the 8oard (ade;0 % Sections %3A to %36 inserted by the Securities =aws (Second A(end(ent) Act, !!! , Sec0 ", w0e0f0 #+ %+ !!!& 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %0, w0r0e0f0 %+ 0+%00$0 $ 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JNo %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-e ,> the ;o%r- /ith the 'o !e t of the $%rtie!.K
4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0
($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 (") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. ");. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3 (e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte; (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 Ri(ht to le(%l re$re!e t%tio . ")C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or an attorney of any Iigh Court, and
includes a pleader in practice0 Li.it%tio . ")D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 Ci+il 'o*rt ot to h%+e G*ri!-i'tio . ")E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "4A$$e%l to S*$re.e Co*rt. ")2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order ,
" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 % , w0r0e0f0 %+ 0+%00$0 <rior to its substitution, Section %36, as inserted by Securities =aws (Second A(end(ent) Act, !!!, w0e0f0 #+ %+ !!!, read as under,1%360 A%%eal t$ @igh /$!rt&-Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0:: 4o/er of Ce tr%l Go+er .e t to .%6e r*le!. "3. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for carrying out the pro'isions of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,164(a) the (anner of in*uiry under sub+section ( ) of section !I3 (aa) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %33: (b) the for( in which an appeal (ay be preferred under sub+section (3) of section %3 and the fees payable in respect of such appeal 3 (c) the procedure for disposing of an appeal under sub+section ($) of section %33 /4(d) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3A and the fees payable in respect of such appeal0: 4o/er of ;o%r- to .%6e re(*l%tio !. "5. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the 8oard (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for(a) the for( in which record is to be (aintained under clause ( i) of sub+section ( ) of section %3 (b) the for( in which the certificate of co((ence(ent of business shall be issued under
sub+section (%) of section 33 (c) the (anner in which the certificate of security shall be surrendered under sub+section ( ) of section #3 (d) the (anner of creating a pledge or hypothecation in respect of security owned by a beneficial owner under sub+section ( ) of section %3 (e) the conditions and the fees payable with respect to the issue of certificate of securities under sub+section (3) of section $3
# Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %%, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (a) read as under,1(a) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %332 / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 #, w0e0f0 #+ %+ !!!0
(f) the rights and obligations of the depositories, participants and the issuers under subsection ( ) of section /3 (g) the eligibility criteria for ad(ission of securities into the depository under sub+section (%) of section /0 4o/er of -e$o!itorie! to .%6e ,>e0l%/!. "8. ( ) A depository shall, with the pre'ious appro'al of the 8oard, (a)e bye+laws consistent with the pro'isions of this Act and the regulations0 (%) In particular, and without preDudice to the generality of the foregoing power, such byelaws shall pro'ide for(a) the eligibility criteria for ad(ission and re(o'al of securities in the depository3 (b) the conditions subDect to which the securities shall be dealt with3 (c) the eligibility criteria for ad(ission of any person as a participant3 (d) the (anner and procedure for de(aterialisation of securities3 (e) the procedure for transactions within the depository3 (f) the (anner in which securities shall be dealt with or withdrawn fro( a depository3 (g) the procedure for ensuring safeguards to protect the interests of participants and beneficial owners3 (h) the conditions of ad(ission into and withdrawal fro( a participant by a beneficial owner3 (i) the procedure for con'eying infor(ation to the participants and beneficial owners on di'idend declaration, shareholder (eetings and other (atters of interest to the beneficial owners3 (j) the (anner of distribution of di'idends, interest and (onetary benefits recei'ed fro( the co(pany a(ong beneficial owners3 (k) the (anner of creating pledge or hypothecation in respect of securities held with a depository3 (l) inter #e rights and obligations a(ong the depository, issuer, participants, and beneficial owners3 (") the (anner and the periodicity of furnishing infor(ation to the 8oard, issuer and other persons3 (n) the procedure for resol'ing disputes in'ol'ing depository, issuer, co(pany or a beneficial owner3 ($) the procedure for proceeding against the participant co((itting breach of the regulations and pro'isions for suspension and expulsion of participants fro( the depository and cancellation of agree(ents entered with the depository3 (%) the internal control standards including procedure for auditing, re'iewing and (onitoring0
(3) Khere the 8oard considers it expedient so to do, it (ay, by order in writing, direct a depository to (a)e any bye+laws or to a(end or re'o)e any bye+laws already (ade within such period as it (ay specify in this behalf0 ($) If the depository fails or neglects to co(ply with such order within the specified period, the 8oard (ay (a)e the bye+laws or a(end or re'o)e the bye+laws (ade either in the for( specified in the order or with such (odifications thereof as the 8oard thin)s fit0 R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t. "7. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. ":. .he pro'isions of this Act shall be in addition to, and not in derogation of, any other law for the ti(e being in force relating to the holding and transfer of securities0 Re.o+%l of -iffi'*ltie!. "9. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as appear to it to be necessary or expedient for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of a period of two years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 A.e -.e t! to 'ert%i e %'t.e t!. )=. 40e%ealed bF 0e%ealing H A"ending Act' 20010: Re$e%l % - !%+i (. )1. ( ) .he 9epositories (.hird) Crdinance, !!# (Crd0 %> of !!#), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 /@(5A9( 4 ee section 30: A?7E9?7E.S .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0:
SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 SECTIONS !'APT"R I 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions !'APT"R II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA
). 7stablish(ent and incorporation of 8oard 3. ?anage(ent of the 8oard 5. .er( of office and conditions of ser'ice of Chair(an and (e(bers of the 8oard 8. Re(o'al of (e(ber fro( office 7. ?eetings 7A. ?e(ber not to participate in (eetings in certain cases :. Bacancies, etc0, not to in'alidate proceedings of 8oard 9. Cfficers and e(ployees of the 8oard !'APT"R III TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD 1=. .ransfer of assets, liabilities, etc0, of existing Securities and 7xchange 8oard to the 8oard !'APT"R IV 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 11. 6unctions of 8oard 11A. 8oard to regulate or prohibit issue of prospectus, offer docu(ent or ad'ertise(ent soliciting (oney for issue of securities 11AA. Collecti'e in'est(ent sche(e 11;. <ower to issue directions 11C. In'estigation 11D. Cease and desist proceedings !'APT"R V REGISTRATION CERTI2ICATE 1". Registration of stoc) bro)ers, sub+bro)ers, share transfer agents, etc0
%
!'APT"R VA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 1"A. <rohibition of (anipulati'e and decepti'e de'ices, insider trading and substantial ac*uisition of securities or control !'APT"R VI 2INANCE, ACCOUNTS AND AUDIT 1). &rants by the Central &o'ern(ent 13. 6und 15. Accounts and audit !'APT"R VIA 4ENALTIES AND ADEUDICATION 15A. <enalty for failure to furnish infor(ation, return, etc & 15;. <enalty for failure by any person to enter into agree(ent with clients 15C. <enalty for failure to redress in'estorsJ grie'ances 15D. <enalty for certain defaults in case of (utual funds 15E. <enalty for failure to obser'e rules and regulations by an asset (anage(ent co(pany 152. <enalty for default in case of stoc) bro)ers 15G. <enalty for insider trading 15D. <enalty for non+disclosure of ac*uisition of shares and ta)eo'ers 15DA. <enalty for fraudulent and unfair trade practices 15D;. <enalty for contra'ention where no separate penalty has been pro'ided
150I. <ower to adDudicate 15E. 6actors to be ta)en into account by the AdDudicating Cfficer 15EA. Crediting su(s realised by way of penalties to Consolidated 6und of India 15E;. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! !'APT"R VIB ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL 15F. 7stablish(ent of Securities Appellate .ribunals 15L. Co(position of Securities Appellate .ribunal 15@. Qualification for appoint(ent as <residing Cfficer or ?e(ber of Securities Appellate .ribunal
3
15N. .enure of office of <residing Cfficer and other (e(bers of Securities Appellate .ribunal 150O. Salary and allowances and other ter(s and conditions of ser'ice of <residing Cfficers 154. 6illing up of 'acancies 159. Resignation and re(o'al 15R. Crders constituting Appellate .ribunal to be final and not to in'alidate its proceedings 15S. Staff of the Securities Appellate .ribunal 15T. Appeal to the Securities Appellate .ribunal 15U. <rocedure and powers of the Securities Appellate .ribunal 15I. Right to legal representation 15?. =i(itation 15A. <residing Cfficer, (e(bers and staff of Securities Appellate .ribunals to be public ser'ants 15M. Ci'il Court not to ha'e Durisdiction 15N. Appeal to Supre(e Court !'APT"R VII @ISCELLANEOUS 18. <ower of Central &o'ern(ent to issue directions 17. <ower of Central &o'ern(ent to supersede the 8oard 1:. Returns and reports 19. 9elegation "=. Appeals "=A. 8ar of Durisdiction "1. Sa'ings "". ?e(bers, officers and e(ployees of the 8oard to be public ser'ants "). <rotection of action ta)en in good faith "3. Cffences "3A. Co(position of certain offences "3;. <ower to grant i((unity "5. 7xe(ption fro( tax on wealth and inco(e "8. CogniFance of offences by Courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! "7. Cffences by co(panies
":. 4C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!":
$
":A. Re'o+er> of %.o* t! "9. <ower to (a)e rules )=. <ower to (a)e regulations )1. Rules and regulations to be laid before <arlia(ent )". Application of other laws not barred )). 4Repealed by Repealing R A(ending Act, %00 : )3. <ower to re(o'e difficulties )5. Repeal and sa'ing .I7 SCI79H=7 4Repealed by Repealing R A(ending Act, %00 : SECURITIES AND EACDANGE ;OARD O2 INDIA ACT, 199" 515 O2 199"< 53th A$ril, 199"< A A't to $ro+i-e for the e!t%,li!h.e t of % ;o%r- to $rote't the i tere!t! of i +e!tor! i !e'*ritie! % - to $ro.ote the -e+elo$.e t of, % - to re(*l%te, the !e'*ritie! .%r6et % - for .%tter! 'o e'te- there/ith or i 'i-e t%l thereto B( it enacted bF 8arlia"ent in the E$rtF7third ;ear $f the 0e%!blic $f :ndia a# f$ll$.# , CDA4TER I 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities and 7xchange 8oard of India Act, !!%0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the 30th day of Manuary, !!%0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 33 (b) 1Chair(an2 (eans the Chair(an of the 8oard3 4(ba) 1collecti'e in'est(ent sche(e2 (eans any sche(e or arrange(ent which satisfies the conditions specified in section AA3: (c) 1existing Securities and 7xchange 8oard2 (eans the Securities and 7xchange 8oard of India constituted under the Resolution of the &o'ern(ent of India in the 9epart(ent of 7cono(ic Affairs Eo0 ($$) S7L>#, dated the %th day of April, !>>3 (d) 16und2 (eans the 6und constituted under section $3 (e) 1(e(ber2 (eans a (e(ber of the 8oard and includes the Chair(an3 (f) 1notification2 (eans a notification published in the Cfficial &aFette3 (g) 1prescribed2 (eans prescribed by rules (ade under this Act3
Inserted by the Securities =aws (A(end(ent) Act, !!!, w0e0f0 %%+%+%0000
"
(h) 1regulations2 (eans the regulations (ade by the 8oard under this Act3 4(ha) 1Reser'e 8an)2 (eans the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)3: (i) 1securities2 has the (eaning assigned to it in section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#)0 %4(%) Kords and expressions used and not defined in this Act but defined in the Securities Contracts (Regulation) Act, !"# ($% of !"#) 34or the 9epositories Act, !!#:, shall ha'e the (eanings respecti'ely assigned to the( in that Act:0 CDA4TER II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA E!t%,li!h.e t % - i 'or$or%tio of ;o%r-.
). ( ) Kith effect fro( such date as the Central &o'ern(ent (ay, by notification, appoint, there shall be established, for the purposes of this Act, a 8oard by the na(e of the Securities and 7xchange 8oard of India0 (%) .he 8oard shall be a body corporate by the na(e aforesaid, ha'ing perpetual succession and a co((on seal, with power subDect to the pro'isions of this Act, to ac*uire, hold and dispose of property, both (o'able and i((o'able, and to contract, and shall, by the said na(e, sue or be sued0 (3) .he head office of the 8oard shall be at 8o(bay0 ($) .he 8oard (ay establish offices at other places in India0 @% %(e.e t of the ;o%r-. 3. ( ) .he 8oard shall consist of the following (e(bers, na(ely,(a) a Chair(an3 (b) two (e(bers fro( a(ongst the officials of the $4?inistry: of the Central &o'ern(ent dealing with 6inance "4and ad(inistration of the Co(panies Act, !"# ( of !"#):3 (c) one (e(ber fro( a(ongst the officials of #4the Reser'e 8an):3 /4(d) fi'e other (e(bers of who( at least three shall be the whole+ti(e (e(bers,: to be appointed by the Central &o'ern(ent0
Inserted by the Securities =aws (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0 <rior to its substitution, sub+section (%) reads as under, 1(%) Kords and expressions used and not defined in this Act but defined in the Capital Issues (Control) Act, !$/ or the Securities Contracts Regulation Act, !"# shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts02 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 $ Substituted for 1?inistries2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1and law2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act !3$ (% of !3$)2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 / Substituted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, clause (d) read as, 1(d) two other (e(bers20
% Substituted
#
(%) .he general superintendence, direction and (anage(ent of the affairs of the 8oard shall 'est in a 8oard of (e(bers, which (ay exercise all powers and do all acts and things which (ay be exercised or done by the 8oard0 (3) Sa'e as otherwise deter(ined by regulations, the Chair(an shall also ha'e powers of general superintendence and direction of the affairs of the 8oard and (ay also exercise all powers and do all acts and things which (ay be exercised or done by that 8oard0 ($) .he Chair(an and (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be appointed by the Central &o'ern(ent and the (e(bers referred to in clauses ( b) and (c) of that sub+section shall be no(inated by the Central &o'ern(ent and the 4Reser'e 8an): respecti'ely0 (") .he Chair(an and the other (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be persons of ability, integrity and standing who ha'e shown capacity in dealing with proble(s relating to securities (ar)et or ha'e special )nowledge or experience of law, finance, econo(ics, accountancy, ad(inistration or in any other discipline which, in the opinion of the Central &o'ern(ent, shall be useful to the 8oard0 Ter. of offi'e % - 'o -itio ! of !er+i'e of Ch%ir.% % - .e.,er! of the ;o%r-. 5. ( ) .he ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers referred to in clause (d) of sub+section ( ) of section $ shall be such as (ay be prescribed0 (%) Eotwithstanding anything contained in sub+section ( ), the Central &o'ern(ent shall ha'e the right to ter(inate the ser'ices of the Chair(an or a (e(ber appointed under clause ( d) of
sub+section ( ) of section $, at any ti(e before the expiry of the period prescribed under subsection ( ), by gi'ing hi( notice of not less than three (onths in writing or three (onthsJ salary and allowances in lieu thereof, and the Chair(an or a (e(ber, as the case (ay be, shall also ha'e the right to relin*uish his office, at any ti(e before the expiry of the period prescribed under sub+section ( ), by gi'ing to the Central &o'ern(ent notice of not less than three (onths in writing0 Re.o+%l of .e.,er fro. offi'e. 8. %4G G G: .he Central &o'ern(ent shall re(o'e a (e(ber fro( office if he(a) is, or at any ti(e has been, adDudicated as insol'ent3 (b) is of unsound (ind and stands so declared by a co(petent court3 (c) has been con'icted of an offence which, in the opinion of the Central &o'ern(ent, in'ol'es a (oral turpitude3 (d) 34G G G: (e) has, in the opinion of the Central &o'ern(ent, so abused his position as to render his continuation in office detri(ental to the public interest , 4ro+i-e- that no (e(ber shall be re(o'ed under this clause unless he has been gi'en a reasonable opportunity of being heard in the (atter0
Substituted for 1Reser'e 8an) of India2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 )2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 C(itted, by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to o(ission clause (d) read read as, 1(d) is appointed as a director of a co(pany20
% 1(
/
@eeti (!. 7. ( ) .he 8oard shall (eet at such ti(es and places, and shall obser'e such rules of procedure in regard to the transaction of business at its (eetings (including *uoru( at such (eetings) as (ay be pro'ided by regulations0 (%) .he Chair(an or, if for any reason, he is unable to attend a (eeting of the 8oard, any other (e(ber chosen by the (e(bers present fro( a(ongst the(sel'es at the (eeting shall preside at the (eeting0 (3) All *uestions which co(e up before any (eeting of the 8oard shall be decided by a (aDority 'otes of the (e(bers present and 'oting, and, in the e'ent of an e*uality of 'otes, the Chair(an, or in his absence, the person presiding, shall ha'e a second or casting 'ote0 4@e.,er ot to $%rti'i$%te i .eeti (! i 'ert%i '%!e!. 7A. Any (e(ber, who is a director of a co(pany and who as such director has any direct or indirect pecuniary interest in any (atter co(ing up for consideration at a (eeting of the 8oard, shall, as soon as possible after rele'ant circu(stances ha'e co(e to his )nowledge, disclose the nature of his interest at such (eeting and such disclosure shall be recorded in the proceedings of the 8oard, and the (e(ber shall not ta)e any part in any deliberation or decision of the 8oard with respect to that (atter0: I%'% 'ie!, et'., ot to i +%li-%te $ro'ee-i (! of ;o%r-. :. Eo act or proceeding of the 8oard shall be in'alid (erely by reason of(a) any 'acancy in, or any defect in the constitution of, the 8oard3 or (b) any defect in the appoint(ent of a person acting as a (e(ber of the 8oard3 or (c) any irregularity in the procedure of the 8oard not affecting the (erits of the case0 Offi'er! % - e.$lo>ee! of the ;o%r-. 9. ( ) .he 8oard (ay appoint such other officers and e(ployees as it considers necessary for the efficient discharge of its functions under this Act0 (%) .he ter( and other conditions of ser'ice of officers and e(ployees of the 8oard appointed under sub+section ( ) shall be such as (ay be deter(ined by regulations0 CDA4TER III
TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD Tr% !fer of %!!et!, li%,ilitie!, et'., of e#i!ti ( Se'*ritie! % - E#'h% (e ;o%r- to the ;o%r-. 1=. ( ) Cn and fro( the date of establish(ent of the 8oard,(a) any reference to the existing Securities and 7xchange 8oard in any law other than this Act or in any contract or other instru(ent shall be dee(ed as a reference to the 8oard3 (b) all properties and assets, (o'able and i((o'able, of, or belonging to, the existing Securities and 7xchange 8oard, shall 'est in the 8oard3
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
>
(c) all rights and liabilities of the existing Securities and 7xchange 8oard shall be transferred to, and be the rights and liabilities of, the 8oard3 (d) without preDudice to the pro'isions of clause (c), all debts, obligations and liabilities incurred, all contracts entered into and all (atters and things engaged to be done by, with or for the existing Securities and 7xchange 8oard i((ediately before that date, for or in connection with the purpose of the said existing 8oard shall be dee(ed to ha'e been incurred, entered into, or engaged to be done by, with or for, the 8oard3 (e) all su(s of (oney due to the existing Securities and 7xchange 8oard i((ediately before that date shall be dee(ed to be due to the 8oard3 (f) all suits and other legal proceedings instituted or which could ha'e been instituted by or against the existing Securities and 7xchange 8oard i((ediately before that date (ay be continued or (ay be instituted by or against the 8oard3 and (g) e'ery e(ployee holding any office under the existing Securities and 7xchange 8oard i((ediately before that date shall hold his office in the 8oard by the sa(e tenure and upon the sa(e ter(s and conditions of ser'ice as respects re(uneration, lea'e, pro'ident fund, retire(ent and other ter(inal benefits as he would ha'e held such office if the 8oard had not been established and shall continue to do so as an e(ployee of the 8oard or until the expiry of the period of six (onths fro( that date if such e(ployee opts not to be the e(ployee of the 8oard within such period0 (%) Eotwithstanding anything contained in the Industrial 9isputes Act, !$/ ( $ of !$/), or in any other law for the ti(e being in force, absorption of any e(ployee by the 8oard in its regular ser'ice under this section shall not entitle such e(ployee to any co(pensation under that Act or other law and no such clai( shall be entertained by any court, tribunal or other authority0 CDA4TER II 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 2* 'tio ! of ;o%r-. 11. ( ) SubDect to the pro'isions of this Act, it shall be the duty of the 8oard to protect the interests of in'estors in securities and to pro(ote the de'elop(ent of, and to regulate the securities (ar)et, by such (easures as it thin)s fit0 (%) Kithout preDudice to the generality of the foregoing pro'isions, the (easures referred to therein (ay pro'ide for(a) regulating the business in stoc) exchanges and any other securities (ar)ets3 (b) registering and regulating the wor)ing of stoc) bro)ers, sub+bro)ers, share transfer agents, ban)ers to an issue, trustees of trust deeds, registrars to an issue, (erchant ban)ers, underwriters, portfolio (anagers, in'est(ent ad'isers and such other inter(ediaries who (ay be associated with securities (ar)ets in any (anner3 4(ba) registering and regulating the wor)ing of the depositories, %4participants:, custodians of securities, foreign institutional in'estors, credit rating agencies and such other inter(ediaries as the 8oard (ay, by notification, specify in this behalf3: (c) registering and regulating the wor)ing of 4'enture capital funds and collecti'e
in'est(ent sche(es:, including (utual funds3
% Inserted
Inserted by Securities =aws (A(end(ent) Act !!", w0r0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+!+ !!"0
!
(d) pro(oting and regulating self+regulatory organisations3 (e) prohibiting fraudulent and unfair trade practices relating to securities (ar)ets3 (f) pro(oting in'estorsJ education and training of inter(ediaries of securities (ar)ets3 (g) prohibiting insider trading in securities3 (h) regulating substantial ac*uisition of shares and ta)e o'er of co(panies3 (i) calling for infor(ation fro(, underta)ing inspection, conducting in*uiries and audits of the %4stoc) exchanges, (utual funds, other persons associated with the securities (ar)et:, inter(ediaries and self+regulatory organisations in the securities (ar)et3 34(ia) '%lli ( for i for.%tio % - re'or-! fro. % > $er!o i 'l*-i ( % > ,% 6 or % > other %*thorit> or ,o%r- or 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l or St%te A't /hi'h, i the o$i io of the ;o%r-, !h%ll ,e rele+% t to % > i +e!ti(%tio or i 7*ir> ,> the ;o%r- i re!$e't of % > tr% !%'tio i !e'*ritie! 3: $5(i,) '%lli ( for i for.%tio fro., or f*r i!hi ( i for.%tio to, other %*thoritie!, /hether i I -i% or o*t!i-e I -i%, h%+i ( f* 'tio ! !i.il%r to tho!e of the ;o%r-, i the .%tter! rel%ti ( to the $re+e tio or -ete'tio of +iol%tio ! i re!$e't of !e'*ritie! l%/!, !*,Ge't to the $ro+i!io ! of other l%/! for the ti.e ,ei ( i for'e i thi! re(%r-& 4ro+i-e- th%t the ;o%r-, for the $*r$o!e of f*r i!hi ( % > i for.%tio to % > %*thorit> o*t!i-e I -i%, .%> e ter i to % %rr% (e.e t or %(ree.e t or * -er!t% -i ( /ith !*'h %*thorit> /ith the $rior %$$ro+%l of the Ce tr%l Go+er .e tH< (j) perfor(ing such functions and exercising such powers under the pro'isions of "4G G G: the Securities Contracts (Regulation) Act, !"# ($% of !"#), as (ay be delegated to it by the Central &o'ern(ent3 (k) le'ying fees or other charges for carrying out the purposes of this section3 (l) conducting research for the abo'e purposes3 #4(la) calling fro( or furnishing to any such agencies, as (ay be specified by the 8oard, such infor(ation as (ay be considered necessary by it for the efficient discharge of its functions3: (") perfor(ing such other functions as (ay be prescribed0 /4(%A) Kithout preDudice to the pro'isions contained in sub+section (%), the 8oard (ay ta)e (easures to underta)e inspection of any boo), or register, or other docu(ent or record of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard
Substituted for 1collecti'e in'est(ent sche(es2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % Substituted for 1stoc) exchanges and2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 S*,!tit*te- for J'%lli ( for i for.%tio % - re'or- fro. % > ,% 6 or % > other %*thorit> or ,o%ror 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l, St%te or 4ro+i 'i%l A't i re!$e't of % > tr% !%'tio i !e'*ritie! /hi'h i! * -er i +e!ti(%tio or i 7*ir> ,> the ;o%r-K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). E%rlier Se'tio 11(")(i%) /%! i !erte- ,> the SE;I (A.e -.e t) A't, "==" /.e.f. "901=0"=="0 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. =80=)0 199:) " .he words 1the Capital Issues (Control) Act, !$/ (%! of !$/) and2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
0
has reasonable grounds to belie'e that such co(pany has been indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et0: 4(3) Eotwithstanding anything contained in any other law for the ti(e being in force while exercising the powers under %4clause (i) or clause (ia) of sub+section (%) or sub+ section (2A):, the 8oard shall ha'e the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(i) the disco'ery and production of boo)s of account and other docu(ents, at such place and such ti(e as (ay be specified by the 8oard3 (ii) su((oning and enforcing the attendance of persons and exa(ining the( on oath3 (iii) inspection of any boo)s, registers and other docu(ents of any person referred to in section %, at any place3: 34(iv) inspection of any boo), or register, or other docu(ent or record of the co(pany referred to in sub+section (%A)3 (v) issuing co((issions for the exa(ination of witnesses or docu(ents0: $4($) Kithout preDudice to the pro'isions contained in sub+sections ( ), (%), (%A) and (3) and section 8, the 8oard (ay, by an order, for reasons to be recorded in writing, in the interests of in'estors or securities (ar)et, ta)e any of the following (easures, either pending in'estigation or in*uiry or on co(pletion of such in'estigation or in*uiry, na(ely,(a) suspend the trading of any security in a recognised stoc) exchange3 (b) restrain persons fro( accessing the securities (ar)et and prohibit any person associated with securities (ar)et to buy, sell or deal in securities3 (c) suspend any office+bearer of any stoc) exchange or self+regulatory organisation fro( holding such position3 (d) i(pound and retain the proceeds or securities in respect of any transaction which is under in'estigation3 (e) attach, after passing of an order on an application (ade for appro'al by the Mudicial ?agistrate of the first class ha'ing Durisdiction, for a period not exceeding one (onth, one or (ore ban) account or accounts of any inter(ediary or any person associated with the securities (ar)et in any (anner in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder , 4ro+i-e- that only the ban) account or accounts or any transaction entered therein, so far as it relates to the proceeds actually in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder shall be allowed to be attached3 (f) direct any inter(ediary or any person associated with the securities (ar)et in any (anner not to dispose of or alienate an asset for(ing part of any transaction which is under in'estigation , 4ro+i-e- that the 8oard (ay, without preDudice to the pro'isions contained in sub+section (%) or sub+section (%A), ta)e any of the (easures specified in clause ( d) or clause (e) or clause (f), in respect of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard has reasonable grounds to belie'e that such co(pany has been
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1clause (i) of sub+section (%)2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 3 Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 $ Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
% Substituted
indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et , 4ro+i-e- f*rther that the 8oard shall, either before or after passing such orders, gi'e an
opportunity of hearing to such inter(ediaries or persons concerned0: 15(5) The %.o* t -i!(or(e-, $*r!*% t to % -ire'tio i!!*e- * -er !e'tio 11; or !e'tio 1"A of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 or !e'tio 19 of the De$o!itorie! A't, 1998, %! the '%!e .%> ,e, !h%ll ,e 're-ite- to the I +e!tor 4rote'tio % - E-*'%tio 2* e!t%,li!he- ,> the ;o%r- % - !*'h %.o* t !h%ll ,e *tiliLe- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< %4;o%r- to re(*l%te or $rohi,it i!!*e of $ro!$e't*!, offer -o'*.e t or %-+erti!e.e t !oli'iti ( .o e> for i!!*e of !e'*ritie!. 11A. ( ) Kithout preDudice to the pro'isions of the Co(panies Act, !"# ( of !"#), the 8oard (ay, for the protection of in'estors,(a) specify, by regulations(i) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (ii) the (anner in which such (atters shall be disclosed by the co(panies3 (b) by general or special orders(i) prohibit any co(pany fro( issuing prospectus, any offer docu(ent, or ad'ertise(ent soliciting (oney fro( the public for the issue of securities3 (ii) specify the conditions subDect to which the prospectus, such offer docu(ent or ad'ertise(ent, if not prohibited, (ay be issued0 (%) Kithout preDudice to the pro'isions of section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the 8oard (ay specify the re*uire(ents for listing and transfer of securities and other (atters incidental thereto0: 34Colle'ti+e i +e!t.e t !'he.e. 11AA. ( ) Any sche(e or arrange(ent which satisfies the conditions referred to in subsection (%) $5or !*,0!e'tio ("A)< shall be a collecti'e in'est(ent sche(e0 "44ro+i-e- th%t % > $ooli ( of f* -! * -er % > !'he.e or %rr% (e.e t, /hi'h i! ot re(i!tere- /ith the ;o%r- or i! ot 'o+ere- * -er !*,0!e'tio ()), i +ol+i ( %
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 7arlier S0 A was inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" for S0 A0 <rior to its substitution, S0 A read as under,+ 1 A0 ?atters to be disclosed by the co(panies0+ Kithout <reDudice to the <ro'isions of the Co(panies Act , !"# ( of !"#), the board (ay , for the protection of in'estors, specify, by regulations,+ (a) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (b) the (anner in which such (atters, shall be disclosed by the co(panies02 3 Inserted by S78I (A(end(ent) Act !!!, w0e0f0 %%+%+%0000 $I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% Substituted
%
'or$*! %.o* t of o e h* -re- 'rore r*$ee! or .ore !h%ll ,e -ee.e- to ,e % 'olle'ti+e i +e!t.e t !'he.e.< (%) Any sche(e or arrange(ent (ade or offered by any 5$er!o < under which,(i) the contributions, or pay(ents (ade by the in'estors, by whate'er na(e called, are pooled and utiliFed for the purposes of the sche(e or arrange(ent3 (ii) the contributions or pay(ents are (ade to such sche(e or arrange(ent by the in'estors with a 'iew to recei'e profits, inco(e, produce or property, whether (o'able or i((o'able, fro( such sche(e or arrange(ent3 (iii) the property, contribution or in'est(ent for(ing part of sche(e or arrange(ent, whether identifiable or not, is (anaged on behalf of the in'estors3
(iv) the in'estors do not ha'e day+to+day control o'er the (anage(ent and operation of the sche(e or arrange(ent0 "5("A)< A > !'he.e or %rr% (e.e t .%-e or offere- ,> % > $er!o !%ti!f>i ( the 'o -itio ! %! .%> ,e !$e'ifie- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< (3) Eotwithstanding anything contained in sub+section (%) 35or !*,0!e'tio ("A)<, any sche(e or arrange(ent(i) (ade or offered by a co+operati'e society registered under the Co+operati'e Societies Act, ! % (% of ! %) or a society being a society registered or dee(ed to be registered under any law relating to co+operati'e societies for the ti(e being in force in any State3 (ii) under which deposits are accepted by non+ban)ing financial co(panies as defined in clause (f) of section $"+I of the Reser'e 8an) of India Act, !3$ (% of !3$)3 (iii) being a contract of insurance to which the Insurance Act, !3> ($ of !3>), applies3 (iv) pro'iding for any Sche(e, <ension Sche(e or the Insurance Sche(e fra(ed under the 7(ployees <ro'ident 6und and ?iscellaneous <ro'isions Act, !"% ( ! of !"%)3 (v) under which deposits are accepted under section ">A of the Co(panies Act, !"# ( of !"#)3 (vi) under which deposits are accepted by a co(pany declared as a Eidhi or a (utual benefit society under section #%0A of the Co(panies Act, !"# ( of !"#)3 (vii) falling within the (eaning of Chit business as defined in clause ( d) of section % of the Chit 6und Act, !>% ($0 of !>%)3 (viii) under which contributions (ade are in the nature of subscription to a (utual fund3 35(i#) !*'h other !'he.e or %rr% (e.e t /hi'h the Ce tr%l Go+er .e t .%>, i 'o !*lt%tio /ith the ;o%r-, otif>H< shall not be a collecti'e in'est(ent sche(e0: "54o/er to i!!*e -ire'tio !. 11;. Sa'e as otherwise pro'ided in section , if after (a)ing or causing to be (ade an en*uiry, the 8oard is satisfied that it is necessary,S*,!tit*te- for J'o.$% >K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) 3I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
%I
3
(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any inter(ediary or other persons referred to in section % being conducted in a (anner detri(ental to the interest of in'estors or securities (ar)et3 or (iii) to secure the proper (anage(ent of any such inter(ediary or person, it (ay issue such directions,(a) to any person or class of persons referred to in section %, or associated with the securities (ar)et3 or (b) to any co(pany in respect of (atters specified in section A, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 15E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< %4I +e!ti(%tio . 11C. ( ) Khere the 8oard has reasonable ground to belie'e that-
(a) the transactions in securities are being dealt with in a (anner detri(ental to the in'estors or the securities (ar)et3 or (b) any inter(ediary or any person associated with the securities (ar)et has 'iolated any of the pro'isions of this Act or the rules or the regulations (ade or directions issued by the 8oard thereunder, it (ay, at any ti(e by order in writing, direct any person (hereafter in this section referred to as the In'estigating Authority) specified in the order to in'estigate the affairs of such inter(ediary or persons associated with the securities (ar)et and to report thereon to the 8oard0 (%) Kithout preDudice to the pro'isions of sections %3" to %$ of the Co(panies Act, !"# ( of !"#), it shall be the duty of e'ery (anager, (anaging director, officer and other e(ployee of the co(pany and e'ery inter(ediary referred to in section % or e'ery person associated with the securities (ar)et to preser'e and to produce to the In'estigating Authority or any person authorised by it in this behalf, all the boo)s, registers, other docu(ents and record of, or relating to, the co(pany or, as the case (ay be, of or relating to, the inter(ediary or such person, which are in their custody or power0 (3) .he In'estigating Authority (ay re*uire any inter(ediary or any person associated with securities (ar)et in any (anner to furnish such infor(ation to, or produce such boo)s, or registers, or other docu(ents, or record before hi( or any person authorised by it in this behalf as it (ay consider necessary if the furnishing of such infor(ation or the production of such boo)s, or registers, or other docu(ents, or record is rele'ant or necessary for the purposes of its in'estigation0 ($) .he In'estigating Authority (ay )eep in its custody any boo)s, registers, other docu(ents and record produced under sub+section (%) or sub+section (3) for six (onths and thereafter
% Inserted
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
$
shall return the sa(e to any inter(ediary or any person associated with securities (ar)et by who( or on whose behalf the boo)s, registers, other docu(ents and record are produced , 4ro+i-e- that the In'estigating Authority (ay call for any boo), register, other docu(ent and record if they are needed again , 4ro+i-e- f*rther that if the person on whose behalf the boo)s, registers, other docu(ents and record are produced re*uires certified copies of the boo)s, registers, other docu(ents and record produced before the In'estigating Authority, it shall gi'e certified copies of such boo)s, registers, other docu(ents and record to such person or on whose behalf the boo)s, registers, other docu(ents and record were produced0 (") Any person, directed to (a)e an in'estigation under sub+section ( ), (ay exa(ine on oath, any (anager, (anaging director, officer and other e(ployee of any inter(ediary or any person associated with securities (ar)et in any (anner, in relation to the affairs of his business and (ay ad(inister an oath accordingly and for that purpose (ay re*uire any of those persons to appear before it personally0 (#) If any person fails without reasonable cause or refuses(a) to produce to the In'estigating Authority or any person authorised by it in this behalf any boo), register, other docu(ent and record which is his duty under sub+section (%) or sub+section (3) to produce3 or (b) to furnish any infor(ation which is his duty under sub+section (3) to furnish3 or (c) to appear before the In'estigating Authority personally when re*uired to do so under sub+section (") or to answer any *uestion which is put to hi( by the In'estigating Authority in pursuance of that sub+section3 or (d) to sign the notes of any exa(ination referred to in sub+section (/), he shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with
fine, which (ay extend to one crore rupees, or with both, and also with a further fine which (ay extend to fi'e la)h rupees for e'ery day after the first during which the failure or refusal continues0 (/) Eotes of any exa(ination under sub+section (") shall be ta)en down in writing and shall be read o'er to, or by, and signed by, the person exa(ined, and (ay thereafter be used in e'idence against hi(0 4(:) ?here i the 'o*r!e of % i +e!ti(%tio , the I +e!ti(%ti ( A*thorit> h%! re%!o to ,elie+e th%t % > $er!o or e ter$ri!e, %! the '%!e .%> ,e, to /ho. % oti'e * -er !*,!e'tio ()) h%! ,ee i!!*e- or .i(ht ,e i!!*e-, 0 (%) h%! o.itte- or f%ile- to $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! %! re7*irei the oti'eH or (,) /o*l- ot $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! /hi'h !h%ll ,e *!ef*l for, or rele+% t to, the i +e!ti(%tio H or (') /o*l- -e!tro>, .*til%te, %lter, f%l!if> or !e'rete the i for.%tio or -o'*.e t! *!ef*l for, or rele+% t to, the i +e!ti(%tio ,
S*,!tit*te- for JKhere in the course of in'estigation, the In'estigating Authority has reasonable ground to belie'e that the boo)s, registers, other docu(ents and record of, or relating to, any inter(ediary or any person associated with securities (ar)et in any (anner, (ay be destroyed, (utilated, altered, falsified or secreted, the In'estigating Authority (ay (a)e an application to the Mudicial ?agistrate of the first class ha'ing Durisdiction for an order for the seiFure of such boo)s, registers, other docu(ents and record K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
"
the , the Ch%ir.% .%>, %fter ,ei ( !%ti!fie- th%t it i! e'e!!%r> to -o !o, %*thoriLe the I +e!ti(%ti ( A*thorit> or % > other offi'er of the ;o%r- (the offi'er !o %*thoriLe- i %ll '%!e! ,ei ( herei %fter referre- to %! the %*thori!e- offi'er), to0 (i) e ter % - !e%r'h, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft /here !*'h i for.%tio or -o'*.e t! %re e#$e'te- or ,elie+e- to ,e 6e$tH (ii) ,re%6 o$e the lo'6 of % > -oor, ,o#, lo'6er, !%fe, %l.ir%h or other re'e$t%'le for e#er'i!i ( the $o/er! 'o ferre- ,> !*,0'l%*!e (i), /here the 6e>! thereof %re ot %+%il%,leH (iii) !e%r'h % > $er!o /ho h%! (ot o*t of, or i! %,o*t to (et i to, or i! i , the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft, if the %*thoriLe- offi'er h%! re%!o to !*!$e't th%t !*'h $er!o h%! !e'rete- %,o*t hi! $er!o % > !*'h ,oo6! of %''o* t or other -o'*.e t!H (i+) re7*ire % > $er!o /ho i! fo* - to ,e i $o!!e!!io or 'o trol of % > ,oo6! of %''o* t or other -o'*.e t!, .%i t%i e- i the for. of ele'tro i' re'or-, to $ro+i-e the %*thori!e- offi'er the e'e!!%r> f%'ilit> to i !$e't !*'h ,oo6! of %''o* t or other -o'*.e t!. "#planation0 2or the $*r$o!e of thi! !*,0'l%*!e, the e#$re!!io Jele'tro i' re'or-K !h%ll h%+e the .e% i ( %!!i( e- to it i 'l%*!e (t) of !*,0!e'tio (1) of !e'tio " of the I for.%tio Te'h olo(> A't, "===. (+) !eiLe % > !*'h ,oo6! of %''o* t or other -o'*.e t! fo* - %! % re!*lt of !*'h !e%r'hH (+i) $l%'e .%r6! of i-e tifi'%tio o % > ,oo6! of %''o* t or other -o'*.e t! or .%6e or '%*!e to ,e .%-e e#tr%'t! or 'o$ie! therefro.H (+ii) re'or- o o%th the !t%te.e t of % > $er!o /ho i! fo* - to ,e i $o!!e!!io or i 'o trol of the i for.%tio or -o'*.e t! referre- to i !*,0'l%*!e! (i), (iii) % - (i+).< 4(9) The ;o%r- .%> .%6e re(*l%tio ! i rel%tio to % > !e%r'h or !eiL*re * -er thi! !e'tio H % - i $%rti'*l%r, /itho*t $reG*-i'e to the (e er%lit> of the fore(oi ( $o/er, !*'h re(*l%tio ! .%> $ro+i-e for the $ro'e-*re to ,e follo/e- ,> the %*thori!e- offi'er0
(%) for o,t%i i ( i (re!! i to % > ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft to ,e !e%r'he- /here free i (re!! thereto i! ot %+%il%,leH
1 S*,!tit*te-
,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) for the follo/i (& JAfter 'o !i-eri ( the %$$li'%tio % - he%ri ( the I +e!ti(%ti ( A*thorit>, if e'e!!%r>, the @%(i!tr%te .%>, ,> or-er, %*thori!e the I +e!ti(%ti ( A*thorit>O (a) to e ter, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the $l%'e or $l%'e! /here !*'h ,oo6!, re(i!ter!, other -o'*.e t! % - re'or- %re 6e$tH (b) to !e%r'h th%t $l%'e or tho!e $l%'e! i the .% er !$e'ifie- i the or-erH % (c) to !eiLe ,oo6!, re(i!ter!, other -o'*.e t! % - re'or-, it 'o !i-er! e'e!!%r> for the $*r$o!e! of the i +e!ti(%tio & 4ro+i-e- th%t the @%(i!tr%te !h%ll ot %*thori!e !eiL*re of ,oo6!, re(i!ter!, other -o'*.e t! % re'or-, of % > li!te- $*,li' 'o.$% > or % $*,li' 'o.$% > ( ot ,ei ( the i ter.e-i%rie! !$e'ifie* -er !e'tio 1") /hi'h i te -! to (et it! !e'*ritie! li!te- o % > re'o( i!e- !to'6 e#'h% (e * le!! !*'h 'o.$% > i -*l(e! i i !i-er tr%-i ( or .%r6et .% i$*l%tio .K
#
(,) for e !*ri ( !%fe '*!to-> of % > ,oo6! of %''o* t or other -o'*.e t! or %!!et! !eiLe-.< ( 0) .he In'estigating Authority shall )eep in its custody the boo)s, registers, other docu(ents and record seiFed under this section for such period not later than the conclusion of the in'estigation as it considers necessary and thereafter shall return the sa(e to the co(pany or the other body corporate, or, as the case (ay be, to the (anaging director or the (anager or any other person, fro( whose custody or power they were seiFed 5***<, 4ro+i-e- that the In'estigating Authority (ay, before returning such boo)s, registers, other docu(ents and record as aforesaid, place identification (ar)s on the( or any part thereof0 ( ) Sa'e as otherwise pro'ided in this section, e'ery search or seiFure (ade under this section shall be carried out in accordance with the pro'isions of the Code of Cri(inal <rocedure, !/3 (% of !/$) relating to searches or seiFures (ade under that Code0 Ce%!e % - -e!i!t $ro'ee-i (!. 11D. If the 8oard finds, after causing an in*uiry to be (ade, that any person has 'iolated, or is li)ely to 'iolate, any pro'isions of this Act, or any rules or regulations (ade thereunder, it (ay pass an order re*uiring such person to cease and desist fro( co((itting or causing such 'iolation, 4ro+i-e- that the 8oard shall not pass such order in respect of any listed public co(pany or a public co(pany (other than the inter(ediaries specified under section %) which intends to get its securities listed on any recognised stoc) exchange unless the 8oard has reasonable grounds to belie'e that such co(pany has indulged in insider trading or (ar)et (anipulation0: CDA4TER I REGISTRATION CERTI2ICATE Re(i!tr%tio of !to'6 ,ro6er!, !*,0,ro6er!, !h%re tr% !fer %(e t!, et'. 1". ( ) Eo stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et shall buy, sell or deal in securities except under, and in accordance with, the conditions of a certificate of registration obtained fro( the 8oard in accordance with the %4regulations: (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et i((ediately before the establish(ent of the 8oard for which no registration certificate was
necessary prior to such establish(ent, (ay continue to do so for a period of three (onths fro( such establish(ent or, if he has (ade an application for such registration within the said period of three (onths, till the disposal of such application,
The /or-! P% - i for. the @%(i!tr%te of !*'h ret*r P, o.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) % Substituted for 1rules2 by Securities =aw (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0
/
44ro+i-e- f*rther that any certificate of registration, obtained i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", shall be dee(ed to ha'e been obtained fro( the 8oard in accordance with the regulations pro'iding for such registration0 ( A) Eo depository, %4participant,: custodian of securities, foreign institutional in'estor, credit rating agency, or any other inter(ediary associated with the securities (ar)et as the 8oard (ay by notification in this behalf specify, shall buy or sell or deal in securities except under and in accordance with the conditions of a certificate of registration obtained fro( the 8oard in accordance with the regulations (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a depository, 34participant,: custodian of securities, foreign institutional in'estor or credit rating agency i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to buy or sell securities or otherwise deal with the securities (ar)et until such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300 ( 8) Eo person shall sponsor or cause to be sponsored or carry on or caused to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es including (utual funds, unless he obtains a certificate of registration fro( the 8oard in accordance with the regulations, 4ro+i-e- that any person sponsoring or causing to be sponsored, carrying or causing to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es operating in the securities (ar)et i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to operate till such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300:
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0
% Inserted
>
4()%lanati$n7 6or the re(o'al of doubts, it is hereby declared that, for purposes of this section, a collecti'e in'est(ent sche(e or (utual fund shall not be include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(ponent of in'est(ent besides the co(ponent of insurance issued by the insurer0: (%) 7'ery application for registration shall be in such (anner and on pay(ent of such fees as (ay be deter(ined by regulations0 (3) .he 8oard (ay, by order, suspend or cancel a certificate of registration in such (anner as (ay be deter(ined by regulations, 4ro+i-e- that no order under this sub+section shall be (ade unless the person concerned has been gi'en a reasonable opportunity of being heard0 %4CIA<.7R BA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 4rohi,itio of .% i$*l%ti+e % - -e'e$ti+e -e+i'e!, i !i-er tr%-i ( % - !*,!t% ti%l %'7*i!itio of !e'*ritie! or 'o trol.
1"A. Eo person shall directly or indirectly(a) use or e(ploy, in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recogniFed stoc) exchange, any (anipulati'e or decepti'e de'ice or contri'ance in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3
Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, w0r0e0f !+$+ %0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, reads as under, /@A81(0 D: ?ISC7==AE7CHS #0 Balidation+ Eotwithstanding anything contained in any Dudg(ent, decree or order of any court, tribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 Repeal and sa'ings + (1) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (2) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0 % Chapter BA inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
!
(b) e(ploy any de'ice, sche(e or artifice to defraud in connection with issue or dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange3 (c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange, in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (d) engage in insider trading3 (e) deal in securities while in possession of (aterial or non+public infor(ation or co((unicate such (aterial or non+public infor(ation to any other person, in a (anner which is in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (f) ac*uire control of any co(pany or securities (ore than the percentage of e*uity share capital of a co(pany whose securities are listed or proposed to be listed on a recognised stoc) exchange in contra'ention of the regulations (ade under this Act0: CDA4TER II 2INANCE, ACCOUNTS AND AUDIT Gr% t! ,> the Ce tr%l Go+er .e t. 1). .he Central &o'ern(ent (ay, after due appropriation (ade by <arlia(ent by law in this behalf, (a)e to the 8oard grants of such su(s of (oney as that &o'ern(ent (ay thin) fit for being utiliFed for the purposes of this Act0 2* -. 13. ( ) .here shall be constituted a 6und to be called the Securities and 7xchange 8oard of
India &eneral 6und and there shall be credited thereto(a) all grants, fees and charges recei'ed by the 8oard under this Act3 4G G G: (aa) %4G G G: (b) all su(s recei'ed by the 8oard fro( such other sources as (ay be decided upon by the Central &o'ern(ent0 (%) .he 6und shall be applied for (eeting(a) the salaries, allowances and other re(uneration of the (e(bers, officers and other e(ployees of the 8oard3 (b) the expenses of the 8oard in the discharge of its functions under section 3 (c) the expenses on obDects and for purposes authorised by this Act0
.he word 1and2 o(itted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 (aa) o(itted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 It was inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Clause (aa) reads as under,+ 1(aa) all su(s realiFed by way of <enalties under this Act3 and20
% Clause
%0
A''o* t! % - %*-it. 15. ( ) .he 8oard shall (aintain proper accounts and other rele'ant records and prepare an annual state(ent of accounts in such for( as (ay be prescribed by the Central &o'ern(ent in consultation with the Co(ptroller and Auditor+&eneral of India0 (%) .he accounts of the 8oard shall be audited by the Co(ptroller and Auditor+&eneral of India at such inter'als as (ay be specified by hi( and any expenditure incurred in connection with such audit shall be payable by the 8oard to the Co(ptroller and Auditor+&eneral of India0 (3) .he Co(ptroller and Auditor+&eneral of India and any other person appointed by hi( in connection with the audit of the accounts of the 8oard shall ha'e the sa(e rights and pri'ileges and authority in connection with such audit as the Co(ptroller and Auditor+ &eneral generally has in connection with the audit of the &o'ern(ent accounts and, in particular, shall ha'e the right to de(and the production of boo)s, accounts, connected 'ouchers and other docu(ents and papers and to inspect any of the offices of the 8oard0 ($) .he accounts of the 8oard as certified by the Co(ptroller and Auditor+&eneral of India or any other person appointed by hi( in this behalf together with the audit report thereon shall be forwarded annually to the Central &o'ern(ent and that &o'ern(ent shall cause the sa(e to be laid before each Iouse of <arlia(ent0 5CDA4TER IIA 4ENALTIES AND ADEUDICATION 4e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 15A. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder,(a) to furnish any docu(ent, return or report to the 8oard, fails to furnish the sa(e, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations, fails to file return or furnish the sa(e within the ti(e specified therefor in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0
Chapters BI A and BI 8 containing Ss0 "A to "M and "@ to "S respecti'ely, inserted by Securities =aws (A(end(ent) Act, !!" w0e0f0 %"+ + !!"0 % Substituted for 1a penalty not exceeding one la)h and fifty thousand rupees for each such failure2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding fi'e thousand rupees for e'ery day during which such failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for e'ery day during which the failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%
4e %lt> for f%il*re ,> % > $er!o to e ter i to %(ree.e t /ith 'lie t!. 15;. If any person, who is registered as an inter(ediary and is re*uired under this Act or any rules or regulations (ade thereunder to enter into an agree(ent with his client, fails to enter into such agree(ent, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 %54e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 15C. If any listed co(pany or any person who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such co(pany or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 4e %lt> for 'ert%i -ef%*lt! i '%!e of .*t*%l f* -!. 15D. If any person, who is(a) re*uired under this Act or any rules or regulations (ade thereunder to obtain a certificate of registration fro( the 8oard for sponsoring or carrying on any collecti'e in'est(ent sche(e, including (utual funds, sponsors or carries on any collecti'e in'est(ent sche(e, including (utual funds, without obtaining such certificate of registration, he shall be liable to 34a penalty of one la)h rupees for each day during which he sponsors or carries on any such collecti'e in'est(ent sche(e including (utual funds, or one crore rupees, whiche'er is less:3 (b) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, for sponsoring or carrying on any in'est(ent sche(e, fails to co(ply with the ter(s and conditions of certificate of registration, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, fails to (a)e an application for listing of its sche(es as pro'ided for in the regulations
Substituted for 1a penalty not exceeding fi'e la)h rupees for e'ery such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1If any person, who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing to redress the grie'ances of in'estors, fails to redress such grie'ances, he shall be liable to a penalty not exceeding ten thousand rupees for each such failure2, by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding ten thousand rupees for each day during which he carries on any such collecti'e in'est(ent sche(e including (utual funds, or ten la)h rupees whiche'er is higher02 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for each day during which such failure continues or ten la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0
%%
go'erning such listing, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (d) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to despatch
unit certificates of any sche(e in the (anner pro'ided in the regulation go'erning such despatch, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (e) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to refund the application (onies paid by the in'estors within the period specified in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (f) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to in'est (oney collected by such collecti'e in'est(ent sche(es in the (anner or within the period specified in the regulations, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for f%il*re to o,!er+e r*le! % - re(*l%tio ! ,> % %!!et .% %(e.e t 'o.$% >. 15E. Khere any asset (anage(ent co(pany of a (utual fund registered under this Act, fails to co(ply with any of the regulations pro'iding for restrictions on the acti'ities of the asset (anage(ent co(panies, such asset (anage(ent co(pany shall be liable to "4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for -ef%*lt i '%!e of !to'6 ,ro6er!. 152. If any person, who is registered as a stoc) bro)er under this Act,(a) fails to issue contract notes in the for( and (anner specified by the stoc) exchange of which such bro)er is a (e(ber, he shall be liable to a penalty not exceeding fi'e ti(es the a(ount for which the contract note was re*uired to be issued by that bro)er3 (b) fails to deli'er any security or fails to (a)e pay(ent of the a(ount due to the in'estor in the (anner within the period specified in the regulations, he shall be liable to #4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3
Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues or fi'e la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding one thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%3
(c) charges an a(ount of bro)erage which is in excess of the bro)erage specified in the regulations, he shall be liable to 4a penalty of one la)h rupees: or fi'e ti(es the a(ount of bro)erage charged in excess of the specified bro)erage, whiche'er is higher0 4e %lt> for i !i-er tr%-i (. 15G. If any insider who,(i) either on his own behalf or on behalf of any other person, deals in securities of a body corporate listed on any stoc) exchange on the basis of any unpublished price+sensiti'e infor(ation3 or (ii) co((unicates any unpublished price+sensiti'e infor(ation to any person, with or without his re*uest for such infor(ation except as re*uired in the ordinary course of business or under any law3 or
(iii) counsels, or procures for any other person to deal in any securities of any body corporate on the basis of unpublished price+sensiti'e infor(ation, shall be liable to a penalty %4of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of insider trading, whiche'er is higher:0 4e %lt> for o 0-i!'lo!*re of %'7*i!itio of !h%re! % - t%6eo+er!. 15D. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder, fails to,(i) disclose the aggregate of his shareholding in the body corporate before he ac*uires any shares of that body corporate3 or (ii) (a)e a public announce(ent to ac*uire shares at a (ini(u( price3 or 34(iii) (a)e a public offer by sending letter of offer to the shareholders of the concerned co(pany3 or (iv) (a)e pay(ent of consideration to the shareholders who sold their shares pursuant to letter of offer,: he shall be liable to a penalty $4of twenty+fi'e crore rupees or three ti(es the a(ount of profits profits (ade out of such failure, whiche'er is higher:0 554e %lt> for fr%*-*le t % - * f%ir tr%-e $r%'ti'e!. 15DA. If any person indulges in fraudulent and unfair trade practices relating to securities, he shall be liable to a penalty of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of such practices, whiche'er is higher0
Substituted for 1a penalty not exceeding fi'e thousand rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00% 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00% %00% " Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00%0
%$
4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 15D;. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 4o/er to %-G*-i'%te. 150I. ( ) 6or the purpose of adDudging under sections "A, "8, "C, "9, "7, "6, "& 4, "I, "IA and "I8:, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in subsection ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> the %-G*-i'%ti ( offi'er. 15E. Khile adDudging *uantu( of penalty under section "+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade
as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 "5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 15EA. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: )5Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!. 15E;. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 11, !e'tio 11;, !e'tio 11D, !*,0!e'tio ()) of !e'tio 1" or !e'tio 150I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e- -ef%*lt!.
Substituted for 1and "I2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the S78I (A(end(ent) Act, %00%, S0 ! w0e0f0 %!+ 0+%00%0 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
% Inserted
%"
(") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't. ()) The !ettle.e t $ro'ee-i (! * -er thi! !e'tio !h%ll ,e 'o -*'te- i %''or-% 'e /ith the $ro'e-*re !$e'ifie- i the re(*l%tio ! .%-e * -er thi! A't. (3) No %$$e%l !h%ll lie * -er !e'tio 15T %(%i !t % > or-er $%!!e- ,> the ;o%r- or %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio . < CDA4TER II; ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL E!t%,li!h.e t of Se'*ritie! A$$ell%te Tri,* %l!. 15F. ( ) .he Central &o'ern(ent shall by notification, establish one or (ore Appellate .ribunals to be )nown as the Securities Appellate .ribunal to exercise the Durisdiction, powers and authority conferred on such .ribunal by or under this Act 4or any other law for the ti(e being in force:0 (%) .he Central &o'ern(ent shall also specify in the notification referred to in sub+section ( ) the (atters and places in relation to which the Securities Appellate .ribunal (ay exercise Durisdiction0 "5Co.$o!itio of Se'*ritie! A$$ell%te Tri,* %l. 15L. A Securities Appellate .ribunal shall consist of a <residing Cfficer and two other (e(bers, to be appointed, by notification, by the Central &o'ern(ent, 4ro+i-e- that the Securities Appellate .ribunal, consisting of one person only, established before the co((ence(ent of the Securities and 7xchange 8oard of India (A(end(ent) Act, %00%, shall continue to exercise the Durisdiction, powers and authority conferred on it by or under this Act or any other law for the ti(e being in force till two other ?e(bers are appointed under this section0 9*%lifi'%tio for %$$oi t.e t %! 4re!i-i ( Offi'er or @e.,er of Se'*ritie! A$$ell%te Tri,* %l.
Inserted by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for Sections "= and "? by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "= and "? read as under,+ 1 "+=0 Co(position of securities Appellate .ribunal0 5 A Securities Appellate .ribunal shall consist of
% Substituted
one person only (hereinafter referred to as the <residing Cfficer of the Securities Appellate .ribunal) to be appointed, by notification, by the central &o'ern(ent0 "?0 Qualifications for appoint(ent as <residing Cfficer of the Securities Appellate .ribunal0 5 A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he + (a) is, or has been, or is *ualified to be, a Mudge of a Iigh Court3 or (b) has been a (e(ber of the Indian =egal Ser'ice and has held a post in &rade I of that ser'ice for at least three years3 or (c) has held office as the <residing Cfficer of a tribunal for at least three years02
%#
15@. 15( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of the Securities Appellate .ribunal unless he + (a) is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court3 or (b) is a sitting or retired Mudge of a Iigh Court who has co(pleted not less than se'en years of ser'ice as a Mudge in a Iigh Court0 ( A) .he <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0: (%) A person shall not be *ualified for appoint(ent as (e(ber of a Securities Appellate .ribunal unless he is a person of ability, integrity and standing who has shown capacity in dealing with proble(s relating to securities (ar)et and has *ualification and experience of corporate law, securities laws, finance, econo(ics or accountancy, 4ro+i-e- that a (e(ber of the 8oard or any person holding a post at senior (anage(ent le'el e*ui'alent to 7xecuti'e 9irector in the 8oard shall not be appointed as <residing Cfficer or ?e(ber of a Securities Appellate .ribunal during his ser'ice or tenure as such with the 8oard or within two years fro( the date on which he ceases to hold office as such in the 8oard0: %4Te *re of offi'e of 4re!i-i ( Offi'er % - other @e.,er! of Se'*ritie! A$$ell%te Tri,* %l. 15N. .he <residing Cfficer and e'ery other ?e(ber of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office and shall be eligible for re+appoint(ent, 4ro+i-e- that no person shall hold office as the <residing Cfficer of the Securities Appellate .ribunal after he has attained the age of sixty+eight years, 4ro+i-e- f*rther that no person shall hold office as a ?e(ber of the Securities Appellate .ribunal after he has attained the age of sixty+two years0: S%l%r> % - %llo/% 'e! % - other ter.! % - 'o -itio ! of !er+i'e of 4re!i-i ( Offi'er!. 150O. .he salary and allowances payable to and the other ter(s and conditions of ser'ice including pension, gratuity and other retire(ent benefits of the 4<residing Cfficer and other ?e(bers: of a Securities Appellate .ribunal shall be such as (ay be prescribed,
Substituted for sub+section ( ) of Section "? by the S78I (A(end(ent) Crdinance, %0 3 w0e0f0 % 00 0%0 30 <rior to substitution, it read as under,+ ;( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court , 4ro+i-e- that the <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0; % Substituted for Section "E, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "E read as under,+ 1 "E0 .er( of office0+ .he <residing officer of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office or until he attains the age of sixtyfi'e years, whiche'er is earlier02
%/
4ro+i-e- that neither the salary and allowances nor the other ter(s and conditions of ser'ice of the %4<residing Cfficer and other ?e(bers of a Securities Appellate .ribunal: shall be 'aried to their disad'antage after appoint(ent0 2illi ( *$ of +%'% 'ie!. 154. If, for reason other than te(porary absence, any 'acancy occurs in the 34office of the <residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal, then the Central &o'ern(ent shall appoint another person in accordance with the pro'isions of this Act to fill the 'acancy and the proceedings (ay be continued before the Securities Appellate .ribunal fro( the stage at which the 'acancy is filled0 Re!i( %tio % - re.o+%l. 159. ( ) .he $4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal (ay, by notice in writing under his hand addressed to the Central &o'ern(ent, resign his office, 4ro+i-e- that "4the <residing Cfficer or any other ?e(ber: shall, unless he is per(itted by the Central &o'ern(ent to relin*uish his office sooner, continue to hold office, until the expiry of three (onths fro( the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his ter( of office, whiche'er is the earliest0 (%) .he #4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal shall not be re(o'ed fro( his office except by an order by the Central &o'ern(ent on the ground of pro'ed (isbeha'iour or incapacity after an in*uiry (ade by a Mudge of the Supre(e Court, in which the /4<residing Cfficer or any other ?e(ber: concerned has been infor(ed of the charges against hi( and gi'en a reasonable opportunity of being heard in respect of these charges0 (3) .he Central &o'ern(ent (ay, by rules, regulate the procedure for the in'estigation of (isbeha'iour or incapacity of the >4<residing Cfficer or any other ?e(ber:0 Or-er! 'o !tit*ti ( A$$ell%te Tri,* %l to ,e fi %l % - ot to i +%li-%te it! $ro'ee-i (!. 15R. Eo order of the Central &o'ern(ent appointing any person as the !4<residing Cfficer or a ?e(ber: of a Securities Appellate .ribunal shall be called in *uestion in any (anner, and no act or proceeding before a Securities Appellate .ribunal shall be called in *uestion in any (anner on the ground (erely of any defect in the constitution of a Securities Appellate .ribunal0
Substituted for 1<residing Cfficer of a Securities Appellate .ribunal2 by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 / Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 > Substituted for 1aforesaid <residing Cfficer2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 ! Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0
%>
St%ff of the Se'*ritie! A$$ell%te Tri,* %l. 15S. ( ) .he Central &o'ern(ent shall pro'ide the Securities Appellate .ribunal with such officers and e(ployees as that &o'ern(ent (ay thin) fit0 (%) .he officers and e(ployees of the Securities Appellate .ribunal shall discharge their functions under general superintendence of the <residing Cfficer0 (3) .he salaries and allowances and other conditions of ser'ice of the officers and e(ployees of the Securities Appellate .ribunal shall be such as (ay be prescribed0 A$$e%l to the Se'*ritie! A$$ell%te Tri,* %l. 15T. 4( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed,(a) by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws
(Second A(end(ent) Act, !!!, under this Act, or the rules or regulations (ade thereunder3 or (b) by an order (ade by an adDudicating officer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 "5(") ********< (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 348oard or the AdDudicating Cfficer, as the case case (ay be,: is recei'ed by hi( and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 ($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0
Substituted for Sub+sec ( ) R (%) by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, Sub+sections ( ) R (%) were read as under, 1( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by any order (ade by any AdDudicating Cfficer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 (%) Eo appeal shall lie to the Securities Appellate .ribunal fro( an order (ade by an AdDudicating Cfficer with the consent of the parties02 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , o.i!!io , S*,0!e'tio (") re%- %! * -er& J(") No %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-eO (a) ,> the ;o%r- o % - %fter the 'o..e 'e.e t of the Se'*ritie! L%/! (Se'o - A.e -.e t) A't, 1999H (b) ,> % %-G*-i'%ti ( offi'er, /ith the 'o !e t of the $%rtie!.2 3 Substituted for 1a copy of the order (ade by the adDudicating officer2 by S78I (A(end(ent) Act !!!, !!!, w0e0f0 #+ %+ !!!0
%!
(") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 48oard, the: parties to the appeal and to the concerned AdDudicating Cfficer0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of the Se'*ritie! A$$ell%te Tri,* %l. 15U. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act, and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purposes of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3
(e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte 3 (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0), and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 %4Ri(ht to le(%l re$re!e t%tio . 15I. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,Substituted for 1parties2, S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for S0 "B by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, S0 "B read as under,+ 1 "B0 .he appellant (ay either appear in person or authorise one or (ore legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal02
% Substituted
30
(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of subsection ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or any attorney of any Iigh Court, and includes a pleader in practice0: Li.it%tio . 15?. .he pro'isions of the =i(itation Act, !#3 (3# of !#3), shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 54re!i-i ( Offi'er, @e.,er! % - !t%ff of Se'*ritie! A$$ell%te Tri,* %l! to ,e $*,li' !er+% t!. 15A. .he <residing Cfficer, ?e(bers and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0: Ci+il Co*rt ot to h%+e G*ri!-i'tio . 15M. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which an adDudicating officer appointed under this Act or a Securities Appellate .ribunal constituted under this Act is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "5A$$e%l to S*$re.e Co*rt.
Substituted for S0 "A by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, it read as under, + 1 "A0 .he <residing Cfficer and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian penal Code( $" of >#0)20 % Substituted for S0 "S by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution , it
was read as under,+ 1 "S0 Appeal to Iigh Court0+ Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, <ro'ided that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
3
15N. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order , 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the applicant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: CDA4TER III @ISCELLANEOUS 4o/er of Ce tr%l Go+er .e t to i!!*e -ire'tio !. 18. ( ) Kithout preDudice to the foregoing pro'isions of this Act 4or the 9epositories Act, !!#:, the 8oard shall, in exercise of its powers or the perfor(ance of its functions under this Act, be bound by such directions on *uestions of policy as the Central &o'ern(ent (ay gi'e in writing to it fro( ti(e to ti(e , 4ro+i-e- that the 8oard shall, as far as practicable, be gi'en an opportunity to express its 'iews before any direction is gi'en under this sub+section0 (%) .he decision of the Central &o'ern(ent whether a *uestion is one of policy or not shall be final0 4o/er of Ce tr%l Go+er .e t to !*$er!e-e the ;o%r-. 17. ( ) If at any ti(e the Central &o'ern(ent is of opinion(a) that on account of gra'e e(ergency, the 8oard is unable to discharge the functions and duties i(posed on it by or under the pro'isions of this Act3 or (b) that the 8oard has persistently (ade default in co(plying with any direction issued by the Central &o'ern(ent under this Act or in the discharge of the functions and duties i(posed on it by or under the pro'isions of this Act and as a result of such default the financial position of the 8oard or the ad(inistration of the 8oard has deteriorated3 or (c) that circu(stances exist which render it necessary in the public interest so to do, the Central &o'ern(ent (ay, by notification, supersede the 8oard for such period, not exceeding six (onths, as (ay be specified in the notification0 (%) Hpon the publication of a notification under sub+section ( ) superseding the 8oard,(a) all the (e(bers shall, as fro( the date of supersession, 'acate their offices as such3 (b) all the powers, functions and duties which (ay, by or under the pro'isions of this Act, be exercised or discharged by or on behalf of the 8oard, shall until the 8oard is reconstituted under sub+section (3), be exercised and discharged by such person or persons as the Central &o'ern(ent (ay direct3 and (c) all property owned or controlled by the 8oard shall, until the 8oard is reconstituted under sub+section (3), 'est in the Central &o'ern(ent0
Substituted for 1this Act2 by the 9epositories Act !!#, w0r0e0f0 %0+!+ !!"0
3%
(3) Cn the expiration of the period of supersession specified in the notification issued under sub+section ( ), the Central &o'ern(ent (ay reconstitute the 8oard by a fresh appoint(ent
and in such case any person or persons who 'acated their offices under clause ( a) of subsection (%), shall not be dee(ed dis*ualified for appoint(ent , 4ro+i-e- that the Central &o'ern(ent (ay, at any ti(e, before the expiration of the period of supersession, ta)e action under this sub+section0 ($) .he Central &o'ern(ent shall cause a notification issued under sub+section ( ) and a full report of any action ta)en under this section and the circu(stances leading to such action to be laid before each Iouse of <arlia(ent at the earliest0 Ret*r ! % - re$ort!. 1:. ( ) .he 8oard shall furnish to the Central &o'ern(ent at such ti(e and in such for( and (anner as (ay be prescribed or as the Central &o'ern(ent (ay direct, such returns and state(ents and such particulars in regard to any proposed or existing progra((e for the pro(otion and de'elop(ent of the securities (ar)et, as the Central &o'ern(ent (ay, fro( ti(e to ti(e, re*uire0 (%) Kithout preDudice to the pro'isions of sub+section ( ), the 8oard shall, within 4ninety: days after the end of each financial year, sub(it to the Central &o'ern(ent a report in such for(, as (ay be prescribed, gi'ing a true and full account of its acti'ities, policy and progra((es during the pre'ious financial year0 (3) A copy of the report recei'ed under sub+section (%) shall be laid, as soon as (ay be after it is recei'ed, before each Iouse of <arlia(ent0 Dele(%tio . 19. .he 8oard (ay, by general or special order in writing delegate to any (e(ber, officer of the 8oard or any other person subDect to such conditions, if any, as (ay be specified in the order, such of its powers and functions under this Act (except the powers under section %!) as it (ay dee( necessary0 A$$e%l!. "=. ( ) Any person aggrie'ed by an order of the 8oard (ade %4, before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!,: under this Act, or the rules or regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor, 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0
Substituted for 1sixty days2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1an order of the 8oard (ade2 by Securities =aws (Second A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0
% Substituted
33
(3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed, 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 4;%r of G*ri!-i'tio . "=A. Eo order passed by the 8oard %4or the AdDudicating Cfficer: under this Act shall be appealable except as pro'ided in 34section ". or: section %0 and no ci'il court shall ha'e Durisdiction in respect of any (atter which the 8oard $4or the AdDudicating Cfficer: is e(powered by, or under, this Act to pass any order and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any order passed by the 8oard "4or the AdDudicating Cfficer: by, or under, this Act0: S%+i (!.
"1. Eothing in this Act shall exe(pt any person fro( any suit or other proceedings which (ight, apart fro( this Act, be brought against hi(0 @e.,er!, offi'er! % - e.$lo>ee! of the ;o%r- to ,e $*,li' !er+% t!. "". All (e(bers, officers and other e(ployees of the 8oard shall be dee(ed, when acting or purporting to act in pursuance of any of the pro'isions of this Act, to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0 4rote'tio of %'tio t%6e i (oo- f%ith. "). Eo suit, prosecution or other legal proceedings shall lie against the Central &o'ern(ent #4or 8oard: or any officer of the Central &o'ern(ent or any (e(ber, officer or other e(ployee of the 8oard for anything which is in good faith done or intended to be done under this Act or the rules or regulations (ade thereunder0 /4Offe 'e!. "3. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, he shall be punishable with
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 18oard2 by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 3 Substituted for 1Section %02, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 $ Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 " Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Substituted by for S0 %$, Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" && <rior to its substitution S0%$ read as under, 1%$0 <enalty0+ Khoe'er contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both02
% Substituted
3$
i(prison(ent for a ter( which (ay extend to 4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to %4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 34Co.$o!itio of 'ert%i offe 'e!. "3A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "3;. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of the alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation, 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0
(%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0:
Substituted for 1one year, or with fine, or with both2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%, for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both20 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3"
E#e.$tio fro. t%# o /e%lth % - i 'o.e. "5. Eotwithstanding anything contained in the Kealth+tax Act, !"/ (%/ of !"/), the Inco(etax Act, !# ($3 of !# ) or any other enact(ent for the ti(e being in force relating to tax on wealth, inco(e, profits or gains(a) the 8oard3 (b) the existing Securities and 7xchange 8oard fro( the date of its constitution to the date of establish(ent of the 8oard, shall not be liable to pay wealth+tax, inco(e+tax or any other tax in respect of their wealth, inco(e, profits or gains deri'ed0 Co( iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations (ade thereunder, sa'e on a co(plaint (ade by the 8oard 4G G G:0 "5(") *****< )5 E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
.he words 1with the pre'ious sanction of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to the o.i!!io , S*,0!e'tio (") re%- %! * -er& 1(") No 'o*rt i ferior to th%t of "5% Co*rt of Se!!io < !h%ll tr> % > offe 'e $* i!h%,le * -er thi!
A't.2 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3#
A$$e%l % - re+i!io "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e of Cri.i %l 4ro'e-*re, 197) to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< Offe 'e! ,> 'o.$% ie!. "7. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly, 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n , 6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and
3/
(b) 1director2, in relation to a fir(, (eans a partner in the fir(0 4o/er to e#e.$t. ":. 4GGGGGG: "5 Re'o+er> of %.o* t! ":A. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith %
-ire'tio of -i!(or(e.e t or-er i!!*e- * -er !e'tio 11; or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifiefor. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.et%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't.
C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Section %> read as under, 1%>0 8$.er t$ e)e"%t+ If the central go'ern(ent if of the opinion that it is necessary or expedient so to do in public interest, it (ay, by order published in the Cfficial gaFette, exe(pt any person or class of persons buying or selling securities or otherwise dealing with the securities (ar)et fro( the operation of sub+section ! ) of Section %02 % I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3>
"#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio 15T of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 11;, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% !
% > offi'er of the ;o%r- /ho .%> ,e %*thoriLe-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 4o/er to .%6e r*le!. "9. ( ) .he Central &o'ern(ent (ay, by notification, (a)e rules for carrying out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers under sub+section ( ) of section "3 (b) the additional functions that (ay be perfor(ed by the 8oard under section 3 (c) 4G G G: (d) the (anner in which the accounts of the 8oard shall be (aintained under section "3 %4(da) the (anner of in*uiry under sub+section ( ) of section "+I3 (db) the salaries and allowances and other ter(s and conditions of ser'ice of the 34<residing Cfficers, ?e(bers: and other officers and e(ployees of the Securities Appellate .ribunal under section "+C and sub+section (3) of section "S3 (dc) the procedure for the in'estigation of (isbeha'iour or incapacity of the 4<residing Cfficers, or other ?e(bers: of the Securities Appellate .ribunal under sub+section (3) of section "Q3
Clause (c) o(itted by Securities laws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, clause (c) it read as under, 1(c) the conditions subDect to which registration certificate is to be issued under sub+section ( ) of section %20 % Inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 3 Substituted for 1<residing Cfficers2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3!
(dd) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section ". and the fees payable in respect of such appeal3: (e) the for( and the (anner in which returns and report to be (ade to the Central &o'ern(ent under section >3 (f) any other (atter which is to be, or (ay be, prescribed, or in respect of which pro'ision is to be, or (ay be, (ade by rules0 4o/er to .%6e re(*l%tio !. )=. ( ) .he 8oard (ay, %4GGG: by notification, (a)e regulations consistent with this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ti(es and places of (eetings of the 8oard and the procedure to be followed at such (eetings under sub+section ( ) of section / including *uoru( necessary for the transaction of business3 (b) the ter(s and other conditions of ser'ice of officers and e(ployees of the 8oard under sub+section (%) of section !3 34(c) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto and the (anner in which such (atters shall be disclosed by the co(panies under section A3 35('%) the *tiliL%tio of the %.o* t 're-ite- * -er !*,0!e'tio (5) of !e'tio 11H (',) the f*lfill.e t of other 'o -itio ! rel%ti ( to 'olle'ti+e i +e!t.e t !'he.e * -er !*,0!e'tio ("A) of !e'tio 11AAH ('') the $ro'e-*re to ,e follo/e- ,> the %*thoriLe- offi'er for !e%r'h or !eiL*re * -er !*,0!e'tio (9) of !e'tio 11CH < (d) the conditions subDect to which certificate of registration is to be issued, the a(ount of
fee to be paid for certificate of registration and the (anner of suspension or cancellation of certificate of registration under section %0: 55(-%) the ter.! -eter.i e- ,> the ;o%r- for !ettle.e t of $ro'ee-i (! * -er !*,!e'tio (") % - the $ro'e-*re for 'o -*'ti ( of !ettle.e t $ro'ee-i (! * -er !*,!e'tio ()) of !e'tio 15E;H (-,) % > other .%tter /hi'h i! re7*ire- to ,e, or .%> ,e, !$e'ifie- ,> re(*l%tio ! or i re!$e't of /hi'h $ro+i!io i! to ,e .%-e ,> re(*l%tio !.< R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t.
Substituted for 1<residing Cfficers2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 words 1with the pre'ious appro'al of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 3 Substituted for the existing clause (c) by the Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 <rior to substitution this clause read as under, 1(c) the a(ount of fee to be paid for registration certificate and (anner of suspension or cancellation of registration certificate under sub+section (%) and (3) of section %02 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% .he
$0
)1. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. )". .he pro'isions of this Act shall be in addition to, and not in derogation of, the pro'isions of any other law for the ti(e being in force0 A.e -.e t of 'ert%i e %'t.e t!. )). 40e%ealed bF 0e%ealing H A"ending Act' 2001&: 4o/er to re.o+e -iffi'*ltie!. )3. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order, published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as (ay appear to be necessary for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of fi'e years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 Re$e%l % - !%+i (. )5. ( ) .he Securities and 7xchange 8oard of India Crdinance, !!% (Crd0 " of !!%), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 1@( /@(5A9( 4 ee section 33: A@END@ENT O2 CERTAIN ENACT@ENTS 40e%ealed bF 0e%ealing H A"ending Act' 2001:
*SECURITIES CONTRACTS (REGULATION) RULES, 1957
In exercise of the powers conferred by section 30 of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the Central &o'ern(ent hereby (a)es the following rules, the sa(e ha'ing been pre'iously published as re*uired by sub+section (3) of the said section, na(ely ,Short title. 1. .hese rules (ay be called the Securities Contracts (Regulation) Rules, !"/0 Defi itio !. ". In these rules, unless the context otherwise re*uires,(a) 1for(2 (eans a for( appended to these rules3 (b) 1the Act2 (eans the Securities Contracts (Regulation) Act, !"# ($% of !"#)3 (c) 1&o'ern(ent co(pany2 (eans a co(pany in which not less than fifty+one per cent of the share capital is held by the Central &o'ern(ent or by any State &o'ern(ent or &o'ern(ents or partly by the Central &o'ern(ent and partly by one or (ore State &o'ern(ents ; 4(d) 1public2 (eans persons other than 5 (i) the pro(oter and pro(oter group3 (ii) subsidiaries and associates of the co(pany0 E#$l% %tio & 6or the purpose of this clause the words 1pro(oter2 and 1pro(oter group2 shall ha'e the sa(e (eaning as assigned to the( under the Securities and 7xchange 8oard of India (Issue of Capital and 9isclosure Re*uire(ents) Regulations, %00!3: %4(da) ;public sector co(pany; (eans a body corporate constituted by an Act of <arlia(ent or any State =egislature and includes a go'ern(ent co(pany,: 4(e) 1public shareholding2 (eans e*uity shares of the co(pany held by public and shall exclude shares which are held by custodian against depository receipts issued o'erseas0: A$$li'%tio for re'o( itio . ). An application under section 3 of the Act for recognition of a stoc) exchange shall be (ade to the 34Securities and 7xchange 8oard of India: in 6or( A0
* The!e R*le! h%+e ,ee *$-%te- ,%!e- o the R*le! % - A.e -.e t! %+%il%,le o the /e,!ite of the De$%rt.e t of E'o o.i' Aff%ir!0 htt$&11fi .i . i'.i 1l%/1i -e#.%!$ % - %+%il%,le %.e -.e t otifi'%tio !. Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 % Inserted by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3 Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
2ee! for %$$li'%tio . 3. ( ) .here shall be paid in respect of e'ery application under rule 3 a fee of rupees fi'e hundred0 (%) .he a(ount of the fee shall be deposited in the nearest &o'ern(ent treasury or the nearest branch of the State 8an) of India, 4ro+i-e- that at 8o(bay, Calcutta, ?adras, 9elhi and @anpur, the a(ount shall be deposited in the Reser'e 8an) of India0 (3) .he a(ount of the fee so deposited shall be credited to the receipt head 1A=BI?iscellaneous-Cther fees, fines and forfeitures20 Do'*.e t! to ,e file- %lo ( /ith the %$$li'%tio % - $%rti'*l%r! it !ho*l- 'o t%i . 5. 7'ery application shall be acco(panied by four copies of the rules (including the (e(orandu( and articles of association where the applicant stoc) exchange is an
incorporated body) and bye+laws of the stoc) exchange applying for recognition as specified in section 3 of the Act and the receipt granted by the &o'ern(ent treasury, or as the case (ay be, the State 8an) of India or the Reser'e 8an) of India, in respect of the a(ount of the fee deposited and shall contain clear particulars as to the (atters specified in the Annexure to 6or( A0 $54o/er to .%6e i 7*irie! % - '%ll for i for.%tio . 5A. 8efore granting recognition to a stoc) exchange under section $ of the Act, the "4Securities and 7xchange 8oard of India: (ay (a)e such in*uiries and re*uire such further infor(ation to be furnished, as it dee(s necessary, relating to the infor(ation furnished by the stoc) exchange in the Annexure to its application in 6or( A0: 2or. of re'o( itio . 8. .he recognition granted to a stoc) exchange shall be in 6or( 8 and be subDect to the following conditions, na(ely ,(a) that the recognition unless granted on a per(anent basis, shall be for such period not less than one year as (ay be specified in the recognition3 (b) that the stoc) exchange shall co(ply with such conditions as are or (ay be prescribed or i(posed under the pro'isions of the Act and these rules fro( ti(e to ti(e0
$ Inserted
by &SR 0!# dated $00/0 !#/, w0e0f0 %%00/0 !#/ for 1Central &o'ern(ent2 by the Securities Contracts (Regulation)(A(end(ent )Rules, !!#, w0e0f0 %30 %0 !!#0
" Substituted
Re e/%l of re'o( itio . 7. ( ) .hree (onths before the expiry of the period of recognition, a recognised stoc) exchange desirous of renewal of such recognition (ay (a)e an application to the #4Securities and 7xchange 8oard of India: in 6or( A0 (%) .he pro'isions of rule 3, rule $, rule ", rule "A and rule # shall apply in relation to renewal of recognition as they apply in relation to grant of recognition except that the fee payable in respect of an application for renewal of recognition shall be rupees two hundred0 9*%lifi'%tio ! for .e.,er!hi$ of % re'o( i!e- !to'6 e#'h% (e. :. .he rules relating to ad(ission of (e(bers of a stoc) exchange see)ing recognition shall inter alia pro'ide that , (1) Eo person shall be eligible to be elected as a (e(ber if(a) he is less than twenty+one years of age3 (b) he is not a citiFen of India3 pro'ided that the go'erning body (ay in suitable cases relax this condition with the prior appro'al of the !4Securities and 7xchange 8oard of India:3 (c) he has been adDudged ban)rupt or a recei'ing order in ban)ruptcy has been (ade against hi( or he has been pro'ed to be insol'ent e'en though he has obtained his final discharge3 (d) he has co(pounded with his creditors unless he has paid sixteen annas in the rupee3 (e) he has been con'icted of an offence in'ol'ing fraud or dishonesty3 (f) he is engaged as principal or e(ployee in any business other than that of securities /4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability unless he underta)es on ad(ission to se'er his connection with such business ,
>44ro+i-e-
that no (e(ber (ay conduct business in co((odity deri'ati'es, except by setting up a separate co(pany which shall co(ply with the regulatory re*uire(ents, such as, networth, capital ade*uacy, (argins and exposure nor(s as (ay be specified by the 6orward ?ar)et Co((ission, fro( ti(e to ti(e ,
# Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, w0e0f0 %30 %0 !!#0 / Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 > Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 <rior to its substitution, the pro'iso as a(ended by Securities Contracts (Regulation) (A(end(ent) Rules, !!# w0e0f0 %30 %0 !!#, read as under, 1<ro'ided that the Securities and 7xchange 8oard of India (ay, for reasons sufficient in the opinion of the said 8oard, per(it a recogniFed stoc) exchange to suspend the enforce(ent of this clause for a specified period on condition that the applicant is not associated with or is a (e(ber of or subscriber to or shareholder or debenture holder in or connected through a partner or e(ployee with any other organisation, institution, association, co(pany or corporation in India where forward business of any )ind whether in goods or co((odities or otherwise is carried on or is not engaged as a principal or e(ployee ion any such business02
4ro+i-e- f*rther that nothing herein shall be applicable to any corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to ()) of the pro'iso to sub+rule ($)0:3 (g) !4GGG: (h) he has been at any ti(e expelled or declared a defaulter by any other stoc) exchange3 (i) he has been pre'iously refused ad(ission to (e(bership unless a period of one year has elapsed since the date of such reDection0 (2) Eo person eligible for ad(ission as a (e(ber under sub+rule ( ) shall be ad(itted as a (e(ber unless ,(a) he has wor)ed for not less than two years as a partner with, or an authorised assistant or authorised cler) or re(isier or apprentice to, a (e(ber3 or (b) he agrees to wor) for a (ini(u( period of two years as a partner or representati'e (e(ber with another (e(ber and to enter into bargains on the floor of the stoc) exchange and not in his own na(e but in the na(e of such other (e(ber 3 or (c) he succeeds to the established business of a deceased or retiring (e(ber who is his father, uncle, brother or any other person who is, in the opinion of the go'erning body, a close relati'e , 4ro+i-e- that the rules of the stoc) exchange (ay authorise the go'erning body to wai'e co(pliance with any of the foregoing conditions if the person see)ing ad(ission is in respect of (eans, position, integrity, )nowledge and experience of business in securities, considered by the go'erning body to be otherwise *ualified for (e(bership0 (3) Eo person who is a (e(ber at the ti(e of application for recognition or subse*uently ad(itted as a (e(ber shall continue as such if(a) he ceases to be a citiFen of India , 4ro+i-e- that nothing herein shall affect those who are not citiFens of India but who were (e(bers at the ti(e of such application or were ad(itted subse*uently under the pro'isions of clause (b) of sub+rule ( ) of this rule, subDect to their co(plying with all other re*uire(ents of this rule3
(b) he is adDudged ban)rupt or a recei'ing order in ban)ruptcy is (ade against hi( or he is pro'ed to be insol'ent3 (c) he is con'icted of an offence in'ol'ing fraud or dishonesty3 (d) 04G G G: (e) 4G G G: (f) he engages either as principal or e(ployee in any business other than that of securities %4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability, pro'ided that! C(itted 0 Ibid0
by &SR 0/0(7) dated "0
0 !>>
Ibid0
% Inserted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(i) the go'erning body (ay, for reasons, to be recorded in writing, per(it a (e(ber to engage hi(self as principal or e(ployee in any such business, if the (e(ber in *uestion ceases to carry on business on the stoc) exchange either as an indi'idual or as a partner in a fir(, (ii) in the case of those (e(bers who were under the rules in force at the ti(e of such application per(itted to engage in any such business and were actually so engaged on the date of such application, a period of three years fro( the date of the grant of recognition shall be allowed for se'ering their connection with any such business, 34(iii) nothing herein shall affect (e(bers of a recognised stoc) exchange which are corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to (k) of the pro'iso to sub+rule ($)0: (4) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section 3%% of the said Act3 (ii) a (aDority of the directors of such co(pany are shareholders of such co(pany and also (e(bers of that stoc) exchange3 and (iii) the directors of such co(pany, who are (e(bers of that stoc) exchange, ha'e ulti(ate liability in such co(pany , 4ro+i-e- that where the $4Securities and 7xchange 8oard of India: (a)es a reco((endation in this regard, the go'erning body of a stoc) exchange shall, in relaxation of the re*uire(ents of this clause, ad(it as (e(ber the following corporations "4,bodies corporate:, co(panies or institutions, na(ely ,(a) the Industrial 6inance Corporation, established under the Industrial 6inance Corporation Act, !$> ( " of !$>)3 (b) the Industrial 9e'elop(ent 8an) of India, established under the Industrial 9e'elop(ent 8an) Act, !#$ ( > of !#$)3 (c) the =ife Insurance Corporation of India, established under the =ife Insurance Corporation Act, !"# (3 of !"#)3 (d) the &eneral Insurance Corporation of India constituted under the &eneral Insurance Corporation (Eationalisation) Act, !/% ("/ of !/%)3 (e) the Hnit .rust of India, established under the Hnit .rust of India Act, !#3 ("% of !#3)3
3 Substituted, ibid0 <rior to its substitution, sub+clause (iii) read as under, 1(iii) nothing herein shall affect (e(bers of a recogniFed stoc) exchange per(itted under the pro'iso to clause (f) of sub+rule( ) to suspend the enforce(ent of the aforesaid clause, for so long as such suspension is effecti'e, except that no (e(ber of such exchange shall engage in forward business of any )ind whether in goods or co((odities or otherwise and , if actually so engaged on the date of such application , he shall se'er his connection with any such business within a period of three years fro( the date of the grant of recognition02 $ Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# " Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(f) the Industrial Credit and In'est(ent Corporation of India, a co(pany registered under the Co(panies Act, !"# ( of !"#)3 (g) the subsidiaries of any of the corporations or co(panies specified in (a) to (f) and any subsidiary of the State 8an) of India or any nationalised ban) set up for pro'iding (erchant ban)ing ser'ices, buying and selling securities and other si(ilar acti'ities0 #4(h) any ban) included in the Second Schedule to the Reser'e 8an) of India Act, !3$ (% of !3$)3 (i) the 7xport I(port 8an) of India, established under the 7xport I(port 8an) of India Act, !> (%> of !> )3 (j) the Eational 8an) for Agriculture and Rural 9e'elop(ent, established under the Eational 8an) for Agriculture and Rural 9e'elop(ent Act, !> (# of !> )3 and (k) the Eational Iousing 8an), established under the Eational Iousing 8an) Act, !>/ ("3 of !>/)0: (4A) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall also be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section % of the said Act3 (ii) such co(pany underta)es to co(ply with such financial re*uire(ents and nor(s as (ay be specified by the Securities and 7xchange 8oard of India for the registration of such co(pany under sub+section ( ) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (iii) /4G G G: (iv) the directors of the co(pany are not dis*ualified fro( being (e(bers of a stoc) exchange under >4clause ( ) 4except sub+clause (b) and sub+clause (f) thereof: or clause (3) 4except sub+clause (a) and sub+clause (f) thereof:: and the 9irectors of the co(pany had not held the offices of the 9irectors in any co(pany which had been a (e(ber of the stoc) exchange and had been declared defaulter or expelled by the stoc) exchange3 and (v) not less than two directors of the co(pany are persons who possess a (ini(u( two yearsJ experience , (a) in dealing in securities3 or (b) as portfolio (anagers3 or (c) as in'est(ent consultants0 (5) Khere any (e(ber of a stoc) exchange is a fir(, the pro'isions of sub+rules ( ), (3) and ($), shall, so far as they can, apply to the ad(ission or continuation of any partner in such fir(0
# Inserted, / C(itted
ibid0 by &SR /$! (7), dated %0 00 !!$ > Substituted by &SR /!0(7), dated 0/0 0 !!$
Co tr%'t! ,et/ee .e.,er! of re'o( i!e- !to'6 e#'h% (e. 9. All contracts between the (e(bers of a recognised stoc) exchange shall be confir(ed in writing and shall be enforced in accordance with the rules and bye+laws of the stoc) exchange of which they are (e(bers0 !5No.i ee! of the Se'*ritie! % - E#'h% (e ;o%r- of I -i%< o the (o+er i ( ,o-ie! of re'o( i!e- !to'6 e#'h% (e!. 1=. .he %04Securities and 7xchange 8oard of India: (ay no(inate one or (ore persons not exceeding three in nu(ber, as (e(ber or (e(bers of the go'erning body of e'ery recognised stoc) exchange0 Such (e(ber or (e(bers shall enDoy the sa(e status and powers as other (e(bers of the go'erning body0 O,li(%tio of the (o+er i ( ,o-> to t%6e -i!'i$li %r> %'tio %(%i !t % .e.,er if !o -ire'te- ,> the % 5Se'*ritie! % - E#'h% (e ;o%r- of I -i%<. 11. After recei'ing the report of the result of an en*uiry (ade under clause (b) of subsection (3) of section # of the Act, the % 4Securities and 7xchange 8oard of India: (ay ta)e such action as they dee( proper and, in particular, (ay direct the go'erning body of the stoc) exchange to ta)e such disciplinary action against the offending (e(ber, including fine, expulsion, suspension or any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney, as (ay be specified by the % 4Securities and 7xchange 8oard of India:3 notwithstanding anything to the contrary contained in the rules or bye+laws of the stoc) exchange concerned, the go'erning body shall gi'e effect to the directions of the % 4Securities and 7xchange 8oard of India: in this behalf and shall not in any (anner co((ute, re'o)e or (odify the action ta)en in pursuance of such directions, without the prior appro'al of the % 4Securities and 7xchange 8oard of India:0 .he % 4Securities and 7xchange 8oard of India: (ay, howe'er, either of its own (otion or on the representation of the (e(ber concerned, (odify or withdraw its direction to the go'erning body0 A*-it of %''o* t! of .e.,er!. 1". 7'ery (e(ber shall get his accounts audited by a chartered accountant whene'er such audit is re*uired by the % 4Securities and 7xchange 8oard of India:0 ?ith-r%/%l of re'o( itio . 1). .he written notice referred to in section " of the Act shall be in 6or( C0
! Substituted %0 Ibid0 %
by 60 Eo0 L3/LS7L!$, dated %#0 00 !!$0
Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> re'o( i!e- !to'6 e#'h% (e. 13. 7'ery recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years, (1) ?inute boo)s of the (eetings of(a) (e(bers3 (b) go'erning body3 (c) any standing co((ittee or co((ittees of the go'erning body or of the general body of (e(bers0
(2) Register of (e(bers showing their full na(es and addresses0 Khere any (e(ber of the stoc) exchange is a fir(, full na(es and addresses of all partners shall be shown0 (3) Register of authorised cler)s0 (4) Register of re(isiers of authorised assistants0 (5) Record of security deposits0 (6) ?argin deposits boo)0 (7) =edgers0 (8) Mournals0 (9) Cash boo)0 (10) 8an) pass+boo)0 ;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> .e.,er of % re'o( i!e- !to'6 e#'h% (e. 15. ( ) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years , (a) Register of transactions ( a!da boo))0 (b) ClientsJ ledger0 (c) &eneral ledger0 (d) Mournals0 (e) Cash boo)0 (f) 8an) pass+boo)0 (g) 9ocu(ents register showing full particulars of shares and securities recei'ed and deli'ered0 (2) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following docu(ents for a period of two years, (a) ?e(berJs contract boo)s showing details of all contracts entered into by hi( with other (e(bers of the sa(e exchange or counterfoils or duplicates of (e(os of confir(ation issued to such other (e(bers0 (b) Counterfoils or duplicates of contract notes issued to clients0 (c) Kritten consent of clients in respect of contracts entered into as principals0 @% er of i 7*ir> i rel%tio to the %ff%ir! of the (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e or the %ff%ir! of % > .e.,er of the !to'6 e#'h% (e i rel%tio to the !to'6 e#'h% (e. 18. ( )(a) .he person or persons appointed by the %%4Securities and 7xchange 8oard of India: to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act shall hereafter in this rule be referred to as the Nin*uiring authorityJ3 (b) where the in*uiring authority consists of two or (ore persons, one of the( shall be appointed as the chair(an or senior (e(ber thereof3 (c) the in*uiring authority shall hand o'er a state(ent of issues to be in*uired into to the go'erning body or the (e(ber concerned, as the case (ay be, who will be gi'en a reasonable opportunity to state their or his side of the case3 (d) if any witness is called for exa(ination, an opportunity shall be pro'ided to the go'erning body or the (e(ber whose affairs are being in*uired into, as the case (ay be, to cross+exa(ine such witness3 (e) where the in*uiring authority consists of (ore than one person, the 'iews of the (aDority shall be dee(ed to represent the findings of such authority and, in the e'ent of
an e*uality of 'otes, the chair(an or senior (e(ber shall ha'e a casting 'ote3 (f) the in*uiring authority shall sub(it its report in writing to the %%4Securities and 7xchange 8oard of India: within the period specified in the order of appoint(ent3 (g) te(porary absence fro( any hearing or hearings of any (e(ber of the in*uiring authority shall not 'itiate its proceedings0 (%) Khere the %%4Securities and 7xchange 8oard of India: has directed the go'erning body of a stoc) exchange to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act, the go'erning body concerned shall appoint one or (ore (e(bers thereof to (a)e the in*uiry and the pro'isions of sub+rule ( ) shall apply "!tati# "!tandi# to such in*uiry0 S*,.i!!io of % *%l re$ort. 17. ( ) 7'ery recognised stoc) exchange shall before the 3 st day of Manuary in each year or within such extended ti(e as the %34Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, allow, furnish the %34Securities and 7xchange 8oard of India: annually with a report about its acti'ities during the preceding calendar year, which shall inter alia contain detailed infor(ation about the following (atters , (a) changes in rules and bye+laws, if any3 (b) changes in the co(position of the go'erning body3 (c) any new sub+co((ittees set up and changes in the co(position of existing ones3
%% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# %3 Ibid0
(d) ad(issions, re+ad(issions, deaths or resignations of (e(bers3 (e) disciplinary action against (e(bers3 (f) arbitration of disputes (nature and nu(ber) between (e(bers and non+(e(bers3 (g) defaults3 (h) action ta)en to co(bat any e(ergency in trade3 (i) securities listed and de+listed3 and (j) securities brought on or re(o'ed fro( the forward list0 (%) 7'ery recognised stoc) exchange shall within one (onth of the date of the holding of its annual general (eeting, furnish the %$4Securities and 7xchange 8oard of India: with a copy of its audited balance+sheet and profit and loss account for its preceding financial year0 S*,.i!!io of $erio-i'%l ret*r !. 17A. 7'ery recognised stoc) exchange shall furnish the %$4Securities and 7xchange 8oard of India: periodical returns relating to(i) the official rates for the securities enlisted thereon3 (ii) the nu(ber of shares deli'ered through the clearing house3 (iii) the (a)ing+up prices3 (iv) the clearing house progra((es3 (v) the nu(ber of securities listed and de+listed during the pre'ious three (onths3 (vi) the nu(ber of securities brought on or re(o'ed fro( the forward list during the pre'ious three (onths3 and (vii) any other (atter as (ay be specified by the %$4Securities and 7xchange 8oard of India:0 @% er of $*,li'%tio of ,>e0l%/! for 'riti'i!.. 1:. .he bye+laws to be (ade, a(ended or re'ised under the Act shall be published for
criticis( in accordance with the pro'isions of section %3 of the &eneral Clauses Act, >!/ both in the &aFette of India and Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate0 Re7*ire.e t! /ith re!$e't to the li!ti ( of !e'*ritie! o % re'o( i!e- !to'6 e#'h% (e. 19. ( ) A public co(pany as defined under the Co(panies Act, !"#, desirous of getting its securities listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars ,
%$ Ibid0
(a) ?e(orandu( and articles of association and, in the case of a debenture issue, a copy of the trust deed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any securities for subscription or sale during the last fi'e years0 (d) Copies of balance+sheets and audited accounts for the last fi'e years, or in the case of new co(panies, for such shorter period for which accounts ha'e been (ade up0 (e) A state(ent showing(i) di'idends and cash bonuses, if any, paid during the last ten years (or such shorter period as the co(pany has been in existence, whether as a pri'ate or public co(pany), (ii) di'idends or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents with or between ,(i) 'endors andLor pro(oters, (ii) underwriters and sub+underwriters, (iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents with(i) (anaging agents and secretaries and treasurers, (ii) selling agents, (iii) (anaging directors and technical directors, (iv) general (anager, sales (anager, (anager or secretary0 (h) Certified copy of e'ery letter, report, balance+sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering securities for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents0 (j) A brief history of the co(pany since its incorporation gi'ing details of its acti'ities including any reorganisation, reconstruction or a(alga(ation, changes in its capital structure, (authorised, issued and subscribed) and debenture borrowings, if any0
(k) <articulars of shares and debentures issued-(i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s including an option for the issue of any )ind of the securities granted to any person0 (") Certified copies of%"4(i) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3: (ii) agree(ents, if any, with the Industrial 6inance Corporation, Industrial Credit and In'est(ent Corporation and si(ilar bodies0 (n) <articulars of shares forfeited0 ($) A list of highest ten holders of each class or )ind of securities of the co(pany as on the date of application along with particulars as to the nu(ber of shares or debentures held by and the address of each such holder0 (%) <articulars of shares or debentures for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0 (%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant co(pany shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer, (ii) that the fully paid shares will be free fro( all lien, while in the case of partly paid shares, the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such shares, (iii) that any a(ount paid+up in ad'ance of calls on any share (ay carry interest but shall not entitle the holder of the share to participate in respect thereof, in a di'idend subse*uently declared, (iv) there will be no forfeiture of unclai(ed di'idends before the clai( beco(es barred by law, (v) that option or right to call of shares shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the securities of a co(pany which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0
%" Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 <rior to its substitution, sub+clause (i), read as under, 1(i) letters of consent of the Controller of Capital Issues02
%#4(b)
(i) At least twenty fi'e per cent0 of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent3 or (ii) At least ten per cent of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent if the post issue capital of the
co(pany calculated at offer price is (ore than four thousand crore rupees, <ro'ided that the re*uire(ent of post issue capital being (ore than four thousand crore rupees shall not apply to a co(pany whose draft offer docu(ent is pending with the Securities and 7xchange 8oard of India on or before the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, if it satisfies the conditions prescribed in clause (b) of sub+rule % of rule ! of the Securities Contracts (Regulation) Rules, !"# as existed prior to the date of such co((ence(ent, %/4<ro'ided further that the co(pany, referred to in sub clause (ii), shall increase its public shareholding to at least twenty fi'e per cent, within a
%# Substituted
by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, clause (b) as a(ended by the A(end(ent Rules, %00 , w0e0f0 0/00#0%00 , read as under, 1(b) At least 0 per cent of each class or )ind of securities issued by a co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted subDect to the following conditions, (a) (ini(u( %0 la)h securities (excluding reser'ations, fir( allot(ent and pro(otersJ contribution) was offered to the public3 (b) the siFe of the offer to the public, i&e&' the offer price (ultiplied by the nu(ber of securities offered to the public was (ini(u( Rs0 00 crores3 and (c) the issue was (ade only through boo) building (ethod with allocation of #0 per cent of the issue siFe to the *ualified institutional buyers as specified by the Securities and 7xchange 8oard of India, 4ro+i-e- that if a co(pany does not fulfil the conditions, it shall offer at least %" per cent of each class or )ind of securities to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted, 4ro+i-e- f*rther that a recognised stoc) exchange (ay relax any of the conditions with the pre'ious appro'al of the Securities and 7xchange 8oard of India, in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#), and subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*6or the purpose of this clause, it is hereby clarified that where any part of the securities sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental 6ire and &eneral Insurance Co(pany =i(ited and the Hnited 6ire and &eneral Insurance Co(pany =i(ited or Hnit .rust of India, the total subscription to the securities, whether by one or (ore of such bodies, shall not for( part of the 0 per cent or %" per cent of the securities, as the case (ay be, to be offered to the public02 %/ Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 <rior to its substitution, second pro'iso, read as under, 1<ro'ided further that the co(pany, referred in sub+clause (ii), shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of atleast fi'e per
period of three years fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India0: %>4GGG:: %!4(c) Eotwithstanding anything contained in clause (b), a public sector co(pany, shall offer and allot at least ten per cent, of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares to public in ter(s of an offer docu(ent0: (3) A co(pany applying for listing shall, as a condition precedent, underta)e inter alia(a) (i) that letters of allot(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to
that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been posted, (ii) that letters of right will be issued si(ultaneously, (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the securities to which they relate, (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right, (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or di'idend on the securities will be calculated, (b) to issue, when so re*uired, receipts for all securities deposited with it whether for registration, sub+di'ision, exchange or for other purposes 3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of certificates and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (bb) to issue, when so re*uired, consolidation and renewal certificates in deno(inations of the (ar)et unit of trading to split certificates, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3
cent per annu( beginning fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India,2 %> C(itted, ibid <rior to its o(ission, third pro'iso, read as under, 1<ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase beings its public shareholding to the le'el of twenty fi'e per cent in that year02 %! Inserted, ibid0
(c) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders, and (ii) to 'erify when the co(pany is unable to issue certificates or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (d) on production of the necessary docu(ents by shareholders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or certificate of the Controller of 7state 9uty or si(ilar other docu(ent has been duly exhibited to
and registered by the co(pany3 (e) to issue certificates in respect of shares or debentures lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance certificates within the sa(e period where the transfer is acco(panied by a larger certificate3 (f) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a di'idend or the issue of right or bonus share will be considered3 (g) to reco((end or declare all di'idends andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all di'idends andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (h) to notify the stoc) exchange of any (aterial change in the general character or nature of the co(panyJs business3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (anaging agent or secretaries and treasurers, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued, copies of all other notices and circulars sent to the shareholders including proceedings of ordinary and extraordinary general (eetings of the co(pany and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the shareholders of any new issue of securities whether by way of right, pri'ilege bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited securities or the issue of securities held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of di'idend or issue of right or bonus shares or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s (or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its shareholders or debentureholders) and specifying the purpose or purposes for which the transfer boo)s are to be closed (or the record is to be ta)en)3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority subDect to which the issue is proposed to be (ade ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after each annual general (eeting of at least ten principal holders of each class of security of the co(pany along with particulars as to the nu(ber of shares or debentures held by,
and address of, each such holder3 (+) to grant to shareholders the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e not being less than four wee)s within which to record, exercise, or renounce such rights, pri'ileges and benefits and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3 (r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any securities listed on the exchange, (ii) of the intention to (a)e a drawing of such securities, inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing of the balance) for the drawing, (iii) of the a(ount of securities outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the shareholders to apprise the position of the co(pany and to a'oid the establish(ent of a false (ar)et in the shares of the co(pany3 (t) (t)that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 304($) An application for listing shall be necessary in respect of the following, (a) all new issues of any class or )ind of securities of a co(pany to be offered to the public3 (b) all further issues of any class or )ind of securities of a co(pany if such class or )ind of securities of the co(pany are already listed on a recognised stoc) exchange0: (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the securities of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 3 44ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any security, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and its orders shall be carried out by the stoc) exchange0: 3%4(#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore
or re+ad(it to dealings any securities suspended or withdrawn fro( the list0: 334(#A) 7xcept as otherwise pro'ided in these rules or per(itted by the Securities and 7xchange 8oard of India under sub+rule (/), all re*uire(ents with respect to listing
30 Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, sub+rule ($), read as under, 1($) A fresh application for listing will be necessary in respect of all new issues desired to be dealt in, pro'ided that, where such new securities are identical in all respects with those already listed, ad(ission to dealings will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new issues0 7xplanation, Shares are identical in all respects only if(a) they are of the sa(e no(inal 'alue and the sa(e a(ount per share has been called up3 (b) they are entitled to di'idend at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the di'idend payable on each share will a(ount to exactly the sa(e su(, net and gross3 and (c) they carry the sa(e rights in all other respects02 3 Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%0000 7arlier, the second pro'iso was a(ended by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 3% Substituted by the Securities Contracts (Regulation) (A(end(ent), %000, w0e0f0 0>00>0%0000 7arlier, subrule (#) was a(ended by the Securities Contracts (Regulation) (A(end(ent), !!#, w0e0f0 %30 %0 !!#0 33 Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!0>0%0 00 <rior to its substitution, sub+rule (#A) as a(ended by the Securities Contracts
prescribed by these rules shall, so far as they (ay be, also apply to a public sector co(pany0: 3$4GGG: (/) .he 3"4Securities and 7xchange 8oard of India: (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect to listing prescribed by these rules0 3#4Co ti *o*! Li!ti ( Re7*ire.e t. 19A. ( ) 7'ery listed co(pany 3/4other than public sector co(pany: shall (aintain public shareholding of at least twenty fi'e per cent0, 3>4<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent, on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall increase its public shareholding to at least twenty fi'e per cent, within a period of three years fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India0 7xplanation, 6or the purposes of this sub+rule, a co(pany whose securities has been listed pursuant to an offer and allot(ent (ade to public in ter(s of sub+clause (ii) of clause (b) of sub+rule (%) of rule !, shall (aintain (ini(u( twenty fi'e per cent, public shareholding fro( the date on which the public shareholding in the co(pany reaches the le'el of twenty fi'e percent in ter(s of said sub+clause0: (%) Khere the public shareholding in a listed co(pany falls below twenty fi'e per cent0 at any ti(e, such co(pany shall bring the public shareholding to twenty fi'e per cent0
(Regulations)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 and &SR % (7) w0e0f0 0!0030 !!", read as under, 1(#A) All the re*uire(ents with respect to listing and continuous listing prescribed by these rules, shall so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature ,2 3$ C(itted by the Securities Contracts (Regulation)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its o(ission, pro'iso, as substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# and inserted by &SR %! (7) dated %/0030 !!", read as under,
1<ro'ided that a recognised stoc) exchange (ay relax the re*uire(ent of offer to public for subscription of atleast twenty+fi'e percent of the each class or )ind of securities issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e02 3" Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent), Rules, !!#, w0e0f0 %30 %0 !!#0 3# Inserted by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 3/ Inserted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3> Substituted, ibid0 <rior to substitution, pro'isos, read as under, 1<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of at least fi'e per cent per annu( beginning fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India, <ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase brings its public shareholding to the le'el of twenty fi'e per cent in that year02
within a (axi(u( period of twel'e (onths fro( the date of such fall in the (anner specified by the Securities and 7xchange 8oard of India0: 3!4(3) Eotwithstanding anything contained in this rule, e'ery listed public sector co(pany shall (aintain public shareholding of at least ten per cent0, <ro'ided that a listed public sector co(pany+ (a) which has public shareholding below ten per cent, on the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of three years fro( the date of such co((ence(ent3 (b) whose public shareholding reduces below ten per cent, after the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of twel'e (onths fro( the date of such reduction,0: $04Re7*ire.e t! /ith re!$e't to the li!ti ( of * it! or % > other i !tr*.e t of % Colle'ti+e I +e!t.e t S'he.e o % re'o( i!e- !to'6 e#'h% (e. "=. ( ) A Collecti'e In'est(ent ?anage(ent Co(pany (CI?C) which is desirous of getting its any collecti'e in'est(ent sche(e listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars , (a) Certificate of incorporation, (e(orandu( and articles of association of the co(pany and the copy of the trust deed of the sche(e intended to be listed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any unit or other instru(ent for subscription or sale during the last fi'e years, or in the case of a new co(pany, such shorter period during which the co(pany has been in existence0 (d) Copies of balance sheets and audited accounts for the last fi'e years, or in the case of a new co(pany, for such co(pleted financial year for which accounts ha'e been (ade up0 (e) A state(ent showing,(i) returns and cash bonuses, if any, paid during the last ten years (or such
shorter period as the co(pany has been in existence whether as a pri'ate or public co(pany)3 (ii) returns or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents pertaining to each sche(e of the co(pany with or between,(i) 'endors andLor pro(oters3 (ii) underwriters and sub+underwriters3
3! Inserted $0 Inserted
by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 0 by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%000
(iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents pertaining to each sche(e of a co(pany with(i) selling agents and other ser'ice pro'iders3 (ii) (anaging directors and technical directors3 (iii) general (anager, sales (anager, (anager or secretary0 (h) Certified copies of e'ery letter, report, balance sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering units or any other instru(ents of the sche(e for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents pertaining to such sche(e0 (j) A brief history of the Co(pany since its incorporation gi'ing details of its acti'ities including any re+organisation, reconstruction or a(alga(ation, changes in its capital structure (authorised, issued and subscribed) and debenture borrowings, if any, and the perfor(ance of other collecti'e in'est(ent sche(es of the co(pany0 (k) <articulars of units of the sche(e andLor shares, debentures of the co(pany issued (i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s granted to any person pertaining to such sche(e0 (") Certified copies of(i) certificate of registration granted by the Securities and 7xchange 8oard of India3 (ii) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3 (iii) agree(ents, if any, with any public financial institution as specified in section $A of the Co(panies Act, !"# ( of !"#)0 (n) A list of the highest ten holders of units of each sche(e of the co(pany as on the date of application along with particulars as to the nu(ber of units held by and the address of each such holder0 ($) <articulars of units of the sche(e for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0
(%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer of units of a particular sche(e3 (ii) that the fully paid units issued under the sche(e will be free fro( all lien, while in the case of partly paid units the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such units3 (iii) that any a(ount paid+up in ad'ance of calls on any units (ay carry interest but shall not entitle the holder of the unit to participate in respect thereof, in a return subse*uently declared3 (iv) there will be no forfeiture of unclai(ed returns before the clai( beco(es barred by law3 (v) that option or right to call of units shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the units of a sche(e which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0 (b) At least twenty+fi'e per cent of the units or any other instru(ent of a sche(e issued by the co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and not (ore than ninety days, and that applications recei'ed in pursuance of such offer were allotted fairly and unconditionally , 4ro+i-e- that a recognised stoc) exchange (ay relax this re*uire(ent, with the pre'ious appro'al of the Securities and 7xchange 8oard of India in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#) and subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*Khere any part of the units or any other instru(ents sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely, the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental Insurance Co(pany =i(ited and the Hnited Insurance Co(pany =i(ited, or Hnit .rust of India, the total subscription to the units or any other instru(ent, whether by one or (ore of such bodies, shall not for( part of the twenty+fi'e per cent of the units or any other instru(ent to be offered to the public0 (3) A co(pany applying for listing of a sche(e shall, as a condition precedent, underta)e, inter alia,(a) (i) that letters of allot(ent of units or any other instru(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been
posted3 (ii) that letters of right will be issued si(ultaneously3 (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and, exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the units or any other instru(ent to which they relate3 (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right3 (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or return on the units or any other instru(ent will be calculated3 (b) to issue, when so re*uired, receipts for all units and any other instru(ent deposited with it whether for registration, sub+di'ision, exchange or for other purposes3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of units and any other instru(ent and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (c) to issue, when so re*uired, consolidation and renewal units or any other instru(ent in deno(inations of the (ar)et unit of trading, to split units or any other instru(ent, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3 (d) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders3 and (ii) to 'erify when the co(pany is unable to issue units or any other instru(ents or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (e) on production of the necessary docu(ents by unit holders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or si(ilar other docu(ent has been duly exhibited to and registered by the co(pany3 (f) to issue certificates in respect of units or any other instru(ent lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance units or any other instru(ent within the sa(e period where the transfer is acco(panied by a larger unit or any other instru(ent certificate3 (g) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a return or the issue or right or bonus units or
any other instru(ent will be considered3 (h) to reco((end or declare all returns andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all returns andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts of such sche(e as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued copies of all other notices and circulars sent to the unitLother instru(ent holders regarding any i(portant de'elop(ent or resolutions passed by the co(pany affecting the perfor(ance of the sche(e and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the unitLany other instru(ent holders, of any new issue of unitsLother instru(ents whether by way of right, pri'ilege, bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited unitsLother instru(ents or the issue of unitsLother instru(ents held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of unit capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of returns or issue of right or bonus unitsLany other instru(ents in the sche(e or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its unitLother instru(ent holders and specifying the purpose or purposes for which the transfer boo)s are to be closed or the record is to be ta)en3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority, subDect to which the issue is proposed to be (ade, ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after the preparation of annual accounts of at least ten principal holders of each class of unitsLany other instru(ents of the co(pany along with particulars as to the nu(ber of unitsLany other instru(ent held by, and address of, each such holder3 (+) to grant to unitLany other instru(ent holders of the sche(e the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e, not being less than four wee)s, within which to record, exercise, or renounce such rights, pri'ileges and benefits, and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3
(r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any unitLother instru(ent listed on the exchange3 (ii) of the intention to (a)e a drawing of such unitLother instru(ent inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing off the balance) for the drawing3 (iii) of the a(ount of unitsLother instru(ents outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the unitLany other instru(ent holders to appraise the position of the sche(e and to a'oid the establish(ent of a false (ar)et in the unitsLany other instru(ents of the co(pany3 (t) that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 ($) A fresh application for listing will be necessary in respect of all new sche(es desired to be dealt in , 4ro+i-e- that, where such new unitsLother instru(ents are identical in all respects with those already listed, ad(ission to dealing will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new sche(es0 ()%lanati$n0-HnitsLany other instru(ents are identical in all respects only if(a) they are issued under the sa(e sche(e3 (b) they are of the sa(e no(inal 'alue and the sa(e a(ount per unitLother instru(ents has been called up3 (c) they are entitled to returns at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the return payable on each unitLother issue will a(ount to exactly the sa(e su(, net and gross3 and (d) they carry the sa(e rights in all other respects0 (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the unitsLother instru(ents of a sche(e of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 4ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any unitLother instru(ent of a collecti'e in'est(ent sche(e, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an
opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and thereupon the orders of the Securities Appellate .ribunal shall be carried out by the stoc) exchange0 (#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore or read(it to dealings any unitsLother instru(ents suspended or withdrawn fro( the list0 (/) All the re*uire(ents with respect to listing prescribed by these rules, shall, so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature , 4ro+i-e- that a recognised stoc) exchange (ay relax the re*uire(ent of offer to the public for subscription of at least twenty+fi'e per cent of the units or any other instru(ent of a collecti'e in'est(ent sche(e issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 (>) .he Securities and 7xchange 8oard of India (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect of listing prescribed by these rules0: $ 4Deli!ti ( of !e'*ritie!. "1. A recogniFed stoc) exchange (ay, without preDudice to any other action that (ay be ta)en under the Act or under any other law for the ti(e being in force, delist any securities listed thereon on any of the following grounds in accordance with the regulations (ade by the Securities and 7xchange 8oard of India, na(ely,(a) the co(pany has incurred losses during the preceding three consecuti'e years and it has negati'e networth3 (b) trading in the securities of the co(pany has re(ained suspended for a period of (ore than six (onths3 (c) the securities of the co(pany ha'e re(ained infre*uently traded during the preceding three years3 (d) the co(pany or any of its pro(oters or any of its director has been con'icted for failure to co(ply with any of the pro'isions of the Act or the Securities and 7xchange 8oard of India Act, !!% or the 9epositories Act, !!# (%% of !!#) or rules, regulations, agree(ents (ade thereunder, as the case (ay be and awarded a penalty of not less than rupees one crore or i(prison(ent of not less than three years3 (e) the addresses of the co(pany or any of its pro(oter or any of its directors, are not )nown or false addresses ha'e been furnished or the co(pany has changed its registered office in contra'ention of the pro'isions of the Co(panies Act, !"# ( of !"#)3 or
$
Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %00>, w0e0f0 000#0%00!
(f) shareholding of the co(pany held by the public has co(e below the (ini(u( le'el applicable to the co(pany as per the listing agree(ent under the Act and the co(pany has failed to raise public holding to the re*uired le'el within the ti(e specified by the recogniFed stoc) exchange , 4ro+i-e- that no securities shall be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) If the securities is delisted under clause ( ),
(a) the co(pany, pro(oter and director of the co(pany shall be Dointly and se'erally liable to purchase the outstanding securities fro( those holders who wish to sell the( at a fair price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India, under the Act3 and (b) the said securities shall be delisted fro( all recogniFed stoc) exchanges0 (3) A recogniFed stoc) exchange (ay, on the re*uest of the co(pany, delist any securities listed thereon in accordance with the regulations (ade under the Act by Securities and 7xchange 8oard of India, subDect to the following conditions, na(ely ,(a) the securities of the co(pany ha'e been listed for a (ini(u( period of three years on the recogniFed stoc) exchange3 (b) the delisting of such securities has been appro'ed by the two+third of public shareholders3 and (c) the co(pany, pro(oter andLor the director of the co(pany purchase the outstanding securities fro( those holders who wish to sell the( at a price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India under the Act, 4ro+i-e- that the condition at (c) (ay be dispensed with by Securities and 7xchange 8oard of India if the securities re(ain listed at least on the Eational Stoc) 7xchange of India =i(ited or the 8o(bay Stoc) 7xchange =i(ited0: FORM A ( ee Rules 3 and /) A$$li'%tio for re'o( itio 1re e/%l of re'o( itio of % !to'6 e#'h% (e * -er !e'tio ) of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 .o 00000000000000000000000000000000000000 00000000000000000000000000000000000000 !bject,*A%%licati$n f$r rec$gniti$n-rene.al $f rec$gniti$n $f a #t$ck e)change !nder #ecti$n 3 $f the ec!ritie# /$ntract# (0eg!lati$n) Act' 1956& Sir, <ursuant to the $%4Securities and 7xchange 8oard of India: Eotification Eo0 00000000000000000000000000 00000000000000000 dated 000000000000000000000000000000000LCertificate of recognition dated0000000000000000000000000000000KeLI on behalf of 000000000000000000 (na(e and address of stoc) exchange) being a stoc) exchange as defined in section % of the Securities Contracts
$% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
(Regulation) Act, !"# hereby apply for recognitionLrenewal of recognition for the purposes of the said Act in respect of contracts in securities0 ". 6our copies of the rules, (e(orandu( and articles of association relating in general to the constitution and (anage(ent of the stoc) exchange and four copies of the bye+laws for the regulation and control contracts in securities are enclosed0 ). All the necessary infor(ation re*uired in the Annexure to this 6or( is enclosed0 Any additional infor(ation will be furnished as and when called for by the $34Securities and 7xchange 8oard of India:0 3. KeLI on behalf of the said stoc) exchange hereby underta)e to co(ply with the re*uire(ents of section $ of the said Act and such other conditions and ter(s as (ay be contained in the certificate of recognition or be prescribed or i(posed subse*uently0 5. .reasury Receipt Eo0 000000dated000000for Rs000000000000is attached0
Oours faithfully, Signature of applicant ANNEAURE TO 2OR@ BAC Part I - General 0 Ea(e of the applicant stoc) exchange0 %0 Address0 30 9ate of establish(ent0 $0 Is your exchange a Doint stoc) co(pany (state whether public or pri'ate) registered under the Indian Co(panies Act or an association for profit or otherwise P If it is organised on so(e other basis, this (ay be stated0 "0 &i'e details of your capital structure and attach three copies of the audited balance sheets and profit and loss account of the 7xchange for the preceding three years0 Part II - Membership #0 State the nu(ber of (e(bers at the ti(e of application0 Also specify how (any are inacti'e0 /0 State whether there is any pro'ision, resolution or con'ention for li(iting the nu(ber of (e(bers and whether in pursuance thereof you ha'e fixed a ceiling on the nu(ber of (e(bers that you would ta)e0 >0 9o you insist on any (ini(u( *ualifications and experience before enrolling new (e(bers P If so gi'e details0 !0 State the different classes of (e(bers, if any, the nu(ber thereof and the pri'ileges enDoyed by each class0 Khat is the procedure followed by your exchange for the ad(ission of different classes of new (e(bers P 00 Khat are the rates of your annual subscription in respect of the different classes of (e(bers P 0 9o you collect any security deposit fro( your (e(bers P If so, gi'e details and also state the (anner in which such deposits are utilised and the rate of interest allowed, if any0
$3 Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
%0 9o you collect any ad(ission or entrance fees fro( your (e(bers or fro( partners of fir(s who are (e(bers P If so, how (uch P 30 9o you insist on your (e(bers and partners of fir(s who are (e(bers di'esting the(sel'es of other acti'ities either as principal or as e(ployee P $0 9o your rules per(it fir(s to beco(e (e(bers P If so, is it incu(bent on (e(bers to see) the appro'al of the go'erning body before ad(itting new partners P State the conditions, if any, laid down in your rules for the ad(ission of such partners0 "0 If your rules do not per(it of fir(s being enrolled as (e(bers, do you per(it indi'idual (e(bers to for( a partnership P State the procedure followed for the recognition of such partnership0 #0 9o you per(it (e(bers to wor) in partnership with non+(e(bers P If so, how far such non+(e(bers subDect to the control of the stoc) exchange P Part III - Governing Body /0 Khat is the present strength of your go'erning body P &i'e details of the constitution, powers of (anage(ent, election and tenure of office of (e(bers of the go'erning body, and the (anner in which its business is transacted0 >0 Are any trade or co((ercial interest represented on your go'erning body P If so,
gi'e details of interests represented0 !0 9o you associate shareholders of in'estors associations with the (anage(ent of your exchange P If so, state the (anner in which it is done0 %00 Are there any &o'ern(ent representati'es on your go'erning body P If so, furnish their na(es0 % 0 9o your rules pro'ide for the direct election by (e(bers of any other bodies or co((ittees, apart fro( the go'erning body P If so, gi'e details of their constitution, tenure, powers and functions0 %%0 9o you ha'e any pro'ision for the appoint(ent of standing or ad h$c subco((ittees of the go'erning body P If so, furnish details of the (ethod of their appoint(ent, ter(s of office, powers and functions0 %30 &i'e the designations, powers and duties of principal office+bearers of your exchange0 Are any of these office+bearers in the pay of the stoc) exchange P If so, gi'e details as to the (ode of their appoint(ent, tenure of office and re(uneration0 Part IV - Trading %$0 9o you ha'e a trading ring P If not, how do you carry on the business P &i'e details0 %"0 State the different )inds of contracts in use on your exchange e&g&' spot, ready and forward0 State the period of deli'ery and pay(ent in each case0 %#0 &i'e details of business hours for each type of contract0 %/0 &i'e details of the scale of bro)erage and other charges, if any, prescribed by your exchange0 %>0 9o you prescribe standard for(s of contract for the use of your (e(bers P Attach three copies of each such contract for(0 %!0 9o you classify your (e(bers into bro)ers and Dobbers P If so, specify the bye+law under which this is done0 300 9o you ha'e a syste( of registration of re(isiers andLor authorised cler)s P If so, gi'e details as to their *ualifications, obligations and rights, etc0 3 0 9o you ha'e any regulations regarding dealings by (e(bers on their own account whether in the nature of 1aravani (day+to+day) or otherwise P 3%0 9o you ha'e any pro'isions for regulating the 'olu(e of business done by any indi'idual (e(ber other than through a syste( of (argins P If so, gi'e details0 330 Khat pro'isions ha'e you (ade for periodical settle(ent of contracts and differences thereunder, the deli'ery of, and pay(ent for securities and the passing of deli'ery orders P 3$0 9o you ha'e a clearing house for the settle(ent of contracts P If so, gi'e details of its organisation and (anage(ent0 3"0 If you ha'e clearing house, what returns do the (e(bers of your exchange sub(it regarding the transactions cleared through such clearing house P 9oes the exchange as) for any regular returns in respect of transactions settled outside the clearing house P Sub(it three copies of for(s used in this connection0 3#0 Iow do you fix, alter or postpone the dates of settle(ent P 3/0 Iow do you deter(ine and declare (a)ing+up prices P 3>0 9o you ha'e any arrange(ents for (a)ing or recording of bargains P 3!0 Ia'e you any arrange(ents for recording and publishing (ar)et rates including opening, closing, highest and lowest rates P $00 Khat pro'isions ha'e you (ade for regulating-(a) the entering into contracts, their
perfor(ance and rescission, including contracts , (i) between (e(bers, (ii) between a (e(ber and his constituent, and (iii) between a (e(ber and a non+(e(ber3 (b) the conse*uences of breach, default or insol'ency on the part of (e(bers whether acting as buyers, sellers or inter(ediaries 3 and (c) 2havala#3 and other (atters relating to conduct of business of (e(bers in the exchange P $ 0 9o you prescribe (argin re*uire(ents P If yes, gi'e details0 $%0 9o you prescribe (axi(u( and (ini(u( prices for securities P If so, how and under what conditions0 $30 9o you pro'ide any safeguards for the pre'ention of Nbulls*ueeFesJ and 3 NbearraidsJ and for (eeting e(ergencies in trade P &i'e details0 $$0 Khat are the (easures adopted by you to regulate or prohibit ad'ertising or issue of circulars by your (e(bers P $"0 Khat are the disciplinary power with the go'erning body to enforce due co(pliance by (e(bers of the rules and bye+laws of the exchange and generally to ensure proper standard of business conduct P $#0 9o you re*uire (e(bers to supply such infor(ation or explanation and to produce such boo)s relating to their business as your go'erning body (ay re*uire P $/0 9o you publish any statistics in regard to business done on the exchange including the transactions settled through the clearing house, if (aintained P In particular, ha'e you e'ol'ed any (achinery for co(puting the 'olu(e of transactions in the different )inds of contracts per(itted on your exchange P &i'e details0 $>0 9o you ha'e any bye+laws contra'ention of which (a)es a contract 'oid P Part V - Miscellaneo s $!0 9o you ha'e any (achinery for arbitration of disputes between (e(bers andLor between (e(bers and their constituents P &i'e details0 "00 Khat are the conditions subDect to which securities are listed for dealings on your exchange P " 0 Khat are your re*uire(ents for ad(itting securities to forward+trading P "%0 9o you ha'e the right to prohibit, withdraw or suspend dealings in a listed security P If so, under what circu(stances is this right exercised P "30 Khat pro'isions ha'e you (ade for the le'y and reco'ery of fees, fines and penalties P FORM B ( ee rules # and /) $$5The Se'*ritie! % - E#'h% (e ;o%r- of I -i%< 4e. 5elhi' the 20&&&&&&&&&&&&& Eo0 000000000000000000000000000000000000.he $"4Securities and 7xchange 8oard of India:, ha'ing considered the application for recognitionLrenewal of recognition (ade under section 3 of the Securities Contracts (Regulation) Act, !"# by000000000000000000000000000000 (na(e and address of exchange) and being satisfied that it would be in the interest of the trade and also in the public interest so to do, hereby grants, in exercise of the powers conferred by section $ of the Securities Contracts (Regulation) Act, !"# recognition to the said exchange under section $ of the said Act for 0000000000000000000 yearLyears ending 0000000000000000000000%0 0000000on a per(anent basis in respect of contracts in securities subDect to the conditions stated herein below or as (ay be prescribed or i(posed hereafter0 Seal of the $#48oard: Signature of Cfficer
Note&-Application for renewal of recognition shall be (ade so as to reach the Central &o'ern(ent not less than three (onths before the expiry of the period0 (.his certificate, will also ha'e to be published as a Eotification in the &aFette of India and also in the Cfficial &aFette of the State in which principal office of the recognised stoc) exchange is situate)0 $/5FORM ! ( ee rule 3) Noti'e to !ho/ '%*!e %(%i !t the /ith-r%/%l of re'o( itio .I7 S7CHRI.I7S AE9 7ACIAE&7 8CAR9 C6 IE9IA 6!"bai' the&&&&&&&&&&& .o 0000000000000000000000000000000000000000000000000000000000000000000000000000000000
$$ Substituted
for 1&o'ern(ent of India, ?inistry of 6inance2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 $" Substituted for 1Central &o'ern(ent2, ibid0 $# Substituted for 1?inistry2, ibid0 $/ Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#
0000000000000000000000000000000000000000000000000000000000000000000000000000000000 (na(e and address of the exchange) Oou are hereby called upon to show cause on or before 0000000000000000000000000000000000000 at the office of 0000000000000000000000000000000000000000000000000000 ( designation of the officer) why the recognition granted to you under the ?inistry of 6inanceLthe Securities and 7xchange 8oard of India, Eotification Eo0 0000000000000000000000000000 dated 000000000000000000000000000000000000000 and Certificate Eo0 00000000000000000000000000000 dated 000000000000000000000000000000 should not be withdrawn for the reasons gi'en in the annexure to this notice0 8y order and in the na(e of the Securities and 7xchange 8oard of India0 Seal of the Securities and 7xchange 8oard of India0 Notifi'%tio & 4$& 576' dated 217271957&
SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< SECTIONS
80(9:6:4A0; 1. Short title, extent and co((ence(ent ". 9efinitions 0(/<=4: (5 1</> (?/@A4=( ). Application for recognition of stoc) exchanges 3. &rant of recognition to stoc) exchanges0 3A. Corporatisation and de(utualisation of stoc) exchanges 3;. <rocedure for corporatisation and de(utualisation 5. Kithdrawal of recognition 8. <ower of Central &o'ern(ent to call for periodical returns or direct in*uiries to be (ade 7. Annual reports to be furnished to Central &o'ern(ent by stoc) exchanges 7A. <ower of recognised stoc) exchange to (a)e rules restricting 'oting rights, etc :. <ower of Central &o'ern(ent to direct rules to be (ade or to (a)e rules :A. Clearing corporation 9. <ower of recognised stoc) exchanges to (a)e bye+laws 1=. <ower of Securities and 7xchange 8oard of India to (a)e or a(end byelaws of recognised stoc) exchanges 11. <ower of Central &o'ern(ent to supersede go'erning body of a recognised stoc) exchange 1". <ower to suspend business of recognised stoc) exchanges0 1"A. <ower to issue directions 1). Contracts in notified areas illegal in certain circu(stances 1)A. Additional trading floor 13. Contracts in notified areas to be 'oid in certain circu(stances 15. ?e(bers (ay not act as principals in certain circu(stances 18. <ower to prohibit contracts in certain cases 17. =icensing of dealers in securities in certain areas 17A. <ublic issue and listing of securities referred to in sub+clause ( ie) of clause (h) of section % 1:. 7xclusion of spot deli'ery contracts fro( sections 3, $, " and / 1:A. Contracts in deri'ati'e 19. Stoc) exchanges other than recognised stoc) exchanges prohibited "=. <rohibition of options in securities "1. Conditions for listing "1A. 9elisting of securities "". Right of appeal against refusal of stoc) exchanges to list securities of public co(panies ""A. Right of appeal to Securities Appellate .ribunal against refusal of stoc) exchange to list securities of public co(panies "";. <rocedure and powers of Securities Appellate .ribunal ""C. Right to legal representation ""D. =i(itation ""E. Ci'il court not to ha'e Durisdiction
""2. Appeal to Supre(e Court 8(4A91:( A45 80</(5A0( "). <enalties ")A. <enalty for failure to furnish infor(ation, return, etc0 ");. <enalty for failure by any person to enter into an agree(ent with clients ")C. <enalty for failure to redress in'estorsJ grie'ances ")D. <enalty for failure to segregate securities or (oneys of client or clients ")E. <enalty for failure to co(ply with pro'ision of listing conditions or delisting conditions or grounds ")2. <enalty for excess de(aterialisation or deli'ery of unlisted securities ")G. <enalty for failure to furnish periodical returns, etc0 ")D. <enalty for contra'ention where no separate penalty has been pro'ided ")0I. <ower to adDudicate ")E. 6actors to be ta)en into account by adDudicating officer ")EA. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! ")E;. Re'o+er> of %.o* t! ")F. Crediting su(s realised by way of penalties to Consolidated 6und of India ")L. Appeal to Securities Appellate .ribunal ")@. Cffences ")N. Co(position of certain offences ")0O. <ower to grant i((unity "3. Cffences by co(panies "5. Certain offences to be cogniFable "8. CogniFance of offences by courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! 6: /(99A4(<A "7. .itle to di'idends "7A. Right to recei'e inco(e fro( collecti'e in'est(ent sche(e "7;. Right to recei'e inco(e fro( (utual fund ":. Act not to apply in certain cases "9. <rotection of action ta)en in good faith "9A. <ower to delegate )=. <ower to (a)e rules )1. <ower of Securities and 7xchange 8oard of India to (a)e regulations SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< 53th Se$te.,er, 1958< A A't to $re+e t * -e!ir%,le tr% !%'tio ! i !e'*ritie! ,> re(*l%ti ( the ,*!i e!! of -e%li ( therei , 14***: ,> $ro+i-i ( for 'ert%i other .%tter! 'o e'te- there/ith. 87 it enacted by <arlia(ent in the Se'enth Oear of the Republic of India as follows ,
80(9:6:4A0; Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities Contracts (Regulation) Act, !"#0 (%) It extends to the whole of India0
Kords 1by prohibiting options and2 o(itted by the Securities =aws (A(end(ent) Act, !!", Sec0 >, w0e0f0 %"+0 + !!".
(3) It shall co(e into force on such date% as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 Defi itio !. ". In this Act, unless the context otherwise re*uires,(a) 1contract2 (eans a contract for or relating to the purchase or sale of securities3 3 4(aa) 1corporatisation2 (eans the succession of a recognised stoc) exchange, being a body of indi'iduals or a society registered under the Societies Registration Act, >#0 (% of >#0), by another stoc) exchange, being a co(pany incorporated for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities carried on by such indi'iduals or society3 (ab) 1de(utualisation2 (eans the segregation of ownership and (anage(ent fro( the trading rights of the (e(bers of a recognised stoc) exchange in accordance with a sche(e appro'ed by the Securities and 7xchange 8oard of India3: $4"4(ac): 1deri'ati'e2 includes(A) a security deri'ed fro( a debt instru(ent, share, loan, whether secured or unsecured, ris) instru(ent or contract for differences or any other for( of security3 (B) a contract which deri'es its 'alue fro( the prices, or index of prices, of underlying securities3: (b) 1&o'ern(ent security2 (eans a security created and issued, whether before or after the co((ence(ent of this Act, by the Central &o'ern(ent or a State &o'ern(ent for the purpose of raising a public loan and ha'ing one of the for(s specified in clause (2) of section % of the <ublic 9ebt Act, !$$ ( > of !$$)3 (c) 1(e(ber2 (eans a (e(ber of a recognised stoc) exchange3 (d) 1option in securities2 (eans a contract for the purchase or sale of a right to buy or sell, or a right to buy and sell, securities in future, and includes a teji' a "andi' a teji "andi' a galli' a put, a call or a put and call in securities3 (e) 1prescribed2 (eans prescribed by rules (ade under this Act3
% %0+%+
!"/ vide SRC "%>, dated #+0%+ !"/, published in the &aFette of India, 7xtra0, <t0 II, Sec0 3, p0 "$!, dated #+0%+ !"/0 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 $ Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000 " Clause (aa) renu(bered as clause (ac) by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0
(f) 1recognised stoc) exchange2 (eans a stoc) exchange which is for the ti(e
being recognised by the Central &o'ern(ent under section $3 (g) 1rules2, with reference to the rules relating in general to the constitution and (anage(ent of a stoc) exchange, includes, in the case of a stoc) exchange which is an incorporated association, its (e(orandu( and articles of association3 64(ga) 1sche(e2 (eans a sche(e for corporatisation or de(utualisation of a recognised stoc) exchange which (ay pro'ide for(i) the issue of shares for a lawful consideration and pro'ision of trading rights in lieu of (e(bership cards of (e(bers of a recognised stoc) exchange3 (ii) the restrictions on 'oting rights3 (iii) the transfer of property, business, assets, rights, liabilities, recognitions, contracts of the recognised stoc) exchange, legal proceedings by, or against, the recognised stoc) exchange, whether in the na(e of the recognised stoc) exchange or any trustee or otherwise and any per(ission gi'en to, or by, the recognised stoc) exchange3 (iv) the transfer of e(ployees of a recognised stoc) exchange to another recognised stoc) exchange3 (v) any other (atter re*uired for the purpose of, or in connection with, the corporatisation or de(utualisation, as the case (ay be, of the recognised stoc) exchange3: /4>4(gb): 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (h) 1securities2 include(i) shares, scrips, stoc)s, bonds, debentures, debenture stoc) or other (ar)etable securities of a li)e nature in or of any incorporated co(pany or other body corporate3 !4(ia) deri'ati'e3 (ib) units or any other instru(ent issued by any collecti'e in'est(ent sche(e to the in'estors in such sche(es3:
# Inserted / Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (Second A(end(ent) Act, !!!, Sec %, w0e0f0 #+ %+ !!!0 > Clause (ga) renu(bered as clause (gb) by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 ! Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000
04(ic) security receipt as defined in clause ( Cg) of section % of the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%3: 114(id) units or any other such instru(ent issued to the in'estors under any (utual fund sche(e3: %47xplanation0-6or the re(o'al of doubts, it is hereby declared that ;securities; shall not include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(bined benefit ris) on the life of the persons and in'est(ent by such
persons and issued by an insurer referred to in clause (!) of section % of the Insurance Act, !3> ($ of !3>)3: 35(ie) any certificate or instru(ent (by whate'er na(e called), issued to an in'estor by any issuer being a special purpose distinct entity which possesses any debt or recei'able, including (ortgage debt, assigned to such entity, and ac)nowledging beneficial interest of such in'estor in such debt or recei'able, including (ortgage debt, as the case (ay be3 <
0 Inserted by the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%, Sec0 $ and Schedule, w0r0e0f0 % +#+%00%0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0e0f0 %+ 0+%00$0 % Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, Sec $, w0r0e0f0 0!+0$+%0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, read as under , ;CIA<.7R BI ?ISC7==AE7CHS #0 Dalidati$n&-Eotwithstanding anything contained in any Dudg(ent, decree or order of any Court, .ribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly, any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 0e%eal and #aving#&*( ) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0; 3 Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec %, w0e0f0 %>+"+ %00/0
$4(ii) &o'ern(ent securities3 (iia) such other instru(ents as (ay be declared by the Central &o'ern(ent to be securities3 and: (iii) rights or interest in securities3 "4(i) 1spot deli'ery contract2 (eans a contract which pro'ides for,(a) actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e
town or locality3 (b) transfer of the securities by the depository fro( the account of a beneficial owner to the account of another beneficial owner when such securities are dealt with by a depository3: #4(j) 1stoc) exchange2 (eans(a) any body of indi'iduals, whether incorporated or not, constituted before corporatisation and de(utualisation under sections $A and $8, or (b) a body corporate incorporated under the Co(panies Act, !"# ( of !"#) whether under a sche(e of corporatisation and de(utualisation or otherwise, for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0: /4I ter$ret%tio of 'ert%i /or-! % - e#$re!!io !. "A. Kords and expressions used herein and not defined in this Act but defined in the Co(panies Act, !"# ( of !"#) or the Securities and 7xchange 8oard of India
$ Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, for sub+clause (ii), w0r0e0f0 30+0 + !!%0 " Substituted by the 9epositories Act, !!#, Sec 30 and Schedule, <t0 III, w0r0e0f0 %0+0!+ !!" . <rior to its substitution, clause (i) read as under , N(i) 1spot deli'ery contract2 (eans a contract which pro'ides for the actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e town or locality3J # Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (j) read as under ,N(j) 1stoc) exchange2 (eans any body of indi'iduals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0J / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
Act, !!% ( " of !!%) or the 9epositories Act, !!# (%% of !!#) shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts0: 0(/<=4: (5 1</> (?/@A4=( A$$li'%tio for re'o( itio of !to'6 e#'h% (e!. ). ( ) Any stoc) exchange, which is desirous of being recognised for the purposes of this Act, (ay (a)e an application in the prescribed (anner to the Central &o'ern(ent01: (%) 7'ery application under sub+section ( ) shall contain such particulars as (ay be prescribed, and shall be acco(panied by a copy of the bye+laws of the stoc) exchange for the regulation and control of contracts and also a copy of the rules relating in general to the constitution of the stoc) exchange and in particular, to(a) the go'erning body of such stoc) exchange, its constitution and powers of (anage(ent and the (anner in which its business is to be transacted3 (b) the powers and duties of the office bearers of the stoc) exchange3 (c) the ad(ission into the stoc) exchange of 'arious classes of (e(bers, the *ualifications for (e(bership, and the exclusion, suspension, expulsion and
re+ad(ission of (e(bers therefro( or thereinto3 (d) the procedure for the registration of partnerships as (e(bers of the stoc) exchange in cases where the rules pro'ide for such (e(bership3 and the no(ination and appoint(ent of authorised representati'es and cler)s0 Gr% t of re'o( itio to !to'6 e#'h% (e!. 3. ( ) If the Central &o'ern(ent ! is satisfied, after (a)ing such in*uiry as (ay be necessary in this behalf and after obtaining such further infor(ation, if any, as it (ay re*uire,(a) that the rules and bye+laws of a stoc) exchange applying for registration are in confor(ity with such conditions as (ay be prescribed with a 'iew to ensure fair dealing and to protect in'estors3 (b) that the stoc) exchange is willing to co(ply with any other conditions (including conditions as to the nu(ber of (e(bers) which the Central &o'ern(ent, after consultation with the go'erning body of the stoc) exchange and ha'ing regard to the area ser'ed by the stoc) exchange and its standing and the nature of the securities dealt with by it, (ay i(pose for the purpose of carrying out the obDects of this Act3 and
> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 ! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
(c) that it would be in the interest of the trade and also in the public interest to grant recognition to the stoc) exchange3 it (ay grant recognition to the stoc) exchange subDect to the conditions i(posed upon it as aforesaid and in such for( as (ay be prescribed0 (%) .he conditions which the Central &o'ern(ent %0 (ay prescribe under clause (a) of sub+section ( ) for the grant of recognition to the stoc) exchanges (ay include, a(ong other (atters, conditions relating to,(i) the *ualifications for (e(bership of stoc) exchanges3 (ii) the (anner in which contracts shall be entered into and enforced as between (e(bers3 (iii) the representation of the Central &o'ern(ent on each of the stoc) exchange by such nu(ber of persons not exceeding three as the Central &o'ern(ent (ay no(inate in this behalf3 and (iv) the (aintenance of accounts of (e(bers and their audit by chartered accountants whene'er such audit is re*uired by the Central &o'ern(ent0 (3) 7'ery grant of recognition to a stoc) exchange under this section shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office as of the stoc) exchange is situate, and such recognition shall ha'e effect as fro( the date of its publication in the &aFette of India0 % ($) Eo application for the grant of recognition shall be refused except after gi'ing an opportunity to the stoc) exchange concerned to be heard in the (atter3 and the reasons for such refusal shall be co((unicated to the stoc) exchange in writing0 %% (") Eo rules of a recognised stoc) exchange relating to any of the (atters specified in sub+section (%) of section 3 shall be a(ended except with the appro'al of the
Central &o'ern(ent0%3 "35Cor$or%ti!%tio % - -e.*t*%li!%tio of !to'6 e#'h% (e!. 3A. Cn and fro( the appointed date, all recognised stoc) exchanges (if not corporatised and de(utualised before the appointed date) shall be corporatised and de(utualised in accordance with the pro'isions contained in section $8 ,
%0 <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 % <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %% <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %3 <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 %$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
4ro+i-e- that the Securities and 7xchange 8oard of India (ay, if it is satisfied that any recognised stoc) exchange was pre'ented by sufficient cause fro( being corporatised and de(utualised on or after the appointed date, specify another appointed date in respect of that recognised stoc) exchange and such recognised stoc) exchange (ay continue as such before such appointed date0 ()%lanati$n&*6or the purposes of this section, 1appointed date2 (eans the date which the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, appoint and different appointed dates (ay be appointed for different recognised stoc) exchanges0: "554ro'e-*re for 'or$or%ti!%tio % - -e.*t*%li!%tio . 3;. ( ) All recognised stoc) exchanges referred to in section $A shall, within such ti(e as (ay be specified by the Securities and 7xchange 8oard of India, sub(it a sche(e for corporatisation and de(utualisation for its appro'al , 4ro+i-e- that the Securities and 7xchange 8oard of India, (ay, by notification in the Cfficial &aFette, specify na(e of the recognised stoc) exchange, which had already been corporatised and de(utualised, and such stoc) exchange shall not be re*uired to sub(it the sche(e under this section0 (%) Cn receipt of the sche(e referred to in sub+section ( ), the Securities and 7xchange 8oard of India (ay, after (a)ing such en*uiry as (ay be necessary in this behalf and obtaining such further infor(ation, if any, as it (ay re*uire and if it is satisfied that it would be in the interest of the trade and also in the public interest, appro'e the sche(e with or without (odification0 (3) Eo sche(e under sub+section (%) shall be appro'ed by the Securities and 7xchange 8oard of India if the issue of shares for a lawful consideration or pro'ision of trading rights in lieu of (e(bership card of the (e(bers of a recognised stoc) exchange or pay(ent of di'idends to (e(bers ha'e been proposed out of any reser'es or assets of that stoc) exchange0 ($) Khere the sche(e is appro'ed under sub+section (%), the sche(e so appro'ed shall be published i((ediately by(a) the Securities and 7xchange 8oard of India in the Cfficial &aFette3 (b) the recognised stoc) exchange in such two daily newspapers circulating in India, as (ay be specified by the Securities and 7xchange 8oard of India,
and upon such publication, notwithstanding anything to the contrary contained in this Act or any other law for the ti(e being in force or any agree(ent, award, Dudg(ent, decree or other instru(ent for the ti(e being in force, the sche(e shall ha'e effect and be binding on all persons and authorities including all (e(bers, creditors, depositors and e(ployees of the recognised stoc) exchange and on all
%" Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
persons ha'ing any contract, right, power, obligation or liability with, against, o'er, to, or in connection with, the recognised stoc) exchange or its (e(bers0 (") Khere the Securities and 7xchange 8oard of India is satisfied that it would not be in the interest of the trade and also in the public interest to appro'e the sche(e under sub+section (%), it (ay, by an order, reDect the sche(e and such order of reDection shall be published by it in the Cfficial &aFette , 4ro+i-e- that the Securities and 7xchange 8oard of India shall gi'e a reasonable opportunity of being heard to all the persons concerned and the recognised stoc) exchange concerned before passing an order reDecting the sche(e0 (#) .he Securities and 7xchange 8oard of India (ay, while appro'ing the sche(e under sub+section (%), by an order in writing, restrict(a) the 'oting rights of the shareholders who are also stoc) bro)ers of the reognised stoc) exchange3 (b) the right of shareholders or a stoc) bro)er of the recognised stoc) exchange to appoint the representati'es on the go'erning board of the stoc) exchange3 (c) the (axi(u( nu(ber of representati'es of the stoc) bro)ers of the recognised stoc) exchange to be appointed on the go'erning board of the recognised stoc) exchange, which shall not exceed one+fourth of the total strength of the go'erning board0 (/) .he order (ade under sub+section (#) shall be published in the Cfficial &aFette and on the publication thereof, the order shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#), or any other law for the ti(e being in force, ha'e full effect0 (>) 7'ery recognised stoc) exchange, in respect of which the sche(e for corporatisation or de(utualisation has been appro'ed under sub+section (%), shall, either by fresh issue of e*uity shares to the public or in any other (anner as (ay be specified by the regulations (ade by the Securities and 7xchange 8oard of India %#, ensure that at least fifty+one per cent of its e*uity share capital is held, within twel'e (onths fro( the date of publication of the order under sub+section (/), by the public other than shareholders ha'ing trading rights , 4ro+i-e- that the Securities and 7xchange 8oard of India (ay, on sufficient cause being shown to it and in the public interest, extend the said period by another twel'e (onths0:
ee Securities Contracts (Regulation) (Stoc) 7xchanges and Clearing Corporations) Regulations, %0 %, w0e0f0 %0+0#+%0 % notified vide &aFette Eotification Eo0 =A9+ ERCL&EL%0 %+ 3L0/L 3"$#, 7xtra0, <t0 III, Section $, dtd %0+0#+%0 %0
%#
?ith-r%/%l of re'o( itio .
5. %/4( ): If the Central &o'ern(ent%> is of opinion that the recognition granted to a stoc) exchange under the pro'isions of this Act should, in the interest of the trade or in the public interest, be withdrawn, the Central &o'ern(ent (ay ser'e on the go'erning body of the stoc) exchange a written notice that the Central &o'ern(ent is considering the withdrawal of the recognition for the reasons stated in the notice and after gi'ing an opportunity to the go'erning body to be heard in the (atter, the Central &o'ern(ent (ay withdraw, by notification in the Cfficial &aFette, the recognition granted to the stoc) exchange , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Central &o'ern(ent (ay, after consultation with the stoc) exchange, (a)e such pro'ision as it dee(s fit in the notification of withdrawal or in any subse*uent notification si(ilarly published for the due perfor(ance of any contracts outstanding on that date0 %!4(%) Khere the recognised stoc) exchange has not been corporatised or de(utualised or it fails to sub(it the sche(e referred to in sub+section ( ) of section $8 within the specified ti(e therefor or the sche(e has been reDected by the Securities and 7xchange 8oard of India under sub+section (") of section $8, the recognition granted to such stoc) exchange under section $, shall, notwithstanding anything to the contrary contained in this Act, stand withdrawn and the Central &o'ern(ent shall publish, by notification in the Cfficial &aFette, such withdrawal of recognition , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Securities and 7xchange 8oard of India (ay, after consultation with the stoc) exchange, (a)e such pro'isions as it dee(s fit in the order reDecting the sche(e published in the Cfficial &aFette under sub+section (") of section $80: 4o/er of Ce tr%l Go+er .e t to '%ll for $erio-i'%l ret*r ! or -ire't i 7*irie! to ,e .%-e. 8. ( ) 7'ery recognised stoc) exchange shall furnish to the 304Securities and 7xchange 8oard of India: such periodical returns relating to its affairs as (ay be prescribed0
%/ Section
" renu(bered as sub+section ( ) by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 %> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 30 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(%) 7'ery recognised stoc) exchange and e'ery (e(ber thereof shall (aintain and preser'e for such periods not exceeding fi'e years such boo)s of account, and other docu(ents as the Central &o'ern(ent, after consultation with the stoc) exchange concerned, (ay prescribe in the interest of the trade or in the public interest, and such boo)s of account, and other docu(ents shall be subDect to inspection at all reasonable ti(es 3 4by the Securities and 7xchange 8oard of India:0 (3) Kithout preDudice to the pro'isions contained in sub+sections ( ) and (%), the
3%4Securities
and 7xchange 8oard of India:, if it is satisfied that it is in the interest of the trade or in the public interest so to do, (ay, by order in writing,(a) call upon a recognised stoc) exchange or any (e(ber thereof to furnish in writing such infor(ation or explanation relating to the affairs of the stoc) exchange or of the (e(ber in relation to the stoc) exchange as the 334Securities and 7xchange 8oard of India: (ay re*uire3 or (b) appoint one or (ore persons to (a)e an in*uiry in the prescribed (anner in relation to the affairs of the go'erning body of a stoc) exchange or the affairs of any of the (e(bers of the stoc) exchange in relation to the stoc) exchange and sub(it a report of the result of such in*uiry to the 3$4Securities and 7xchange 8oard of India: within such ti(e as (ay be specified in the order or, in the case of an in*uiry in relation to the affairs of any of the (e(bers of a stoc) exchange, direct the go'erning body to (a)e the in*uiry and sub(it its report to the 3"4Securities and 7xchange 8oard of India:0 ($) Khere an in*uiry in relation to the affairs of a recognised stoc) exchange or the affairs of any of its (e(bers in relation to the stoc) exchange has been underta)en under sub+section (3),(a) e'ery director, (anager, secretary or other officer of such stoc) exchange3 (b) e'ery (e(ber of such stoc) exchange3 (c) if the (e(ber of the stoc) exchange is a fir(, e'ery partner, (anager, secretary or other officer of the fir(3 and (d) e'ery other person or body of persons who has had dealings in the course of business with any of the persons (entioned in clauses ( a), (b) and (c), whether directly or indirectly3
Substituted for ;by the Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3% Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 33 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3" Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
3
shall be bound to produce before the authority (a)ing the in*uiry all such boo)s of account, and other docu(ents in his custody or power relating to or ha'ing a bearing on the subDect+(atter of such in*uiry and also to furnish the authorities within such ti(e as (ay be specified with any such state(ent or infor(ation relating thereto as (ay be re*uired of hi(0 )8A *%l re$ort! to ,e f*r i!he- to Ce tr%l Go+er .e t ,> !to'6 e#'h% (e!. 7. 7'ery recognised stoc) exchange shall furnish the Central &o'ern(ent with a copy of the annual report, and such annual report shall contain such particulars as (ay be prescribed0 )754o/er of re'o( i!e- !to'6 e#'h% (e to .%6e r*le! re!tri'ti ( +oti ( ri(ht!, et'. 7A. ( ) A recognised stoc) exchange (ay (a)e rules or a(end any rules (ade by it
to pro'ide for all or any of the following (atters, na(ely ,(a) the restriction of 'oting rights to (e(bers only in respect of any (atter placed before the stoc) exchange at any (eeting3 (b) the regulation of 'oting rights in respect of any (atter placed before the stoc) exchange at any (eeting so that each (e(ber (ay be entitled to ha'e one 'ote only, irrespecti'e of his share of the paid+up e*uity capital of the stoc) exchange3 (c) the restriction on the right of a (e(ber to appoint another person as his proxy to attend and 'ote at a (eeting of the stoc) exchange3 (d) such incidental, conse*uential and supple(entary (atters as (ay be necessary to gi'e effect to any of the (atters specified in clauses ( a), (b) and (c)0 (%) Eo rules of a recognised stoc) exchange (ade or a(ended in relation to any (atter referred to in clauses (a) to (d) of sub+section ( ) shall ha'e effect until they ha'e been appro'ed by the Central &o'ern(ent 3> and published by that &o'ern(ent in the Cfficial &aFette and, in appro'ing the rules so (ade or a(ended, the Central &o'ern(ent (ay (a)e such (odifications therein as it thin)s fit, and on such publication, the rules as appro'ed by the Central &o'ern(ent shall be dee(ed to ha'e been 'alidly (ade, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#)0:
3# <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 3/ Inserted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec %, w0e0f0 0>+ %+ !"!0 3> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
4o/er of Ce tr%l Go+er .e t )9 to -ire't r*le! to ,e .%-e or to .%6e r*le!. :. ( ) Khere, after consultation with the go'erning bodies of stoc) exchanges generally or with the go'erning body of any stoc) exchange in particular, the Central &o'ern(ent is of opinion that it is necessary or expedient so to do, it (ay, by order in writing together with a state(ent of the reasons therefor, direct recognised stoc) exchanges generally or any recognised stoc) exchange in particular, as the case (ay be, to (a)e any rules or to a(end any rules already (ade in respect of all or any of the (atters specified in sub+section (%) of section 3 within a period of $04two (onths: fro( the date of the order0 (%) If any recognised stoc) exchange fails or neglects to co(ply with any order (ade under sub+section ( ) within the period specified therein, the Central &o'ern(ent (ay (a)e the rules for, or a(end the rules (ade by, the recognised stoc) exchange, either in the for( proposed in the order or with such (odifications thereof as (ay be agreed to between the stoc) exchange and the Central &o'ern(ent0 (3) Khere in pursuance of this section any rules ha'e been (ade or a(ended, the rules so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette or &aFettes of the State or States in which the principal office or offices of the recognised stoc) exchange or exchanges is or are situate, and, on the publication thereof in the &aFette of India, the rules so (ade or a(ended shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# (
of !"#), or in any other law for the ti(e being in force, ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange or stoc) exchanges, as the case (ay be0 315Cle%ri ( 'or$or%tio . :A. ( ) A recognised stoc) exchange (ay, with the prior appro'al of the Securities and 7xchange 8oard of India, transfer the duties and functions of a clearing house to a clearing corporation, being a co(pany incorporated under the Co(panies Act, !"# ( of !"#), for the purpose of(a) the periodical settle(ent of contracts and differences thereunder3 (b) the deli'ery of, and pay(ent for, securities3 (c) any other (atter incidental to, or connected with, such transfer0 (%) 7'ery clearing corporation shall, for the purpose of transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( ),
3! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 $0 Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec !, w0e0f0 %"+ 0 + !!"0 $ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0
(a)e bye+laws and sub(it the sa(e to the Securities and 7xchange 8oard of India for its appro'al0 (3) .he Securities and 7xchange 8oard of India (ay, on being satisfied that it is in the interest of the trade and also in the public interest to transfer the duties and functions of a clearing house to a clearing corporation, grant appro'al to the byelaws sub(itted to it under sub+section (%) and appro'e the transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( )0 ($) .he pro'isions of sections $, ", #, /, >, !, 0, and % shall, as far as (ay be, apply to a clearing corporation referred to in sub+section ( ) as they apply in relation to a recognised stoc) exchange0: 4o/er of re'o( i!e- !to'6 e#'h% (e! to .%6e ,>e0l%/!. 9. ( ) Any recognised stoc) exchange (ay, subDect to the pre'ious appro'al of the $%4Securities and 7xchange 8oard of India:, (a)e bye+laws for the regulation and control of contracts0 (%) In particular, and without preDudice to the generality of the foregoing power, such bye+laws (ay pro'ide for , (a) the opening and closing of (ar)ets and the regulation of the hours of trade3 (b) a clearing house for the periodical settle(ent of contracts and differences thereunder, the deli'ery of and pay(ent for securities, the passing on of deli'ery orders and the regulation and (aintenance of such clearing house3 (c) the sub(ission to the $34Securities and 7xchange 8oard of India: by the clearing house as soon as (ay be after each periodical settle(ent of all or any of the following particulars as the $$4Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, re*uire, na(ely ,(i) the total nu(ber of each category of security carried o'er fro( one settle(ent period to another3 (ii) the total nu(ber of each category of security, contracts in respect of
which ha'e been s*uared up during the course of each settle(ent period3 (iii) the total nu(ber of each category of security actually deli'ered at each clearing3
$% Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(d) the publication by the clearing house of all or any of the particulars sub(itted to the $"4Securities and 7xchange 8oard of India: under clause ( c) subDect to the directions, if any, issued by the $#4Securities and 7xchange 8oard of India: in this behalf3 (e) the regulation or prohibition of blan) transfers3 (f) the nu(ber and classes of contracts in respect of which settle(ents shall be (ade or differences paid through the clearing house3 (g) the regulation, or prohibition of b!dla# or carry+o'er facilities3 (h) the fixing, altering or postponing of days for settle(ents3 (i) the deter(ination and declaration of (ar)et rates, including the opening, closing highest and lowest rates for securities3 (j) the ter(s, conditions and incidents of contracts, including the prescription of (argin re*uire(ents, if any, and conditions relating thereto, and the for(s of contracts in writing3 (k) the regulation of the entering into, (a)ing, perfor(ance, recession and ter(ination, of contracts, including contracts between (e(bers or between a (e(ber and his constituent or between a (e(ber and a person who is not a (e(ber, and the conse*uences of default or insol'ency on the part of a seller or buyer or inter(ediary, the conse*uences of a breach or o(ission by a seller or buyer, and the responsibility of (e(bers who are not parties to such contracts3 (l) the regulation of taravani business including the placing of li(itations thereon3 (") the listing of securities on the stoc) exchange, the inclusion of any security for the purpose of dealings and the suspension or withdrawal of any such securities, and the suspension or prohibition of trading in any specified securities3 (n) the (ethod and procedure for the settle(ent of clai(s or disputes, including settle(ent by arbitration3 ($) the le'y and reco'ery of fees, fines and penalties3 (%) the regulation of the course of business between parties to contracts in any capacity3 (+) the fixing of a scale of bro)erage and other charges3 (r) the (a)ing, co(paring, settling and closing of bargains3 (#) the e(ergencies in trade which (ay arise, whether as a result of pool or syndicated operations or cornering or otherwise, and the exercise of powers in
$" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%,
Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $# Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
such e(ergencies, including the power to fix (axi(u( and (ini(u( prices for securities3 (t) the regulation of dealings by (e(bers for their own account3 (!) the separation of the functions of Dobbers and bro)ers3 (v) the li(itations on the 'olu(e of trade done by any indi'idual (e(ber in exceptional circu(stances3 (.) the obligation of (e(bers to supply such infor(ation or explanation and to produce such docu(ents relating to the business as the go'erning body (ay re*uire0 (3) .he bye+laws (ade under this section (ay(a) specify the bye+laws the contra'ention of which shall (a)e a contract entered into otherwise than in accordance with the bye+laws 'oid under sub+section ( ) of section $3 (b) pro'ide that the contra'ention of any of the bye+laws shall render the (e(ber concerned liable to one or (ore of the following punish(ents, na(ely ,(i) fine, (ii) expulsion fro( (e(bership, (iii) suspension fro( (e(bership for a specified period, (iv) any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney0 ($) Any bye+laws (ade under this section shall be subDect to such conditions in regard to pre'ious publication as (ay be prescribed, and, when appro'ed by the $/4Securities and 7xchange 8oard of India:, shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and shall ha'e effect as fro( the date of its publication in the &aFette of India , 4ro+i-e- that if the $>4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+law should be (ade i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0
$/ Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $> Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4o/er of 395Se'*ritie! % - E#'h% (e ;o%r- of I -i%< to .%6e or %.e - ,>e0l%/! of re'o( i!e- !to'6 e#'h% (e!. 1=. ( ) .he "04Securities and 7xchange 8oard of India: (ay, either on a re*uest in writing recei'ed by it in this behalf fro( the go'erning body of a recognised stoc) exchange or on its own (otion, if it is satisfied after consultation with the go'erning body of the stoc) exchange that it is necessary or expedient so to do and after recording its reasons for so doing, (a)e bye+laws for all or any of the (atters specified in section ! or a(end any bye+laws (ade by such stoc) exchange under that section0
(%) Khere in pursuance of this section any bye+laws ha'e been (ade or a(ended the bye+laws so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and on the publication thereof in the &aFette of India, the bye+laws so (ade or a(ended shall ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange concerned0 (3) Eotwithstanding anything contained in this section, where the go'erning body of a recognised stoc) exchange obDects to any bye+laws (ade or a(ended under this section by the " 4Securities and 7xchange 8oard of India: on its own (otion, it (ay, within "%4two (onths: of the publication thereof in the &aFette of India under subsection (%), apply to the "34Securities and 7xchange 8oard of India: for re'ision thereof, and the "$4Securities and 7xchange 8oard of India: (ay, after gi'ing an opportunity to the go'erning body of the stoc) exchange to be heard in the (atter, re'ise the bye+laws so (ade or a(ended, anywhere any bye+laws so (ade or a(ended are re'ised as a result of any action ta)en under this sub+section, the byelaws so re'ised shall be published and shall beco(e effecti'e as pro'ided in subsection (%)0 ($) .he (a)ing or the a(end(ent or re'ision of any bye+laws under this section shall in all cases be subDect to the condition of pre'ious publication ,
$! Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "0 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 " Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "% Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec %0, w0e0f0 %"+ 0 + !!"0 "3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4ro+i-e- that if the ""4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+laws should be (ade, a(ended or re'ised i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0 4o/er of Ce tr%l Go+er .e t 58 to !*$er!e-e (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e. 11. ( ) Kithout preDudice to any other powers 'ested in the Central &o'ern(ent under this Act, where the Central &o'ern(ent is of opinion that the go'erning body of any recognised stoc) exchange should be superseded, then, notwithstanding anything contained in any other law for the ti(e being in force, in the Central &o'ern(ent (ay ser'e on the go'erning body a written notice that the Central &o'ern(ent is considering the supersession of the go'erning body for the reasons specified in the notice and after gi'ing an opportunity to the go'erning body to be
heard in the (atter, it (ay, by notification in the Cfficial &aFette, declare the go'erning body of such stoc) exchange to be superseded, and (ay appoint any person or persons to exercise and perfor( all the powers and duties of the go'erning body, and, where (ore persons than one are appointed, (ay appoint one of such persons to be the chair(an and another to be the 'ice+chair(an thereof0 (%) Cn the publication of a notification in the Cfficial &aFette under sub+section ( ), the following conse*uences shall ensue, na(ely,(a) the (e(bers of the go'erning body which has been superseded shall, as fro( the date of the notification of supersession, cease to hold office as such (e(bers3 (b) the person or persons appointed under sub+section ( ) (ay exercise and perfor( all the powers and duties of the go'erning body which has been superseded3 (c) all such property of the recognised stoc) exchange as the person or persons appointed under sub+section ( ) (ay, by order in writing, specify in this behalf as being necessary for the purpose of enabling hi( or the( to carry on the business of the stoc) exchange, shall 'est in such person or persons0 (3) Eotwithstanding anything to the contrary contained in any law or the rules or bye+laws of the recognised stoc) exchange the go'erning body of which is superseded under sub+section ( ), the person or persons appointed under that subsection shall hold office for such period as (ay be specified in the notification published under that sub+section and the Central &o'ern(ent (ay fro( ti(e to ti(e, by li)e notification, 'ary such period0
"" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "# <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0
($) .he Central &o'ern(ent (ay at any ti(e before the deter(ination of the period of office of any person or persons appointed under this section call upon the recognised stoc) exchange to re+constitute the go'erning body in accordance with its rules and on such re+constitution all the property of the recognised stoc) exchange which has 'ested in, or was in the possession of, the person or persons appointed under sub+section ( ), shall re+'est or 'est, as the case (ay be, in the go'erning body so re+constituted , 4ro+i-e- that until a go'erning body is so re+constituted, the person or persons appointed under sub+section ( ) shall continue to exercise and perfor( their powers and duties0 4o/er57 to !*!$e - ,*!i e!! of re'o( i!e- !to'6 e#'h% (e!. 1". If in the opinion of the Central &o'ern(ent an e(ergency has arisen and for the purpose of (eeting the e(ergency the Central &o'ern(ent considers it expedient so to do, it (ay, by notification in the Cfficial &aFette, for reasons to be set out therein, direct a recognised stoc) exchange to suspend such of its business for such period not exceeding se'en days and subDect to such conditions as (ay be specified in the notification, and, if, in the opinion of the Central &o'ern(ent, the interest of
the trade or the public interest re*uires that the period should be extended, (ay, by li)e notification extend the said period fro( ti(e to ti(e , 4ro+i-e- that where the period of suspension is to be extended beyond the first period, no notification extending the period of suspension shall be issued unless the go'erning body of the ">4recognised stoc) exchange: has been gi'en an opportunity of being heard in the (atter0 "!54o/er to i!!*e -ire'tio !. 1"A. If, after (a)ing or causing to be (ade an in*uiry, the Securities and 7xchange 8oard of India is satisfied that it is necessary(a) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (b) to pre'ent the affairs of any recognised stoc) exchange or clearing corporation, or such other agency or person, pro'iding trading or clearing or settle(ent facility in respect of securities, being conducted in a (anner detri(ental to the interests of in'estors or securities (ar)et3 or (c) to secure the proper (anage(ent of any such stoc) exchange or clearing corporation or agency or person, referred to in clause ( b),
"/ <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 "> Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 "! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0
it (ay issue such directions,(i) to any stoc) exchange or clearing corporation or agency or person referred to in clause (b) or any person or class of persons associated with the securities (ar)et3 or (ii) to any co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 8=5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< /<410A/1 A45 <81:<4 :4 (/A0:1:( Co tr%'t! i otifie- %re%! ille(%l i 'ert%i 'ir'*.!t% 'e!. 1). If the Central &o'ern(ent# is satisfied, ha'ing regard to the nature or the 'olu(e of transactions in securities in any #%4State or States or area: that it is necessary so to do, it (ay, by notification in the Cfficial &aFette, declared this section to apply to such #34State or States or area:, and thereupon e'ery contract in such #$4State or States or area: which is entered into after the date of the notification otherwise than #"4between (e(bers of a recognised stoc) exchange or recognised stoc) exchanges: in such ##4State or States or area: or through or with such (e(ber shall be illegal ,
#0 I #
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 #% Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #3 Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #$ Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$ for ;between (e(bers of a recognised stoc) exchange; & ## Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0
#/54ro+i-e-
that any contract entered into between (e(bers of two or (ore recognised stoc) exchanges in such State or States or area, shall(i) be subDect to such ter(s and conditions as (ay be stipulated by the respecti'e stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India3 (ii) re*uire prior per(ission fro( the respecti'e stoc) exchanges if so stipulated by the stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India0: #>4A--itio %l tr%-i ( floor. 1)A. A stoc) exchange (ay establish additional trading floor with the prior appro'al of the Securities and 7xchange 8oard of India in accordance with the ter(s and conditions stipulated by the said 8oard0 ()%lanati$n , 6or the purposes of this section, 1additional trading floor2 (eans a trading ring or trading facility offered by a recognised stoc) exchange outside its area of operation to enable the in'estors to buy and sell securities through such trading floor under the regulatory fra(ewor) of that stoc) exchange0: Co tr%'t! i otifie- %re%! to ,e +oi- i 'ert%i 'ir'*.!t% 'e!. 13. ( ) Any contract entered into in any State or area specified in the notification under section 3 which is in contra'ention of any of the bye+laws specified in that behalf under clause (a) of sub+section (3) of section ! shall be 'oid , (i) as respects the rights of any (e(ber of the recognised stoc) exchange who has entered into such contract in contra'ention of any such bye+law, and also (ii) as respects the rights of any other person who has )nowingly participated in the transaction entailing such contra'ention0 (%) Eothing in sub+section ( ) shall be construed to affect the right of any person other than a (e(ber of the recognised stoc) exchange to enforce any such contract or to reco'er any su( under or in respect of such contract if such person had no )nowledge that the transaction was in contra'ention of any of the bye+laws specified in clause (a) of sub+section (3) of section !0 @e.,er! .%> ot %'t %! $ri 'i$%l! i 'ert%i 'ir'*.!t% 'e!. 15. Eo (e(ber of a recognised stoc) exchange shall in respect of any securities enter into any contract as a principal with any person other than a (e(ber of a recognised stoc) exchange, unless he has secured the consent or authority of such
#/ Inserted #> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (A(end(ent) Act, !!", Sec % , w0e0f0 %"+0 + !!"0
person and discloses in the note, (e(orandu( or agree(ent of sale or purchase that he is acting as a principal , 4ro+i-e- that where the (e(ber has secured the consent or authority of such person otherwise than in writing he shall secure written confir(ation by such person or such consent or authority within three days fro( the date of the contract , 4ro+i-e- f*rther that no such written consent or authority of such person shall be necessary for closing out any outstanding contract entered into by such person in accordance with the bye+laws, if the (e(ber discloses in the note, (e(orandu( or agree(ent of sale or purchase in respect of such closing out that he is acting as a principal0 4o/er89 to $rohi,it 'o tr%'t! i 'ert%i '%!e!. 18. ( ) If the Central &o'ern(ent is of opinion that it is necessary to pre'ent undesirable speculation in specified securities in any State or area, it (ay, by notification in the Cfficial &aFette, declare that no person in the State or area specified in the notification shall, sa'e with the per(ission of the Central &o'ern(ent, enter into any contract for the sale or purchase of any security specified in the notification except to the extent and in the (anner, if any, specified therein0 (%) All contracts in contra'ention of the pro'isions of sub+section ( ) entered into after the date of notification issued thereunder shall be illegal0 Li'e !i ( of -e%ler! i !e'*ritie! i 'ert%i %re%!. 17. ( ) SubDect to the pro'isions of sub+section (3) and to the other pro'isions contained in this Act, no person shall carry on or purport to carry on, whether on his own behalf or on behalf of any other person, the business of dealing in securities in any State or area to which section 3 has not been declared to apply and to which the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, declare this section to apply, except under the authority of a /04licence granted by the Securities and 7xchange 8oard of India: in this behalf0 (%) Eo notification under sub+section ( ) shall be issued with respect to any State or area unless the Central &o'ern(ent is satisfied, ha'ing regard to the (anner in which securities are being dealt with in such State or area, that it is desirable or
#! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 <owers are exercisable by R8I also 'ide &o'ern(ent of India Eotification Eo0 >3 (7), 9ated 0 +03+%000 in relation to any contracts in go'ern(ent securities, (oney (ar)et securities etc0 /0 Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% for ;licence granted by the Central &o'ern(ent;0
expedient in the interest of the trade or in the public interest that such dealings should be regulated by a syste( of licensing0 (3) .he restrictions i(posed by sub+section ( ) in relation to dealings in securities shall not apply to the doing of anything by or on behalf of a (e(ber of any recognised stoc) exchange0
7154*,li'
i!!*e % - li!ti ( of !e'*ritie! referre- to i !*,0'l%*!e ( ie) of 'l%*!e (h)
of !e'tio ". 17A. ( ) Kithout preDudice to the pro'isions contained in this Act or any other law for the ti(e being in force, no securities of the nature referred to in sub+clause (ie) of clause (h) of section % shall be offered to the public or listed on any recognised stoc) exchange unless the issuer fulfils such eligibility criteria and co(plies with such other re*uire(ents as (ay be specified by regulations (ade by the Securities and 7xchange 8oard of India0 (%) 7'ery issuer referred to in sub+clause (ie) of clause (h) of section % intending to offer the certificates or instru(ents referred therein to the public shall (a)e an application, before issuing the offer docu(ent to the public, to one or (ore recognised stoc) exchanges for per(ission for such certificates or instru(ents to be listed on the stoc) exchange or each such stoc) exchange0 (3) Khere the per(ission applied for under sub+section (%) for listing has not been granted or refused by the recognised stoc) exchanges or any of the(, the issuer shall forthwith repay all (oneys, if any, recei'ed fro( applicants in pursuance of the offer docu(ent, and if any such (oney is not repaid within eight days after the issuer beco(es liable to repay it, the issuer and e'ery director or trustee thereof, as the case (ay be, who is in default shall, on and fro( the expiry of the eighth day, be Dointly and se'erally liable to repay that (oney with interest at the rate of fifteen per cent per annu(0 7xplanation0-In rec)oning the eighth day after another day, any inter'ening day which is a public holiday under the Eegotiable Instru(ents Act, >> (%# of >> ), shall be disregarded, and if the eighth day (as so rec)oned) is itself such a public holiday, there shall for the said purposes be substituted the first day thereafter which is not a holiday0 ($) All the pro'isions of this Act relating to listing of securities of a public co(pany on a recognised stoc) exchange shall, (utatis (utandis, apply to the listing of the securities of the nature referred to in sub+clause (ie) of clause (h) of section % by the issuer, being a special purpose distinct entity0 <
Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec 3, w0e0f0 %>+0"+ %00/0
/
E#'l*!io of !$ot -eli+er> 'o tr%'t! fro. !e'tio ! 1), 13, 15 % - 17. 1:. ( ) Eothing contained in sections 3, $, " and / shall apply to spot deli'ery contracts0 (%) Eotwithstanding anything contained in sub+section ( ), if the Central &o'ern(ent/% is of opinion that in the interest of the trade or in the public interest it is expedient to regulate and control the business of dealing in spot deli'ery contracts also in any State or area (whether section 3 has been declared to apply to that State or area or not), it (ay, by notification in the Cfficial &aFette, declare that the pro'isions of section / shall also apply to such State or area in respect of spot deli'ery contracts generally or in respect of spot deli'ery contracts for the sale or purchase of such securities as (ay be specified in the notification, and (ay also specify the (anner in which, and the extent to which, the pro'isions of that section
shall so apply0 /34Co tr%'t! i -eri+%ti+e. 1:A. Eotwithstanding anything contained in any other law for the ti(e being in force, contracts in deri'ati'e shall be legal and 'alid if such contracts are(a) traded on a recognised stoc) exchange3 (b) settled on the clearing house of the recognised stoc) exchange, in accordance with the rules and bye+laws of such stoc) exchange0: Sto'6 e#'h% (e! other th% re'o( i!e- !to'6 e#'h% (e! $rohi,ite-. 19. ( ) Eo person shall, except with the per(ission of the Central &o'ern(ent, organise or assist in organising or be a (e(ber of any stoc) exchange (other than a recognised stoc) exchange) for the purpose of assisting in, entering into or perfor(ing any contracts in securities0 (%) .his section shall co(e into force in any State or area on such date as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 4rohi,itio of o$tio ! i !e'*ritie!. "=. 734GGGGG:
/% <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 /3 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec 3, w0e0f0 %%+%+%0000 /$ C(itted by the Securities =aws (A(end(ent) Act, !!", Sec %%, w0e0f0 %"+0 + !!"0 <rior to o(ission, section %0 read as under , 1%00 8r$hibiti$n $f $%ti$n# in #ec!ritie#&-( ) Eotwithstanding anything contained in this Act or in any other law for the ti(e being in force, all options in securities entered into after the co((ence(ent of this Act shall be illegal0
9: 1:4= <E (/A0:1:( 754GGG: /#4Co -itio ! for li!ti (. "1. Khere securities are listed on the application of any person in any recognised stoc) exchange, such person shall co(ply with the conditions of the listing agree(ent with that stoc) exchange&: 775Deli!ti ( of !e'*ritie!. "1A. ( ) A recognised stoc) exchange (ay delist the securities, after recording the reasons therefor, fro( any recognised stoc) exchange on any of the ground or grounds as (ay be prescribed under this Act , 4ro+i-e- that the securities of a co(pany shall not be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) A listed co(pany or an aggrie'ed in'estor (ay file an appeal before the Securities Appellate .ribunal against the decision of the recognised stoc) exchange delisting the securities within fifteen days fro( the date of the decision of the recognised stoc) exchange delisting the securities and the pro'isions of sections %%8 to %%7 of this Act, shall apply, as far as (ay be, to such appeals , 4ro+i-e- that the Securities Appellate .ribunal (ay, if it is satisfied that the co(pany was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding one (onth0:
(%) Any option in securities which has been entered into before such co((ence(ent and which re(ains to be perfor(ed, whether wholly or in part, after such co((ence(ent shall, to that
extent, beco(e 'oid02 /" Kords 18O <H8=IC CC?<AEI7S2 o(itted by the Securities =aws (A(end(ent) Act, !!!, Sec $, w0e0f0 %%+0%+%0000 /# Substituted by the Securities =aws (A(end(ent) Act, !!", Sec 33, w0e0f0 %"+0 + !!" . <rior to substitution, section % read as under , 1% 0 8$.er t$ c$"%el li#ting $f #ec!ritie# bF %!blic c$"%anie#& -Eotwithstanding anything contained in any other law for the ti(e being in force, if the Securities and 7xchange 8oard of India is of opinion, ha'ing regard to the nature of the securities issued by any public co(pany as defined in the Co(panies Act, !"# ( of !"#), or to the dealings in the(, that it is necessary or expedient in the interest of the trade or in the public interest so to do, it (ay re*uire the co(pany, after gi'ing it an opportunity of being heard in the (atter, to co(ply with such re*uire(ents as (ay be prescribed with respect to the listing of its securities on any recognised stoc) exchange02 // Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec >, w0r0e0f0 %+ 0+%00$0
7:5Ri(ht
of %$$e%l %(%i !t ref*!%l of !to'6 e#'h% (e! to li!t !e'*ritie! of $*,li' 'o.$% ie!. 79"". Khere a recognised stoc) exchange acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any public co(pany >04or collecti'e in'est(ent sche(e:, the co(pany > 4or sche(e: shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( ) of section /3 of the Co(panies Act, !"# ( of !"#) (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Central &o'ern(ent (ay, on sufficient cause being shown, allow, appeal to the Central &o'ern(ent against such refusal, o(ission or failure, as the case (ay be, and thereupon the Central &o'ern(ent (ay, after gi'ing the stoc) exchange an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange, or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Central &o'ern(ent sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Central &o'ern(ent: , >%44ro+i-e- that no appeal shall be preferred against refusal, o(ission or failure, as the case (ay be, under this section on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!0: :)5Ri(ht of %$$e%l to Se'*ritie! A$$ell%te Tri,* %l %(%i !t ref*!%l of !to'6 e#'h% (e to li!t !e'*ritie! of $*,li' 'o.$% ie!.
/> Substituted
by .he Co(panies (A(end(ent) Act, !/$ (Act Eo0 $ of !/$), Sec $%, w0e0f0 0 + 0%+ !/"0 /! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the
&aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 >0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%00003 Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 > Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%0000 >% Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec $, w0e0f0 #+ %+ !!!0 >3 Sections %%A, %%8, %%C, %%9, %%7 and %%6 inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!!& 7arlier section %%A was inserted by .he
""A. ( ) Khere a recognised stoc) exchange, acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any co(pany, the co(pany shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( A) of section /3 of the Co(panies Act, !"# ( of !"#), (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Securities Appellate .ribunal (ay, on sufficient cause being shown, allow, appeal to the Securities Appellate .ribunal ha'ing Durisdiction in the (atter against such refusal, o(ission or failure, as the case (ay be, and thereupon the Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange, an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange3 or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Securities Appellate .ribunal sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Securities Appellate .ribunal0 (%) 7'ery appeal under sub+section ( ) shall be in such for( and be acco(panied by such fee as (ay be prescribed0 (3) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 ($) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: :354ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. "";. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of
Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec %, w0e0f0 /+ 0 + !>#, and o(itted by the 9epositories Act, !!#, Sec 30 and Sch0, <t0III, w0r0e0f0 %0+0!+ !!"0 >$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath 3 (b) re*uiring the disco'ery and production of docu(ents 3 (c) recei'ing e'idence on affida'its 3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents 3 (e) re'iewing its decisions 3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte ; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0: :55Ri(ht to le(%l re$re!e t%tio . ""C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of sub+section ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of subsection ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of
>" Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
!"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, vakil or an attorney of any Iigh Court, and includes a pleader in practice0: :85Li.it%tio . ""D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0: :75Ci+il 'o*rt ot to h%+e G*ri!-i'tio .
""E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0: ::5A$$e%l to S*$re.e Co*rt. ""2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order, 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: 8(4A91:( A45 80</(5A0( 4e %ltie!. "). ( ) Any person who+
># Inserted >/ Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & >> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec !, w0r0e0f0 %+ 0+%00$0 7arlier section %%6 as inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", read as under,+ 1""2. A$$e%l to Di(h Co*rt.+Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order , 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
(a) without reasonable excuse (the burden of pro'ing which shall be on hi() fails to co(ply with any re*uisition (ade under sub+section ($) of section #3 or (b) enters into any contract in contra'ention of any of the pro'isions contained in section 3 or section #3 or (c) contra'enes the pro'isions contained in >!5section / or section /A<, or section !3 or 90 4(d) enters into any contract in deri'ati'e in contra'ention of section >A or the rules (ade under section 303: (e) owns or )eeps a place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act and )nowingly per(its such place to be used for such purposes3 or (f) (anages, controls, or assists in )eeping any place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act or at which contracts are recorded or adDusted or rights or liabilities arising out of contracts are adDusted, regulated or enforced in any (anner whatsoe'er3 or (g) not being a (e(ber of a recognised stoc) exchange or his agent authorised as
such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section / wilfully represents to or induces any person to belie'e that contracts can be entered into or perfor(ed under this Act through hi(3 or (h) not being a (e(ber of a recognised stoc) exchange or his agent authorised as such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section /, can'asses, ad'ertises or touts in any (anner either for hi(self or on behalf of any other persons for any business connected with contracts in contra'ention of any of the pro'isions of this Act3 or (i) Doins, gathers or assists in gathering at any place other than the place of business specified in the bye+laws of a recognised stoc) exchange any person or persons for (a)ing bids or offers or for entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act3 ! 4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which
>! Inserted
by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec $, w0e0f0 %>+0"+ %00/ for ;section /;0 !0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec #, w0e0f0 %%+0%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 ! Substituted for 1shall, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0
(ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: (%) Any person who enters into any contract in contra'ention of the pro'isions contained in section " !%4or who fails to co(ply with the pro'isions of !34section % or section % A: or with the orders of: or section %% !$4or with the orders of the Securities Appellate .ribunal: !"4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 9854e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. ")A. Any person, who is re*uired under this Act or any rules (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to a recognised stoc) exchange, fails to furnish the sa(e within the ti(e specified therefor in the listing agree(ent or conditions or bye+laws of the recognised stoc) exchange, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to (aintain boo)s of account or records, as per the listing agree(ent or conditions, or bye+laws of a recognised stoc) exchange, fails to (aintain the sa(e, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0:
9754e
%lt> for f%il*re ,> % > $er!o to e ter i to % %(ree.e t /ith 'lie t!. ");. If any person, who is re*uired under this Act or any bye+laws of a recognised stoc) exchange (ade thereunder, to enter into an agree(ent with his client, fails to enter into such an agree(ent, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0:
!% Substituted
for 1or who fails to co(ply with the orders of the Securities and 7xchange 8oard of India under section % 2 by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 <rior to !!", ;Securities and 7xchange 8oard of India under section % or Central &o'ern(ent under section %%; were substituted for ;Central &o'ern(ent under section % or section %%; vide .he Schedule, <art II of Securities and 7xchange 8oard of India Act, !!%, w0e0f0 30+0 + !!%0 !3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec #, w0e0f0 #+ %+ !!!0 !" Substituted for 1shall, on con'iction, be punishable with fine which (ay extend to one thousand rupees2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !# Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$ & !/ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$0
9:54e
%lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. ")C. If any stoc) bro)er or sub+bro)er or a co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, after ha'ing been called upon by the Securities and 7xchange 8oard of India or a recognised stoc) exchange in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e stipulated by the Securities and 7xchange 8oard of India or a recognised stoc) exchange, he or it shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 9954e %lt> for f%il*re to !e(re(%te !e'*ritie! or .o e>! of 'lie t or 'lie t!. ")D. If any person, who is registered under section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%) as a stoc) bro)er or sub+bro)er, fails to segregate securities or (oneys of the client or clients or uses the securities or (oneys of a client or clients for self or for any other client, he shall be liable to a penalty not exceeding one crore rupees0: 1==54e %lt> for f%il*re to 'o.$l> /ith $ro+i!io of li!ti ( 'o -itio ! or -eli!ti ( 'o -itio ! or (ro* -!. ")E. If a co(pany or any person (anaging collecti'e in'est(ent sche(e or (utual fund, fails to co(ply with the listing conditions or delisting conditions or grounds or co((its a breach thereof, it or he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0: 1=154e %lt> for e#'e!! -e.%teri%li!%tio or -eli+er> of * li!te- !e'*ritie!. ")2. If any issuer de(aterialises securities (ore than the issued securities of a co(pany or deli'ers in the stoc) exchanges the securities which are not listed in the recognised stoc) exchange or deli'ers securities where no trading per(ission has been gi'en by the recognised stoc) exchange, he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0:
!> Inserted !! Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 00 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0
%+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0
1="54e
%lt> for f%il*re to f*r i!h $erio-i'%l ret*r !, et'. ")G. If a recognised stoc) exchange fails or neglects to furnish periodical returns to the Securities and 7xchange 8oard of India or fails or neglects to (a)e or a(end its rules or bye+laws as directed by the Securities and 7xchange 8oard of India or fails to co(ply with directions issued by the Securities and 7xchange 8oard of India, such recognised stoc) exchange shall be liable to a penalty which (ay extend to twenty+fi'e crore rupees0: 1=)54e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. ")D. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or articles or bye+ laws or the regulations of the recognised stoc) exchange or directions issued by the Securities and 7xchange 8oard of India for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 1=354o/er to %-G*-i'%te. ")0I. ( ) 6or the purpose of adDudging under sections %3A, %38, %3C, %39, %37, %36, %3& and %3I, the Securities and 7xchange 8oard of India shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0: 1=552%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. ")E. Khile adDudging the *uantu( of penalty under section %3+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3
0% Inserted 03 Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec 0$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0" Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 , w0r0e0f0 , w0r0e0f0 , w0r0e0f0
%+ %+ %+ %+
0+%00$0 0+%00$0 0+%00$0 0+%00$0
(b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0: 1=85 Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!.
")EA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 1"A or !e'tio ")0I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%tefor the %lle(e- -ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re %! !$e'ifie,> the ;o%r- * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")L %(%i !t % > or-er $%!!e- ,> the ;o%ror %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 1=75Re'o+er> of %.o* t!. ")E;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 1"A or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H
0# I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30"==7) 0/ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %!
.%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - ThirS'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")L of thi! A't. (") The re'o+er> offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ())Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 0'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 1"A, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1),(") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 1=:5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. ")F. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: 1=95A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")L. ( ) Any person aggrie'ed, by the order or decision of the recogniFed stoc) exchange or the adDudicating officer or any order (ade by the Securities and 7xchange 8oard of India under section $8, (ay prefer an appeal before the Securities Appellate .ribunal and the pro'isions of sections %%8, %%C, %%9 and %%7 of this Act, shall apply, as far as (ay be, to such appeals0 (%) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order or decision is recei'ed by the
appellant and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 (3) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 ($) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the parties to the appeal and to the concerned adDudicating officer0 (") .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: 11=5Offe 'e!. ")@. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws
0> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 0! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
(ade thereunder, for which no punish(ent is pro'ided elsewhere in this Act, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 1115Co.$o!itio of 'ert%i offe 'e!. ")N. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0: 11"54o/er to (r% t i..* it>. ")0O. ( ) .he Central &o'ern(ent (ay, on reco((endation by the Securities and 7xchange 8oard of India, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation,
4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that the reco((endation of the Securities and 7xchange 8oard of India under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under
% Inserted
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
this Act to which such person would ha'e been liable, had not such i((unity been granted0: Offe 'e! ,> 'o.$% ie!. "3. ( ) Khere an offence has been co((itted by a co(pany, e'ery person who, at the ti(e when the offence was co((itted, was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence, and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any gross negligence on the part of any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer of the co(pany, shall also be dee(ed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n0-6or the purpose of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals, and 34(b) 1director2, in relation to(i) a fir(, (eans a partner in the fir(3 (ii) any association of persons or a body of indi'iduals, (eans any (e(ber controlling the affairs thereof0: $4(3) .he pro'isions of this section shall be in addition to, and not in derogation of, the pro'isions of section %%A0: Cert%i offe 'e! to ,e 'o( iL%,le. "5. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, >!> (" of >!>) ", any offence punishable under #4GGG: section %3 shall be dee(ed to be a
cogniFable offence within the (eaning of that Code0
3 Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec /, w0e0f0 %%+%+%0000 <rior to its substitution, sub+clause (b) read as under, N(b) 1director2, in relation to a fir(, (eans a partner in the fir(0J $ Inserted by .he Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec 3, w0e0f0 /+0 + !>#0
iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central &o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or a recognised stoc) exchange or by any person0 >5(")********< 1195E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
ee now the Code of Cri(inal <rocedure, !/3 (% of !/$) 1sub+section ( ) of2 o(itted by the Securities =aws (A(end(ent) Act, %00$, w0e0f0 %+ 0+%00$0 / Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$ & <rior to its substitution section %# read as under ,1%#0 G!ri#dicti$n t$ trF $ffence# !nder thi# Act&-Eo court inferior to that of a presidency (agistrate or a (agistrate of the first class shall ta)e cogniFance of or try any offence punishable under this Act02 > O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JEo court inferior to that of a Court of Session shall try any offence punishable under this Act .K ! I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
" # Kords
/4Co(
A$$e%l % - Re+i!io . "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt. "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel% $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io !. "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< 6: /(99A4(<A Title to -i+i-e -!. "7. ( ) It shall be lawful for the holder of any security whose na(e appears on the boo)s of the co(pany issuing the said security to recei'e and retain any di'idend declared by the co(pany in respect thereof for any year, notwithstanding that the said security has already been transferred by hi( for consideration, unless the transferee who clai(s the di'idend fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the co(pany with the co(pany for being registered in his na(e within fifteen days of the date on which the di'idend beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the di'idend3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security and other docu(ents relating to
the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a co(pany to pay any di'idend which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the co(pany as the holder of the security in respect of which the di'idend has beco(e due3 or (b) the right of the transferee of any security to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security in the na(e of the transferee0 %04Ri(ht to re'ei+e i 'o.e fro. 'olle'ti+e i +e!t.e t !'he.e. "7A. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, whose na(e appears on the boo)s of the collecti'e in'est(ent sche(e issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e declared by the collecti'e in'est(ent sche(e in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e fro( the transfer or has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the collecti'e in'est(ent sche(e with the collecti'e in'est(ent sche(e for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec >, w0e0f0 %%+%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the collecti'e in'est(ent sche(e3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a collecti'e in'est(ent sche(e to pay any inco(e fro( units or other instru(ents issued by the collecti'e in'est(ent sche(e which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the collecti'e in'est(ent sche(e as the holder of the security being
units or other instru(ents issued by the collecti'e in'est(ent sche(e in respect of which the inco(e in respect of units or other instru(ents issued by the collecti'e sche(e has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security being units or other instru(ents issued by the collecti'e in'est(ent sche(e in the na(e of the transferee0: % 4Ri(ht to re'ei+e i 'o.e fro. .*t*%l f* -. "7;. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by any (utual fund, whose na(e appears on the boo)s of the (utual fund issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the (utual fund declared by the (utual fund in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the (utual fund, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the (utual fund fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the (utual fund with the (utual fund for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the (utual fund beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the (utual fund3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the (utual fund, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a (utual fund to pay any inco(e fro( units or other instru(ents issued by the (utual fund which has beco(e due to any person, whose na(e is for the ti(e being registered in the boo)s of the (utual fund as the holder of the security being units or other instru(ents issued by the (utual fund in respect of which the inco(e in respect of units or other instru(ents issued by the (utual fund has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the (utual fund, to enforce against the transferor or any other person, his rights, if any, in relation to the transfer in any case where the (utual fund has refused to register the transfer of the security being units or other instru(ents issued by the (utual fund in the na(e of the transferee0:
1""5A't
ot to %$$l> i 'ert%i '%!e!. ":. ( ) .he pro'isions of this Act shall not apply to(a) the &o'ern(ent, the Reser'e 8an) of India, any local authority or any corporation set up by a special law or any person who has effected any transaction with or through the agency of any such authority as is referred to in this clause3 (b) any con'ertible bond or share warrant or any option or right in relation thereto, in so far as it entitles the person in whose fa'our any of the foregoing has been issued to obtain at his option fro( the co(pany or other body corporate, issuing the sa(e or fro( any of its shareholders or duly appointed agentsJ shares of the co(pany or other body corporate, whether by con'ersion of the bond or warrant or otherwise, on the basis of the price agreed upon when the sa(e was issued0 (%) Kithout preDudice to the pro'isions contained in sub+section ( ), if the Central &o'ern(ent %3 is satisfied that in the interests of trade and co((erce or the
%% Substituted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec 3, w0e0f0 0>+ %+ !"!0
econo(ic de'elop(ent of the country it is necessary or expedient so to do, it (ay, by notification in the Cfficial &aFette, specify any class of contracts as contracts to which this Act or any pro'ision contained therein shall not apply, and also the conditions, li(itations or restrictions, if any, subDect to which it shall not so apply0: 4rote'tio of %'tio t%6e i (oo- f%ith. "9. Eo suit, prosecution or other legal proceeding whatsoe'er shall lie in any court against the go'erning body or any (e(ber, office bearer or ser'ant of any recognised stoc) exchange or against any person or persons appointed under subsection ( ) of section for anything which is in good faith done or intended to be done in pursuance of this Act or of any rules or bye+laws (ade thereunder0 %$44o/er to -ele(%te. "9A. .he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers (except the power under section 30) exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India or the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)0: 4o/er to .%6e r*le!. )=. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for the purpose of carrying into effect the obDects of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for,(a) the (anner in which applications (ay be (ade, the particulars which they should contain and the le'y of a fee in respect of such applications 3 (b) the (anner in which any in*uiry for the purpose of recognising any stoc) exchange (ay be (ade, the conditions which (ay be i(posed for the grant of such recognition, including conditions as to the ad(ission of (e(bers if the
%3 <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %$ Inserted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% and Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec !, w0e0f0 %%+0%+%0000 <rior to its substitution, section %!A read as under , 1%!A0 8$.er t$ delegate&*.he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India02
stoc) exchange concerned is to be the only recognised stoc) exchange in the area3 and the for( in which such recognition shall be granted3 (c) the particulars which should be contained in the periodical returns and annual reports to be furnished to the Central &o'ern(ent3 (d) the docu(ents which should be (aintained and preser'ed under section # and the periods for which they should be preser'ed3 (e) the (anner in which any in*uiry by the go'erning body of a stoc) exchange shall be (ade under section #3 (f) the (anner in which the bye+laws to be (ade or a(ended under this Act shall before being so (ade or a(ended be published for criticis(3 (g) the (anner in which applications (ay be (ade by dealers in securities for licences under section /, the fee payable in respect thereof and the period of such licences, the conditions subDect to which licences (ay be granted, including conditions relating to the for(s which (ay be used in (a)ing contracts, the docu(ents to be (aintained by licensed dealers and the furnishing of periodical infor(ation to such authority as (ay be specified and the re'ocation of licences for breach of conditions3 %"4(h) the re*uire(ents which shall be co(plied with(A) by public co(panies for the purpose of getting their securities listed on any stoc) exchange3 (B) by collecti'e in'est(ent sche(e for the purpose of getting their units listed on any stoc) exchange3: %#4GGG: %/4(ha) the grounds on which the securities of a co(pany (ay be delisted fro( any recognised stoc) exchange under sub+section ( ) of section % A3 (hb) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under sub+section (%) of section % A and the fees payable in respect of such appeal3 (hc) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3
%" Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec 0, w0e0f0 %%+0%+%0000 <rior to its substitution, clause (h) read as under , 1(h) the re*uire(ents which shall be co(plied with by public co(panies for the purpose of getting their securities listed on any stoc) exchange32 %# .he word ;and; o(itted by .he Securities Contracts (Regulation) A(end(ent Act, !>", Sec $, w0e0f0 /+0 + !>#0 %/ Substituted for clause (ha) by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 7arlier clause (ha), as a(ended by the Securities =aws (A(end(ent) Act, !!!, read as
under ,1(ha) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3 and2
(hd) the (anner of in*uiry under sub+section ( ) of section %3+I3 (he) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3= and the fees payable in respect of such appeal3: (i) any other (atter which is to be or (ay be prescribed0 %>4(3) 7'ery rule (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule0: 1"954o/er of Se'*ritie! % - E#'h% (e ;o%r- of I -i% to .%6e re(*l%tio !. )1. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 305(%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,%> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 <rior to its substitution, sub+section (3), as a(ended by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!", read as under , 1(3) 7'ery rule (ade under this section shall, as soon as (ay be, after its publication in the Cfficial &aFette, be laid before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e session aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule02 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0 7arlier it was repealed by the Repealing and A(ending Act, !#0, Sec % and 6irst Sch0 w0e0f0 %>+ %+ !#00 30 Substituted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec ", w0e0f0 %>+ 0"+%00/0 <rior to substitution it read as under , 1(%) In particular and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for the (anner in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section02
(a) the (anner, in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of
publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section3 (b) the eligibility criteria and other re*uire(ents under section /A0 < (3) 7'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the regulation or both Iouses agree that the regulation should not be (ade, the regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that regulation0:
DE4OSITORIES ACT, 1998 SECTIONS /@A81(0 : 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS ). Certificate of co((ence(ent of business by depositories /@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS 3. Agree(ent between depository and participant 5. Ser'ices of depository 8. Surrender of certificate of security 7. Registration of transfer of securities with depositories :. Cptions to recei'e security certificate or hold securities with depository 9. Securities in depositories to be in fungible for( 1=. Rights of depositories and beneficial owner 11. Register of beneficial owner 1". <ledge or hypothecation of securities held in a depository 1). 6urnishing of infor(ation and records by depository and issuer 13. Cption to opt out in respect of any security 15. Act > of >! to apply to depositories 18. 9epositories to inde(nify loss in certain cases 17. Rights and obligations of depositories, etc0 /@A81(0 :: EN9UIRM AND INS4ECTION 1:. <ower of 8oard to call for infor(ation and en*uiry 19. <ower of 8oard to gi'e directions in certain cases 19A. <enalty for failure to furnish infor(ation, return, etc0 19;. <enalty for failure to enter into an agree(ent 19C. <enalty for failure to redress in'estorsJ grie'ances
19D. <enalty for delay in de(aterialisation or issue of certificate of securities 19E. <enalty for failure to reconcile records 192. <enalty for failure to co(ply with directions issued by 8oard under section ! of the Act 19G. <enalty for contra'ention where no separate penalty has been pro'ided 19D. <ower to adDudicate 190I. 6actors to be ta)en into account by adDudicating officer 190IA. Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (! 190I;. Re'o+er> of %.o* t! 190E. Crediting su(s realised by way of penalties to Consolidated 6und of India /@A81(0 D 4ENALTM "=. Cffences "1. Cffences by co(panies /@A81(0 D: @ISCELLANEOUS "". CogniFance of offences by courts ""A. Co(position of certain offences "";. <ower to grant i((unity ""C. E!t%,li!h.e t of S$e'i%l Co*rt! ""D. Offe 'e! tri%,le ,> S$e'i%l Co*rt! ""E. A$$e%l % - re+i!io ""2. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""G. Tr% !itio %l 4ro+i!io ! "). Appeals ")A. Appeal to Securities Appellate .ribunal ")A. Appeal to Securities Appellate .ribunal ");. <rocedure and powers of Securities Appellate .ribunal ")C. Right to =egal Representation ")D. =i(itation ")E. Ci'il court not to ha'e Durisdiction ")2. Appeal to Supre(e Court "3. <ower of Central &o'ern(ent to (a)e rules "5. <ower of 8oard to (a)e regulations "8. <ower of depositories to (a)e bye+laws "7. Rules and regulations to be laid before <arlia(ent ":. Application of other laws not barred "9. Re(o'al of difficulties )=. A(end(ents to certain enact(ents )1. Repeal and sa'ing /@(5A9( A?7E9?7E. .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0: DE4OSITORIES ACT, 1998 5"" O2 1998< 51=th A*(*!t, 1998< An Act to provide $or reg lation o$ depositories in sec rities and $or matters connected there%ith or incidental thereto& B( it enacted bF 8arlia"ent in the E$rtF7#eventh ;ear $f the 0e%!blic $f :ndia a# f$ll$.# ,*
/@A81(0 : 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the 9epositories Act, !!#0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the %0th day of Septe(ber, !!"0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 1beneficial owner2 (eans a person whose na(e is recorded as such with a depository3 (b) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 3 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (c) 1bye+laws2 (eans bye+laws (ade by a depository under section %#3 (d) 1Co(pany =aw 8oard2 (eans the 8oard of Co(pany =aw Ad(inistration constituted under section 07 of the Co(panies Act, !"# ( of !"#)3 (e) 1depository2 (eans a co(pany for(ed and registered under the Co(panies Act, !"# ( of !"#), and which has been granted a certificate of registration under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (f) 1issuer2 (eans any person (a)ing an issue of securities3 (g) 1participant2 (eans a person registered as such under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (h) 1prescribed2 (eans prescribed by rules (ade under this Act3 (i) 1record2 includes the records (aintained in the for( of boo)s or stored in a co(puter or in such other for( as (ay be deter(ined by regulations3 (j) 1registered owner2 (eans a depository whose na(e is entered as such in the register of the issuer3 (k) 1regulations2 (eans the regulations (ade by the 8oard3 4(ka) 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (l) 1security2 (eans such security as (ay be specified by the 8oard3 (") 1ser'ice2 (eans any ser'ice connected with recording of allot(ent of securities or transfer of ownership of securities in the record of a depository0 (%) Kords and expressions used herein and not defined but defined in the Co(panies Act, !"# ( of !"#), or the Securities Contracts (Regulation) Act, !"# ($% of !"#), or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), shall ha'e the (eanings respecti'ely assigned to the( in those Acts0 /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS Certifi'%te of 'o..e 'e.e t of ,*!i e!! ,> -e$o!itorie!. ). ( ) Eo depository shall act as a depository unless it obtains a certificate of co((ence(ent of business fro( the 8oard0 (%) A certificate granted under sub+section ( ) shall be in such for( as (ay be specified by the regulations0 (3) .he 8oard shall not grant a certificate under sub+section ( ) unless it is satisfied that the depository has ade*uate syste(s and safeguards to pre'ent (anipulation of records and transactions , 4ro+i-e- that no certificate shall be refused under this section unless the depository concerned has been gi'en a reasonable opportunity of being heard0
Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
/@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS A(ree.e t ,et/ee -e$o!itor> % - $%rti'i$% t. 3. ( ) A depository shall enter into an agree(ent with one or (ore participants as its agent0 (%) 7'ery agree(ent under sub+section ( ) shall be in such for( as (ay be specified by the bye+laws0 Ser+i'e! of -e$o!itor>. 5. Any person, through a participant, (ay enter into an agree(ent, in such for( as (ay be specified by the bye+laws, with any depository for a'ailing its ser'ices0 S*rre -er of 'ertifi'%te of !e'*rit>. 8. ( ) Any person who has entered into an agree(ent under section " shall surrender the certificate of security, for which he see)s to a'ail the ser'ices of a depository, to the issuer in such (anner as (ay be specified by the regulations0 (%) .he issuer, on receipt of certificate of security under sub+section ( ), shall cancel the certificate of security and substitute in its records the na(e of the depository as a registered owner in respect of that security and infor( the depository accordingly0 (3) A depository shall, on receipt of infor(ation under sub+section (%), enter the na(e of the person referred to in sub+section ( ) in its records, as the beneficial owner0 Re(i!tr%tio of tr% !fer of !e'*ritie! /ith -e$o!itor>. 7. ( ) 7'ery depository shall, on receipt of inti(ation fro( a participant, register the transfer of security in the na(e of the transferee0 (%) If a beneficial owner or a transferee of any security see)s to ha'e custody of such security the depository shall infor( the issuer accordingly0 O$tio ! to re'ei+e !e'*rit> 'ertifi'%te or hol- !e'*ritie! /ith -e$o!itor>. :. ( ) 7'ery person subscribing to securities offered by an issuer shall ha'e the option either to recei'e the security certificates or hold securities with a depository0 (%) Khere a person opts to hold a security with a depository, the issuer shall inti(ate such depository the details of allot(ent of the security, and on receipt of such infor(ation the depository shall enter in its records the na(e of the allottee as the beneficial owner of that security0 Se'*ritie! i -e$o!itorie! to ,e i f* (i,le for.. 9. ( ) All securities held by a depository shall be de(aterialised and shall be in a fungible for(0 %4(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#), shall apply to a depository in respect of securities held by it on behalf of the beneficial owners&: Ri(ht! of -e$o!itorie! % - ,e efi'i%l o/ er. 1=. ( ) Eotwithstanding anything contained in any other law for the ti(e being in force, a depository shall be dee(ed to be the registered owner for the purposes of effecting transfer of ownership of security on behalf of a beneficial owner0 (%) Sa'e as otherwise pro'ided in sub+section ( ), the depository as a registered owner shall not ha'e any 'oting rights or any other rights in respect of securities held by it0 (3) .he beneficial owner shall be entitled to all the rights and benefits and be subDected to all the liabilities in respect of his securities held by a depository0 Re(i!ter of ,e efi'i%l o/ er. 11. 7'ery depository shall (aintain a register and an index of beneficial owners in the
(anner pro'ided in sections "0, " and "% of the Co(panies Act, !"# ( of !"#)0 4le-(e or h>$othe'%tio of !e'*ritie! hel- i % -e$o!itor>. 1". ( ) SubDect to such regulations and bye+laws, as (ay be (ade in this behalf, a beneficial owner (ay with the pre'ious appro'al of the depository create a pledge or hypothecation in respect of a security owned by hi( through a depository0 (%) 7'ery beneficial owner shall gi'e inti(ation of such pledge or hypothecation to the depository and such depository shall thereupon (a)e entries in its records accordingly0 (3) Any entry in the records of a depository under sub+section (%) shall be e'idence of a pledge or hypothecation0 2*r i!hi ( of i for.%tio % - re'or-! ,> -e$o!itor> % - i!!*er. 1). ( ) 7'ery depository shall furnish to the issuer infor(ation about the transfer of securities in the na(e of beneficial owners at such inter'als and in such (anner as (ay be specified by the bye+laws0 (%) 7'ery issuer shall (a)e a'ailable to the depository copies of the rele'ant records in respect of securities held by such depository0 O$tio to o$t o*t i re!$e't of % > !e'*rit>.
% Substituted
by the 9epositories Related =aws (A(end(ent) Act, !!/, Sec %%, w0e0f0 "+0 + !!/0 <rior to its substitution sub+section (%) read as under , 1(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#) shall apply to the securities held by a depository on behalf of the beneficial owners02
13. ( ) If a beneficial owner see)s to opt out of a depository in respect of any security he shall infor( the depository accordingly0 (%) .he depository shall on receipt of inti(ation under sub+section ( ) (a)e appropriate entries in its records and shall infor( the issuer0 (3) 7'ery issuer shall, within thirty days of the receipt of inti(ation fro( the depository and on fulfil(ent of such conditions and on pay(ent of such fees as (ay be specified by the regulations, issue the certificate of securities to the beneficial owner or the transferee, as the case (ay be0 A't 1: of 1:91 to %$$l> to -e$o!itorie!. 15. .he 8an)ersJ 8oo)s 7'idence Act, >! shall apply in relation to a depository as if it were a ban) as defined in section % of that Act0 De$o!itorie! to i -e. if> lo!! i 'ert%i '%!e!. 18. ( ) Kithout preDudice to the pro'isions of any other law for the ti(e being in force, any loss caused to the beneficial owner due to the negligence of the depository or the participant, the depository shall inde(nify such beneficial owner0 (%) Khere the loss due to the negligence of the participant under sub+section ( ) is inde(nified by the depository, the depository shall ha'e the right to reco'er the sa(e fro( such participant0 Ri(ht! % - o,li(%tio ! of -e$o!itorie!, et'. 17. ( ) SubDect to the pro'isions of this Act, the rights and obligations of the depositories, participants and the issuers whose securities are dealt with by a depository shall be specified by the regulations0 (%) .he eligibility criteria for ad(ission of securities into the depository shall be specified by the regulations0 /@A81(0 :D EN9UIRM AND INS4ECTION 4o/er of ;o%r- to '%ll for i for.%tio % - e 7*ir>. 1:. ( ) .he 8oard, on being satisfied that it is necessary in the public interest or in the interest of in'estors so to do, (ay, by order in writing,-
(a) call upon any issuer, depository, participant or beneficial owner to furnish in writing such infor(ation relating to the securities held in a depository as it (ay re*uire3 or (b) authorise any person to (a)e an en*uiry or inspection in relation to the affairs of the issuer, beneficial owner, depository or participant, who shall sub(it a report of such en*uiry or inspection to it within such period as (ay be specified in the order0 (%) 7'ery director, (anager, partner, secretary, officer or e(ployee of the depository or issuer or the participant or beneficial owner shall on de(and produce before the person (a)ing the en*uiry or inspection all infor(ation or such records and other docu(ents in his custody ha'ing a bearing on the subDect+(atter of such en*uiry or inspection0 4o/er of ;o%r- to (i+e -ire'tio ! i 'ert%i '%!e!. 19. Sa'e as pro'ided in this Act, if after (a)ing or causing to be (ade an en*uiry or inspection, the 8oard is satisfied that it is necessary(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any depository or participant being conducted in the (anner detri(ental to the interests of in'estors or securities (ar)et, it (ay issue such directions,(a) to any depository or participant or any person associated with the securities (ar)et3 or (b) to any issuer, as (ay be appropriate in the interest of in'estors or the securities (ar)et0 )5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< $44e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 19A. Any person, who is re*uired under this Act or any rules or regulations or bye+laws (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to the 8oard, fails to furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations or bye+laws, fails to file return or furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0
3I $ Inserted
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the Securities =aws (A(end(ent) Act, %00$, Sec0 /, w0r0e0f0 %+ 0+%00$0
4e %lt> for f%il*re to e ter i to % %(ree.e t. 19;. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and is re*uired under this Act or any rules or regulations (ade thereunder, to enter into an agree(ent, fails to enter into such agree(ent, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0
4e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 19C. If any depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such depository or participant or issuer or its agents or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for -el%> i -e.%teri%li!%tio or i!!*e of 'ertifi'%te of !e'*ritie!. 19D. If any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to de(aterialise or issue the certificate of securities on opting out of a depository by the in'estors, within the ti(e specified under this Act or regulations or bye+laws (ade thereunder or abets in delaying the process of de(aterialisation or issue the certificate of securities on opting out of a depository of securities, such issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to re'o 'ile re'or-!. 19E. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to reconcile the records of de(aterialised securities with all the securities issued by the issuer as specified in the regulations, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to 'o.$l> /ith -ire'tio ! i!!*e- ,> ;o%r- * -er !e'tio 19 of the A't. 192. If any person fails to co(ply with the directions issued by the 8oard under section !, within the ti(e specified by it, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 19G. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations or bye+laws (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0 4o/er to %-G*-i'%te. 19D. ( ) 6or the purpose of adDudging under sections !A, !8, !C, !9, !7, !6 and !&, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the
sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. 190I. Khile adDudging the *uantu( of penalty under section !I, the adDudicating officer shall ha'e due regard to the following factors, na(ely,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 55 Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (!. 190IA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 19, !e'tio 19D, %! the '%!e .%> ,e, .%> file % %$$li'%tio i /riti ( to the ;o%r$ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e-ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h
"I
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re !$e'ifie- ,> the ;o%r* -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")A %(%i !t % > or-er $%!!e- ,> the ;o%r- or the %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 85 Re'o+er> of %.o* t!. 190I;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 19 or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6
%''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hilor !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C!
#I
!erte- ,> The Se'*ritie! L%/! (A.e- .e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
.o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")A of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 19, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 19E. All su(s realiFed by way of penalties under this Act shall be credited to the Consolidated 6und of India0: /@A81(0 D 4ENALTM /4Offe 'e!. "=. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws (ade thereunder, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0
/ Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 >, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %0 read as under,1%00 <ffence#0- Khoe'er contran'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or any regulations or bye+laws (ade thereunder shall be punishable with i(prison(ent for a ter( which (ay extend to fi'e years, or with fine or with both02
(%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with
fine, which (ay extend to twenty+fi'e crore rupees, or with both0: Offe 'e! ,> 'o.$% ie!. "1. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n&-6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and (b) 1director2, in relation to a fir(, (eans a partner in the fir(0 /@A81(0 D: @ISCELLANEOUS >4Co( iL% 'e of offe 'e! ,> 'o*rt!. "". ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central
> Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 !, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %% read as under,1%%0 /$gniCance $f $ffence# bF c$!rt#&*( ) Eo Court shall ta)e cogniFance of any offence punishable under this Act or any regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the 8oard0 (%) Eo court inferior to that of a ?etropolitan ?agistrate or a Dudicial ?agistrate of the first class shall try any offence punishable under this Act02
&o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or by any person0 !5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < Co.$o!itio of 'ert%i offe 'e!. ""A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "";. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any
penalty under this Act with respect to the alleged 'iolation , 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity , 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0: 1=5 E!t%,li!h.e t of S$e'i%l Co*rt!. ""C. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>.
! <rior
to o(ission, Sub+section(%) read 1Eo court inferior to that of a Court of Session shall try any offence punishable under this Act02 0 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. ""D. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-. A$$e%l % - Re+i!io ""E. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""2. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197).
(") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erioof ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! ""G. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< A$$e%l!. "). ( ) Any person aggrie'ed by an order of the 8oard (ade 4before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!: under this Act, or the regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor , 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0 (3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed , 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 %4A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")A. ( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!, under this Act, or the regulations (ade thereunder, 34or by an order (ade by an adDudicating officer under this Act: (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 $5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 8oard is recei'ed by the person referred to in sub+section ( ) and it shall be in such for( and be acco(panied by such fee as (ay be prescribed ,
Substituted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 $, w0e0f0 #+ %+ !!! for ;an order of the 8oard (ade;0 % Sections %3A to %36 inserted by the Securities =aws (Second A(end(ent) Act, !!! , Sec0 ", w0e0f0 #+ %+ !!!& 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %0, w0r0e0f0 %+ 0+%00$0 $ 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JNo %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-e ,> the ;o%r- /ith the 'o !e t of the $%rtie!.K
4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0
($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 (") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. ");. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3 (e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte; (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 Ri(ht to le(%l re$re!e t%tio . ")C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or an attorney of any Iigh Court, and
includes a pleader in practice0 Li.it%tio . ")D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 Ci+il 'o*rt ot to h%+e G*ri!-i'tio . ")E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "4A$$e%l to S*$re.e Co*rt. ")2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order ,
" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 % , w0r0e0f0 %+ 0+%00$0 <rior to its substitution, Section %36, as inserted by Securities =aws (Second A(end(ent) Act, !!!, w0e0f0 #+ %+ !!!, read as under,1%360 A%%eal t$ @igh /$!rt&-Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0:: 4o/er of Ce tr%l Go+er .e t to .%6e r*le!. "3. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for carrying out the pro'isions of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,164(a) the (anner of in*uiry under sub+section ( ) of section !I3 (aa) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %33: (b) the for( in which an appeal (ay be preferred under sub+section (3) of section %3 and the fees payable in respect of such appeal 3 (c) the procedure for disposing of an appeal under sub+section ($) of section %33 /4(d) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3A and the fees payable in respect of such appeal0: 4o/er of ;o%r- to .%6e re(*l%tio !. "5. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the 8oard (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for(a) the for( in which record is to be (aintained under clause ( i) of sub+section ( ) of section %3 (b) the for( in which the certificate of co((ence(ent of business shall be issued under
sub+section (%) of section 33 (c) the (anner in which the certificate of security shall be surrendered under sub+section ( ) of section #3 (d) the (anner of creating a pledge or hypothecation in respect of security owned by a beneficial owner under sub+section ( ) of section %3 (e) the conditions and the fees payable with respect to the issue of certificate of securities under sub+section (3) of section $3
# Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %%, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (a) read as under,1(a) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %332 / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 #, w0e0f0 #+ %+ !!!0
(f) the rights and obligations of the depositories, participants and the issuers under subsection ( ) of section /3 (g) the eligibility criteria for ad(ission of securities into the depository under sub+section (%) of section /0 4o/er of -e$o!itorie! to .%6e ,>e0l%/!. "8. ( ) A depository shall, with the pre'ious appro'al of the 8oard, (a)e bye+laws consistent with the pro'isions of this Act and the regulations0 (%) In particular, and without preDudice to the generality of the foregoing power, such byelaws shall pro'ide for(a) the eligibility criteria for ad(ission and re(o'al of securities in the depository3 (b) the conditions subDect to which the securities shall be dealt with3 (c) the eligibility criteria for ad(ission of any person as a participant3 (d) the (anner and procedure for de(aterialisation of securities3 (e) the procedure for transactions within the depository3 (f) the (anner in which securities shall be dealt with or withdrawn fro( a depository3 (g) the procedure for ensuring safeguards to protect the interests of participants and beneficial owners3 (h) the conditions of ad(ission into and withdrawal fro( a participant by a beneficial owner3 (i) the procedure for con'eying infor(ation to the participants and beneficial owners on di'idend declaration, shareholder (eetings and other (atters of interest to the beneficial owners3 (j) the (anner of distribution of di'idends, interest and (onetary benefits recei'ed fro( the co(pany a(ong beneficial owners3 (k) the (anner of creating pledge or hypothecation in respect of securities held with a depository3 (l) inter #e rights and obligations a(ong the depository, issuer, participants, and beneficial owners3 (") the (anner and the periodicity of furnishing infor(ation to the 8oard, issuer and other persons3 (n) the procedure for resol'ing disputes in'ol'ing depository, issuer, co(pany or a beneficial owner3 ($) the procedure for proceeding against the participant co((itting breach of the regulations and pro'isions for suspension and expulsion of participants fro( the depository and cancellation of agree(ents entered with the depository3 (%) the internal control standards including procedure for auditing, re'iewing and (onitoring0
(3) Khere the 8oard considers it expedient so to do, it (ay, by order in writing, direct a depository to (a)e any bye+laws or to a(end or re'o)e any bye+laws already (ade within such period as it (ay specify in this behalf0 ($) If the depository fails or neglects to co(ply with such order within the specified period, the 8oard (ay (a)e the bye+laws or a(end or re'o)e the bye+laws (ade either in the for( specified in the order or with such (odifications thereof as the 8oard thin)s fit0 R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t. "7. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. ":. .he pro'isions of this Act shall be in addition to, and not in derogation of, any other law for the ti(e being in force relating to the holding and transfer of securities0 Re.o+%l of -iffi'*ltie!. "9. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as appear to it to be necessary or expedient for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of a period of two years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 A.e -.e t! to 'ert%i e %'t.e t!. )=. 40e%ealed bF 0e%ealing H A"ending Act' 20010: Re$e%l % - !%+i (. )1. ( ) .he 9epositories (.hird) Crdinance, !!# (Crd0 %> of !!#), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 /@(5A9( 4 ee section 30: A?7E9?7E.S .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0:
SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 SECTIONS !'APT"R I 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions !'APT"R II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA
). 7stablish(ent and incorporation of 8oard 3. ?anage(ent of the 8oard 5. .er( of office and conditions of ser'ice of Chair(an and (e(bers of the 8oard 8. Re(o'al of (e(ber fro( office 7. ?eetings 7A. ?e(ber not to participate in (eetings in certain cases :. Bacancies, etc0, not to in'alidate proceedings of 8oard 9. Cfficers and e(ployees of the 8oard !'APT"R III TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD 1=. .ransfer of assets, liabilities, etc0, of existing Securities and 7xchange 8oard to the 8oard !'APT"R IV 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 11. 6unctions of 8oard 11A. 8oard to regulate or prohibit issue of prospectus, offer docu(ent or ad'ertise(ent soliciting (oney for issue of securities 11AA. Collecti'e in'est(ent sche(e 11;. <ower to issue directions 11C. In'estigation 11D. Cease and desist proceedings !'APT"R V REGISTRATION CERTI2ICATE 1". Registration of stoc) bro)ers, sub+bro)ers, share transfer agents, etc0
%
!'APT"R VA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 1"A. <rohibition of (anipulati'e and decepti'e de'ices, insider trading and substantial ac*uisition of securities or control !'APT"R VI 2INANCE, ACCOUNTS AND AUDIT 1). &rants by the Central &o'ern(ent 13. 6und 15. Accounts and audit !'APT"R VIA 4ENALTIES AND ADEUDICATION 15A. <enalty for failure to furnish infor(ation, return, etc & 15;. <enalty for failure by any person to enter into agree(ent with clients 15C. <enalty for failure to redress in'estorsJ grie'ances 15D. <enalty for certain defaults in case of (utual funds 15E. <enalty for failure to obser'e rules and regulations by an asset (anage(ent co(pany 152. <enalty for default in case of stoc) bro)ers 15G. <enalty for insider trading 15D. <enalty for non+disclosure of ac*uisition of shares and ta)eo'ers 15DA. <enalty for fraudulent and unfair trade practices 15D;. <enalty for contra'ention where no separate penalty has been pro'ided
150I. <ower to adDudicate 15E. 6actors to be ta)en into account by the AdDudicating Cfficer 15EA. Crediting su(s realised by way of penalties to Consolidated 6und of India 15E;. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! !'APT"R VIB ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL 15F. 7stablish(ent of Securities Appellate .ribunals 15L. Co(position of Securities Appellate .ribunal 15@. Qualification for appoint(ent as <residing Cfficer or ?e(ber of Securities Appellate .ribunal
3
15N. .enure of office of <residing Cfficer and other (e(bers of Securities Appellate .ribunal 150O. Salary and allowances and other ter(s and conditions of ser'ice of <residing Cfficers 154. 6illing up of 'acancies 159. Resignation and re(o'al 15R. Crders constituting Appellate .ribunal to be final and not to in'alidate its proceedings 15S. Staff of the Securities Appellate .ribunal 15T. Appeal to the Securities Appellate .ribunal 15U. <rocedure and powers of the Securities Appellate .ribunal 15I. Right to legal representation 15?. =i(itation 15A. <residing Cfficer, (e(bers and staff of Securities Appellate .ribunals to be public ser'ants 15M. Ci'il Court not to ha'e Durisdiction 15N. Appeal to Supre(e Court !'APT"R VII @ISCELLANEOUS 18. <ower of Central &o'ern(ent to issue directions 17. <ower of Central &o'ern(ent to supersede the 8oard 1:. Returns and reports 19. 9elegation "=. Appeals "=A. 8ar of Durisdiction "1. Sa'ings "". ?e(bers, officers and e(ployees of the 8oard to be public ser'ants "). <rotection of action ta)en in good faith "3. Cffences "3A. Co(position of certain offences "3;. <ower to grant i((unity "5. 7xe(ption fro( tax on wealth and inco(e "8. CogniFance of offences by Courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! "7. Cffences by co(panies
":. 4C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!":
$
":A. Re'o+er> of %.o* t! "9. <ower to (a)e rules )=. <ower to (a)e regulations )1. Rules and regulations to be laid before <arlia(ent )". Application of other laws not barred )). 4Repealed by Repealing R A(ending Act, %00 : )3. <ower to re(o'e difficulties )5. Repeal and sa'ing .I7 SCI79H=7 4Repealed by Repealing R A(ending Act, %00 : SECURITIES AND EACDANGE ;OARD O2 INDIA ACT, 199" 515 O2 199"< 53th A$ril, 199"< A A't to $ro+i-e for the e!t%,li!h.e t of % ;o%r- to $rote't the i tere!t! of i +e!tor! i !e'*ritie! % - to $ro.ote the -e+elo$.e t of, % - to re(*l%te, the !e'*ritie! .%r6et % - for .%tter! 'o e'te- there/ith or i 'i-e t%l thereto B( it enacted bF 8arlia"ent in the E$rtF7third ;ear $f the 0e%!blic $f :ndia a# f$ll$.# , CDA4TER I 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities and 7xchange 8oard of India Act, !!%0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the 30th day of Manuary, !!%0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 33 (b) 1Chair(an2 (eans the Chair(an of the 8oard3 4(ba) 1collecti'e in'est(ent sche(e2 (eans any sche(e or arrange(ent which satisfies the conditions specified in section AA3: (c) 1existing Securities and 7xchange 8oard2 (eans the Securities and 7xchange 8oard of India constituted under the Resolution of the &o'ern(ent of India in the 9epart(ent of 7cono(ic Affairs Eo0 ($$) S7L>#, dated the %th day of April, !>>3 (d) 16und2 (eans the 6und constituted under section $3 (e) 1(e(ber2 (eans a (e(ber of the 8oard and includes the Chair(an3 (f) 1notification2 (eans a notification published in the Cfficial &aFette3 (g) 1prescribed2 (eans prescribed by rules (ade under this Act3
Inserted by the Securities =aws (A(end(ent) Act, !!!, w0e0f0 %%+%+%0000
"
(h) 1regulations2 (eans the regulations (ade by the 8oard under this Act3 4(ha) 1Reser'e 8an)2 (eans the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)3: (i) 1securities2 has the (eaning assigned to it in section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#)0 %4(%) Kords and expressions used and not defined in this Act but defined in the Securities Contracts (Regulation) Act, !"# ($% of !"#) 34or the 9epositories Act, !!#:, shall ha'e the (eanings respecti'ely assigned to the( in that Act:0 CDA4TER II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA E!t%,li!h.e t % - i 'or$or%tio of ;o%r-.
). ( ) Kith effect fro( such date as the Central &o'ern(ent (ay, by notification, appoint, there shall be established, for the purposes of this Act, a 8oard by the na(e of the Securities and 7xchange 8oard of India0 (%) .he 8oard shall be a body corporate by the na(e aforesaid, ha'ing perpetual succession and a co((on seal, with power subDect to the pro'isions of this Act, to ac*uire, hold and dispose of property, both (o'able and i((o'able, and to contract, and shall, by the said na(e, sue or be sued0 (3) .he head office of the 8oard shall be at 8o(bay0 ($) .he 8oard (ay establish offices at other places in India0 @% %(e.e t of the ;o%r-. 3. ( ) .he 8oard shall consist of the following (e(bers, na(ely,(a) a Chair(an3 (b) two (e(bers fro( a(ongst the officials of the $4?inistry: of the Central &o'ern(ent dealing with 6inance "4and ad(inistration of the Co(panies Act, !"# ( of !"#):3 (c) one (e(ber fro( a(ongst the officials of #4the Reser'e 8an):3 /4(d) fi'e other (e(bers of who( at least three shall be the whole+ti(e (e(bers,: to be appointed by the Central &o'ern(ent0
Inserted by the Securities =aws (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0 <rior to its substitution, sub+section (%) reads as under, 1(%) Kords and expressions used and not defined in this Act but defined in the Capital Issues (Control) Act, !$/ or the Securities Contracts Regulation Act, !"# shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts02 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 $ Substituted for 1?inistries2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1and law2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act !3$ (% of !3$)2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 / Substituted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, clause (d) read as, 1(d) two other (e(bers20
% Substituted
#
(%) .he general superintendence, direction and (anage(ent of the affairs of the 8oard shall 'est in a 8oard of (e(bers, which (ay exercise all powers and do all acts and things which (ay be exercised or done by the 8oard0 (3) Sa'e as otherwise deter(ined by regulations, the Chair(an shall also ha'e powers of general superintendence and direction of the affairs of the 8oard and (ay also exercise all powers and do all acts and things which (ay be exercised or done by that 8oard0 ($) .he Chair(an and (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be appointed by the Central &o'ern(ent and the (e(bers referred to in clauses ( b) and (c) of that sub+section shall be no(inated by the Central &o'ern(ent and the 4Reser'e 8an): respecti'ely0 (") .he Chair(an and the other (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be persons of ability, integrity and standing who ha'e shown capacity in dealing with proble(s relating to securities (ar)et or ha'e special )nowledge or experience of law, finance, econo(ics, accountancy, ad(inistration or in any other discipline which, in the opinion of the Central &o'ern(ent, shall be useful to the 8oard0 Ter. of offi'e % - 'o -itio ! of !er+i'e of Ch%ir.% % - .e.,er! of the ;o%r-. 5. ( ) .he ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers referred to in clause (d) of sub+section ( ) of section $ shall be such as (ay be prescribed0 (%) Eotwithstanding anything contained in sub+section ( ), the Central &o'ern(ent shall ha'e the right to ter(inate the ser'ices of the Chair(an or a (e(ber appointed under clause ( d) of
sub+section ( ) of section $, at any ti(e before the expiry of the period prescribed under subsection ( ), by gi'ing hi( notice of not less than three (onths in writing or three (onthsJ salary and allowances in lieu thereof, and the Chair(an or a (e(ber, as the case (ay be, shall also ha'e the right to relin*uish his office, at any ti(e before the expiry of the period prescribed under sub+section ( ), by gi'ing to the Central &o'ern(ent notice of not less than three (onths in writing0 Re.o+%l of .e.,er fro. offi'e. 8. %4G G G: .he Central &o'ern(ent shall re(o'e a (e(ber fro( office if he(a) is, or at any ti(e has been, adDudicated as insol'ent3 (b) is of unsound (ind and stands so declared by a co(petent court3 (c) has been con'icted of an offence which, in the opinion of the Central &o'ern(ent, in'ol'es a (oral turpitude3 (d) 34G G G: (e) has, in the opinion of the Central &o'ern(ent, so abused his position as to render his continuation in office detri(ental to the public interest , 4ro+i-e- that no (e(ber shall be re(o'ed under this clause unless he has been gi'en a reasonable opportunity of being heard in the (atter0
Substituted for 1Reser'e 8an) of India2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 )2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 C(itted, by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to o(ission clause (d) read read as, 1(d) is appointed as a director of a co(pany20
% 1(
/
@eeti (!. 7. ( ) .he 8oard shall (eet at such ti(es and places, and shall obser'e such rules of procedure in regard to the transaction of business at its (eetings (including *uoru( at such (eetings) as (ay be pro'ided by regulations0 (%) .he Chair(an or, if for any reason, he is unable to attend a (eeting of the 8oard, any other (e(ber chosen by the (e(bers present fro( a(ongst the(sel'es at the (eeting shall preside at the (eeting0 (3) All *uestions which co(e up before any (eeting of the 8oard shall be decided by a (aDority 'otes of the (e(bers present and 'oting, and, in the e'ent of an e*uality of 'otes, the Chair(an, or in his absence, the person presiding, shall ha'e a second or casting 'ote0 4@e.,er ot to $%rti'i$%te i .eeti (! i 'ert%i '%!e!. 7A. Any (e(ber, who is a director of a co(pany and who as such director has any direct or indirect pecuniary interest in any (atter co(ing up for consideration at a (eeting of the 8oard, shall, as soon as possible after rele'ant circu(stances ha'e co(e to his )nowledge, disclose the nature of his interest at such (eeting and such disclosure shall be recorded in the proceedings of the 8oard, and the (e(ber shall not ta)e any part in any deliberation or decision of the 8oard with respect to that (atter0: I%'% 'ie!, et'., ot to i +%li-%te $ro'ee-i (! of ;o%r-. :. Eo act or proceeding of the 8oard shall be in'alid (erely by reason of(a) any 'acancy in, or any defect in the constitution of, the 8oard3 or (b) any defect in the appoint(ent of a person acting as a (e(ber of the 8oard3 or (c) any irregularity in the procedure of the 8oard not affecting the (erits of the case0 Offi'er! % - e.$lo>ee! of the ;o%r-. 9. ( ) .he 8oard (ay appoint such other officers and e(ployees as it considers necessary for the efficient discharge of its functions under this Act0 (%) .he ter( and other conditions of ser'ice of officers and e(ployees of the 8oard appointed under sub+section ( ) shall be such as (ay be deter(ined by regulations0 CDA4TER III
TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD Tr% !fer of %!!et!, li%,ilitie!, et'., of e#i!ti ( Se'*ritie! % - E#'h% (e ;o%r- to the ;o%r-. 1=. ( ) Cn and fro( the date of establish(ent of the 8oard,(a) any reference to the existing Securities and 7xchange 8oard in any law other than this Act or in any contract or other instru(ent shall be dee(ed as a reference to the 8oard3 (b) all properties and assets, (o'able and i((o'able, of, or belonging to, the existing Securities and 7xchange 8oard, shall 'est in the 8oard3
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
>
(c) all rights and liabilities of the existing Securities and 7xchange 8oard shall be transferred to, and be the rights and liabilities of, the 8oard3 (d) without preDudice to the pro'isions of clause (c), all debts, obligations and liabilities incurred, all contracts entered into and all (atters and things engaged to be done by, with or for the existing Securities and 7xchange 8oard i((ediately before that date, for or in connection with the purpose of the said existing 8oard shall be dee(ed to ha'e been incurred, entered into, or engaged to be done by, with or for, the 8oard3 (e) all su(s of (oney due to the existing Securities and 7xchange 8oard i((ediately before that date shall be dee(ed to be due to the 8oard3 (f) all suits and other legal proceedings instituted or which could ha'e been instituted by or against the existing Securities and 7xchange 8oard i((ediately before that date (ay be continued or (ay be instituted by or against the 8oard3 and (g) e'ery e(ployee holding any office under the existing Securities and 7xchange 8oard i((ediately before that date shall hold his office in the 8oard by the sa(e tenure and upon the sa(e ter(s and conditions of ser'ice as respects re(uneration, lea'e, pro'ident fund, retire(ent and other ter(inal benefits as he would ha'e held such office if the 8oard had not been established and shall continue to do so as an e(ployee of the 8oard or until the expiry of the period of six (onths fro( that date if such e(ployee opts not to be the e(ployee of the 8oard within such period0 (%) Eotwithstanding anything contained in the Industrial 9isputes Act, !$/ ( $ of !$/), or in any other law for the ti(e being in force, absorption of any e(ployee by the 8oard in its regular ser'ice under this section shall not entitle such e(ployee to any co(pensation under that Act or other law and no such clai( shall be entertained by any court, tribunal or other authority0 CDA4TER II 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 2* 'tio ! of ;o%r-. 11. ( ) SubDect to the pro'isions of this Act, it shall be the duty of the 8oard to protect the interests of in'estors in securities and to pro(ote the de'elop(ent of, and to regulate the securities (ar)et, by such (easures as it thin)s fit0 (%) Kithout preDudice to the generality of the foregoing pro'isions, the (easures referred to therein (ay pro'ide for(a) regulating the business in stoc) exchanges and any other securities (ar)ets3 (b) registering and regulating the wor)ing of stoc) bro)ers, sub+bro)ers, share transfer agents, ban)ers to an issue, trustees of trust deeds, registrars to an issue, (erchant ban)ers, underwriters, portfolio (anagers, in'est(ent ad'isers and such other inter(ediaries who (ay be associated with securities (ar)ets in any (anner3 4(ba) registering and regulating the wor)ing of the depositories, %4participants:, custodians of securities, foreign institutional in'estors, credit rating agencies and such other inter(ediaries as the 8oard (ay, by notification, specify in this behalf3: (c) registering and regulating the wor)ing of 4'enture capital funds and collecti'e
in'est(ent sche(es:, including (utual funds3
% Inserted
Inserted by Securities =aws (A(end(ent) Act !!", w0r0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+!+ !!"0
!
(d) pro(oting and regulating self+regulatory organisations3 (e) prohibiting fraudulent and unfair trade practices relating to securities (ar)ets3 (f) pro(oting in'estorsJ education and training of inter(ediaries of securities (ar)ets3 (g) prohibiting insider trading in securities3 (h) regulating substantial ac*uisition of shares and ta)e o'er of co(panies3 (i) calling for infor(ation fro(, underta)ing inspection, conducting in*uiries and audits of the %4stoc) exchanges, (utual funds, other persons associated with the securities (ar)et:, inter(ediaries and self+regulatory organisations in the securities (ar)et3 34(ia) '%lli ( for i for.%tio % - re'or-! fro. % > $er!o i 'l*-i ( % > ,% 6 or % > other %*thorit> or ,o%r- or 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l or St%te A't /hi'h, i the o$i io of the ;o%r-, !h%ll ,e rele+% t to % > i +e!ti(%tio or i 7*ir> ,> the ;o%r- i re!$e't of % > tr% !%'tio i !e'*ritie! 3: $5(i,) '%lli ( for i for.%tio fro., or f*r i!hi ( i for.%tio to, other %*thoritie!, /hether i I -i% or o*t!i-e I -i%, h%+i ( f* 'tio ! !i.il%r to tho!e of the ;o%r-, i the .%tter! rel%ti ( to the $re+e tio or -ete'tio of +iol%tio ! i re!$e't of !e'*ritie! l%/!, !*,Ge't to the $ro+i!io ! of other l%/! for the ti.e ,ei ( i for'e i thi! re(%r-& 4ro+i-e- th%t the ;o%r-, for the $*r$o!e of f*r i!hi ( % > i for.%tio to % > %*thorit> o*t!i-e I -i%, .%> e ter i to % %rr% (e.e t or %(ree.e t or * -er!t% -i ( /ith !*'h %*thorit> /ith the $rior %$$ro+%l of the Ce tr%l Go+er .e tH< (j) perfor(ing such functions and exercising such powers under the pro'isions of "4G G G: the Securities Contracts (Regulation) Act, !"# ($% of !"#), as (ay be delegated to it by the Central &o'ern(ent3 (k) le'ying fees or other charges for carrying out the purposes of this section3 (l) conducting research for the abo'e purposes3 #4(la) calling fro( or furnishing to any such agencies, as (ay be specified by the 8oard, such infor(ation as (ay be considered necessary by it for the efficient discharge of its functions3: (") perfor(ing such other functions as (ay be prescribed0 /4(%A) Kithout preDudice to the pro'isions contained in sub+section (%), the 8oard (ay ta)e (easures to underta)e inspection of any boo), or register, or other docu(ent or record of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard
Substituted for 1collecti'e in'est(ent sche(es2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % Substituted for 1stoc) exchanges and2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 S*,!tit*te- for J'%lli ( for i for.%tio % - re'or- fro. % > ,% 6 or % > other %*thorit> or ,o%ror 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l, St%te or 4ro+i 'i%l A't i re!$e't of % > tr% !%'tio i !e'*ritie! /hi'h i! * -er i +e!ti(%tio or i 7*ir> ,> the ;o%r-K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). E%rlier Se'tio 11(")(i%) /%! i !erte- ,> the SE;I (A.e -.e t) A't, "==" /.e.f. "901=0"=="0 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. =80=)0 199:) " .he words 1the Capital Issues (Control) Act, !$/ (%! of !$/) and2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
0
has reasonable grounds to belie'e that such co(pany has been indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et0: 4(3) Eotwithstanding anything contained in any other law for the ti(e being in force while exercising the powers under %4clause (i) or clause (ia) of sub+section (%) or sub+ section (2A):, the 8oard shall ha'e the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(i) the disco'ery and production of boo)s of account and other docu(ents, at such place and such ti(e as (ay be specified by the 8oard3 (ii) su((oning and enforcing the attendance of persons and exa(ining the( on oath3 (iii) inspection of any boo)s, registers and other docu(ents of any person referred to in section %, at any place3: 34(iv) inspection of any boo), or register, or other docu(ent or record of the co(pany referred to in sub+section (%A)3 (v) issuing co((issions for the exa(ination of witnesses or docu(ents0: $4($) Kithout preDudice to the pro'isions contained in sub+sections ( ), (%), (%A) and (3) and section 8, the 8oard (ay, by an order, for reasons to be recorded in writing, in the interests of in'estors or securities (ar)et, ta)e any of the following (easures, either pending in'estigation or in*uiry or on co(pletion of such in'estigation or in*uiry, na(ely,(a) suspend the trading of any security in a recognised stoc) exchange3 (b) restrain persons fro( accessing the securities (ar)et and prohibit any person associated with securities (ar)et to buy, sell or deal in securities3 (c) suspend any office+bearer of any stoc) exchange or self+regulatory organisation fro( holding such position3 (d) i(pound and retain the proceeds or securities in respect of any transaction which is under in'estigation3 (e) attach, after passing of an order on an application (ade for appro'al by the Mudicial ?agistrate of the first class ha'ing Durisdiction, for a period not exceeding one (onth, one or (ore ban) account or accounts of any inter(ediary or any person associated with the securities (ar)et in any (anner in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder , 4ro+i-e- that only the ban) account or accounts or any transaction entered therein, so far as it relates to the proceeds actually in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder shall be allowed to be attached3 (f) direct any inter(ediary or any person associated with the securities (ar)et in any (anner not to dispose of or alienate an asset for(ing part of any transaction which is under in'estigation , 4ro+i-e- that the 8oard (ay, without preDudice to the pro'isions contained in sub+section (%) or sub+section (%A), ta)e any of the (easures specified in clause ( d) or clause (e) or clause (f), in respect of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard has reasonable grounds to belie'e that such co(pany has been
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1clause (i) of sub+section (%)2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 3 Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 $ Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
% Substituted
indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et , 4ro+i-e- f*rther that the 8oard shall, either before or after passing such orders, gi'e an
opportunity of hearing to such inter(ediaries or persons concerned0: 15(5) The %.o* t -i!(or(e-, $*r!*% t to % -ire'tio i!!*e- * -er !e'tio 11; or !e'tio 1"A of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 or !e'tio 19 of the De$o!itorie! A't, 1998, %! the '%!e .%> ,e, !h%ll ,e 're-ite- to the I +e!tor 4rote'tio % - E-*'%tio 2* e!t%,li!he- ,> the ;o%r- % - !*'h %.o* t !h%ll ,e *tiliLe- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< %4;o%r- to re(*l%te or $rohi,it i!!*e of $ro!$e't*!, offer -o'*.e t or %-+erti!e.e t !oli'iti ( .o e> for i!!*e of !e'*ritie!. 11A. ( ) Kithout preDudice to the pro'isions of the Co(panies Act, !"# ( of !"#), the 8oard (ay, for the protection of in'estors,(a) specify, by regulations(i) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (ii) the (anner in which such (atters shall be disclosed by the co(panies3 (b) by general or special orders(i) prohibit any co(pany fro( issuing prospectus, any offer docu(ent, or ad'ertise(ent soliciting (oney fro( the public for the issue of securities3 (ii) specify the conditions subDect to which the prospectus, such offer docu(ent or ad'ertise(ent, if not prohibited, (ay be issued0 (%) Kithout preDudice to the pro'isions of section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the 8oard (ay specify the re*uire(ents for listing and transfer of securities and other (atters incidental thereto0: 34Colle'ti+e i +e!t.e t !'he.e. 11AA. ( ) Any sche(e or arrange(ent which satisfies the conditions referred to in subsection (%) $5or !*,0!e'tio ("A)< shall be a collecti'e in'est(ent sche(e0 "44ro+i-e- th%t % > $ooli ( of f* -! * -er % > !'he.e or %rr% (e.e t, /hi'h i! ot re(i!tere- /ith the ;o%r- or i! ot 'o+ere- * -er !*,0!e'tio ()), i +ol+i ( %
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 7arlier S0 A was inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" for S0 A0 <rior to its substitution, S0 A read as under,+ 1 A0 ?atters to be disclosed by the co(panies0+ Kithout <reDudice to the <ro'isions of the Co(panies Act , !"# ( of !"#), the board (ay , for the protection of in'estors, specify, by regulations,+ (a) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (b) the (anner in which such (atters, shall be disclosed by the co(panies02 3 Inserted by S78I (A(end(ent) Act !!!, w0e0f0 %%+%+%0000 $I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% Substituted
%
'or$*! %.o* t of o e h* -re- 'rore r*$ee! or .ore !h%ll ,e -ee.e- to ,e % 'olle'ti+e i +e!t.e t !'he.e.< (%) Any sche(e or arrange(ent (ade or offered by any 5$er!o < under which,(i) the contributions, or pay(ents (ade by the in'estors, by whate'er na(e called, are pooled and utiliFed for the purposes of the sche(e or arrange(ent3 (ii) the contributions or pay(ents are (ade to such sche(e or arrange(ent by the in'estors with a 'iew to recei'e profits, inco(e, produce or property, whether (o'able or i((o'able, fro( such sche(e or arrange(ent3 (iii) the property, contribution or in'est(ent for(ing part of sche(e or arrange(ent, whether identifiable or not, is (anaged on behalf of the in'estors3
(iv) the in'estors do not ha'e day+to+day control o'er the (anage(ent and operation of the sche(e or arrange(ent0 "5("A)< A > !'he.e or %rr% (e.e t .%-e or offere- ,> % > $er!o !%ti!f>i ( the 'o -itio ! %! .%> ,e !$e'ifie- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< (3) Eotwithstanding anything contained in sub+section (%) 35or !*,0!e'tio ("A)<, any sche(e or arrange(ent(i) (ade or offered by a co+operati'e society registered under the Co+operati'e Societies Act, ! % (% of ! %) or a society being a society registered or dee(ed to be registered under any law relating to co+operati'e societies for the ti(e being in force in any State3 (ii) under which deposits are accepted by non+ban)ing financial co(panies as defined in clause (f) of section $"+I of the Reser'e 8an) of India Act, !3$ (% of !3$)3 (iii) being a contract of insurance to which the Insurance Act, !3> ($ of !3>), applies3 (iv) pro'iding for any Sche(e, <ension Sche(e or the Insurance Sche(e fra(ed under the 7(ployees <ro'ident 6und and ?iscellaneous <ro'isions Act, !"% ( ! of !"%)3 (v) under which deposits are accepted under section ">A of the Co(panies Act, !"# ( of !"#)3 (vi) under which deposits are accepted by a co(pany declared as a Eidhi or a (utual benefit society under section #%0A of the Co(panies Act, !"# ( of !"#)3 (vii) falling within the (eaning of Chit business as defined in clause ( d) of section % of the Chit 6und Act, !>% ($0 of !>%)3 (viii) under which contributions (ade are in the nature of subscription to a (utual fund3 35(i#) !*'h other !'he.e or %rr% (e.e t /hi'h the Ce tr%l Go+er .e t .%>, i 'o !*lt%tio /ith the ;o%r-, otif>H< shall not be a collecti'e in'est(ent sche(e0: "54o/er to i!!*e -ire'tio !. 11;. Sa'e as otherwise pro'ided in section , if after (a)ing or causing to be (ade an en*uiry, the 8oard is satisfied that it is necessary,S*,!tit*te- for J'o.$% >K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) 3I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
%I
3
(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any inter(ediary or other persons referred to in section % being conducted in a (anner detri(ental to the interest of in'estors or securities (ar)et3 or (iii) to secure the proper (anage(ent of any such inter(ediary or person, it (ay issue such directions,(a) to any person or class of persons referred to in section %, or associated with the securities (ar)et3 or (b) to any co(pany in respect of (atters specified in section A, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 15E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< %4I +e!ti(%tio . 11C. ( ) Khere the 8oard has reasonable ground to belie'e that-
(a) the transactions in securities are being dealt with in a (anner detri(ental to the in'estors or the securities (ar)et3 or (b) any inter(ediary or any person associated with the securities (ar)et has 'iolated any of the pro'isions of this Act or the rules or the regulations (ade or directions issued by the 8oard thereunder, it (ay, at any ti(e by order in writing, direct any person (hereafter in this section referred to as the In'estigating Authority) specified in the order to in'estigate the affairs of such inter(ediary or persons associated with the securities (ar)et and to report thereon to the 8oard0 (%) Kithout preDudice to the pro'isions of sections %3" to %$ of the Co(panies Act, !"# ( of !"#), it shall be the duty of e'ery (anager, (anaging director, officer and other e(ployee of the co(pany and e'ery inter(ediary referred to in section % or e'ery person associated with the securities (ar)et to preser'e and to produce to the In'estigating Authority or any person authorised by it in this behalf, all the boo)s, registers, other docu(ents and record of, or relating to, the co(pany or, as the case (ay be, of or relating to, the inter(ediary or such person, which are in their custody or power0 (3) .he In'estigating Authority (ay re*uire any inter(ediary or any person associated with securities (ar)et in any (anner to furnish such infor(ation to, or produce such boo)s, or registers, or other docu(ents, or record before hi( or any person authorised by it in this behalf as it (ay consider necessary if the furnishing of such infor(ation or the production of such boo)s, or registers, or other docu(ents, or record is rele'ant or necessary for the purposes of its in'estigation0 ($) .he In'estigating Authority (ay )eep in its custody any boo)s, registers, other docu(ents and record produced under sub+section (%) or sub+section (3) for six (onths and thereafter
% Inserted
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
$
shall return the sa(e to any inter(ediary or any person associated with securities (ar)et by who( or on whose behalf the boo)s, registers, other docu(ents and record are produced , 4ro+i-e- that the In'estigating Authority (ay call for any boo), register, other docu(ent and record if they are needed again , 4ro+i-e- f*rther that if the person on whose behalf the boo)s, registers, other docu(ents and record are produced re*uires certified copies of the boo)s, registers, other docu(ents and record produced before the In'estigating Authority, it shall gi'e certified copies of such boo)s, registers, other docu(ents and record to such person or on whose behalf the boo)s, registers, other docu(ents and record were produced0 (") Any person, directed to (a)e an in'estigation under sub+section ( ), (ay exa(ine on oath, any (anager, (anaging director, officer and other e(ployee of any inter(ediary or any person associated with securities (ar)et in any (anner, in relation to the affairs of his business and (ay ad(inister an oath accordingly and for that purpose (ay re*uire any of those persons to appear before it personally0 (#) If any person fails without reasonable cause or refuses(a) to produce to the In'estigating Authority or any person authorised by it in this behalf any boo), register, other docu(ent and record which is his duty under sub+section (%) or sub+section (3) to produce3 or (b) to furnish any infor(ation which is his duty under sub+section (3) to furnish3 or (c) to appear before the In'estigating Authority personally when re*uired to do so under sub+section (") or to answer any *uestion which is put to hi( by the In'estigating Authority in pursuance of that sub+section3 or (d) to sign the notes of any exa(ination referred to in sub+section (/), he shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with
fine, which (ay extend to one crore rupees, or with both, and also with a further fine which (ay extend to fi'e la)h rupees for e'ery day after the first during which the failure or refusal continues0 (/) Eotes of any exa(ination under sub+section (") shall be ta)en down in writing and shall be read o'er to, or by, and signed by, the person exa(ined, and (ay thereafter be used in e'idence against hi(0 4(:) ?here i the 'o*r!e of % i +e!ti(%tio , the I +e!ti(%ti ( A*thorit> h%! re%!o to ,elie+e th%t % > $er!o or e ter$ri!e, %! the '%!e .%> ,e, to /ho. % oti'e * -er !*,!e'tio ()) h%! ,ee i!!*e- or .i(ht ,e i!!*e-, 0 (%) h%! o.itte- or f%ile- to $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! %! re7*irei the oti'eH or (,) /o*l- ot $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! /hi'h !h%ll ,e *!ef*l for, or rele+% t to, the i +e!ti(%tio H or (') /o*l- -e!tro>, .*til%te, %lter, f%l!if> or !e'rete the i for.%tio or -o'*.e t! *!ef*l for, or rele+% t to, the i +e!ti(%tio ,
S*,!tit*te- for JKhere in the course of in'estigation, the In'estigating Authority has reasonable ground to belie'e that the boo)s, registers, other docu(ents and record of, or relating to, any inter(ediary or any person associated with securities (ar)et in any (anner, (ay be destroyed, (utilated, altered, falsified or secreted, the In'estigating Authority (ay (a)e an application to the Mudicial ?agistrate of the first class ha'ing Durisdiction for an order for the seiFure of such boo)s, registers, other docu(ents and record K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
"
the , the Ch%ir.% .%>, %fter ,ei ( !%ti!fie- th%t it i! e'e!!%r> to -o !o, %*thoriLe the I +e!ti(%ti ( A*thorit> or % > other offi'er of the ;o%r- (the offi'er !o %*thoriLe- i %ll '%!e! ,ei ( herei %fter referre- to %! the %*thori!e- offi'er), to0 (i) e ter % - !e%r'h, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft /here !*'h i for.%tio or -o'*.e t! %re e#$e'te- or ,elie+e- to ,e 6e$tH (ii) ,re%6 o$e the lo'6 of % > -oor, ,o#, lo'6er, !%fe, %l.ir%h or other re'e$t%'le for e#er'i!i ( the $o/er! 'o ferre- ,> !*,0'l%*!e (i), /here the 6e>! thereof %re ot %+%il%,leH (iii) !e%r'h % > $er!o /ho h%! (ot o*t of, or i! %,o*t to (et i to, or i! i , the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft, if the %*thoriLe- offi'er h%! re%!o to !*!$e't th%t !*'h $er!o h%! !e'rete- %,o*t hi! $er!o % > !*'h ,oo6! of %''o* t or other -o'*.e t!H (i+) re7*ire % > $er!o /ho i! fo* - to ,e i $o!!e!!io or 'o trol of % > ,oo6! of %''o* t or other -o'*.e t!, .%i t%i e- i the for. of ele'tro i' re'or-, to $ro+i-e the %*thori!e- offi'er the e'e!!%r> f%'ilit> to i !$e't !*'h ,oo6! of %''o* t or other -o'*.e t!. "#planation0 2or the $*r$o!e of thi! !*,0'l%*!e, the e#$re!!io Jele'tro i' re'or-K !h%ll h%+e the .e% i ( %!!i( e- to it i 'l%*!e (t) of !*,0!e'tio (1) of !e'tio " of the I for.%tio Te'h olo(> A't, "===. (+) !eiLe % > !*'h ,oo6! of %''o* t or other -o'*.e t! fo* - %! % re!*lt of !*'h !e%r'hH (+i) $l%'e .%r6! of i-e tifi'%tio o % > ,oo6! of %''o* t or other -o'*.e t! or .%6e or '%*!e to ,e .%-e e#tr%'t! or 'o$ie! therefro.H (+ii) re'or- o o%th the !t%te.e t of % > $er!o /ho i! fo* - to ,e i $o!!e!!io or i 'o trol of the i for.%tio or -o'*.e t! referre- to i !*,0'l%*!e! (i), (iii) % - (i+).< 4(9) The ;o%r- .%> .%6e re(*l%tio ! i rel%tio to % > !e%r'h or !eiL*re * -er thi! !e'tio H % - i $%rti'*l%r, /itho*t $reG*-i'e to the (e er%lit> of the fore(oi ( $o/er, !*'h re(*l%tio ! .%> $ro+i-e for the $ro'e-*re to ,e follo/e- ,> the %*thori!e- offi'er0
(%) for o,t%i i ( i (re!! i to % > ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft to ,e !e%r'he- /here free i (re!! thereto i! ot %+%il%,leH
1 S*,!tit*te-
,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) for the follo/i (& JAfter 'o !i-eri ( the %$$li'%tio % - he%ri ( the I +e!ti(%ti ( A*thorit>, if e'e!!%r>, the @%(i!tr%te .%>, ,> or-er, %*thori!e the I +e!ti(%ti ( A*thorit>O (a) to e ter, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the $l%'e or $l%'e! /here !*'h ,oo6!, re(i!ter!, other -o'*.e t! % - re'or- %re 6e$tH (b) to !e%r'h th%t $l%'e or tho!e $l%'e! i the .% er !$e'ifie- i the or-erH % (c) to !eiLe ,oo6!, re(i!ter!, other -o'*.e t! % - re'or-, it 'o !i-er! e'e!!%r> for the $*r$o!e! of the i +e!ti(%tio & 4ro+i-e- th%t the @%(i!tr%te !h%ll ot %*thori!e !eiL*re of ,oo6!, re(i!ter!, other -o'*.e t! % re'or-, of % > li!te- $*,li' 'o.$% > or % $*,li' 'o.$% > ( ot ,ei ( the i ter.e-i%rie! !$e'ifie* -er !e'tio 1") /hi'h i te -! to (et it! !e'*ritie! li!te- o % > re'o( i!e- !to'6 e#'h% (e * le!! !*'h 'o.$% > i -*l(e! i i !i-er tr%-i ( or .%r6et .% i$*l%tio .K
#
(,) for e !*ri ( !%fe '*!to-> of % > ,oo6! of %''o* t or other -o'*.e t! or %!!et! !eiLe-.< ( 0) .he In'estigating Authority shall )eep in its custody the boo)s, registers, other docu(ents and record seiFed under this section for such period not later than the conclusion of the in'estigation as it considers necessary and thereafter shall return the sa(e to the co(pany or the other body corporate, or, as the case (ay be, to the (anaging director or the (anager or any other person, fro( whose custody or power they were seiFed 5***<, 4ro+i-e- that the In'estigating Authority (ay, before returning such boo)s, registers, other docu(ents and record as aforesaid, place identification (ar)s on the( or any part thereof0 ( ) Sa'e as otherwise pro'ided in this section, e'ery search or seiFure (ade under this section shall be carried out in accordance with the pro'isions of the Code of Cri(inal <rocedure, !/3 (% of !/$) relating to searches or seiFures (ade under that Code0 Ce%!e % - -e!i!t $ro'ee-i (!. 11D. If the 8oard finds, after causing an in*uiry to be (ade, that any person has 'iolated, or is li)ely to 'iolate, any pro'isions of this Act, or any rules or regulations (ade thereunder, it (ay pass an order re*uiring such person to cease and desist fro( co((itting or causing such 'iolation, 4ro+i-e- that the 8oard shall not pass such order in respect of any listed public co(pany or a public co(pany (other than the inter(ediaries specified under section %) which intends to get its securities listed on any recognised stoc) exchange unless the 8oard has reasonable grounds to belie'e that such co(pany has indulged in insider trading or (ar)et (anipulation0: CDA4TER I REGISTRATION CERTI2ICATE Re(i!tr%tio of !to'6 ,ro6er!, !*,0,ro6er!, !h%re tr% !fer %(e t!, et'. 1". ( ) Eo stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et shall buy, sell or deal in securities except under, and in accordance with, the conditions of a certificate of registration obtained fro( the 8oard in accordance with the %4regulations: (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et i((ediately before the establish(ent of the 8oard for which no registration certificate was
necessary prior to such establish(ent, (ay continue to do so for a period of three (onths fro( such establish(ent or, if he has (ade an application for such registration within the said period of three (onths, till the disposal of such application,
The /or-! P% - i for. the @%(i!tr%te of !*'h ret*r P, o.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) % Substituted for 1rules2 by Securities =aw (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0
/
44ro+i-e- f*rther that any certificate of registration, obtained i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", shall be dee(ed to ha'e been obtained fro( the 8oard in accordance with the regulations pro'iding for such registration0 ( A) Eo depository, %4participant,: custodian of securities, foreign institutional in'estor, credit rating agency, or any other inter(ediary associated with the securities (ar)et as the 8oard (ay by notification in this behalf specify, shall buy or sell or deal in securities except under and in accordance with the conditions of a certificate of registration obtained fro( the 8oard in accordance with the regulations (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a depository, 34participant,: custodian of securities, foreign institutional in'estor or credit rating agency i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to buy or sell securities or otherwise deal with the securities (ar)et until such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300 ( 8) Eo person shall sponsor or cause to be sponsored or carry on or caused to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es including (utual funds, unless he obtains a certificate of registration fro( the 8oard in accordance with the regulations, 4ro+i-e- that any person sponsoring or causing to be sponsored, carrying or causing to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es operating in the securities (ar)et i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to operate till such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300:
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0
% Inserted
>
4()%lanati$n7 6or the re(o'al of doubts, it is hereby declared that, for purposes of this section, a collecti'e in'est(ent sche(e or (utual fund shall not be include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(ponent of in'est(ent besides the co(ponent of insurance issued by the insurer0: (%) 7'ery application for registration shall be in such (anner and on pay(ent of such fees as (ay be deter(ined by regulations0 (3) .he 8oard (ay, by order, suspend or cancel a certificate of registration in such (anner as (ay be deter(ined by regulations, 4ro+i-e- that no order under this sub+section shall be (ade unless the person concerned has been gi'en a reasonable opportunity of being heard0 %4CIA<.7R BA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 4rohi,itio of .% i$*l%ti+e % - -e'e$ti+e -e+i'e!, i !i-er tr%-i ( % - !*,!t% ti%l %'7*i!itio of !e'*ritie! or 'o trol.
1"A. Eo person shall directly or indirectly(a) use or e(ploy, in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recogniFed stoc) exchange, any (anipulati'e or decepti'e de'ice or contri'ance in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3
Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, w0r0e0f !+$+ %0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, reads as under, /@A81(0 D: ?ISC7==AE7CHS #0 Balidation+ Eotwithstanding anything contained in any Dudg(ent, decree or order of any court, tribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 Repeal and sa'ings + (1) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (2) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0 % Chapter BA inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
!
(b) e(ploy any de'ice, sche(e or artifice to defraud in connection with issue or dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange3 (c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange, in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (d) engage in insider trading3 (e) deal in securities while in possession of (aterial or non+public infor(ation or co((unicate such (aterial or non+public infor(ation to any other person, in a (anner which is in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (f) ac*uire control of any co(pany or securities (ore than the percentage of e*uity share capital of a co(pany whose securities are listed or proposed to be listed on a recognised stoc) exchange in contra'ention of the regulations (ade under this Act0: CDA4TER II 2INANCE, ACCOUNTS AND AUDIT Gr% t! ,> the Ce tr%l Go+er .e t. 1). .he Central &o'ern(ent (ay, after due appropriation (ade by <arlia(ent by law in this behalf, (a)e to the 8oard grants of such su(s of (oney as that &o'ern(ent (ay thin) fit for being utiliFed for the purposes of this Act0 2* -. 13. ( ) .here shall be constituted a 6und to be called the Securities and 7xchange 8oard of
India &eneral 6und and there shall be credited thereto(a) all grants, fees and charges recei'ed by the 8oard under this Act3 4G G G: (aa) %4G G G: (b) all su(s recei'ed by the 8oard fro( such other sources as (ay be decided upon by the Central &o'ern(ent0 (%) .he 6und shall be applied for (eeting(a) the salaries, allowances and other re(uneration of the (e(bers, officers and other e(ployees of the 8oard3 (b) the expenses of the 8oard in the discharge of its functions under section 3 (c) the expenses on obDects and for purposes authorised by this Act0
.he word 1and2 o(itted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 (aa) o(itted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 It was inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Clause (aa) reads as under,+ 1(aa) all su(s realiFed by way of <enalties under this Act3 and20
% Clause
%0
A''o* t! % - %*-it. 15. ( ) .he 8oard shall (aintain proper accounts and other rele'ant records and prepare an annual state(ent of accounts in such for( as (ay be prescribed by the Central &o'ern(ent in consultation with the Co(ptroller and Auditor+&eneral of India0 (%) .he accounts of the 8oard shall be audited by the Co(ptroller and Auditor+&eneral of India at such inter'als as (ay be specified by hi( and any expenditure incurred in connection with such audit shall be payable by the 8oard to the Co(ptroller and Auditor+&eneral of India0 (3) .he Co(ptroller and Auditor+&eneral of India and any other person appointed by hi( in connection with the audit of the accounts of the 8oard shall ha'e the sa(e rights and pri'ileges and authority in connection with such audit as the Co(ptroller and Auditor+ &eneral generally has in connection with the audit of the &o'ern(ent accounts and, in particular, shall ha'e the right to de(and the production of boo)s, accounts, connected 'ouchers and other docu(ents and papers and to inspect any of the offices of the 8oard0 ($) .he accounts of the 8oard as certified by the Co(ptroller and Auditor+&eneral of India or any other person appointed by hi( in this behalf together with the audit report thereon shall be forwarded annually to the Central &o'ern(ent and that &o'ern(ent shall cause the sa(e to be laid before each Iouse of <arlia(ent0 5CDA4TER IIA 4ENALTIES AND ADEUDICATION 4e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 15A. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder,(a) to furnish any docu(ent, return or report to the 8oard, fails to furnish the sa(e, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations, fails to file return or furnish the sa(e within the ti(e specified therefor in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0
Chapters BI A and BI 8 containing Ss0 "A to "M and "@ to "S respecti'ely, inserted by Securities =aws (A(end(ent) Act, !!" w0e0f0 %"+ + !!"0 % Substituted for 1a penalty not exceeding one la)h and fifty thousand rupees for each such failure2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding fi'e thousand rupees for e'ery day during which such failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for e'ery day during which the failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%
4e %lt> for f%il*re ,> % > $er!o to e ter i to %(ree.e t /ith 'lie t!. 15;. If any person, who is registered as an inter(ediary and is re*uired under this Act or any rules or regulations (ade thereunder to enter into an agree(ent with his client, fails to enter into such agree(ent, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 %54e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 15C. If any listed co(pany or any person who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such co(pany or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 4e %lt> for 'ert%i -ef%*lt! i '%!e of .*t*%l f* -!. 15D. If any person, who is(a) re*uired under this Act or any rules or regulations (ade thereunder to obtain a certificate of registration fro( the 8oard for sponsoring or carrying on any collecti'e in'est(ent sche(e, including (utual funds, sponsors or carries on any collecti'e in'est(ent sche(e, including (utual funds, without obtaining such certificate of registration, he shall be liable to 34a penalty of one la)h rupees for each day during which he sponsors or carries on any such collecti'e in'est(ent sche(e including (utual funds, or one crore rupees, whiche'er is less:3 (b) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, for sponsoring or carrying on any in'est(ent sche(e, fails to co(ply with the ter(s and conditions of certificate of registration, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, fails to (a)e an application for listing of its sche(es as pro'ided for in the regulations
Substituted for 1a penalty not exceeding fi'e la)h rupees for e'ery such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1If any person, who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing to redress the grie'ances of in'estors, fails to redress such grie'ances, he shall be liable to a penalty not exceeding ten thousand rupees for each such failure2, by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding ten thousand rupees for each day during which he carries on any such collecti'e in'est(ent sche(e including (utual funds, or ten la)h rupees whiche'er is higher02 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for each day during which such failure continues or ten la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0
%%
go'erning such listing, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (d) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to despatch
unit certificates of any sche(e in the (anner pro'ided in the regulation go'erning such despatch, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (e) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to refund the application (onies paid by the in'estors within the period specified in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (f) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to in'est (oney collected by such collecti'e in'est(ent sche(es in the (anner or within the period specified in the regulations, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for f%il*re to o,!er+e r*le! % - re(*l%tio ! ,> % %!!et .% %(e.e t 'o.$% >. 15E. Khere any asset (anage(ent co(pany of a (utual fund registered under this Act, fails to co(ply with any of the regulations pro'iding for restrictions on the acti'ities of the asset (anage(ent co(panies, such asset (anage(ent co(pany shall be liable to "4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for -ef%*lt i '%!e of !to'6 ,ro6er!. 152. If any person, who is registered as a stoc) bro)er under this Act,(a) fails to issue contract notes in the for( and (anner specified by the stoc) exchange of which such bro)er is a (e(ber, he shall be liable to a penalty not exceeding fi'e ti(es the a(ount for which the contract note was re*uired to be issued by that bro)er3 (b) fails to deli'er any security or fails to (a)e pay(ent of the a(ount due to the in'estor in the (anner within the period specified in the regulations, he shall be liable to #4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3
Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues or fi'e la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding one thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%3
(c) charges an a(ount of bro)erage which is in excess of the bro)erage specified in the regulations, he shall be liable to 4a penalty of one la)h rupees: or fi'e ti(es the a(ount of bro)erage charged in excess of the specified bro)erage, whiche'er is higher0 4e %lt> for i !i-er tr%-i (. 15G. If any insider who,(i) either on his own behalf or on behalf of any other person, deals in securities of a body corporate listed on any stoc) exchange on the basis of any unpublished price+sensiti'e infor(ation3 or (ii) co((unicates any unpublished price+sensiti'e infor(ation to any person, with or without his re*uest for such infor(ation except as re*uired in the ordinary course of business or under any law3 or
(iii) counsels, or procures for any other person to deal in any securities of any body corporate on the basis of unpublished price+sensiti'e infor(ation, shall be liable to a penalty %4of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of insider trading, whiche'er is higher:0 4e %lt> for o 0-i!'lo!*re of %'7*i!itio of !h%re! % - t%6eo+er!. 15D. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder, fails to,(i) disclose the aggregate of his shareholding in the body corporate before he ac*uires any shares of that body corporate3 or (ii) (a)e a public announce(ent to ac*uire shares at a (ini(u( price3 or 34(iii) (a)e a public offer by sending letter of offer to the shareholders of the concerned co(pany3 or (iv) (a)e pay(ent of consideration to the shareholders who sold their shares pursuant to letter of offer,: he shall be liable to a penalty $4of twenty+fi'e crore rupees or three ti(es the a(ount of profits profits (ade out of such failure, whiche'er is higher:0 554e %lt> for fr%*-*le t % - * f%ir tr%-e $r%'ti'e!. 15DA. If any person indulges in fraudulent and unfair trade practices relating to securities, he shall be liable to a penalty of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of such practices, whiche'er is higher0
Substituted for 1a penalty not exceeding fi'e thousand rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00% 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00% %00% " Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00%0
%$
4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 15D;. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 4o/er to %-G*-i'%te. 150I. ( ) 6or the purpose of adDudging under sections "A, "8, "C, "9, "7, "6, "& 4, "I, "IA and "I8:, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in subsection ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> the %-G*-i'%ti ( offi'er. 15E. Khile adDudging *uantu( of penalty under section "+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade
as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 "5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 15EA. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: )5Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!. 15E;. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 11, !e'tio 11;, !e'tio 11D, !*,0!e'tio ()) of !e'tio 1" or !e'tio 150I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e- -ef%*lt!.
Substituted for 1and "I2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the S78I (A(end(ent) Act, %00%, S0 ! w0e0f0 %!+ 0+%00%0 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
% Inserted
%"
(") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't. ()) The !ettle.e t $ro'ee-i (! * -er thi! !e'tio !h%ll ,e 'o -*'te- i %''or-% 'e /ith the $ro'e-*re !$e'ifie- i the re(*l%tio ! .%-e * -er thi! A't. (3) No %$$e%l !h%ll lie * -er !e'tio 15T %(%i !t % > or-er $%!!e- ,> the ;o%r- or %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio . < CDA4TER II; ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL E!t%,li!h.e t of Se'*ritie! A$$ell%te Tri,* %l!. 15F. ( ) .he Central &o'ern(ent shall by notification, establish one or (ore Appellate .ribunals to be )nown as the Securities Appellate .ribunal to exercise the Durisdiction, powers and authority conferred on such .ribunal by or under this Act 4or any other law for the ti(e being in force:0 (%) .he Central &o'ern(ent shall also specify in the notification referred to in sub+section ( ) the (atters and places in relation to which the Securities Appellate .ribunal (ay exercise Durisdiction0 "5Co.$o!itio of Se'*ritie! A$$ell%te Tri,* %l. 15L. A Securities Appellate .ribunal shall consist of a <residing Cfficer and two other (e(bers, to be appointed, by notification, by the Central &o'ern(ent, 4ro+i-e- that the Securities Appellate .ribunal, consisting of one person only, established before the co((ence(ent of the Securities and 7xchange 8oard of India (A(end(ent) Act, %00%, shall continue to exercise the Durisdiction, powers and authority conferred on it by or under this Act or any other law for the ti(e being in force till two other ?e(bers are appointed under this section0 9*%lifi'%tio for %$$oi t.e t %! 4re!i-i ( Offi'er or @e.,er of Se'*ritie! A$$ell%te Tri,* %l.
Inserted by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for Sections "= and "? by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "= and "? read as under,+ 1 "+=0 Co(position of securities Appellate .ribunal0 5 A Securities Appellate .ribunal shall consist of
% Substituted
one person only (hereinafter referred to as the <residing Cfficer of the Securities Appellate .ribunal) to be appointed, by notification, by the central &o'ern(ent0 "?0 Qualifications for appoint(ent as <residing Cfficer of the Securities Appellate .ribunal0 5 A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he + (a) is, or has been, or is *ualified to be, a Mudge of a Iigh Court3 or (b) has been a (e(ber of the Indian =egal Ser'ice and has held a post in &rade I of that ser'ice for at least three years3 or (c) has held office as the <residing Cfficer of a tribunal for at least three years02
%#
15@. 15( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of the Securities Appellate .ribunal unless he + (a) is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court3 or (b) is a sitting or retired Mudge of a Iigh Court who has co(pleted not less than se'en years of ser'ice as a Mudge in a Iigh Court0 ( A) .he <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0: (%) A person shall not be *ualified for appoint(ent as (e(ber of a Securities Appellate .ribunal unless he is a person of ability, integrity and standing who has shown capacity in dealing with proble(s relating to securities (ar)et and has *ualification and experience of corporate law, securities laws, finance, econo(ics or accountancy, 4ro+i-e- that a (e(ber of the 8oard or any person holding a post at senior (anage(ent le'el e*ui'alent to 7xecuti'e 9irector in the 8oard shall not be appointed as <residing Cfficer or ?e(ber of a Securities Appellate .ribunal during his ser'ice or tenure as such with the 8oard or within two years fro( the date on which he ceases to hold office as such in the 8oard0: %4Te *re of offi'e of 4re!i-i ( Offi'er % - other @e.,er! of Se'*ritie! A$$ell%te Tri,* %l. 15N. .he <residing Cfficer and e'ery other ?e(ber of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office and shall be eligible for re+appoint(ent, 4ro+i-e- that no person shall hold office as the <residing Cfficer of the Securities Appellate .ribunal after he has attained the age of sixty+eight years, 4ro+i-e- f*rther that no person shall hold office as a ?e(ber of the Securities Appellate .ribunal after he has attained the age of sixty+two years0: S%l%r> % - %llo/% 'e! % - other ter.! % - 'o -itio ! of !er+i'e of 4re!i-i ( Offi'er!. 150O. .he salary and allowances payable to and the other ter(s and conditions of ser'ice including pension, gratuity and other retire(ent benefits of the 4<residing Cfficer and other ?e(bers: of a Securities Appellate .ribunal shall be such as (ay be prescribed,
Substituted for sub+section ( ) of Section "? by the S78I (A(end(ent) Crdinance, %0 3 w0e0f0 % 00 0%0 30 <rior to substitution, it read as under,+ ;( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court , 4ro+i-e- that the <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0; % Substituted for Section "E, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "E read as under,+ 1 "E0 .er( of office0+ .he <residing officer of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office or until he attains the age of sixtyfi'e years, whiche'er is earlier02
%/
4ro+i-e- that neither the salary and allowances nor the other ter(s and conditions of ser'ice of the %4<residing Cfficer and other ?e(bers of a Securities Appellate .ribunal: shall be 'aried to their disad'antage after appoint(ent0 2illi ( *$ of +%'% 'ie!. 154. If, for reason other than te(porary absence, any 'acancy occurs in the 34office of the <residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal, then the Central &o'ern(ent shall appoint another person in accordance with the pro'isions of this Act to fill the 'acancy and the proceedings (ay be continued before the Securities Appellate .ribunal fro( the stage at which the 'acancy is filled0 Re!i( %tio % - re.o+%l. 159. ( ) .he $4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal (ay, by notice in writing under his hand addressed to the Central &o'ern(ent, resign his office, 4ro+i-e- that "4the <residing Cfficer or any other ?e(ber: shall, unless he is per(itted by the Central &o'ern(ent to relin*uish his office sooner, continue to hold office, until the expiry of three (onths fro( the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his ter( of office, whiche'er is the earliest0 (%) .he #4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal shall not be re(o'ed fro( his office except by an order by the Central &o'ern(ent on the ground of pro'ed (isbeha'iour or incapacity after an in*uiry (ade by a Mudge of the Supre(e Court, in which the /4<residing Cfficer or any other ?e(ber: concerned has been infor(ed of the charges against hi( and gi'en a reasonable opportunity of being heard in respect of these charges0 (3) .he Central &o'ern(ent (ay, by rules, regulate the procedure for the in'estigation of (isbeha'iour or incapacity of the >4<residing Cfficer or any other ?e(ber:0 Or-er! 'o !tit*ti ( A$$ell%te Tri,* %l to ,e fi %l % - ot to i +%li-%te it! $ro'ee-i (!. 15R. Eo order of the Central &o'ern(ent appointing any person as the !4<residing Cfficer or a ?e(ber: of a Securities Appellate .ribunal shall be called in *uestion in any (anner, and no act or proceeding before a Securities Appellate .ribunal shall be called in *uestion in any (anner on the ground (erely of any defect in the constitution of a Securities Appellate .ribunal0
Substituted for 1<residing Cfficer of a Securities Appellate .ribunal2 by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 / Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 > Substituted for 1aforesaid <residing Cfficer2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 ! Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0
%>
St%ff of the Se'*ritie! A$$ell%te Tri,* %l. 15S. ( ) .he Central &o'ern(ent shall pro'ide the Securities Appellate .ribunal with such officers and e(ployees as that &o'ern(ent (ay thin) fit0 (%) .he officers and e(ployees of the Securities Appellate .ribunal shall discharge their functions under general superintendence of the <residing Cfficer0 (3) .he salaries and allowances and other conditions of ser'ice of the officers and e(ployees of the Securities Appellate .ribunal shall be such as (ay be prescribed0 A$$e%l to the Se'*ritie! A$$ell%te Tri,* %l. 15T. 4( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed,(a) by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws
(Second A(end(ent) Act, !!!, under this Act, or the rules or regulations (ade thereunder3 or (b) by an order (ade by an adDudicating officer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 "5(") ********< (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 348oard or the AdDudicating Cfficer, as the case case (ay be,: is recei'ed by hi( and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 ($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0
Substituted for Sub+sec ( ) R (%) by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, Sub+sections ( ) R (%) were read as under, 1( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by any order (ade by any AdDudicating Cfficer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 (%) Eo appeal shall lie to the Securities Appellate .ribunal fro( an order (ade by an AdDudicating Cfficer with the consent of the parties02 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , o.i!!io , S*,0!e'tio (") re%- %! * -er& J(") No %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-eO (a) ,> the ;o%r- o % - %fter the 'o..e 'e.e t of the Se'*ritie! L%/! (Se'o - A.e -.e t) A't, 1999H (b) ,> % %-G*-i'%ti ( offi'er, /ith the 'o !e t of the $%rtie!.2 3 Substituted for 1a copy of the order (ade by the adDudicating officer2 by S78I (A(end(ent) Act !!!, !!!, w0e0f0 #+ %+ !!!0
%!
(") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 48oard, the: parties to the appeal and to the concerned AdDudicating Cfficer0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of the Se'*ritie! A$$ell%te Tri,* %l. 15U. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act, and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purposes of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3
(e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte 3 (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0), and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 %4Ri(ht to le(%l re$re!e t%tio . 15I. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,Substituted for 1parties2, S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for S0 "B by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, S0 "B read as under,+ 1 "B0 .he appellant (ay either appear in person or authorise one or (ore legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal02
% Substituted
30
(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of subsection ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or any attorney of any Iigh Court, and includes a pleader in practice0: Li.it%tio . 15?. .he pro'isions of the =i(itation Act, !#3 (3# of !#3), shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 54re!i-i ( Offi'er, @e.,er! % - !t%ff of Se'*ritie! A$$ell%te Tri,* %l! to ,e $*,li' !er+% t!. 15A. .he <residing Cfficer, ?e(bers and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0: Ci+il Co*rt ot to h%+e G*ri!-i'tio . 15M. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which an adDudicating officer appointed under this Act or a Securities Appellate .ribunal constituted under this Act is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "5A$$e%l to S*$re.e Co*rt.
Substituted for S0 "A by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, it read as under, + 1 "A0 .he <residing Cfficer and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian penal Code( $" of >#0)20 % Substituted for S0 "S by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution , it
was read as under,+ 1 "S0 Appeal to Iigh Court0+ Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, <ro'ided that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
3
15N. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order , 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the applicant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: CDA4TER III @ISCELLANEOUS 4o/er of Ce tr%l Go+er .e t to i!!*e -ire'tio !. 18. ( ) Kithout preDudice to the foregoing pro'isions of this Act 4or the 9epositories Act, !!#:, the 8oard shall, in exercise of its powers or the perfor(ance of its functions under this Act, be bound by such directions on *uestions of policy as the Central &o'ern(ent (ay gi'e in writing to it fro( ti(e to ti(e , 4ro+i-e- that the 8oard shall, as far as practicable, be gi'en an opportunity to express its 'iews before any direction is gi'en under this sub+section0 (%) .he decision of the Central &o'ern(ent whether a *uestion is one of policy or not shall be final0 4o/er of Ce tr%l Go+er .e t to !*$er!e-e the ;o%r-. 17. ( ) If at any ti(e the Central &o'ern(ent is of opinion(a) that on account of gra'e e(ergency, the 8oard is unable to discharge the functions and duties i(posed on it by or under the pro'isions of this Act3 or (b) that the 8oard has persistently (ade default in co(plying with any direction issued by the Central &o'ern(ent under this Act or in the discharge of the functions and duties i(posed on it by or under the pro'isions of this Act and as a result of such default the financial position of the 8oard or the ad(inistration of the 8oard has deteriorated3 or (c) that circu(stances exist which render it necessary in the public interest so to do, the Central &o'ern(ent (ay, by notification, supersede the 8oard for such period, not exceeding six (onths, as (ay be specified in the notification0 (%) Hpon the publication of a notification under sub+section ( ) superseding the 8oard,(a) all the (e(bers shall, as fro( the date of supersession, 'acate their offices as such3 (b) all the powers, functions and duties which (ay, by or under the pro'isions of this Act, be exercised or discharged by or on behalf of the 8oard, shall until the 8oard is reconstituted under sub+section (3), be exercised and discharged by such person or persons as the Central &o'ern(ent (ay direct3 and (c) all property owned or controlled by the 8oard shall, until the 8oard is reconstituted under sub+section (3), 'est in the Central &o'ern(ent0
Substituted for 1this Act2 by the 9epositories Act !!#, w0r0e0f0 %0+!+ !!"0
3%
(3) Cn the expiration of the period of supersession specified in the notification issued under sub+section ( ), the Central &o'ern(ent (ay reconstitute the 8oard by a fresh appoint(ent
and in such case any person or persons who 'acated their offices under clause ( a) of subsection (%), shall not be dee(ed dis*ualified for appoint(ent , 4ro+i-e- that the Central &o'ern(ent (ay, at any ti(e, before the expiration of the period of supersession, ta)e action under this sub+section0 ($) .he Central &o'ern(ent shall cause a notification issued under sub+section ( ) and a full report of any action ta)en under this section and the circu(stances leading to such action to be laid before each Iouse of <arlia(ent at the earliest0 Ret*r ! % - re$ort!. 1:. ( ) .he 8oard shall furnish to the Central &o'ern(ent at such ti(e and in such for( and (anner as (ay be prescribed or as the Central &o'ern(ent (ay direct, such returns and state(ents and such particulars in regard to any proposed or existing progra((e for the pro(otion and de'elop(ent of the securities (ar)et, as the Central &o'ern(ent (ay, fro( ti(e to ti(e, re*uire0 (%) Kithout preDudice to the pro'isions of sub+section ( ), the 8oard shall, within 4ninety: days after the end of each financial year, sub(it to the Central &o'ern(ent a report in such for(, as (ay be prescribed, gi'ing a true and full account of its acti'ities, policy and progra((es during the pre'ious financial year0 (3) A copy of the report recei'ed under sub+section (%) shall be laid, as soon as (ay be after it is recei'ed, before each Iouse of <arlia(ent0 Dele(%tio . 19. .he 8oard (ay, by general or special order in writing delegate to any (e(ber, officer of the 8oard or any other person subDect to such conditions, if any, as (ay be specified in the order, such of its powers and functions under this Act (except the powers under section %!) as it (ay dee( necessary0 A$$e%l!. "=. ( ) Any person aggrie'ed by an order of the 8oard (ade %4, before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!,: under this Act, or the rules or regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor, 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0
Substituted for 1sixty days2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1an order of the 8oard (ade2 by Securities =aws (Second A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0
% Substituted
33
(3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed, 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 4;%r of G*ri!-i'tio . "=A. Eo order passed by the 8oard %4or the AdDudicating Cfficer: under this Act shall be appealable except as pro'ided in 34section ". or: section %0 and no ci'il court shall ha'e Durisdiction in respect of any (atter which the 8oard $4or the AdDudicating Cfficer: is e(powered by, or under, this Act to pass any order and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any order passed by the 8oard "4or the AdDudicating Cfficer: by, or under, this Act0: S%+i (!.
"1. Eothing in this Act shall exe(pt any person fro( any suit or other proceedings which (ight, apart fro( this Act, be brought against hi(0 @e.,er!, offi'er! % - e.$lo>ee! of the ;o%r- to ,e $*,li' !er+% t!. "". All (e(bers, officers and other e(ployees of the 8oard shall be dee(ed, when acting or purporting to act in pursuance of any of the pro'isions of this Act, to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0 4rote'tio of %'tio t%6e i (oo- f%ith. "). Eo suit, prosecution or other legal proceedings shall lie against the Central &o'ern(ent #4or 8oard: or any officer of the Central &o'ern(ent or any (e(ber, officer or other e(ployee of the 8oard for anything which is in good faith done or intended to be done under this Act or the rules or regulations (ade thereunder0 /4Offe 'e!. "3. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, he shall be punishable with
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 18oard2 by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 3 Substituted for 1Section %02, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 $ Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 " Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Substituted by for S0 %$, Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" && <rior to its substitution S0%$ read as under, 1%$0 <enalty0+ Khoe'er contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both02
% Substituted
3$
i(prison(ent for a ter( which (ay extend to 4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to %4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 34Co.$o!itio of 'ert%i offe 'e!. "3A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "3;. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of the alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation, 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0
(%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0:
Substituted for 1one year, or with fine, or with both2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%, for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both20 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3"
E#e.$tio fro. t%# o /e%lth % - i 'o.e. "5. Eotwithstanding anything contained in the Kealth+tax Act, !"/ (%/ of !"/), the Inco(etax Act, !# ($3 of !# ) or any other enact(ent for the ti(e being in force relating to tax on wealth, inco(e, profits or gains(a) the 8oard3 (b) the existing Securities and 7xchange 8oard fro( the date of its constitution to the date of establish(ent of the 8oard, shall not be liable to pay wealth+tax, inco(e+tax or any other tax in respect of their wealth, inco(e, profits or gains deri'ed0 Co( iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations (ade thereunder, sa'e on a co(plaint (ade by the 8oard 4G G G:0 "5(") *****< )5 E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
.he words 1with the pre'ious sanction of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to the o.i!!io , S*,0!e'tio (") re%- %! * -er& 1(") No 'o*rt i ferior to th%t of "5% Co*rt of Se!!io < !h%ll tr> % > offe 'e $* i!h%,le * -er thi!
A't.2 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3#
A$$e%l % - re+i!io "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e of Cri.i %l 4ro'e-*re, 197) to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< Offe 'e! ,> 'o.$% ie!. "7. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly, 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n , 6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and
3/
(b) 1director2, in relation to a fir(, (eans a partner in the fir(0 4o/er to e#e.$t. ":. 4GGGGGG: "5 Re'o+er> of %.o* t! ":A. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith %
-ire'tio of -i!(or(e.e t or-er i!!*e- * -er !e'tio 11; or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifiefor. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.et%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't.
C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Section %> read as under, 1%>0 8$.er t$ e)e"%t+ If the central go'ern(ent if of the opinion that it is necessary or expedient so to do in public interest, it (ay, by order published in the Cfficial gaFette, exe(pt any person or class of persons buying or selling securities or otherwise dealing with the securities (ar)et fro( the operation of sub+section ! ) of Section %02 % I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3>
"#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio 15T of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 11;, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% !
% > offi'er of the ;o%r- /ho .%> ,e %*thoriLe-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 4o/er to .%6e r*le!. "9. ( ) .he Central &o'ern(ent (ay, by notification, (a)e rules for carrying out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers under sub+section ( ) of section "3 (b) the additional functions that (ay be perfor(ed by the 8oard under section 3 (c) 4G G G: (d) the (anner in which the accounts of the 8oard shall be (aintained under section "3 %4(da) the (anner of in*uiry under sub+section ( ) of section "+I3 (db) the salaries and allowances and other ter(s and conditions of ser'ice of the 34<residing Cfficers, ?e(bers: and other officers and e(ployees of the Securities Appellate .ribunal under section "+C and sub+section (3) of section "S3 (dc) the procedure for the in'estigation of (isbeha'iour or incapacity of the 4<residing Cfficers, or other ?e(bers: of the Securities Appellate .ribunal under sub+section (3) of section "Q3
Clause (c) o(itted by Securities laws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, clause (c) it read as under, 1(c) the conditions subDect to which registration certificate is to be issued under sub+section ( ) of section %20 % Inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 3 Substituted for 1<residing Cfficers2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3!
(dd) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section ". and the fees payable in respect of such appeal3: (e) the for( and the (anner in which returns and report to be (ade to the Central &o'ern(ent under section >3 (f) any other (atter which is to be, or (ay be, prescribed, or in respect of which pro'ision is to be, or (ay be, (ade by rules0 4o/er to .%6e re(*l%tio !. )=. ( ) .he 8oard (ay, %4GGG: by notification, (a)e regulations consistent with this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ti(es and places of (eetings of the 8oard and the procedure to be followed at such (eetings under sub+section ( ) of section / including *uoru( necessary for the transaction of business3 (b) the ter(s and other conditions of ser'ice of officers and e(ployees of the 8oard under sub+section (%) of section !3 34(c) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto and the (anner in which such (atters shall be disclosed by the co(panies under section A3 35('%) the *tiliL%tio of the %.o* t 're-ite- * -er !*,0!e'tio (5) of !e'tio 11H (',) the f*lfill.e t of other 'o -itio ! rel%ti ( to 'olle'ti+e i +e!t.e t !'he.e * -er !*,0!e'tio ("A) of !e'tio 11AAH ('') the $ro'e-*re to ,e follo/e- ,> the %*thoriLe- offi'er for !e%r'h or !eiL*re * -er !*,0!e'tio (9) of !e'tio 11CH < (d) the conditions subDect to which certificate of registration is to be issued, the a(ount of
fee to be paid for certificate of registration and the (anner of suspension or cancellation of certificate of registration under section %0: 55(-%) the ter.! -eter.i e- ,> the ;o%r- for !ettle.e t of $ro'ee-i (! * -er !*,!e'tio (") % - the $ro'e-*re for 'o -*'ti ( of !ettle.e t $ro'ee-i (! * -er !*,!e'tio ()) of !e'tio 15E;H (-,) % > other .%tter /hi'h i! re7*ire- to ,e, or .%> ,e, !$e'ifie- ,> re(*l%tio ! or i re!$e't of /hi'h $ro+i!io i! to ,e .%-e ,> re(*l%tio !.< R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t.
Substituted for 1<residing Cfficers2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 words 1with the pre'ious appro'al of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 3 Substituted for the existing clause (c) by the Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 <rior to substitution this clause read as under, 1(c) the a(ount of fee to be paid for registration certificate and (anner of suspension or cancellation of registration certificate under sub+section (%) and (3) of section %02 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% .he
$0
)1. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. )". .he pro'isions of this Act shall be in addition to, and not in derogation of, the pro'isions of any other law for the ti(e being in force0 A.e -.e t of 'ert%i e %'t.e t!. )). 40e%ealed bF 0e%ealing H A"ending Act' 2001&: 4o/er to re.o+e -iffi'*ltie!. )3. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order, published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as (ay appear to be necessary for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of fi'e years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 Re$e%l % - !%+i (. )5. ( ) .he Securities and 7xchange 8oard of India Crdinance, !!% (Crd0 " of !!%), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 1@( /@(5A9( 4 ee section 33: A@END@ENT O2 CERTAIN ENACT@ENTS 40e%ealed bF 0e%ealing H A"ending Act' 2001:
*SECURITIES CONTRACTS (REGULATION) RULES, 1957
In exercise of the powers conferred by section 30 of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the Central &o'ern(ent hereby (a)es the following rules, the sa(e ha'ing been pre'iously published as re*uired by sub+section (3) of the said section, na(ely ,Short title. 1. .hese rules (ay be called the Securities Contracts (Regulation) Rules, !"/0 Defi itio !. ". In these rules, unless the context otherwise re*uires,(a) 1for(2 (eans a for( appended to these rules3 (b) 1the Act2 (eans the Securities Contracts (Regulation) Act, !"# ($% of !"#)3 (c) 1&o'ern(ent co(pany2 (eans a co(pany in which not less than fifty+one per cent of the share capital is held by the Central &o'ern(ent or by any State &o'ern(ent or &o'ern(ents or partly by the Central &o'ern(ent and partly by one or (ore State &o'ern(ents ; 4(d) 1public2 (eans persons other than 5 (i) the pro(oter and pro(oter group3 (ii) subsidiaries and associates of the co(pany0 E#$l% %tio & 6or the purpose of this clause the words 1pro(oter2 and 1pro(oter group2 shall ha'e the sa(e (eaning as assigned to the( under the Securities and 7xchange 8oard of India (Issue of Capital and 9isclosure Re*uire(ents) Regulations, %00!3: %4(da) ;public sector co(pany; (eans a body corporate constituted by an Act of <arlia(ent or any State =egislature and includes a go'ern(ent co(pany,: 4(e) 1public shareholding2 (eans e*uity shares of the co(pany held by public and shall exclude shares which are held by custodian against depository receipts issued o'erseas0: A$$li'%tio for re'o( itio . ). An application under section 3 of the Act for recognition of a stoc) exchange shall be (ade to the 34Securities and 7xchange 8oard of India: in 6or( A0
* The!e R*le! h%+e ,ee *$-%te- ,%!e- o the R*le! % - A.e -.e t! %+%il%,le o the /e,!ite of the De$%rt.e t of E'o o.i' Aff%ir!0 htt$&11fi .i . i'.i 1l%/1i -e#.%!$ % - %+%il%,le %.e -.e t otifi'%tio !. Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 % Inserted by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3 Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
2ee! for %$$li'%tio . 3. ( ) .here shall be paid in respect of e'ery application under rule 3 a fee of rupees fi'e hundred0 (%) .he a(ount of the fee shall be deposited in the nearest &o'ern(ent treasury or the nearest branch of the State 8an) of India, 4ro+i-e- that at 8o(bay, Calcutta, ?adras, 9elhi and @anpur, the a(ount shall be deposited in the Reser'e 8an) of India0 (3) .he a(ount of the fee so deposited shall be credited to the receipt head 1A=BI?iscellaneous-Cther fees, fines and forfeitures20 Do'*.e t! to ,e file- %lo ( /ith the %$$li'%tio % - $%rti'*l%r! it !ho*l- 'o t%i . 5. 7'ery application shall be acco(panied by four copies of the rules (including the (e(orandu( and articles of association where the applicant stoc) exchange is an
incorporated body) and bye+laws of the stoc) exchange applying for recognition as specified in section 3 of the Act and the receipt granted by the &o'ern(ent treasury, or as the case (ay be, the State 8an) of India or the Reser'e 8an) of India, in respect of the a(ount of the fee deposited and shall contain clear particulars as to the (atters specified in the Annexure to 6or( A0 $54o/er to .%6e i 7*irie! % - '%ll for i for.%tio . 5A. 8efore granting recognition to a stoc) exchange under section $ of the Act, the "4Securities and 7xchange 8oard of India: (ay (a)e such in*uiries and re*uire such further infor(ation to be furnished, as it dee(s necessary, relating to the infor(ation furnished by the stoc) exchange in the Annexure to its application in 6or( A0: 2or. of re'o( itio . 8. .he recognition granted to a stoc) exchange shall be in 6or( 8 and be subDect to the following conditions, na(ely ,(a) that the recognition unless granted on a per(anent basis, shall be for such period not less than one year as (ay be specified in the recognition3 (b) that the stoc) exchange shall co(ply with such conditions as are or (ay be prescribed or i(posed under the pro'isions of the Act and these rules fro( ti(e to ti(e0
$ Inserted
by &SR 0!# dated $00/0 !#/, w0e0f0 %%00/0 !#/ for 1Central &o'ern(ent2 by the Securities Contracts (Regulation)(A(end(ent )Rules, !!#, w0e0f0 %30 %0 !!#0
" Substituted
Re e/%l of re'o( itio . 7. ( ) .hree (onths before the expiry of the period of recognition, a recognised stoc) exchange desirous of renewal of such recognition (ay (a)e an application to the #4Securities and 7xchange 8oard of India: in 6or( A0 (%) .he pro'isions of rule 3, rule $, rule ", rule "A and rule # shall apply in relation to renewal of recognition as they apply in relation to grant of recognition except that the fee payable in respect of an application for renewal of recognition shall be rupees two hundred0 9*%lifi'%tio ! for .e.,er!hi$ of % re'o( i!e- !to'6 e#'h% (e. :. .he rules relating to ad(ission of (e(bers of a stoc) exchange see)ing recognition shall inter alia pro'ide that , (1) Eo person shall be eligible to be elected as a (e(ber if(a) he is less than twenty+one years of age3 (b) he is not a citiFen of India3 pro'ided that the go'erning body (ay in suitable cases relax this condition with the prior appro'al of the !4Securities and 7xchange 8oard of India:3 (c) he has been adDudged ban)rupt or a recei'ing order in ban)ruptcy has been (ade against hi( or he has been pro'ed to be insol'ent e'en though he has obtained his final discharge3 (d) he has co(pounded with his creditors unless he has paid sixteen annas in the rupee3 (e) he has been con'icted of an offence in'ol'ing fraud or dishonesty3 (f) he is engaged as principal or e(ployee in any business other than that of securities /4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability unless he underta)es on ad(ission to se'er his connection with such business ,
>44ro+i-e-
that no (e(ber (ay conduct business in co((odity deri'ati'es, except by setting up a separate co(pany which shall co(ply with the regulatory re*uire(ents, such as, networth, capital ade*uacy, (argins and exposure nor(s as (ay be specified by the 6orward ?ar)et Co((ission, fro( ti(e to ti(e ,
# Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, w0e0f0 %30 %0 !!#0 / Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 > Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 <rior to its substitution, the pro'iso as a(ended by Securities Contracts (Regulation) (A(end(ent) Rules, !!# w0e0f0 %30 %0 !!#, read as under, 1<ro'ided that the Securities and 7xchange 8oard of India (ay, for reasons sufficient in the opinion of the said 8oard, per(it a recogniFed stoc) exchange to suspend the enforce(ent of this clause for a specified period on condition that the applicant is not associated with or is a (e(ber of or subscriber to or shareholder or debenture holder in or connected through a partner or e(ployee with any other organisation, institution, association, co(pany or corporation in India where forward business of any )ind whether in goods or co((odities or otherwise is carried on or is not engaged as a principal or e(ployee ion any such business02
4ro+i-e- f*rther that nothing herein shall be applicable to any corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to ()) of the pro'iso to sub+rule ($)0:3 (g) !4GGG: (h) he has been at any ti(e expelled or declared a defaulter by any other stoc) exchange3 (i) he has been pre'iously refused ad(ission to (e(bership unless a period of one year has elapsed since the date of such reDection0 (2) Eo person eligible for ad(ission as a (e(ber under sub+rule ( ) shall be ad(itted as a (e(ber unless ,(a) he has wor)ed for not less than two years as a partner with, or an authorised assistant or authorised cler) or re(isier or apprentice to, a (e(ber3 or (b) he agrees to wor) for a (ini(u( period of two years as a partner or representati'e (e(ber with another (e(ber and to enter into bargains on the floor of the stoc) exchange and not in his own na(e but in the na(e of such other (e(ber 3 or (c) he succeeds to the established business of a deceased or retiring (e(ber who is his father, uncle, brother or any other person who is, in the opinion of the go'erning body, a close relati'e , 4ro+i-e- that the rules of the stoc) exchange (ay authorise the go'erning body to wai'e co(pliance with any of the foregoing conditions if the person see)ing ad(ission is in respect of (eans, position, integrity, )nowledge and experience of business in securities, considered by the go'erning body to be otherwise *ualified for (e(bership0 (3) Eo person who is a (e(ber at the ti(e of application for recognition or subse*uently ad(itted as a (e(ber shall continue as such if(a) he ceases to be a citiFen of India , 4ro+i-e- that nothing herein shall affect those who are not citiFens of India but who were (e(bers at the ti(e of such application or were ad(itted subse*uently under the pro'isions of clause (b) of sub+rule ( ) of this rule, subDect to their co(plying with all other re*uire(ents of this rule3
(b) he is adDudged ban)rupt or a recei'ing order in ban)ruptcy is (ade against hi( or he is pro'ed to be insol'ent3 (c) he is con'icted of an offence in'ol'ing fraud or dishonesty3 (d) 04G G G: (e) 4G G G: (f) he engages either as principal or e(ployee in any business other than that of securities %4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability, pro'ided that! C(itted 0 Ibid0
by &SR 0/0(7) dated "0
0 !>>
Ibid0
% Inserted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(i) the go'erning body (ay, for reasons, to be recorded in writing, per(it a (e(ber to engage hi(self as principal or e(ployee in any such business, if the (e(ber in *uestion ceases to carry on business on the stoc) exchange either as an indi'idual or as a partner in a fir(, (ii) in the case of those (e(bers who were under the rules in force at the ti(e of such application per(itted to engage in any such business and were actually so engaged on the date of such application, a period of three years fro( the date of the grant of recognition shall be allowed for se'ering their connection with any such business, 34(iii) nothing herein shall affect (e(bers of a recognised stoc) exchange which are corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to (k) of the pro'iso to sub+rule ($)0: (4) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section 3%% of the said Act3 (ii) a (aDority of the directors of such co(pany are shareholders of such co(pany and also (e(bers of that stoc) exchange3 and (iii) the directors of such co(pany, who are (e(bers of that stoc) exchange, ha'e ulti(ate liability in such co(pany , 4ro+i-e- that where the $4Securities and 7xchange 8oard of India: (a)es a reco((endation in this regard, the go'erning body of a stoc) exchange shall, in relaxation of the re*uire(ents of this clause, ad(it as (e(ber the following corporations "4,bodies corporate:, co(panies or institutions, na(ely ,(a) the Industrial 6inance Corporation, established under the Industrial 6inance Corporation Act, !$> ( " of !$>)3 (b) the Industrial 9e'elop(ent 8an) of India, established under the Industrial 9e'elop(ent 8an) Act, !#$ ( > of !#$)3 (c) the =ife Insurance Corporation of India, established under the =ife Insurance Corporation Act, !"# (3 of !"#)3 (d) the &eneral Insurance Corporation of India constituted under the &eneral Insurance Corporation (Eationalisation) Act, !/% ("/ of !/%)3 (e) the Hnit .rust of India, established under the Hnit .rust of India Act, !#3 ("% of !#3)3
3 Substituted, ibid0 <rior to its substitution, sub+clause (iii) read as under, 1(iii) nothing herein shall affect (e(bers of a recogniFed stoc) exchange per(itted under the pro'iso to clause (f) of sub+rule( ) to suspend the enforce(ent of the aforesaid clause, for so long as such suspension is effecti'e, except that no (e(ber of such exchange shall engage in forward business of any )ind whether in goods or co((odities or otherwise and , if actually so engaged on the date of such application , he shall se'er his connection with any such business within a period of three years fro( the date of the grant of recognition02 $ Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# " Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(f) the Industrial Credit and In'est(ent Corporation of India, a co(pany registered under the Co(panies Act, !"# ( of !"#)3 (g) the subsidiaries of any of the corporations or co(panies specified in (a) to (f) and any subsidiary of the State 8an) of India or any nationalised ban) set up for pro'iding (erchant ban)ing ser'ices, buying and selling securities and other si(ilar acti'ities0 #4(h) any ban) included in the Second Schedule to the Reser'e 8an) of India Act, !3$ (% of !3$)3 (i) the 7xport I(port 8an) of India, established under the 7xport I(port 8an) of India Act, !> (%> of !> )3 (j) the Eational 8an) for Agriculture and Rural 9e'elop(ent, established under the Eational 8an) for Agriculture and Rural 9e'elop(ent Act, !> (# of !> )3 and (k) the Eational Iousing 8an), established under the Eational Iousing 8an) Act, !>/ ("3 of !>/)0: (4A) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall also be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section % of the said Act3 (ii) such co(pany underta)es to co(ply with such financial re*uire(ents and nor(s as (ay be specified by the Securities and 7xchange 8oard of India for the registration of such co(pany under sub+section ( ) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (iii) /4G G G: (iv) the directors of the co(pany are not dis*ualified fro( being (e(bers of a stoc) exchange under >4clause ( ) 4except sub+clause (b) and sub+clause (f) thereof: or clause (3) 4except sub+clause (a) and sub+clause (f) thereof:: and the 9irectors of the co(pany had not held the offices of the 9irectors in any co(pany which had been a (e(ber of the stoc) exchange and had been declared defaulter or expelled by the stoc) exchange3 and (v) not less than two directors of the co(pany are persons who possess a (ini(u( two yearsJ experience , (a) in dealing in securities3 or (b) as portfolio (anagers3 or (c) as in'est(ent consultants0 (5) Khere any (e(ber of a stoc) exchange is a fir(, the pro'isions of sub+rules ( ), (3) and ($), shall, so far as they can, apply to the ad(ission or continuation of any partner in such fir(0
# Inserted, / C(itted
ibid0 by &SR /$! (7), dated %0 00 !!$ > Substituted by &SR /!0(7), dated 0/0 0 !!$
Co tr%'t! ,et/ee .e.,er! of re'o( i!e- !to'6 e#'h% (e. 9. All contracts between the (e(bers of a recognised stoc) exchange shall be confir(ed in writing and shall be enforced in accordance with the rules and bye+laws of the stoc) exchange of which they are (e(bers0 !5No.i ee! of the Se'*ritie! % - E#'h% (e ;o%r- of I -i%< o the (o+er i ( ,o-ie! of re'o( i!e- !to'6 e#'h% (e!. 1=. .he %04Securities and 7xchange 8oard of India: (ay no(inate one or (ore persons not exceeding three in nu(ber, as (e(ber or (e(bers of the go'erning body of e'ery recognised stoc) exchange0 Such (e(ber or (e(bers shall enDoy the sa(e status and powers as other (e(bers of the go'erning body0 O,li(%tio of the (o+er i ( ,o-> to t%6e -i!'i$li %r> %'tio %(%i !t % .e.,er if !o -ire'te- ,> the % 5Se'*ritie! % - E#'h% (e ;o%r- of I -i%<. 11. After recei'ing the report of the result of an en*uiry (ade under clause (b) of subsection (3) of section # of the Act, the % 4Securities and 7xchange 8oard of India: (ay ta)e such action as they dee( proper and, in particular, (ay direct the go'erning body of the stoc) exchange to ta)e such disciplinary action against the offending (e(ber, including fine, expulsion, suspension or any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney, as (ay be specified by the % 4Securities and 7xchange 8oard of India:3 notwithstanding anything to the contrary contained in the rules or bye+laws of the stoc) exchange concerned, the go'erning body shall gi'e effect to the directions of the % 4Securities and 7xchange 8oard of India: in this behalf and shall not in any (anner co((ute, re'o)e or (odify the action ta)en in pursuance of such directions, without the prior appro'al of the % 4Securities and 7xchange 8oard of India:0 .he % 4Securities and 7xchange 8oard of India: (ay, howe'er, either of its own (otion or on the representation of the (e(ber concerned, (odify or withdraw its direction to the go'erning body0 A*-it of %''o* t! of .e.,er!. 1". 7'ery (e(ber shall get his accounts audited by a chartered accountant whene'er such audit is re*uired by the % 4Securities and 7xchange 8oard of India:0 ?ith-r%/%l of re'o( itio . 1). .he written notice referred to in section " of the Act shall be in 6or( C0
! Substituted %0 Ibid0 %
by 60 Eo0 L3/LS7L!$, dated %#0 00 !!$0
Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> re'o( i!e- !to'6 e#'h% (e. 13. 7'ery recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years, (1) ?inute boo)s of the (eetings of(a) (e(bers3 (b) go'erning body3 (c) any standing co((ittee or co((ittees of the go'erning body or of the general body of (e(bers0
(2) Register of (e(bers showing their full na(es and addresses0 Khere any (e(ber of the stoc) exchange is a fir(, full na(es and addresses of all partners shall be shown0 (3) Register of authorised cler)s0 (4) Register of re(isiers of authorised assistants0 (5) Record of security deposits0 (6) ?argin deposits boo)0 (7) =edgers0 (8) Mournals0 (9) Cash boo)0 (10) 8an) pass+boo)0 ;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> .e.,er of % re'o( i!e- !to'6 e#'h% (e. 15. ( ) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years , (a) Register of transactions ( a!da boo))0 (b) ClientsJ ledger0 (c) &eneral ledger0 (d) Mournals0 (e) Cash boo)0 (f) 8an) pass+boo)0 (g) 9ocu(ents register showing full particulars of shares and securities recei'ed and deli'ered0 (2) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following docu(ents for a period of two years, (a) ?e(berJs contract boo)s showing details of all contracts entered into by hi( with other (e(bers of the sa(e exchange or counterfoils or duplicates of (e(os of confir(ation issued to such other (e(bers0 (b) Counterfoils or duplicates of contract notes issued to clients0 (c) Kritten consent of clients in respect of contracts entered into as principals0 @% er of i 7*ir> i rel%tio to the %ff%ir! of the (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e or the %ff%ir! of % > .e.,er of the !to'6 e#'h% (e i rel%tio to the !to'6 e#'h% (e. 18. ( )(a) .he person or persons appointed by the %%4Securities and 7xchange 8oard of India: to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act shall hereafter in this rule be referred to as the Nin*uiring authorityJ3 (b) where the in*uiring authority consists of two or (ore persons, one of the( shall be appointed as the chair(an or senior (e(ber thereof3 (c) the in*uiring authority shall hand o'er a state(ent of issues to be in*uired into to the go'erning body or the (e(ber concerned, as the case (ay be, who will be gi'en a reasonable opportunity to state their or his side of the case3 (d) if any witness is called for exa(ination, an opportunity shall be pro'ided to the go'erning body or the (e(ber whose affairs are being in*uired into, as the case (ay be, to cross+exa(ine such witness3 (e) where the in*uiring authority consists of (ore than one person, the 'iews of the (aDority shall be dee(ed to represent the findings of such authority and, in the e'ent of
an e*uality of 'otes, the chair(an or senior (e(ber shall ha'e a casting 'ote3 (f) the in*uiring authority shall sub(it its report in writing to the %%4Securities and 7xchange 8oard of India: within the period specified in the order of appoint(ent3 (g) te(porary absence fro( any hearing or hearings of any (e(ber of the in*uiring authority shall not 'itiate its proceedings0 (%) Khere the %%4Securities and 7xchange 8oard of India: has directed the go'erning body of a stoc) exchange to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act, the go'erning body concerned shall appoint one or (ore (e(bers thereof to (a)e the in*uiry and the pro'isions of sub+rule ( ) shall apply "!tati# "!tandi# to such in*uiry0 S*,.i!!io of % *%l re$ort. 17. ( ) 7'ery recognised stoc) exchange shall before the 3 st day of Manuary in each year or within such extended ti(e as the %34Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, allow, furnish the %34Securities and 7xchange 8oard of India: annually with a report about its acti'ities during the preceding calendar year, which shall inter alia contain detailed infor(ation about the following (atters , (a) changes in rules and bye+laws, if any3 (b) changes in the co(position of the go'erning body3 (c) any new sub+co((ittees set up and changes in the co(position of existing ones3
%% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# %3 Ibid0
(d) ad(issions, re+ad(issions, deaths or resignations of (e(bers3 (e) disciplinary action against (e(bers3 (f) arbitration of disputes (nature and nu(ber) between (e(bers and non+(e(bers3 (g) defaults3 (h) action ta)en to co(bat any e(ergency in trade3 (i) securities listed and de+listed3 and (j) securities brought on or re(o'ed fro( the forward list0 (%) 7'ery recognised stoc) exchange shall within one (onth of the date of the holding of its annual general (eeting, furnish the %$4Securities and 7xchange 8oard of India: with a copy of its audited balance+sheet and profit and loss account for its preceding financial year0 S*,.i!!io of $erio-i'%l ret*r !. 17A. 7'ery recognised stoc) exchange shall furnish the %$4Securities and 7xchange 8oard of India: periodical returns relating to(i) the official rates for the securities enlisted thereon3 (ii) the nu(ber of shares deli'ered through the clearing house3 (iii) the (a)ing+up prices3 (iv) the clearing house progra((es3 (v) the nu(ber of securities listed and de+listed during the pre'ious three (onths3 (vi) the nu(ber of securities brought on or re(o'ed fro( the forward list during the pre'ious three (onths3 and (vii) any other (atter as (ay be specified by the %$4Securities and 7xchange 8oard of India:0 @% er of $*,li'%tio of ,>e0l%/! for 'riti'i!.. 1:. .he bye+laws to be (ade, a(ended or re'ised under the Act shall be published for
criticis( in accordance with the pro'isions of section %3 of the &eneral Clauses Act, >!/ both in the &aFette of India and Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate0 Re7*ire.e t! /ith re!$e't to the li!ti ( of !e'*ritie! o % re'o( i!e- !to'6 e#'h% (e. 19. ( ) A public co(pany as defined under the Co(panies Act, !"#, desirous of getting its securities listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars ,
%$ Ibid0
(a) ?e(orandu( and articles of association and, in the case of a debenture issue, a copy of the trust deed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any securities for subscription or sale during the last fi'e years0 (d) Copies of balance+sheets and audited accounts for the last fi'e years, or in the case of new co(panies, for such shorter period for which accounts ha'e been (ade up0 (e) A state(ent showing(i) di'idends and cash bonuses, if any, paid during the last ten years (or such shorter period as the co(pany has been in existence, whether as a pri'ate or public co(pany), (ii) di'idends or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents with or between ,(i) 'endors andLor pro(oters, (ii) underwriters and sub+underwriters, (iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents with(i) (anaging agents and secretaries and treasurers, (ii) selling agents, (iii) (anaging directors and technical directors, (iv) general (anager, sales (anager, (anager or secretary0 (h) Certified copy of e'ery letter, report, balance+sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering securities for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents0 (j) A brief history of the co(pany since its incorporation gi'ing details of its acti'ities including any reorganisation, reconstruction or a(alga(ation, changes in its capital structure, (authorised, issued and subscribed) and debenture borrowings, if any0
(k) <articulars of shares and debentures issued-(i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s including an option for the issue of any )ind of the securities granted to any person0 (") Certified copies of%"4(i) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3: (ii) agree(ents, if any, with the Industrial 6inance Corporation, Industrial Credit and In'est(ent Corporation and si(ilar bodies0 (n) <articulars of shares forfeited0 ($) A list of highest ten holders of each class or )ind of securities of the co(pany as on the date of application along with particulars as to the nu(ber of shares or debentures held by and the address of each such holder0 (%) <articulars of shares or debentures for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0 (%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant co(pany shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer, (ii) that the fully paid shares will be free fro( all lien, while in the case of partly paid shares, the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such shares, (iii) that any a(ount paid+up in ad'ance of calls on any share (ay carry interest but shall not entitle the holder of the share to participate in respect thereof, in a di'idend subse*uently declared, (iv) there will be no forfeiture of unclai(ed di'idends before the clai( beco(es barred by law, (v) that option or right to call of shares shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the securities of a co(pany which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0
%" Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 <rior to its substitution, sub+clause (i), read as under, 1(i) letters of consent of the Controller of Capital Issues02
%#4(b)
(i) At least twenty fi'e per cent0 of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent3 or (ii) At least ten per cent of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent if the post issue capital of the
co(pany calculated at offer price is (ore than four thousand crore rupees, <ro'ided that the re*uire(ent of post issue capital being (ore than four thousand crore rupees shall not apply to a co(pany whose draft offer docu(ent is pending with the Securities and 7xchange 8oard of India on or before the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, if it satisfies the conditions prescribed in clause (b) of sub+rule % of rule ! of the Securities Contracts (Regulation) Rules, !"# as existed prior to the date of such co((ence(ent, %/4<ro'ided further that the co(pany, referred to in sub clause (ii), shall increase its public shareholding to at least twenty fi'e per cent, within a
%# Substituted
by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, clause (b) as a(ended by the A(end(ent Rules, %00 , w0e0f0 0/00#0%00 , read as under, 1(b) At least 0 per cent of each class or )ind of securities issued by a co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted subDect to the following conditions, (a) (ini(u( %0 la)h securities (excluding reser'ations, fir( allot(ent and pro(otersJ contribution) was offered to the public3 (b) the siFe of the offer to the public, i&e&' the offer price (ultiplied by the nu(ber of securities offered to the public was (ini(u( Rs0 00 crores3 and (c) the issue was (ade only through boo) building (ethod with allocation of #0 per cent of the issue siFe to the *ualified institutional buyers as specified by the Securities and 7xchange 8oard of India, 4ro+i-e- that if a co(pany does not fulfil the conditions, it shall offer at least %" per cent of each class or )ind of securities to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted, 4ro+i-e- f*rther that a recognised stoc) exchange (ay relax any of the conditions with the pre'ious appro'al of the Securities and 7xchange 8oard of India, in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#), and subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*6or the purpose of this clause, it is hereby clarified that where any part of the securities sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental 6ire and &eneral Insurance Co(pany =i(ited and the Hnited 6ire and &eneral Insurance Co(pany =i(ited or Hnit .rust of India, the total subscription to the securities, whether by one or (ore of such bodies, shall not for( part of the 0 per cent or %" per cent of the securities, as the case (ay be, to be offered to the public02 %/ Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 <rior to its substitution, second pro'iso, read as under, 1<ro'ided further that the co(pany, referred in sub+clause (ii), shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of atleast fi'e per
period of three years fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India0: %>4GGG:: %!4(c) Eotwithstanding anything contained in clause (b), a public sector co(pany, shall offer and allot at least ten per cent, of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares to public in ter(s of an offer docu(ent0: (3) A co(pany applying for listing shall, as a condition precedent, underta)e inter alia(a) (i) that letters of allot(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to
that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been posted, (ii) that letters of right will be issued si(ultaneously, (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the securities to which they relate, (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right, (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or di'idend on the securities will be calculated, (b) to issue, when so re*uired, receipts for all securities deposited with it whether for registration, sub+di'ision, exchange or for other purposes 3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of certificates and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (bb) to issue, when so re*uired, consolidation and renewal certificates in deno(inations of the (ar)et unit of trading to split certificates, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3
cent per annu( beginning fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India,2 %> C(itted, ibid <rior to its o(ission, third pro'iso, read as under, 1<ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase beings its public shareholding to the le'el of twenty fi'e per cent in that year02 %! Inserted, ibid0
(c) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders, and (ii) to 'erify when the co(pany is unable to issue certificates or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (d) on production of the necessary docu(ents by shareholders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or certificate of the Controller of 7state 9uty or si(ilar other docu(ent has been duly exhibited to
and registered by the co(pany3 (e) to issue certificates in respect of shares or debentures lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance certificates within the sa(e period where the transfer is acco(panied by a larger certificate3 (f) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a di'idend or the issue of right or bonus share will be considered3 (g) to reco((end or declare all di'idends andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all di'idends andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (h) to notify the stoc) exchange of any (aterial change in the general character or nature of the co(panyJs business3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (anaging agent or secretaries and treasurers, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued, copies of all other notices and circulars sent to the shareholders including proceedings of ordinary and extraordinary general (eetings of the co(pany and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the shareholders of any new issue of securities whether by way of right, pri'ilege bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited securities or the issue of securities held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of di'idend or issue of right or bonus shares or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s (or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its shareholders or debentureholders) and specifying the purpose or purposes for which the transfer boo)s are to be closed (or the record is to be ta)en)3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority subDect to which the issue is proposed to be (ade ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after each annual general (eeting of at least ten principal holders of each class of security of the co(pany along with particulars as to the nu(ber of shares or debentures held by,
and address of, each such holder3 (+) to grant to shareholders the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e not being less than four wee)s within which to record, exercise, or renounce such rights, pri'ileges and benefits and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3 (r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any securities listed on the exchange, (ii) of the intention to (a)e a drawing of such securities, inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing of the balance) for the drawing, (iii) of the a(ount of securities outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the shareholders to apprise the position of the co(pany and to a'oid the establish(ent of a false (ar)et in the shares of the co(pany3 (t) (t)that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 304($) An application for listing shall be necessary in respect of the following, (a) all new issues of any class or )ind of securities of a co(pany to be offered to the public3 (b) all further issues of any class or )ind of securities of a co(pany if such class or )ind of securities of the co(pany are already listed on a recognised stoc) exchange0: (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the securities of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 3 44ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any security, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and its orders shall be carried out by the stoc) exchange0: 3%4(#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore
or re+ad(it to dealings any securities suspended or withdrawn fro( the list0: 334(#A) 7xcept as otherwise pro'ided in these rules or per(itted by the Securities and 7xchange 8oard of India under sub+rule (/), all re*uire(ents with respect to listing
30 Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, sub+rule ($), read as under, 1($) A fresh application for listing will be necessary in respect of all new issues desired to be dealt in, pro'ided that, where such new securities are identical in all respects with those already listed, ad(ission to dealings will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new issues0 7xplanation, Shares are identical in all respects only if(a) they are of the sa(e no(inal 'alue and the sa(e a(ount per share has been called up3 (b) they are entitled to di'idend at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the di'idend payable on each share will a(ount to exactly the sa(e su(, net and gross3 and (c) they carry the sa(e rights in all other respects02 3 Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%0000 7arlier, the second pro'iso was a(ended by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 3% Substituted by the Securities Contracts (Regulation) (A(end(ent), %000, w0e0f0 0>00>0%0000 7arlier, subrule (#) was a(ended by the Securities Contracts (Regulation) (A(end(ent), !!#, w0e0f0 %30 %0 !!#0 33 Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!0>0%0 00 <rior to its substitution, sub+rule (#A) as a(ended by the Securities Contracts
prescribed by these rules shall, so far as they (ay be, also apply to a public sector co(pany0: 3$4GGG: (/) .he 3"4Securities and 7xchange 8oard of India: (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect to listing prescribed by these rules0 3#4Co ti *o*! Li!ti ( Re7*ire.e t. 19A. ( ) 7'ery listed co(pany 3/4other than public sector co(pany: shall (aintain public shareholding of at least twenty fi'e per cent0, 3>4<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent, on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall increase its public shareholding to at least twenty fi'e per cent, within a period of three years fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India0 7xplanation, 6or the purposes of this sub+rule, a co(pany whose securities has been listed pursuant to an offer and allot(ent (ade to public in ter(s of sub+clause (ii) of clause (b) of sub+rule (%) of rule !, shall (aintain (ini(u( twenty fi'e per cent, public shareholding fro( the date on which the public shareholding in the co(pany reaches the le'el of twenty fi'e percent in ter(s of said sub+clause0: (%) Khere the public shareholding in a listed co(pany falls below twenty fi'e per cent0 at any ti(e, such co(pany shall bring the public shareholding to twenty fi'e per cent0
(Regulations)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 and &SR % (7) w0e0f0 0!0030 !!", read as under, 1(#A) All the re*uire(ents with respect to listing and continuous listing prescribed by these rules, shall so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature ,2 3$ C(itted by the Securities Contracts (Regulation)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its o(ission, pro'iso, as substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# and inserted by &SR %! (7) dated %/0030 !!", read as under,
1<ro'ided that a recognised stoc) exchange (ay relax the re*uire(ent of offer to public for subscription of atleast twenty+fi'e percent of the each class or )ind of securities issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e02 3" Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent), Rules, !!#, w0e0f0 %30 %0 !!#0 3# Inserted by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 3/ Inserted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3> Substituted, ibid0 <rior to substitution, pro'isos, read as under, 1<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of at least fi'e per cent per annu( beginning fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India, <ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase brings its public shareholding to the le'el of twenty fi'e per cent in that year02
within a (axi(u( period of twel'e (onths fro( the date of such fall in the (anner specified by the Securities and 7xchange 8oard of India0: 3!4(3) Eotwithstanding anything contained in this rule, e'ery listed public sector co(pany shall (aintain public shareholding of at least ten per cent0, <ro'ided that a listed public sector co(pany+ (a) which has public shareholding below ten per cent, on the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of three years fro( the date of such co((ence(ent3 (b) whose public shareholding reduces below ten per cent, after the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of twel'e (onths fro( the date of such reduction,0: $04Re7*ire.e t! /ith re!$e't to the li!ti ( of * it! or % > other i !tr*.e t of % Colle'ti+e I +e!t.e t S'he.e o % re'o( i!e- !to'6 e#'h% (e. "=. ( ) A Collecti'e In'est(ent ?anage(ent Co(pany (CI?C) which is desirous of getting its any collecti'e in'est(ent sche(e listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars , (a) Certificate of incorporation, (e(orandu( and articles of association of the co(pany and the copy of the trust deed of the sche(e intended to be listed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any unit or other instru(ent for subscription or sale during the last fi'e years, or in the case of a new co(pany, such shorter period during which the co(pany has been in existence0 (d) Copies of balance sheets and audited accounts for the last fi'e years, or in the case of a new co(pany, for such co(pleted financial year for which accounts ha'e been (ade up0 (e) A state(ent showing,(i) returns and cash bonuses, if any, paid during the last ten years (or such
shorter period as the co(pany has been in existence whether as a pri'ate or public co(pany)3 (ii) returns or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents pertaining to each sche(e of the co(pany with or between,(i) 'endors andLor pro(oters3 (ii) underwriters and sub+underwriters3
3! Inserted $0 Inserted
by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 0 by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%000
(iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents pertaining to each sche(e of a co(pany with(i) selling agents and other ser'ice pro'iders3 (ii) (anaging directors and technical directors3 (iii) general (anager, sales (anager, (anager or secretary0 (h) Certified copies of e'ery letter, report, balance sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering units or any other instru(ents of the sche(e for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents pertaining to such sche(e0 (j) A brief history of the Co(pany since its incorporation gi'ing details of its acti'ities including any re+organisation, reconstruction or a(alga(ation, changes in its capital structure (authorised, issued and subscribed) and debenture borrowings, if any, and the perfor(ance of other collecti'e in'est(ent sche(es of the co(pany0 (k) <articulars of units of the sche(e andLor shares, debentures of the co(pany issued (i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s granted to any person pertaining to such sche(e0 (") Certified copies of(i) certificate of registration granted by the Securities and 7xchange 8oard of India3 (ii) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3 (iii) agree(ents, if any, with any public financial institution as specified in section $A of the Co(panies Act, !"# ( of !"#)0 (n) A list of the highest ten holders of units of each sche(e of the co(pany as on the date of application along with particulars as to the nu(ber of units held by and the address of each such holder0 ($) <articulars of units of the sche(e for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0
(%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer of units of a particular sche(e3 (ii) that the fully paid units issued under the sche(e will be free fro( all lien, while in the case of partly paid units the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such units3 (iii) that any a(ount paid+up in ad'ance of calls on any units (ay carry interest but shall not entitle the holder of the unit to participate in respect thereof, in a return subse*uently declared3 (iv) there will be no forfeiture of unclai(ed returns before the clai( beco(es barred by law3 (v) that option or right to call of units shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the units of a sche(e which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0 (b) At least twenty+fi'e per cent of the units or any other instru(ent of a sche(e issued by the co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and not (ore than ninety days, and that applications recei'ed in pursuance of such offer were allotted fairly and unconditionally , 4ro+i-e- that a recognised stoc) exchange (ay relax this re*uire(ent, with the pre'ious appro'al of the Securities and 7xchange 8oard of India in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#) and subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*Khere any part of the units or any other instru(ents sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely, the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental Insurance Co(pany =i(ited and the Hnited Insurance Co(pany =i(ited, or Hnit .rust of India, the total subscription to the units or any other instru(ent, whether by one or (ore of such bodies, shall not for( part of the twenty+fi'e per cent of the units or any other instru(ent to be offered to the public0 (3) A co(pany applying for listing of a sche(e shall, as a condition precedent, underta)e, inter alia,(a) (i) that letters of allot(ent of units or any other instru(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been
posted3 (ii) that letters of right will be issued si(ultaneously3 (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and, exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the units or any other instru(ent to which they relate3 (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right3 (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or return on the units or any other instru(ent will be calculated3 (b) to issue, when so re*uired, receipts for all units and any other instru(ent deposited with it whether for registration, sub+di'ision, exchange or for other purposes3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of units and any other instru(ent and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (c) to issue, when so re*uired, consolidation and renewal units or any other instru(ent in deno(inations of the (ar)et unit of trading, to split units or any other instru(ent, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3 (d) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders3 and (ii) to 'erify when the co(pany is unable to issue units or any other instru(ents or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (e) on production of the necessary docu(ents by unit holders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or si(ilar other docu(ent has been duly exhibited to and registered by the co(pany3 (f) to issue certificates in respect of units or any other instru(ent lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance units or any other instru(ent within the sa(e period where the transfer is acco(panied by a larger unit or any other instru(ent certificate3 (g) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a return or the issue or right or bonus units or
any other instru(ent will be considered3 (h) to reco((end or declare all returns andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all returns andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts of such sche(e as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued copies of all other notices and circulars sent to the unitLother instru(ent holders regarding any i(portant de'elop(ent or resolutions passed by the co(pany affecting the perfor(ance of the sche(e and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the unitLany other instru(ent holders, of any new issue of unitsLother instru(ents whether by way of right, pri'ilege, bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited unitsLother instru(ents or the issue of unitsLother instru(ents held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of unit capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of returns or issue of right or bonus unitsLany other instru(ents in the sche(e or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its unitLother instru(ent holders and specifying the purpose or purposes for which the transfer boo)s are to be closed or the record is to be ta)en3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority, subDect to which the issue is proposed to be (ade, ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after the preparation of annual accounts of at least ten principal holders of each class of unitsLany other instru(ents of the co(pany along with particulars as to the nu(ber of unitsLany other instru(ent held by, and address of, each such holder3 (+) to grant to unitLany other instru(ent holders of the sche(e the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e, not being less than four wee)s, within which to record, exercise, or renounce such rights, pri'ileges and benefits, and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3
(r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any unitLother instru(ent listed on the exchange3 (ii) of the intention to (a)e a drawing of such unitLother instru(ent inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing off the balance) for the drawing3 (iii) of the a(ount of unitsLother instru(ents outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the unitLany other instru(ent holders to appraise the position of the sche(e and to a'oid the establish(ent of a false (ar)et in the unitsLany other instru(ents of the co(pany3 (t) that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 ($) A fresh application for listing will be necessary in respect of all new sche(es desired to be dealt in , 4ro+i-e- that, where such new unitsLother instru(ents are identical in all respects with those already listed, ad(ission to dealing will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new sche(es0 ()%lanati$n0-HnitsLany other instru(ents are identical in all respects only if(a) they are issued under the sa(e sche(e3 (b) they are of the sa(e no(inal 'alue and the sa(e a(ount per unitLother instru(ents has been called up3 (c) they are entitled to returns at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the return payable on each unitLother issue will a(ount to exactly the sa(e su(, net and gross3 and (d) they carry the sa(e rights in all other respects0 (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the unitsLother instru(ents of a sche(e of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 4ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any unitLother instru(ent of a collecti'e in'est(ent sche(e, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an
opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and thereupon the orders of the Securities Appellate .ribunal shall be carried out by the stoc) exchange0 (#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore or read(it to dealings any unitsLother instru(ents suspended or withdrawn fro( the list0 (/) All the re*uire(ents with respect to listing prescribed by these rules, shall, so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature , 4ro+i-e- that a recognised stoc) exchange (ay relax the re*uire(ent of offer to the public for subscription of at least twenty+fi'e per cent of the units or any other instru(ent of a collecti'e in'est(ent sche(e issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 (>) .he Securities and 7xchange 8oard of India (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect of listing prescribed by these rules0: $ 4Deli!ti ( of !e'*ritie!. "1. A recogniFed stoc) exchange (ay, without preDudice to any other action that (ay be ta)en under the Act or under any other law for the ti(e being in force, delist any securities listed thereon on any of the following grounds in accordance with the regulations (ade by the Securities and 7xchange 8oard of India, na(ely,(a) the co(pany has incurred losses during the preceding three consecuti'e years and it has negati'e networth3 (b) trading in the securities of the co(pany has re(ained suspended for a period of (ore than six (onths3 (c) the securities of the co(pany ha'e re(ained infre*uently traded during the preceding three years3 (d) the co(pany or any of its pro(oters or any of its director has been con'icted for failure to co(ply with any of the pro'isions of the Act or the Securities and 7xchange 8oard of India Act, !!% or the 9epositories Act, !!# (%% of !!#) or rules, regulations, agree(ents (ade thereunder, as the case (ay be and awarded a penalty of not less than rupees one crore or i(prison(ent of not less than three years3 (e) the addresses of the co(pany or any of its pro(oter or any of its directors, are not )nown or false addresses ha'e been furnished or the co(pany has changed its registered office in contra'ention of the pro'isions of the Co(panies Act, !"# ( of !"#)3 or
$
Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %00>, w0e0f0 000#0%00!
(f) shareholding of the co(pany held by the public has co(e below the (ini(u( le'el applicable to the co(pany as per the listing agree(ent under the Act and the co(pany has failed to raise public holding to the re*uired le'el within the ti(e specified by the recogniFed stoc) exchange , 4ro+i-e- that no securities shall be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) If the securities is delisted under clause ( ),
(a) the co(pany, pro(oter and director of the co(pany shall be Dointly and se'erally liable to purchase the outstanding securities fro( those holders who wish to sell the( at a fair price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India, under the Act3 and (b) the said securities shall be delisted fro( all recogniFed stoc) exchanges0 (3) A recogniFed stoc) exchange (ay, on the re*uest of the co(pany, delist any securities listed thereon in accordance with the regulations (ade under the Act by Securities and 7xchange 8oard of India, subDect to the following conditions, na(ely ,(a) the securities of the co(pany ha'e been listed for a (ini(u( period of three years on the recogniFed stoc) exchange3 (b) the delisting of such securities has been appro'ed by the two+third of public shareholders3 and (c) the co(pany, pro(oter andLor the director of the co(pany purchase the outstanding securities fro( those holders who wish to sell the( at a price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India under the Act, 4ro+i-e- that the condition at (c) (ay be dispensed with by Securities and 7xchange 8oard of India if the securities re(ain listed at least on the Eational Stoc) 7xchange of India =i(ited or the 8o(bay Stoc) 7xchange =i(ited0: FORM A ( ee Rules 3 and /) A$$li'%tio for re'o( itio 1re e/%l of re'o( itio of % !to'6 e#'h% (e * -er !e'tio ) of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 .o 00000000000000000000000000000000000000 00000000000000000000000000000000000000 !bject,*A%%licati$n f$r rec$gniti$n-rene.al $f rec$gniti$n $f a #t$ck e)change !nder #ecti$n 3 $f the ec!ritie# /$ntract# (0eg!lati$n) Act' 1956& Sir, <ursuant to the $%4Securities and 7xchange 8oard of India: Eotification Eo0 00000000000000000000000000 00000000000000000 dated 000000000000000000000000000000000LCertificate of recognition dated0000000000000000000000000000000KeLI on behalf of 000000000000000000 (na(e and address of stoc) exchange) being a stoc) exchange as defined in section % of the Securities Contracts
$% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
(Regulation) Act, !"# hereby apply for recognitionLrenewal of recognition for the purposes of the said Act in respect of contracts in securities0 ". 6our copies of the rules, (e(orandu( and articles of association relating in general to the constitution and (anage(ent of the stoc) exchange and four copies of the bye+laws for the regulation and control contracts in securities are enclosed0 ). All the necessary infor(ation re*uired in the Annexure to this 6or( is enclosed0 Any additional infor(ation will be furnished as and when called for by the $34Securities and 7xchange 8oard of India:0 3. KeLI on behalf of the said stoc) exchange hereby underta)e to co(ply with the re*uire(ents of section $ of the said Act and such other conditions and ter(s as (ay be contained in the certificate of recognition or be prescribed or i(posed subse*uently0 5. .reasury Receipt Eo0 000000dated000000for Rs000000000000is attached0
Oours faithfully, Signature of applicant ANNEAURE TO 2OR@ BAC Part I - General 0 Ea(e of the applicant stoc) exchange0 %0 Address0 30 9ate of establish(ent0 $0 Is your exchange a Doint stoc) co(pany (state whether public or pri'ate) registered under the Indian Co(panies Act or an association for profit or otherwise P If it is organised on so(e other basis, this (ay be stated0 "0 &i'e details of your capital structure and attach three copies of the audited balance sheets and profit and loss account of the 7xchange for the preceding three years0 Part II - Membership #0 State the nu(ber of (e(bers at the ti(e of application0 Also specify how (any are inacti'e0 /0 State whether there is any pro'ision, resolution or con'ention for li(iting the nu(ber of (e(bers and whether in pursuance thereof you ha'e fixed a ceiling on the nu(ber of (e(bers that you would ta)e0 >0 9o you insist on any (ini(u( *ualifications and experience before enrolling new (e(bers P If so gi'e details0 !0 State the different classes of (e(bers, if any, the nu(ber thereof and the pri'ileges enDoyed by each class0 Khat is the procedure followed by your exchange for the ad(ission of different classes of new (e(bers P 00 Khat are the rates of your annual subscription in respect of the different classes of (e(bers P 0 9o you collect any security deposit fro( your (e(bers P If so, gi'e details and also state the (anner in which such deposits are utilised and the rate of interest allowed, if any0
$3 Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
%0 9o you collect any ad(ission or entrance fees fro( your (e(bers or fro( partners of fir(s who are (e(bers P If so, how (uch P 30 9o you insist on your (e(bers and partners of fir(s who are (e(bers di'esting the(sel'es of other acti'ities either as principal or as e(ployee P $0 9o your rules per(it fir(s to beco(e (e(bers P If so, is it incu(bent on (e(bers to see) the appro'al of the go'erning body before ad(itting new partners P State the conditions, if any, laid down in your rules for the ad(ission of such partners0 "0 If your rules do not per(it of fir(s being enrolled as (e(bers, do you per(it indi'idual (e(bers to for( a partnership P State the procedure followed for the recognition of such partnership0 #0 9o you per(it (e(bers to wor) in partnership with non+(e(bers P If so, how far such non+(e(bers subDect to the control of the stoc) exchange P Part III - Governing Body /0 Khat is the present strength of your go'erning body P &i'e details of the constitution, powers of (anage(ent, election and tenure of office of (e(bers of the go'erning body, and the (anner in which its business is transacted0 >0 Are any trade or co((ercial interest represented on your go'erning body P If so,
gi'e details of interests represented0 !0 9o you associate shareholders of in'estors associations with the (anage(ent of your exchange P If so, state the (anner in which it is done0 %00 Are there any &o'ern(ent representati'es on your go'erning body P If so, furnish their na(es0 % 0 9o your rules pro'ide for the direct election by (e(bers of any other bodies or co((ittees, apart fro( the go'erning body P If so, gi'e details of their constitution, tenure, powers and functions0 %%0 9o you ha'e any pro'ision for the appoint(ent of standing or ad h$c subco((ittees of the go'erning body P If so, furnish details of the (ethod of their appoint(ent, ter(s of office, powers and functions0 %30 &i'e the designations, powers and duties of principal office+bearers of your exchange0 Are any of these office+bearers in the pay of the stoc) exchange P If so, gi'e details as to the (ode of their appoint(ent, tenure of office and re(uneration0 Part IV - Trading %$0 9o you ha'e a trading ring P If not, how do you carry on the business P &i'e details0 %"0 State the different )inds of contracts in use on your exchange e&g&' spot, ready and forward0 State the period of deli'ery and pay(ent in each case0 %#0 &i'e details of business hours for each type of contract0 %/0 &i'e details of the scale of bro)erage and other charges, if any, prescribed by your exchange0 %>0 9o you prescribe standard for(s of contract for the use of your (e(bers P Attach three copies of each such contract for(0 %!0 9o you classify your (e(bers into bro)ers and Dobbers P If so, specify the bye+law under which this is done0 300 9o you ha'e a syste( of registration of re(isiers andLor authorised cler)s P If so, gi'e details as to their *ualifications, obligations and rights, etc0 3 0 9o you ha'e any regulations regarding dealings by (e(bers on their own account whether in the nature of 1aravani (day+to+day) or otherwise P 3%0 9o you ha'e any pro'isions for regulating the 'olu(e of business done by any indi'idual (e(ber other than through a syste( of (argins P If so, gi'e details0 330 Khat pro'isions ha'e you (ade for periodical settle(ent of contracts and differences thereunder, the deli'ery of, and pay(ent for securities and the passing of deli'ery orders P 3$0 9o you ha'e a clearing house for the settle(ent of contracts P If so, gi'e details of its organisation and (anage(ent0 3"0 If you ha'e clearing house, what returns do the (e(bers of your exchange sub(it regarding the transactions cleared through such clearing house P 9oes the exchange as) for any regular returns in respect of transactions settled outside the clearing house P Sub(it three copies of for(s used in this connection0 3#0 Iow do you fix, alter or postpone the dates of settle(ent P 3/0 Iow do you deter(ine and declare (a)ing+up prices P 3>0 9o you ha'e any arrange(ents for (a)ing or recording of bargains P 3!0 Ia'e you any arrange(ents for recording and publishing (ar)et rates including opening, closing, highest and lowest rates P $00 Khat pro'isions ha'e you (ade for regulating-(a) the entering into contracts, their
perfor(ance and rescission, including contracts , (i) between (e(bers, (ii) between a (e(ber and his constituent, and (iii) between a (e(ber and a non+(e(ber3 (b) the conse*uences of breach, default or insol'ency on the part of (e(bers whether acting as buyers, sellers or inter(ediaries 3 and (c) 2havala#3 and other (atters relating to conduct of business of (e(bers in the exchange P $ 0 9o you prescribe (argin re*uire(ents P If yes, gi'e details0 $%0 9o you prescribe (axi(u( and (ini(u( prices for securities P If so, how and under what conditions0 $30 9o you pro'ide any safeguards for the pre'ention of Nbulls*ueeFesJ and 3 NbearraidsJ and for (eeting e(ergencies in trade P &i'e details0 $$0 Khat are the (easures adopted by you to regulate or prohibit ad'ertising or issue of circulars by your (e(bers P $"0 Khat are the disciplinary power with the go'erning body to enforce due co(pliance by (e(bers of the rules and bye+laws of the exchange and generally to ensure proper standard of business conduct P $#0 9o you re*uire (e(bers to supply such infor(ation or explanation and to produce such boo)s relating to their business as your go'erning body (ay re*uire P $/0 9o you publish any statistics in regard to business done on the exchange including the transactions settled through the clearing house, if (aintained P In particular, ha'e you e'ol'ed any (achinery for co(puting the 'olu(e of transactions in the different )inds of contracts per(itted on your exchange P &i'e details0 $>0 9o you ha'e any bye+laws contra'ention of which (a)es a contract 'oid P Part V - Miscellaneo s $!0 9o you ha'e any (achinery for arbitration of disputes between (e(bers andLor between (e(bers and their constituents P &i'e details0 "00 Khat are the conditions subDect to which securities are listed for dealings on your exchange P " 0 Khat are your re*uire(ents for ad(itting securities to forward+trading P "%0 9o you ha'e the right to prohibit, withdraw or suspend dealings in a listed security P If so, under what circu(stances is this right exercised P "30 Khat pro'isions ha'e you (ade for the le'y and reco'ery of fees, fines and penalties P FORM B ( ee rules # and /) $$5The Se'*ritie! % - E#'h% (e ;o%r- of I -i%< 4e. 5elhi' the 20&&&&&&&&&&&&& Eo0 000000000000000000000000000000000000.he $"4Securities and 7xchange 8oard of India:, ha'ing considered the application for recognitionLrenewal of recognition (ade under section 3 of the Securities Contracts (Regulation) Act, !"# by000000000000000000000000000000 (na(e and address of exchange) and being satisfied that it would be in the interest of the trade and also in the public interest so to do, hereby grants, in exercise of the powers conferred by section $ of the Securities Contracts (Regulation) Act, !"# recognition to the said exchange under section $ of the said Act for 0000000000000000000 yearLyears ending 0000000000000000000000%0 0000000on a per(anent basis in respect of contracts in securities subDect to the conditions stated herein below or as (ay be prescribed or i(posed hereafter0 Seal of the $#48oard: Signature of Cfficer
Note&-Application for renewal of recognition shall be (ade so as to reach the Central &o'ern(ent not less than three (onths before the expiry of the period0 (.his certificate, will also ha'e to be published as a Eotification in the &aFette of India and also in the Cfficial &aFette of the State in which principal office of the recognised stoc) exchange is situate)0 $/5FORM ! ( ee rule 3) Noti'e to !ho/ '%*!e %(%i !t the /ith-r%/%l of re'o( itio .I7 S7CHRI.I7S AE9 7ACIAE&7 8CAR9 C6 IE9IA 6!"bai' the&&&&&&&&&&& .o 0000000000000000000000000000000000000000000000000000000000000000000000000000000000
$$ Substituted
for 1&o'ern(ent of India, ?inistry of 6inance2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 $" Substituted for 1Central &o'ern(ent2, ibid0 $# Substituted for 1?inistry2, ibid0 $/ Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#
0000000000000000000000000000000000000000000000000000000000000000000000000000000000 (na(e and address of the exchange) Oou are hereby called upon to show cause on or before 0000000000000000000000000000000000000 at the office of 0000000000000000000000000000000000000000000000000000 ( designation of the officer) why the recognition granted to you under the ?inistry of 6inanceLthe Securities and 7xchange 8oard of India, Eotification Eo0 0000000000000000000000000000 dated 000000000000000000000000000000000000000 and Certificate Eo0 00000000000000000000000000000 dated 000000000000000000000000000000 should not be withdrawn for the reasons gi'en in the annexure to this notice0 8y order and in the na(e of the Securities and 7xchange 8oard of India0 Seal of the Securities and 7xchange 8oard of India0 Notifi'%tio & 4$& 576' dated 217271957&
SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< SECTIONS
80(9:6:4A0; 1. Short title, extent and co((ence(ent ". 9efinitions 0(/<=4: (5 1</> (?/@A4=( ). Application for recognition of stoc) exchanges 3. &rant of recognition to stoc) exchanges0 3A. Corporatisation and de(utualisation of stoc) exchanges 3;. <rocedure for corporatisation and de(utualisation 5. Kithdrawal of recognition 8. <ower of Central &o'ern(ent to call for periodical returns or direct in*uiries to be (ade 7. Annual reports to be furnished to Central &o'ern(ent by stoc) exchanges 7A. <ower of recognised stoc) exchange to (a)e rules restricting 'oting rights, etc :. <ower of Central &o'ern(ent to direct rules to be (ade or to (a)e rules :A. Clearing corporation 9. <ower of recognised stoc) exchanges to (a)e bye+laws 1=. <ower of Securities and 7xchange 8oard of India to (a)e or a(end byelaws of recognised stoc) exchanges 11. <ower of Central &o'ern(ent to supersede go'erning body of a recognised stoc) exchange 1". <ower to suspend business of recognised stoc) exchanges0 1"A. <ower to issue directions 1). Contracts in notified areas illegal in certain circu(stances 1)A. Additional trading floor 13. Contracts in notified areas to be 'oid in certain circu(stances 15. ?e(bers (ay not act as principals in certain circu(stances 18. <ower to prohibit contracts in certain cases 17. =icensing of dealers in securities in certain areas 17A. <ublic issue and listing of securities referred to in sub+clause ( ie) of clause (h) of section % 1:. 7xclusion of spot deli'ery contracts fro( sections 3, $, " and / 1:A. Contracts in deri'ati'e 19. Stoc) exchanges other than recognised stoc) exchanges prohibited "=. <rohibition of options in securities "1. Conditions for listing "1A. 9elisting of securities "". Right of appeal against refusal of stoc) exchanges to list securities of public co(panies ""A. Right of appeal to Securities Appellate .ribunal against refusal of stoc) exchange to list securities of public co(panies "";. <rocedure and powers of Securities Appellate .ribunal ""C. Right to legal representation ""D. =i(itation ""E. Ci'il court not to ha'e Durisdiction
""2. Appeal to Supre(e Court 8(4A91:( A45 80</(5A0( "). <enalties ")A. <enalty for failure to furnish infor(ation, return, etc0 ");. <enalty for failure by any person to enter into an agree(ent with clients ")C. <enalty for failure to redress in'estorsJ grie'ances ")D. <enalty for failure to segregate securities or (oneys of client or clients ")E. <enalty for failure to co(ply with pro'ision of listing conditions or delisting conditions or grounds ")2. <enalty for excess de(aterialisation or deli'ery of unlisted securities ")G. <enalty for failure to furnish periodical returns, etc0 ")D. <enalty for contra'ention where no separate penalty has been pro'ided ")0I. <ower to adDudicate ")E. 6actors to be ta)en into account by adDudicating officer ")EA. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! ")E;. Re'o+er> of %.o* t! ")F. Crediting su(s realised by way of penalties to Consolidated 6und of India ")L. Appeal to Securities Appellate .ribunal ")@. Cffences ")N. Co(position of certain offences ")0O. <ower to grant i((unity "3. Cffences by co(panies "5. Certain offences to be cogniFable "8. CogniFance of offences by courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! 6: /(99A4(<A "7. .itle to di'idends "7A. Right to recei'e inco(e fro( collecti'e in'est(ent sche(e "7;. Right to recei'e inco(e fro( (utual fund ":. Act not to apply in certain cases "9. <rotection of action ta)en in good faith "9A. <ower to delegate )=. <ower to (a)e rules )1. <ower of Securities and 7xchange 8oard of India to (a)e regulations SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< 53th Se$te.,er, 1958< A A't to $re+e t * -e!ir%,le tr% !%'tio ! i !e'*ritie! ,> re(*l%ti ( the ,*!i e!! of -e%li ( therei , 14***: ,> $ro+i-i ( for 'ert%i other .%tter! 'o e'te- there/ith. 87 it enacted by <arlia(ent in the Se'enth Oear of the Republic of India as follows ,
80(9:6:4A0; Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities Contracts (Regulation) Act, !"#0 (%) It extends to the whole of India0
Kords 1by prohibiting options and2 o(itted by the Securities =aws (A(end(ent) Act, !!", Sec0 >, w0e0f0 %"+0 + !!".
(3) It shall co(e into force on such date% as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 Defi itio !. ". In this Act, unless the context otherwise re*uires,(a) 1contract2 (eans a contract for or relating to the purchase or sale of securities3 3 4(aa) 1corporatisation2 (eans the succession of a recognised stoc) exchange, being a body of indi'iduals or a society registered under the Societies Registration Act, >#0 (% of >#0), by another stoc) exchange, being a co(pany incorporated for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities carried on by such indi'iduals or society3 (ab) 1de(utualisation2 (eans the segregation of ownership and (anage(ent fro( the trading rights of the (e(bers of a recognised stoc) exchange in accordance with a sche(e appro'ed by the Securities and 7xchange 8oard of India3: $4"4(ac): 1deri'ati'e2 includes(A) a security deri'ed fro( a debt instru(ent, share, loan, whether secured or unsecured, ris) instru(ent or contract for differences or any other for( of security3 (B) a contract which deri'es its 'alue fro( the prices, or index of prices, of underlying securities3: (b) 1&o'ern(ent security2 (eans a security created and issued, whether before or after the co((ence(ent of this Act, by the Central &o'ern(ent or a State &o'ern(ent for the purpose of raising a public loan and ha'ing one of the for(s specified in clause (2) of section % of the <ublic 9ebt Act, !$$ ( > of !$$)3 (c) 1(e(ber2 (eans a (e(ber of a recognised stoc) exchange3 (d) 1option in securities2 (eans a contract for the purchase or sale of a right to buy or sell, or a right to buy and sell, securities in future, and includes a teji' a "andi' a teji "andi' a galli' a put, a call or a put and call in securities3 (e) 1prescribed2 (eans prescribed by rules (ade under this Act3
% %0+%+
!"/ vide SRC "%>, dated #+0%+ !"/, published in the &aFette of India, 7xtra0, <t0 II, Sec0 3, p0 "$!, dated #+0%+ !"/0 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 $ Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000 " Clause (aa) renu(bered as clause (ac) by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0
(f) 1recognised stoc) exchange2 (eans a stoc) exchange which is for the ti(e
being recognised by the Central &o'ern(ent under section $3 (g) 1rules2, with reference to the rules relating in general to the constitution and (anage(ent of a stoc) exchange, includes, in the case of a stoc) exchange which is an incorporated association, its (e(orandu( and articles of association3 64(ga) 1sche(e2 (eans a sche(e for corporatisation or de(utualisation of a recognised stoc) exchange which (ay pro'ide for(i) the issue of shares for a lawful consideration and pro'ision of trading rights in lieu of (e(bership cards of (e(bers of a recognised stoc) exchange3 (ii) the restrictions on 'oting rights3 (iii) the transfer of property, business, assets, rights, liabilities, recognitions, contracts of the recognised stoc) exchange, legal proceedings by, or against, the recognised stoc) exchange, whether in the na(e of the recognised stoc) exchange or any trustee or otherwise and any per(ission gi'en to, or by, the recognised stoc) exchange3 (iv) the transfer of e(ployees of a recognised stoc) exchange to another recognised stoc) exchange3 (v) any other (atter re*uired for the purpose of, or in connection with, the corporatisation or de(utualisation, as the case (ay be, of the recognised stoc) exchange3: /4>4(gb): 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (h) 1securities2 include(i) shares, scrips, stoc)s, bonds, debentures, debenture stoc) or other (ar)etable securities of a li)e nature in or of any incorporated co(pany or other body corporate3 !4(ia) deri'ati'e3 (ib) units or any other instru(ent issued by any collecti'e in'est(ent sche(e to the in'estors in such sche(es3:
# Inserted / Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (Second A(end(ent) Act, !!!, Sec %, w0e0f0 #+ %+ !!!0 > Clause (ga) renu(bered as clause (gb) by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 ! Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000
04(ic) security receipt as defined in clause ( Cg) of section % of the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%3: 114(id) units or any other such instru(ent issued to the in'estors under any (utual fund sche(e3: %47xplanation0-6or the re(o'al of doubts, it is hereby declared that ;securities; shall not include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(bined benefit ris) on the life of the persons and in'est(ent by such
persons and issued by an insurer referred to in clause (!) of section % of the Insurance Act, !3> ($ of !3>)3: 35(ie) any certificate or instru(ent (by whate'er na(e called), issued to an in'estor by any issuer being a special purpose distinct entity which possesses any debt or recei'able, including (ortgage debt, assigned to such entity, and ac)nowledging beneficial interest of such in'estor in such debt or recei'able, including (ortgage debt, as the case (ay be3 <
0 Inserted by the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%, Sec0 $ and Schedule, w0r0e0f0 % +#+%00%0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0e0f0 %+ 0+%00$0 % Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, Sec $, w0r0e0f0 0!+0$+%0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, read as under , ;CIA<.7R BI ?ISC7==AE7CHS #0 Dalidati$n&-Eotwithstanding anything contained in any Dudg(ent, decree or order of any Court, .ribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly, any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 0e%eal and #aving#&*( ) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0; 3 Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec %, w0e0f0 %>+"+ %00/0
$4(ii) &o'ern(ent securities3 (iia) such other instru(ents as (ay be declared by the Central &o'ern(ent to be securities3 and: (iii) rights or interest in securities3 "4(i) 1spot deli'ery contract2 (eans a contract which pro'ides for,(a) actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e
town or locality3 (b) transfer of the securities by the depository fro( the account of a beneficial owner to the account of another beneficial owner when such securities are dealt with by a depository3: #4(j) 1stoc) exchange2 (eans(a) any body of indi'iduals, whether incorporated or not, constituted before corporatisation and de(utualisation under sections $A and $8, or (b) a body corporate incorporated under the Co(panies Act, !"# ( of !"#) whether under a sche(e of corporatisation and de(utualisation or otherwise, for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0: /4I ter$ret%tio of 'ert%i /or-! % - e#$re!!io !. "A. Kords and expressions used herein and not defined in this Act but defined in the Co(panies Act, !"# ( of !"#) or the Securities and 7xchange 8oard of India
$ Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, for sub+clause (ii), w0r0e0f0 30+0 + !!%0 " Substituted by the 9epositories Act, !!#, Sec 30 and Schedule, <t0 III, w0r0e0f0 %0+0!+ !!" . <rior to its substitution, clause (i) read as under , N(i) 1spot deli'ery contract2 (eans a contract which pro'ides for the actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e town or locality3J # Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (j) read as under ,N(j) 1stoc) exchange2 (eans any body of indi'iduals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0J / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
Act, !!% ( " of !!%) or the 9epositories Act, !!# (%% of !!#) shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts0: 0(/<=4: (5 1</> (?/@A4=( A$$li'%tio for re'o( itio of !to'6 e#'h% (e!. ). ( ) Any stoc) exchange, which is desirous of being recognised for the purposes of this Act, (ay (a)e an application in the prescribed (anner to the Central &o'ern(ent01: (%) 7'ery application under sub+section ( ) shall contain such particulars as (ay be prescribed, and shall be acco(panied by a copy of the bye+laws of the stoc) exchange for the regulation and control of contracts and also a copy of the rules relating in general to the constitution of the stoc) exchange and in particular, to(a) the go'erning body of such stoc) exchange, its constitution and powers of (anage(ent and the (anner in which its business is to be transacted3 (b) the powers and duties of the office bearers of the stoc) exchange3 (c) the ad(ission into the stoc) exchange of 'arious classes of (e(bers, the *ualifications for (e(bership, and the exclusion, suspension, expulsion and
re+ad(ission of (e(bers therefro( or thereinto3 (d) the procedure for the registration of partnerships as (e(bers of the stoc) exchange in cases where the rules pro'ide for such (e(bership3 and the no(ination and appoint(ent of authorised representati'es and cler)s0 Gr% t of re'o( itio to !to'6 e#'h% (e!. 3. ( ) If the Central &o'ern(ent ! is satisfied, after (a)ing such in*uiry as (ay be necessary in this behalf and after obtaining such further infor(ation, if any, as it (ay re*uire,(a) that the rules and bye+laws of a stoc) exchange applying for registration are in confor(ity with such conditions as (ay be prescribed with a 'iew to ensure fair dealing and to protect in'estors3 (b) that the stoc) exchange is willing to co(ply with any other conditions (including conditions as to the nu(ber of (e(bers) which the Central &o'ern(ent, after consultation with the go'erning body of the stoc) exchange and ha'ing regard to the area ser'ed by the stoc) exchange and its standing and the nature of the securities dealt with by it, (ay i(pose for the purpose of carrying out the obDects of this Act3 and
> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 ! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
(c) that it would be in the interest of the trade and also in the public interest to grant recognition to the stoc) exchange3 it (ay grant recognition to the stoc) exchange subDect to the conditions i(posed upon it as aforesaid and in such for( as (ay be prescribed0 (%) .he conditions which the Central &o'ern(ent %0 (ay prescribe under clause (a) of sub+section ( ) for the grant of recognition to the stoc) exchanges (ay include, a(ong other (atters, conditions relating to,(i) the *ualifications for (e(bership of stoc) exchanges3 (ii) the (anner in which contracts shall be entered into and enforced as between (e(bers3 (iii) the representation of the Central &o'ern(ent on each of the stoc) exchange by such nu(ber of persons not exceeding three as the Central &o'ern(ent (ay no(inate in this behalf3 and (iv) the (aintenance of accounts of (e(bers and their audit by chartered accountants whene'er such audit is re*uired by the Central &o'ern(ent0 (3) 7'ery grant of recognition to a stoc) exchange under this section shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office as of the stoc) exchange is situate, and such recognition shall ha'e effect as fro( the date of its publication in the &aFette of India0 % ($) Eo application for the grant of recognition shall be refused except after gi'ing an opportunity to the stoc) exchange concerned to be heard in the (atter3 and the reasons for such refusal shall be co((unicated to the stoc) exchange in writing0 %% (") Eo rules of a recognised stoc) exchange relating to any of the (atters specified in sub+section (%) of section 3 shall be a(ended except with the appro'al of the
Central &o'ern(ent0%3 "35Cor$or%ti!%tio % - -e.*t*%li!%tio of !to'6 e#'h% (e!. 3A. Cn and fro( the appointed date, all recognised stoc) exchanges (if not corporatised and de(utualised before the appointed date) shall be corporatised and de(utualised in accordance with the pro'isions contained in section $8 ,
%0 <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 % <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %% <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %3 <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 %$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
4ro+i-e- that the Securities and 7xchange 8oard of India (ay, if it is satisfied that any recognised stoc) exchange was pre'ented by sufficient cause fro( being corporatised and de(utualised on or after the appointed date, specify another appointed date in respect of that recognised stoc) exchange and such recognised stoc) exchange (ay continue as such before such appointed date0 ()%lanati$n&*6or the purposes of this section, 1appointed date2 (eans the date which the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, appoint and different appointed dates (ay be appointed for different recognised stoc) exchanges0: "554ro'e-*re for 'or$or%ti!%tio % - -e.*t*%li!%tio . 3;. ( ) All recognised stoc) exchanges referred to in section $A shall, within such ti(e as (ay be specified by the Securities and 7xchange 8oard of India, sub(it a sche(e for corporatisation and de(utualisation for its appro'al , 4ro+i-e- that the Securities and 7xchange 8oard of India, (ay, by notification in the Cfficial &aFette, specify na(e of the recognised stoc) exchange, which had already been corporatised and de(utualised, and such stoc) exchange shall not be re*uired to sub(it the sche(e under this section0 (%) Cn receipt of the sche(e referred to in sub+section ( ), the Securities and 7xchange 8oard of India (ay, after (a)ing such en*uiry as (ay be necessary in this behalf and obtaining such further infor(ation, if any, as it (ay re*uire and if it is satisfied that it would be in the interest of the trade and also in the public interest, appro'e the sche(e with or without (odification0 (3) Eo sche(e under sub+section (%) shall be appro'ed by the Securities and 7xchange 8oard of India if the issue of shares for a lawful consideration or pro'ision of trading rights in lieu of (e(bership card of the (e(bers of a recognised stoc) exchange or pay(ent of di'idends to (e(bers ha'e been proposed out of any reser'es or assets of that stoc) exchange0 ($) Khere the sche(e is appro'ed under sub+section (%), the sche(e so appro'ed shall be published i((ediately by(a) the Securities and 7xchange 8oard of India in the Cfficial &aFette3 (b) the recognised stoc) exchange in such two daily newspapers circulating in India, as (ay be specified by the Securities and 7xchange 8oard of India,
and upon such publication, notwithstanding anything to the contrary contained in this Act or any other law for the ti(e being in force or any agree(ent, award, Dudg(ent, decree or other instru(ent for the ti(e being in force, the sche(e shall ha'e effect and be binding on all persons and authorities including all (e(bers, creditors, depositors and e(ployees of the recognised stoc) exchange and on all
%" Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
persons ha'ing any contract, right, power, obligation or liability with, against, o'er, to, or in connection with, the recognised stoc) exchange or its (e(bers0 (") Khere the Securities and 7xchange 8oard of India is satisfied that it would not be in the interest of the trade and also in the public interest to appro'e the sche(e under sub+section (%), it (ay, by an order, reDect the sche(e and such order of reDection shall be published by it in the Cfficial &aFette , 4ro+i-e- that the Securities and 7xchange 8oard of India shall gi'e a reasonable opportunity of being heard to all the persons concerned and the recognised stoc) exchange concerned before passing an order reDecting the sche(e0 (#) .he Securities and 7xchange 8oard of India (ay, while appro'ing the sche(e under sub+section (%), by an order in writing, restrict(a) the 'oting rights of the shareholders who are also stoc) bro)ers of the reognised stoc) exchange3 (b) the right of shareholders or a stoc) bro)er of the recognised stoc) exchange to appoint the representati'es on the go'erning board of the stoc) exchange3 (c) the (axi(u( nu(ber of representati'es of the stoc) bro)ers of the recognised stoc) exchange to be appointed on the go'erning board of the recognised stoc) exchange, which shall not exceed one+fourth of the total strength of the go'erning board0 (/) .he order (ade under sub+section (#) shall be published in the Cfficial &aFette and on the publication thereof, the order shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#), or any other law for the ti(e being in force, ha'e full effect0 (>) 7'ery recognised stoc) exchange, in respect of which the sche(e for corporatisation or de(utualisation has been appro'ed under sub+section (%), shall, either by fresh issue of e*uity shares to the public or in any other (anner as (ay be specified by the regulations (ade by the Securities and 7xchange 8oard of India %#, ensure that at least fifty+one per cent of its e*uity share capital is held, within twel'e (onths fro( the date of publication of the order under sub+section (/), by the public other than shareholders ha'ing trading rights , 4ro+i-e- that the Securities and 7xchange 8oard of India (ay, on sufficient cause being shown to it and in the public interest, extend the said period by another twel'e (onths0:
ee Securities Contracts (Regulation) (Stoc) 7xchanges and Clearing Corporations) Regulations, %0 %, w0e0f0 %0+0#+%0 % notified vide &aFette Eotification Eo0 =A9+ ERCL&EL%0 %+ 3L0/L 3"$#, 7xtra0, <t0 III, Section $, dtd %0+0#+%0 %0
%#
?ith-r%/%l of re'o( itio .
5. %/4( ): If the Central &o'ern(ent%> is of opinion that the recognition granted to a stoc) exchange under the pro'isions of this Act should, in the interest of the trade or in the public interest, be withdrawn, the Central &o'ern(ent (ay ser'e on the go'erning body of the stoc) exchange a written notice that the Central &o'ern(ent is considering the withdrawal of the recognition for the reasons stated in the notice and after gi'ing an opportunity to the go'erning body to be heard in the (atter, the Central &o'ern(ent (ay withdraw, by notification in the Cfficial &aFette, the recognition granted to the stoc) exchange , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Central &o'ern(ent (ay, after consultation with the stoc) exchange, (a)e such pro'ision as it dee(s fit in the notification of withdrawal or in any subse*uent notification si(ilarly published for the due perfor(ance of any contracts outstanding on that date0 %!4(%) Khere the recognised stoc) exchange has not been corporatised or de(utualised or it fails to sub(it the sche(e referred to in sub+section ( ) of section $8 within the specified ti(e therefor or the sche(e has been reDected by the Securities and 7xchange 8oard of India under sub+section (") of section $8, the recognition granted to such stoc) exchange under section $, shall, notwithstanding anything to the contrary contained in this Act, stand withdrawn and the Central &o'ern(ent shall publish, by notification in the Cfficial &aFette, such withdrawal of recognition , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Securities and 7xchange 8oard of India (ay, after consultation with the stoc) exchange, (a)e such pro'isions as it dee(s fit in the order reDecting the sche(e published in the Cfficial &aFette under sub+section (") of section $80: 4o/er of Ce tr%l Go+er .e t to '%ll for $erio-i'%l ret*r ! or -ire't i 7*irie! to ,e .%-e. 8. ( ) 7'ery recognised stoc) exchange shall furnish to the 304Securities and 7xchange 8oard of India: such periodical returns relating to its affairs as (ay be prescribed0
%/ Section
" renu(bered as sub+section ( ) by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 %> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 30 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(%) 7'ery recognised stoc) exchange and e'ery (e(ber thereof shall (aintain and preser'e for such periods not exceeding fi'e years such boo)s of account, and other docu(ents as the Central &o'ern(ent, after consultation with the stoc) exchange concerned, (ay prescribe in the interest of the trade or in the public interest, and such boo)s of account, and other docu(ents shall be subDect to inspection at all reasonable ti(es 3 4by the Securities and 7xchange 8oard of India:0 (3) Kithout preDudice to the pro'isions contained in sub+sections ( ) and (%), the
3%4Securities
and 7xchange 8oard of India:, if it is satisfied that it is in the interest of the trade or in the public interest so to do, (ay, by order in writing,(a) call upon a recognised stoc) exchange or any (e(ber thereof to furnish in writing such infor(ation or explanation relating to the affairs of the stoc) exchange or of the (e(ber in relation to the stoc) exchange as the 334Securities and 7xchange 8oard of India: (ay re*uire3 or (b) appoint one or (ore persons to (a)e an in*uiry in the prescribed (anner in relation to the affairs of the go'erning body of a stoc) exchange or the affairs of any of the (e(bers of the stoc) exchange in relation to the stoc) exchange and sub(it a report of the result of such in*uiry to the 3$4Securities and 7xchange 8oard of India: within such ti(e as (ay be specified in the order or, in the case of an in*uiry in relation to the affairs of any of the (e(bers of a stoc) exchange, direct the go'erning body to (a)e the in*uiry and sub(it its report to the 3"4Securities and 7xchange 8oard of India:0 ($) Khere an in*uiry in relation to the affairs of a recognised stoc) exchange or the affairs of any of its (e(bers in relation to the stoc) exchange has been underta)en under sub+section (3),(a) e'ery director, (anager, secretary or other officer of such stoc) exchange3 (b) e'ery (e(ber of such stoc) exchange3 (c) if the (e(ber of the stoc) exchange is a fir(, e'ery partner, (anager, secretary or other officer of the fir(3 and (d) e'ery other person or body of persons who has had dealings in the course of business with any of the persons (entioned in clauses ( a), (b) and (c), whether directly or indirectly3
Substituted for ;by the Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3% Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 33 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3" Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
3
shall be bound to produce before the authority (a)ing the in*uiry all such boo)s of account, and other docu(ents in his custody or power relating to or ha'ing a bearing on the subDect+(atter of such in*uiry and also to furnish the authorities within such ti(e as (ay be specified with any such state(ent or infor(ation relating thereto as (ay be re*uired of hi(0 )8A *%l re$ort! to ,e f*r i!he- to Ce tr%l Go+er .e t ,> !to'6 e#'h% (e!. 7. 7'ery recognised stoc) exchange shall furnish the Central &o'ern(ent with a copy of the annual report, and such annual report shall contain such particulars as (ay be prescribed0 )754o/er of re'o( i!e- !to'6 e#'h% (e to .%6e r*le! re!tri'ti ( +oti ( ri(ht!, et'. 7A. ( ) A recognised stoc) exchange (ay (a)e rules or a(end any rules (ade by it
to pro'ide for all or any of the following (atters, na(ely ,(a) the restriction of 'oting rights to (e(bers only in respect of any (atter placed before the stoc) exchange at any (eeting3 (b) the regulation of 'oting rights in respect of any (atter placed before the stoc) exchange at any (eeting so that each (e(ber (ay be entitled to ha'e one 'ote only, irrespecti'e of his share of the paid+up e*uity capital of the stoc) exchange3 (c) the restriction on the right of a (e(ber to appoint another person as his proxy to attend and 'ote at a (eeting of the stoc) exchange3 (d) such incidental, conse*uential and supple(entary (atters as (ay be necessary to gi'e effect to any of the (atters specified in clauses ( a), (b) and (c)0 (%) Eo rules of a recognised stoc) exchange (ade or a(ended in relation to any (atter referred to in clauses (a) to (d) of sub+section ( ) shall ha'e effect until they ha'e been appro'ed by the Central &o'ern(ent 3> and published by that &o'ern(ent in the Cfficial &aFette and, in appro'ing the rules so (ade or a(ended, the Central &o'ern(ent (ay (a)e such (odifications therein as it thin)s fit, and on such publication, the rules as appro'ed by the Central &o'ern(ent shall be dee(ed to ha'e been 'alidly (ade, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#)0:
3# <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 3/ Inserted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec %, w0e0f0 0>+ %+ !"!0 3> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
4o/er of Ce tr%l Go+er .e t )9 to -ire't r*le! to ,e .%-e or to .%6e r*le!. :. ( ) Khere, after consultation with the go'erning bodies of stoc) exchanges generally or with the go'erning body of any stoc) exchange in particular, the Central &o'ern(ent is of opinion that it is necessary or expedient so to do, it (ay, by order in writing together with a state(ent of the reasons therefor, direct recognised stoc) exchanges generally or any recognised stoc) exchange in particular, as the case (ay be, to (a)e any rules or to a(end any rules already (ade in respect of all or any of the (atters specified in sub+section (%) of section 3 within a period of $04two (onths: fro( the date of the order0 (%) If any recognised stoc) exchange fails or neglects to co(ply with any order (ade under sub+section ( ) within the period specified therein, the Central &o'ern(ent (ay (a)e the rules for, or a(end the rules (ade by, the recognised stoc) exchange, either in the for( proposed in the order or with such (odifications thereof as (ay be agreed to between the stoc) exchange and the Central &o'ern(ent0 (3) Khere in pursuance of this section any rules ha'e been (ade or a(ended, the rules so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette or &aFettes of the State or States in which the principal office or offices of the recognised stoc) exchange or exchanges is or are situate, and, on the publication thereof in the &aFette of India, the rules so (ade or a(ended shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# (
of !"#), or in any other law for the ti(e being in force, ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange or stoc) exchanges, as the case (ay be0 315Cle%ri ( 'or$or%tio . :A. ( ) A recognised stoc) exchange (ay, with the prior appro'al of the Securities and 7xchange 8oard of India, transfer the duties and functions of a clearing house to a clearing corporation, being a co(pany incorporated under the Co(panies Act, !"# ( of !"#), for the purpose of(a) the periodical settle(ent of contracts and differences thereunder3 (b) the deli'ery of, and pay(ent for, securities3 (c) any other (atter incidental to, or connected with, such transfer0 (%) 7'ery clearing corporation shall, for the purpose of transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( ),
3! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 $0 Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec !, w0e0f0 %"+ 0 + !!"0 $ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0
(a)e bye+laws and sub(it the sa(e to the Securities and 7xchange 8oard of India for its appro'al0 (3) .he Securities and 7xchange 8oard of India (ay, on being satisfied that it is in the interest of the trade and also in the public interest to transfer the duties and functions of a clearing house to a clearing corporation, grant appro'al to the byelaws sub(itted to it under sub+section (%) and appro'e the transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( )0 ($) .he pro'isions of sections $, ", #, /, >, !, 0, and % shall, as far as (ay be, apply to a clearing corporation referred to in sub+section ( ) as they apply in relation to a recognised stoc) exchange0: 4o/er of re'o( i!e- !to'6 e#'h% (e! to .%6e ,>e0l%/!. 9. ( ) Any recognised stoc) exchange (ay, subDect to the pre'ious appro'al of the $%4Securities and 7xchange 8oard of India:, (a)e bye+laws for the regulation and control of contracts0 (%) In particular, and without preDudice to the generality of the foregoing power, such bye+laws (ay pro'ide for , (a) the opening and closing of (ar)ets and the regulation of the hours of trade3 (b) a clearing house for the periodical settle(ent of contracts and differences thereunder, the deli'ery of and pay(ent for securities, the passing on of deli'ery orders and the regulation and (aintenance of such clearing house3 (c) the sub(ission to the $34Securities and 7xchange 8oard of India: by the clearing house as soon as (ay be after each periodical settle(ent of all or any of the following particulars as the $$4Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, re*uire, na(ely ,(i) the total nu(ber of each category of security carried o'er fro( one settle(ent period to another3 (ii) the total nu(ber of each category of security, contracts in respect of
which ha'e been s*uared up during the course of each settle(ent period3 (iii) the total nu(ber of each category of security actually deli'ered at each clearing3
$% Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(d) the publication by the clearing house of all or any of the particulars sub(itted to the $"4Securities and 7xchange 8oard of India: under clause ( c) subDect to the directions, if any, issued by the $#4Securities and 7xchange 8oard of India: in this behalf3 (e) the regulation or prohibition of blan) transfers3 (f) the nu(ber and classes of contracts in respect of which settle(ents shall be (ade or differences paid through the clearing house3 (g) the regulation, or prohibition of b!dla# or carry+o'er facilities3 (h) the fixing, altering or postponing of days for settle(ents3 (i) the deter(ination and declaration of (ar)et rates, including the opening, closing highest and lowest rates for securities3 (j) the ter(s, conditions and incidents of contracts, including the prescription of (argin re*uire(ents, if any, and conditions relating thereto, and the for(s of contracts in writing3 (k) the regulation of the entering into, (a)ing, perfor(ance, recession and ter(ination, of contracts, including contracts between (e(bers or between a (e(ber and his constituent or between a (e(ber and a person who is not a (e(ber, and the conse*uences of default or insol'ency on the part of a seller or buyer or inter(ediary, the conse*uences of a breach or o(ission by a seller or buyer, and the responsibility of (e(bers who are not parties to such contracts3 (l) the regulation of taravani business including the placing of li(itations thereon3 (") the listing of securities on the stoc) exchange, the inclusion of any security for the purpose of dealings and the suspension or withdrawal of any such securities, and the suspension or prohibition of trading in any specified securities3 (n) the (ethod and procedure for the settle(ent of clai(s or disputes, including settle(ent by arbitration3 ($) the le'y and reco'ery of fees, fines and penalties3 (%) the regulation of the course of business between parties to contracts in any capacity3 (+) the fixing of a scale of bro)erage and other charges3 (r) the (a)ing, co(paring, settling and closing of bargains3 (#) the e(ergencies in trade which (ay arise, whether as a result of pool or syndicated operations or cornering or otherwise, and the exercise of powers in
$" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%,
Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $# Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
such e(ergencies, including the power to fix (axi(u( and (ini(u( prices for securities3 (t) the regulation of dealings by (e(bers for their own account3 (!) the separation of the functions of Dobbers and bro)ers3 (v) the li(itations on the 'olu(e of trade done by any indi'idual (e(ber in exceptional circu(stances3 (.) the obligation of (e(bers to supply such infor(ation or explanation and to produce such docu(ents relating to the business as the go'erning body (ay re*uire0 (3) .he bye+laws (ade under this section (ay(a) specify the bye+laws the contra'ention of which shall (a)e a contract entered into otherwise than in accordance with the bye+laws 'oid under sub+section ( ) of section $3 (b) pro'ide that the contra'ention of any of the bye+laws shall render the (e(ber concerned liable to one or (ore of the following punish(ents, na(ely ,(i) fine, (ii) expulsion fro( (e(bership, (iii) suspension fro( (e(bership for a specified period, (iv) any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney0 ($) Any bye+laws (ade under this section shall be subDect to such conditions in regard to pre'ious publication as (ay be prescribed, and, when appro'ed by the $/4Securities and 7xchange 8oard of India:, shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and shall ha'e effect as fro( the date of its publication in the &aFette of India , 4ro+i-e- that if the $>4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+law should be (ade i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0
$/ Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $> Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4o/er of 395Se'*ritie! % - E#'h% (e ;o%r- of I -i%< to .%6e or %.e - ,>e0l%/! of re'o( i!e- !to'6 e#'h% (e!. 1=. ( ) .he "04Securities and 7xchange 8oard of India: (ay, either on a re*uest in writing recei'ed by it in this behalf fro( the go'erning body of a recognised stoc) exchange or on its own (otion, if it is satisfied after consultation with the go'erning body of the stoc) exchange that it is necessary or expedient so to do and after recording its reasons for so doing, (a)e bye+laws for all or any of the (atters specified in section ! or a(end any bye+laws (ade by such stoc) exchange under that section0
(%) Khere in pursuance of this section any bye+laws ha'e been (ade or a(ended the bye+laws so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and on the publication thereof in the &aFette of India, the bye+laws so (ade or a(ended shall ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange concerned0 (3) Eotwithstanding anything contained in this section, where the go'erning body of a recognised stoc) exchange obDects to any bye+laws (ade or a(ended under this section by the " 4Securities and 7xchange 8oard of India: on its own (otion, it (ay, within "%4two (onths: of the publication thereof in the &aFette of India under subsection (%), apply to the "34Securities and 7xchange 8oard of India: for re'ision thereof, and the "$4Securities and 7xchange 8oard of India: (ay, after gi'ing an opportunity to the go'erning body of the stoc) exchange to be heard in the (atter, re'ise the bye+laws so (ade or a(ended, anywhere any bye+laws so (ade or a(ended are re'ised as a result of any action ta)en under this sub+section, the byelaws so re'ised shall be published and shall beco(e effecti'e as pro'ided in subsection (%)0 ($) .he (a)ing or the a(end(ent or re'ision of any bye+laws under this section shall in all cases be subDect to the condition of pre'ious publication ,
$! Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "0 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 " Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "% Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec %0, w0e0f0 %"+ 0 + !!"0 "3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4ro+i-e- that if the ""4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+laws should be (ade, a(ended or re'ised i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0 4o/er of Ce tr%l Go+er .e t 58 to !*$er!e-e (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e. 11. ( ) Kithout preDudice to any other powers 'ested in the Central &o'ern(ent under this Act, where the Central &o'ern(ent is of opinion that the go'erning body of any recognised stoc) exchange should be superseded, then, notwithstanding anything contained in any other law for the ti(e being in force, in the Central &o'ern(ent (ay ser'e on the go'erning body a written notice that the Central &o'ern(ent is considering the supersession of the go'erning body for the reasons specified in the notice and after gi'ing an opportunity to the go'erning body to be
heard in the (atter, it (ay, by notification in the Cfficial &aFette, declare the go'erning body of such stoc) exchange to be superseded, and (ay appoint any person or persons to exercise and perfor( all the powers and duties of the go'erning body, and, where (ore persons than one are appointed, (ay appoint one of such persons to be the chair(an and another to be the 'ice+chair(an thereof0 (%) Cn the publication of a notification in the Cfficial &aFette under sub+section ( ), the following conse*uences shall ensue, na(ely,(a) the (e(bers of the go'erning body which has been superseded shall, as fro( the date of the notification of supersession, cease to hold office as such (e(bers3 (b) the person or persons appointed under sub+section ( ) (ay exercise and perfor( all the powers and duties of the go'erning body which has been superseded3 (c) all such property of the recognised stoc) exchange as the person or persons appointed under sub+section ( ) (ay, by order in writing, specify in this behalf as being necessary for the purpose of enabling hi( or the( to carry on the business of the stoc) exchange, shall 'est in such person or persons0 (3) Eotwithstanding anything to the contrary contained in any law or the rules or bye+laws of the recognised stoc) exchange the go'erning body of which is superseded under sub+section ( ), the person or persons appointed under that subsection shall hold office for such period as (ay be specified in the notification published under that sub+section and the Central &o'ern(ent (ay fro( ti(e to ti(e, by li)e notification, 'ary such period0
"" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "# <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0
($) .he Central &o'ern(ent (ay at any ti(e before the deter(ination of the period of office of any person or persons appointed under this section call upon the recognised stoc) exchange to re+constitute the go'erning body in accordance with its rules and on such re+constitution all the property of the recognised stoc) exchange which has 'ested in, or was in the possession of, the person or persons appointed under sub+section ( ), shall re+'est or 'est, as the case (ay be, in the go'erning body so re+constituted , 4ro+i-e- that until a go'erning body is so re+constituted, the person or persons appointed under sub+section ( ) shall continue to exercise and perfor( their powers and duties0 4o/er57 to !*!$e - ,*!i e!! of re'o( i!e- !to'6 e#'h% (e!. 1". If in the opinion of the Central &o'ern(ent an e(ergency has arisen and for the purpose of (eeting the e(ergency the Central &o'ern(ent considers it expedient so to do, it (ay, by notification in the Cfficial &aFette, for reasons to be set out therein, direct a recognised stoc) exchange to suspend such of its business for such period not exceeding se'en days and subDect to such conditions as (ay be specified in the notification, and, if, in the opinion of the Central &o'ern(ent, the interest of
the trade or the public interest re*uires that the period should be extended, (ay, by li)e notification extend the said period fro( ti(e to ti(e , 4ro+i-e- that where the period of suspension is to be extended beyond the first period, no notification extending the period of suspension shall be issued unless the go'erning body of the ">4recognised stoc) exchange: has been gi'en an opportunity of being heard in the (atter0 "!54o/er to i!!*e -ire'tio !. 1"A. If, after (a)ing or causing to be (ade an in*uiry, the Securities and 7xchange 8oard of India is satisfied that it is necessary(a) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (b) to pre'ent the affairs of any recognised stoc) exchange or clearing corporation, or such other agency or person, pro'iding trading or clearing or settle(ent facility in respect of securities, being conducted in a (anner detri(ental to the interests of in'estors or securities (ar)et3 or (c) to secure the proper (anage(ent of any such stoc) exchange or clearing corporation or agency or person, referred to in clause ( b),
"/ <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 "> Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 "! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0
it (ay issue such directions,(i) to any stoc) exchange or clearing corporation or agency or person referred to in clause (b) or any person or class of persons associated with the securities (ar)et3 or (ii) to any co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 8=5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< /<410A/1 A45 <81:<4 :4 (/A0:1:( Co tr%'t! i otifie- %re%! ille(%l i 'ert%i 'ir'*.!t% 'e!. 1). If the Central &o'ern(ent# is satisfied, ha'ing regard to the nature or the 'olu(e of transactions in securities in any #%4State or States or area: that it is necessary so to do, it (ay, by notification in the Cfficial &aFette, declared this section to apply to such #34State or States or area:, and thereupon e'ery contract in such #$4State or States or area: which is entered into after the date of the notification otherwise than #"4between (e(bers of a recognised stoc) exchange or recognised stoc) exchanges: in such ##4State or States or area: or through or with such (e(ber shall be illegal ,
#0 I #
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 #% Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #3 Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #$ Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$ for ;between (e(bers of a recognised stoc) exchange; & ## Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0
#/54ro+i-e-
that any contract entered into between (e(bers of two or (ore recognised stoc) exchanges in such State or States or area, shall(i) be subDect to such ter(s and conditions as (ay be stipulated by the respecti'e stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India3 (ii) re*uire prior per(ission fro( the respecti'e stoc) exchanges if so stipulated by the stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India0: #>4A--itio %l tr%-i ( floor. 1)A. A stoc) exchange (ay establish additional trading floor with the prior appro'al of the Securities and 7xchange 8oard of India in accordance with the ter(s and conditions stipulated by the said 8oard0 ()%lanati$n , 6or the purposes of this section, 1additional trading floor2 (eans a trading ring or trading facility offered by a recognised stoc) exchange outside its area of operation to enable the in'estors to buy and sell securities through such trading floor under the regulatory fra(ewor) of that stoc) exchange0: Co tr%'t! i otifie- %re%! to ,e +oi- i 'ert%i 'ir'*.!t% 'e!. 13. ( ) Any contract entered into in any State or area specified in the notification under section 3 which is in contra'ention of any of the bye+laws specified in that behalf under clause (a) of sub+section (3) of section ! shall be 'oid , (i) as respects the rights of any (e(ber of the recognised stoc) exchange who has entered into such contract in contra'ention of any such bye+law, and also (ii) as respects the rights of any other person who has )nowingly participated in the transaction entailing such contra'ention0 (%) Eothing in sub+section ( ) shall be construed to affect the right of any person other than a (e(ber of the recognised stoc) exchange to enforce any such contract or to reco'er any su( under or in respect of such contract if such person had no )nowledge that the transaction was in contra'ention of any of the bye+laws specified in clause (a) of sub+section (3) of section !0 @e.,er! .%> ot %'t %! $ri 'i$%l! i 'ert%i 'ir'*.!t% 'e!. 15. Eo (e(ber of a recognised stoc) exchange shall in respect of any securities enter into any contract as a principal with any person other than a (e(ber of a recognised stoc) exchange, unless he has secured the consent or authority of such
#/ Inserted #> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (A(end(ent) Act, !!", Sec % , w0e0f0 %"+0 + !!"0
person and discloses in the note, (e(orandu( or agree(ent of sale or purchase that he is acting as a principal , 4ro+i-e- that where the (e(ber has secured the consent or authority of such person otherwise than in writing he shall secure written confir(ation by such person or such consent or authority within three days fro( the date of the contract , 4ro+i-e- f*rther that no such written consent or authority of such person shall be necessary for closing out any outstanding contract entered into by such person in accordance with the bye+laws, if the (e(ber discloses in the note, (e(orandu( or agree(ent of sale or purchase in respect of such closing out that he is acting as a principal0 4o/er89 to $rohi,it 'o tr%'t! i 'ert%i '%!e!. 18. ( ) If the Central &o'ern(ent is of opinion that it is necessary to pre'ent undesirable speculation in specified securities in any State or area, it (ay, by notification in the Cfficial &aFette, declare that no person in the State or area specified in the notification shall, sa'e with the per(ission of the Central &o'ern(ent, enter into any contract for the sale or purchase of any security specified in the notification except to the extent and in the (anner, if any, specified therein0 (%) All contracts in contra'ention of the pro'isions of sub+section ( ) entered into after the date of notification issued thereunder shall be illegal0 Li'e !i ( of -e%ler! i !e'*ritie! i 'ert%i %re%!. 17. ( ) SubDect to the pro'isions of sub+section (3) and to the other pro'isions contained in this Act, no person shall carry on or purport to carry on, whether on his own behalf or on behalf of any other person, the business of dealing in securities in any State or area to which section 3 has not been declared to apply and to which the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, declare this section to apply, except under the authority of a /04licence granted by the Securities and 7xchange 8oard of India: in this behalf0 (%) Eo notification under sub+section ( ) shall be issued with respect to any State or area unless the Central &o'ern(ent is satisfied, ha'ing regard to the (anner in which securities are being dealt with in such State or area, that it is desirable or
#! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 <owers are exercisable by R8I also 'ide &o'ern(ent of India Eotification Eo0 >3 (7), 9ated 0 +03+%000 in relation to any contracts in go'ern(ent securities, (oney (ar)et securities etc0 /0 Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% for ;licence granted by the Central &o'ern(ent;0
expedient in the interest of the trade or in the public interest that such dealings should be regulated by a syste( of licensing0 (3) .he restrictions i(posed by sub+section ( ) in relation to dealings in securities shall not apply to the doing of anything by or on behalf of a (e(ber of any recognised stoc) exchange0
7154*,li'
i!!*e % - li!ti ( of !e'*ritie! referre- to i !*,0'l%*!e ( ie) of 'l%*!e (h)
of !e'tio ". 17A. ( ) Kithout preDudice to the pro'isions contained in this Act or any other law for the ti(e being in force, no securities of the nature referred to in sub+clause (ie) of clause (h) of section % shall be offered to the public or listed on any recognised stoc) exchange unless the issuer fulfils such eligibility criteria and co(plies with such other re*uire(ents as (ay be specified by regulations (ade by the Securities and 7xchange 8oard of India0 (%) 7'ery issuer referred to in sub+clause (ie) of clause (h) of section % intending to offer the certificates or instru(ents referred therein to the public shall (a)e an application, before issuing the offer docu(ent to the public, to one or (ore recognised stoc) exchanges for per(ission for such certificates or instru(ents to be listed on the stoc) exchange or each such stoc) exchange0 (3) Khere the per(ission applied for under sub+section (%) for listing has not been granted or refused by the recognised stoc) exchanges or any of the(, the issuer shall forthwith repay all (oneys, if any, recei'ed fro( applicants in pursuance of the offer docu(ent, and if any such (oney is not repaid within eight days after the issuer beco(es liable to repay it, the issuer and e'ery director or trustee thereof, as the case (ay be, who is in default shall, on and fro( the expiry of the eighth day, be Dointly and se'erally liable to repay that (oney with interest at the rate of fifteen per cent per annu(0 7xplanation0-In rec)oning the eighth day after another day, any inter'ening day which is a public holiday under the Eegotiable Instru(ents Act, >> (%# of >> ), shall be disregarded, and if the eighth day (as so rec)oned) is itself such a public holiday, there shall for the said purposes be substituted the first day thereafter which is not a holiday0 ($) All the pro'isions of this Act relating to listing of securities of a public co(pany on a recognised stoc) exchange shall, (utatis (utandis, apply to the listing of the securities of the nature referred to in sub+clause (ie) of clause (h) of section % by the issuer, being a special purpose distinct entity0 <
Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec 3, w0e0f0 %>+0"+ %00/0
/
E#'l*!io of !$ot -eli+er> 'o tr%'t! fro. !e'tio ! 1), 13, 15 % - 17. 1:. ( ) Eothing contained in sections 3, $, " and / shall apply to spot deli'ery contracts0 (%) Eotwithstanding anything contained in sub+section ( ), if the Central &o'ern(ent/% is of opinion that in the interest of the trade or in the public interest it is expedient to regulate and control the business of dealing in spot deli'ery contracts also in any State or area (whether section 3 has been declared to apply to that State or area or not), it (ay, by notification in the Cfficial &aFette, declare that the pro'isions of section / shall also apply to such State or area in respect of spot deli'ery contracts generally or in respect of spot deli'ery contracts for the sale or purchase of such securities as (ay be specified in the notification, and (ay also specify the (anner in which, and the extent to which, the pro'isions of that section
shall so apply0 /34Co tr%'t! i -eri+%ti+e. 1:A. Eotwithstanding anything contained in any other law for the ti(e being in force, contracts in deri'ati'e shall be legal and 'alid if such contracts are(a) traded on a recognised stoc) exchange3 (b) settled on the clearing house of the recognised stoc) exchange, in accordance with the rules and bye+laws of such stoc) exchange0: Sto'6 e#'h% (e! other th% re'o( i!e- !to'6 e#'h% (e! $rohi,ite-. 19. ( ) Eo person shall, except with the per(ission of the Central &o'ern(ent, organise or assist in organising or be a (e(ber of any stoc) exchange (other than a recognised stoc) exchange) for the purpose of assisting in, entering into or perfor(ing any contracts in securities0 (%) .his section shall co(e into force in any State or area on such date as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 4rohi,itio of o$tio ! i !e'*ritie!. "=. 734GGGGG:
/% <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 /3 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec 3, w0e0f0 %%+%+%0000 /$ C(itted by the Securities =aws (A(end(ent) Act, !!", Sec %%, w0e0f0 %"+0 + !!"0 <rior to o(ission, section %0 read as under , 1%00 8r$hibiti$n $f $%ti$n# in #ec!ritie#&-( ) Eotwithstanding anything contained in this Act or in any other law for the ti(e being in force, all options in securities entered into after the co((ence(ent of this Act shall be illegal0
9: 1:4= <E (/A0:1:( 754GGG: /#4Co -itio ! for li!ti (. "1. Khere securities are listed on the application of any person in any recognised stoc) exchange, such person shall co(ply with the conditions of the listing agree(ent with that stoc) exchange&: 775Deli!ti ( of !e'*ritie!. "1A. ( ) A recognised stoc) exchange (ay delist the securities, after recording the reasons therefor, fro( any recognised stoc) exchange on any of the ground or grounds as (ay be prescribed under this Act , 4ro+i-e- that the securities of a co(pany shall not be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) A listed co(pany or an aggrie'ed in'estor (ay file an appeal before the Securities Appellate .ribunal against the decision of the recognised stoc) exchange delisting the securities within fifteen days fro( the date of the decision of the recognised stoc) exchange delisting the securities and the pro'isions of sections %%8 to %%7 of this Act, shall apply, as far as (ay be, to such appeals , 4ro+i-e- that the Securities Appellate .ribunal (ay, if it is satisfied that the co(pany was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding one (onth0:
(%) Any option in securities which has been entered into before such co((ence(ent and which re(ains to be perfor(ed, whether wholly or in part, after such co((ence(ent shall, to that
extent, beco(e 'oid02 /" Kords 18O <H8=IC CC?<AEI7S2 o(itted by the Securities =aws (A(end(ent) Act, !!!, Sec $, w0e0f0 %%+0%+%0000 /# Substituted by the Securities =aws (A(end(ent) Act, !!", Sec 33, w0e0f0 %"+0 + !!" . <rior to substitution, section % read as under , 1% 0 8$.er t$ c$"%el li#ting $f #ec!ritie# bF %!blic c$"%anie#& -Eotwithstanding anything contained in any other law for the ti(e being in force, if the Securities and 7xchange 8oard of India is of opinion, ha'ing regard to the nature of the securities issued by any public co(pany as defined in the Co(panies Act, !"# ( of !"#), or to the dealings in the(, that it is necessary or expedient in the interest of the trade or in the public interest so to do, it (ay re*uire the co(pany, after gi'ing it an opportunity of being heard in the (atter, to co(ply with such re*uire(ents as (ay be prescribed with respect to the listing of its securities on any recognised stoc) exchange02 // Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec >, w0r0e0f0 %+ 0+%00$0
7:5Ri(ht
of %$$e%l %(%i !t ref*!%l of !to'6 e#'h% (e! to li!t !e'*ritie! of $*,li' 'o.$% ie!. 79"". Khere a recognised stoc) exchange acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any public co(pany >04or collecti'e in'est(ent sche(e:, the co(pany > 4or sche(e: shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( ) of section /3 of the Co(panies Act, !"# ( of !"#) (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Central &o'ern(ent (ay, on sufficient cause being shown, allow, appeal to the Central &o'ern(ent against such refusal, o(ission or failure, as the case (ay be, and thereupon the Central &o'ern(ent (ay, after gi'ing the stoc) exchange an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange, or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Central &o'ern(ent sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Central &o'ern(ent: , >%44ro+i-e- that no appeal shall be preferred against refusal, o(ission or failure, as the case (ay be, under this section on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!0: :)5Ri(ht of %$$e%l to Se'*ritie! A$$ell%te Tri,* %l %(%i !t ref*!%l of !to'6 e#'h% (e to li!t !e'*ritie! of $*,li' 'o.$% ie!.
/> Substituted
by .he Co(panies (A(end(ent) Act, !/$ (Act Eo0 $ of !/$), Sec $%, w0e0f0 0 + 0%+ !/"0 /! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the
&aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 >0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%00003 Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 > Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%0000 >% Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec $, w0e0f0 #+ %+ !!!0 >3 Sections %%A, %%8, %%C, %%9, %%7 and %%6 inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!!& 7arlier section %%A was inserted by .he
""A. ( ) Khere a recognised stoc) exchange, acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any co(pany, the co(pany shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( A) of section /3 of the Co(panies Act, !"# ( of !"#), (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Securities Appellate .ribunal (ay, on sufficient cause being shown, allow, appeal to the Securities Appellate .ribunal ha'ing Durisdiction in the (atter against such refusal, o(ission or failure, as the case (ay be, and thereupon the Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange, an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange3 or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Securities Appellate .ribunal sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Securities Appellate .ribunal0 (%) 7'ery appeal under sub+section ( ) shall be in such for( and be acco(panied by such fee as (ay be prescribed0 (3) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 ($) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: :354ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. "";. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of
Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec %, w0e0f0 /+ 0 + !>#, and o(itted by the 9epositories Act, !!#, Sec 30 and Sch0, <t0III, w0r0e0f0 %0+0!+ !!"0 >$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath 3 (b) re*uiring the disco'ery and production of docu(ents 3 (c) recei'ing e'idence on affida'its 3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents 3 (e) re'iewing its decisions 3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte ; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0: :55Ri(ht to le(%l re$re!e t%tio . ""C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of sub+section ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of subsection ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of
>" Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
!"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, vakil or an attorney of any Iigh Court, and includes a pleader in practice0: :85Li.it%tio . ""D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0: :75Ci+il 'o*rt ot to h%+e G*ri!-i'tio .
""E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0: ::5A$$e%l to S*$re.e Co*rt. ""2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order, 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: 8(4A91:( A45 80</(5A0( 4e %ltie!. "). ( ) Any person who+
># Inserted >/ Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & >> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec !, w0r0e0f0 %+ 0+%00$0 7arlier section %%6 as inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", read as under,+ 1""2. A$$e%l to Di(h Co*rt.+Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order , 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
(a) without reasonable excuse (the burden of pro'ing which shall be on hi() fails to co(ply with any re*uisition (ade under sub+section ($) of section #3 or (b) enters into any contract in contra'ention of any of the pro'isions contained in section 3 or section #3 or (c) contra'enes the pro'isions contained in >!5section / or section /A<, or section !3 or 90 4(d) enters into any contract in deri'ati'e in contra'ention of section >A or the rules (ade under section 303: (e) owns or )eeps a place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act and )nowingly per(its such place to be used for such purposes3 or (f) (anages, controls, or assists in )eeping any place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act or at which contracts are recorded or adDusted or rights or liabilities arising out of contracts are adDusted, regulated or enforced in any (anner whatsoe'er3 or (g) not being a (e(ber of a recognised stoc) exchange or his agent authorised as
such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section / wilfully represents to or induces any person to belie'e that contracts can be entered into or perfor(ed under this Act through hi(3 or (h) not being a (e(ber of a recognised stoc) exchange or his agent authorised as such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section /, can'asses, ad'ertises or touts in any (anner either for hi(self or on behalf of any other persons for any business connected with contracts in contra'ention of any of the pro'isions of this Act3 or (i) Doins, gathers or assists in gathering at any place other than the place of business specified in the bye+laws of a recognised stoc) exchange any person or persons for (a)ing bids or offers or for entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act3 ! 4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which
>! Inserted
by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec $, w0e0f0 %>+0"+ %00/ for ;section /;0 !0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec #, w0e0f0 %%+0%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 ! Substituted for 1shall, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0
(ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: (%) Any person who enters into any contract in contra'ention of the pro'isions contained in section " !%4or who fails to co(ply with the pro'isions of !34section % or section % A: or with the orders of: or section %% !$4or with the orders of the Securities Appellate .ribunal: !"4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 9854e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. ")A. Any person, who is re*uired under this Act or any rules (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to a recognised stoc) exchange, fails to furnish the sa(e within the ti(e specified therefor in the listing agree(ent or conditions or bye+laws of the recognised stoc) exchange, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to (aintain boo)s of account or records, as per the listing agree(ent or conditions, or bye+laws of a recognised stoc) exchange, fails to (aintain the sa(e, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0:
9754e
%lt> for f%il*re ,> % > $er!o to e ter i to % %(ree.e t /ith 'lie t!. ");. If any person, who is re*uired under this Act or any bye+laws of a recognised stoc) exchange (ade thereunder, to enter into an agree(ent with his client, fails to enter into such an agree(ent, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0:
!% Substituted
for 1or who fails to co(ply with the orders of the Securities and 7xchange 8oard of India under section % 2 by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 <rior to !!", ;Securities and 7xchange 8oard of India under section % or Central &o'ern(ent under section %%; were substituted for ;Central &o'ern(ent under section % or section %%; vide .he Schedule, <art II of Securities and 7xchange 8oard of India Act, !!%, w0e0f0 30+0 + !!%0 !3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec #, w0e0f0 #+ %+ !!!0 !" Substituted for 1shall, on con'iction, be punishable with fine which (ay extend to one thousand rupees2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !# Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$ & !/ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$0
9:54e
%lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. ")C. If any stoc) bro)er or sub+bro)er or a co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, after ha'ing been called upon by the Securities and 7xchange 8oard of India or a recognised stoc) exchange in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e stipulated by the Securities and 7xchange 8oard of India or a recognised stoc) exchange, he or it shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 9954e %lt> for f%il*re to !e(re(%te !e'*ritie! or .o e>! of 'lie t or 'lie t!. ")D. If any person, who is registered under section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%) as a stoc) bro)er or sub+bro)er, fails to segregate securities or (oneys of the client or clients or uses the securities or (oneys of a client or clients for self or for any other client, he shall be liable to a penalty not exceeding one crore rupees0: 1==54e %lt> for f%il*re to 'o.$l> /ith $ro+i!io of li!ti ( 'o -itio ! or -eli!ti ( 'o -itio ! or (ro* -!. ")E. If a co(pany or any person (anaging collecti'e in'est(ent sche(e or (utual fund, fails to co(ply with the listing conditions or delisting conditions or grounds or co((its a breach thereof, it or he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0: 1=154e %lt> for e#'e!! -e.%teri%li!%tio or -eli+er> of * li!te- !e'*ritie!. ")2. If any issuer de(aterialises securities (ore than the issued securities of a co(pany or deli'ers in the stoc) exchanges the securities which are not listed in the recognised stoc) exchange or deli'ers securities where no trading per(ission has been gi'en by the recognised stoc) exchange, he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0:
!> Inserted !! Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 00 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0
%+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0
1="54e
%lt> for f%il*re to f*r i!h $erio-i'%l ret*r !, et'. ")G. If a recognised stoc) exchange fails or neglects to furnish periodical returns to the Securities and 7xchange 8oard of India or fails or neglects to (a)e or a(end its rules or bye+laws as directed by the Securities and 7xchange 8oard of India or fails to co(ply with directions issued by the Securities and 7xchange 8oard of India, such recognised stoc) exchange shall be liable to a penalty which (ay extend to twenty+fi'e crore rupees0: 1=)54e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. ")D. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or articles or bye+ laws or the regulations of the recognised stoc) exchange or directions issued by the Securities and 7xchange 8oard of India for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 1=354o/er to %-G*-i'%te. ")0I. ( ) 6or the purpose of adDudging under sections %3A, %38, %3C, %39, %37, %36, %3& and %3I, the Securities and 7xchange 8oard of India shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0: 1=552%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. ")E. Khile adDudging the *uantu( of penalty under section %3+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3
0% Inserted 03 Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec 0$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0" Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 , w0r0e0f0 , w0r0e0f0 , w0r0e0f0
%+ %+ %+ %+
0+%00$0 0+%00$0 0+%00$0 0+%00$0
(b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0: 1=85 Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!.
")EA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 1"A or !e'tio ")0I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%tefor the %lle(e- -ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re %! !$e'ifie,> the ;o%r- * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")L %(%i !t % > or-er $%!!e- ,> the ;o%ror %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 1=75Re'o+er> of %.o* t!. ")E;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 1"A or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H
0# I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30"==7) 0/ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %!
.%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - ThirS'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")L of thi! A't. (") The re'o+er> offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ())Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 0'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 1"A, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1),(") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 1=:5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. ")F. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: 1=95A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")L. ( ) Any person aggrie'ed, by the order or decision of the recogniFed stoc) exchange or the adDudicating officer or any order (ade by the Securities and 7xchange 8oard of India under section $8, (ay prefer an appeal before the Securities Appellate .ribunal and the pro'isions of sections %%8, %%C, %%9 and %%7 of this Act, shall apply, as far as (ay be, to such appeals0 (%) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order or decision is recei'ed by the
appellant and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 (3) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 ($) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the parties to the appeal and to the concerned adDudicating officer0 (") .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: 11=5Offe 'e!. ")@. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws
0> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 0! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
(ade thereunder, for which no punish(ent is pro'ided elsewhere in this Act, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 1115Co.$o!itio of 'ert%i offe 'e!. ")N. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0: 11"54o/er to (r% t i..* it>. ")0O. ( ) .he Central &o'ern(ent (ay, on reco((endation by the Securities and 7xchange 8oard of India, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation,
4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that the reco((endation of the Securities and 7xchange 8oard of India under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under
% Inserted
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
this Act to which such person would ha'e been liable, had not such i((unity been granted0: Offe 'e! ,> 'o.$% ie!. "3. ( ) Khere an offence has been co((itted by a co(pany, e'ery person who, at the ti(e when the offence was co((itted, was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence, and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any gross negligence on the part of any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer of the co(pany, shall also be dee(ed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n0-6or the purpose of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals, and 34(b) 1director2, in relation to(i) a fir(, (eans a partner in the fir(3 (ii) any association of persons or a body of indi'iduals, (eans any (e(ber controlling the affairs thereof0: $4(3) .he pro'isions of this section shall be in addition to, and not in derogation of, the pro'isions of section %%A0: Cert%i offe 'e! to ,e 'o( iL%,le. "5. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, >!> (" of >!>) ", any offence punishable under #4GGG: section %3 shall be dee(ed to be a
cogniFable offence within the (eaning of that Code0
3 Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec /, w0e0f0 %%+%+%0000 <rior to its substitution, sub+clause (b) read as under, N(b) 1director2, in relation to a fir(, (eans a partner in the fir(0J $ Inserted by .he Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec 3, w0e0f0 /+0 + !>#0
iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central &o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or a recognised stoc) exchange or by any person0 >5(")********< 1195E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
ee now the Code of Cri(inal <rocedure, !/3 (% of !/$) 1sub+section ( ) of2 o(itted by the Securities =aws (A(end(ent) Act, %00$, w0e0f0 %+ 0+%00$0 / Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$ & <rior to its substitution section %# read as under ,1%#0 G!ri#dicti$n t$ trF $ffence# !nder thi# Act&-Eo court inferior to that of a presidency (agistrate or a (agistrate of the first class shall ta)e cogniFance of or try any offence punishable under this Act02 > O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JEo court inferior to that of a Court of Session shall try any offence punishable under this Act .K ! I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
" # Kords
/4Co(
A$$e%l % - Re+i!io . "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt. "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel% $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io !. "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< 6: /(99A4(<A Title to -i+i-e -!. "7. ( ) It shall be lawful for the holder of any security whose na(e appears on the boo)s of the co(pany issuing the said security to recei'e and retain any di'idend declared by the co(pany in respect thereof for any year, notwithstanding that the said security has already been transferred by hi( for consideration, unless the transferee who clai(s the di'idend fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the co(pany with the co(pany for being registered in his na(e within fifteen days of the date on which the di'idend beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the di'idend3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security and other docu(ents relating to
the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a co(pany to pay any di'idend which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the co(pany as the holder of the security in respect of which the di'idend has beco(e due3 or (b) the right of the transferee of any security to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security in the na(e of the transferee0 %04Ri(ht to re'ei+e i 'o.e fro. 'olle'ti+e i +e!t.e t !'he.e. "7A. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, whose na(e appears on the boo)s of the collecti'e in'est(ent sche(e issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e declared by the collecti'e in'est(ent sche(e in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e fro( the transfer or has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the collecti'e in'est(ent sche(e with the collecti'e in'est(ent sche(e for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec >, w0e0f0 %%+%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the collecti'e in'est(ent sche(e3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a collecti'e in'est(ent sche(e to pay any inco(e fro( units or other instru(ents issued by the collecti'e in'est(ent sche(e which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the collecti'e in'est(ent sche(e as the holder of the security being
units or other instru(ents issued by the collecti'e in'est(ent sche(e in respect of which the inco(e in respect of units or other instru(ents issued by the collecti'e sche(e has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security being units or other instru(ents issued by the collecti'e in'est(ent sche(e in the na(e of the transferee0: % 4Ri(ht to re'ei+e i 'o.e fro. .*t*%l f* -. "7;. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by any (utual fund, whose na(e appears on the boo)s of the (utual fund issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the (utual fund declared by the (utual fund in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the (utual fund, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the (utual fund fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the (utual fund with the (utual fund for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the (utual fund beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the (utual fund3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the (utual fund, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a (utual fund to pay any inco(e fro( units or other instru(ents issued by the (utual fund which has beco(e due to any person, whose na(e is for the ti(e being registered in the boo)s of the (utual fund as the holder of the security being units or other instru(ents issued by the (utual fund in respect of which the inco(e in respect of units or other instru(ents issued by the (utual fund has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the (utual fund, to enforce against the transferor or any other person, his rights, if any, in relation to the transfer in any case where the (utual fund has refused to register the transfer of the security being units or other instru(ents issued by the (utual fund in the na(e of the transferee0:
1""5A't
ot to %$$l> i 'ert%i '%!e!. ":. ( ) .he pro'isions of this Act shall not apply to(a) the &o'ern(ent, the Reser'e 8an) of India, any local authority or any corporation set up by a special law or any person who has effected any transaction with or through the agency of any such authority as is referred to in this clause3 (b) any con'ertible bond or share warrant or any option or right in relation thereto, in so far as it entitles the person in whose fa'our any of the foregoing has been issued to obtain at his option fro( the co(pany or other body corporate, issuing the sa(e or fro( any of its shareholders or duly appointed agentsJ shares of the co(pany or other body corporate, whether by con'ersion of the bond or warrant or otherwise, on the basis of the price agreed upon when the sa(e was issued0 (%) Kithout preDudice to the pro'isions contained in sub+section ( ), if the Central &o'ern(ent %3 is satisfied that in the interests of trade and co((erce or the
%% Substituted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec 3, w0e0f0 0>+ %+ !"!0
econo(ic de'elop(ent of the country it is necessary or expedient so to do, it (ay, by notification in the Cfficial &aFette, specify any class of contracts as contracts to which this Act or any pro'ision contained therein shall not apply, and also the conditions, li(itations or restrictions, if any, subDect to which it shall not so apply0: 4rote'tio of %'tio t%6e i (oo- f%ith. "9. Eo suit, prosecution or other legal proceeding whatsoe'er shall lie in any court against the go'erning body or any (e(ber, office bearer or ser'ant of any recognised stoc) exchange or against any person or persons appointed under subsection ( ) of section for anything which is in good faith done or intended to be done in pursuance of this Act or of any rules or bye+laws (ade thereunder0 %$44o/er to -ele(%te. "9A. .he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers (except the power under section 30) exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India or the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)0: 4o/er to .%6e r*le!. )=. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for the purpose of carrying into effect the obDects of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for,(a) the (anner in which applications (ay be (ade, the particulars which they should contain and the le'y of a fee in respect of such applications 3 (b) the (anner in which any in*uiry for the purpose of recognising any stoc) exchange (ay be (ade, the conditions which (ay be i(posed for the grant of such recognition, including conditions as to the ad(ission of (e(bers if the
%3 <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %$ Inserted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% and Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec !, w0e0f0 %%+0%+%0000 <rior to its substitution, section %!A read as under , 1%!A0 8$.er t$ delegate&*.he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India02
stoc) exchange concerned is to be the only recognised stoc) exchange in the area3 and the for( in which such recognition shall be granted3 (c) the particulars which should be contained in the periodical returns and annual reports to be furnished to the Central &o'ern(ent3 (d) the docu(ents which should be (aintained and preser'ed under section # and the periods for which they should be preser'ed3 (e) the (anner in which any in*uiry by the go'erning body of a stoc) exchange shall be (ade under section #3 (f) the (anner in which the bye+laws to be (ade or a(ended under this Act shall before being so (ade or a(ended be published for criticis(3 (g) the (anner in which applications (ay be (ade by dealers in securities for licences under section /, the fee payable in respect thereof and the period of such licences, the conditions subDect to which licences (ay be granted, including conditions relating to the for(s which (ay be used in (a)ing contracts, the docu(ents to be (aintained by licensed dealers and the furnishing of periodical infor(ation to such authority as (ay be specified and the re'ocation of licences for breach of conditions3 %"4(h) the re*uire(ents which shall be co(plied with(A) by public co(panies for the purpose of getting their securities listed on any stoc) exchange3 (B) by collecti'e in'est(ent sche(e for the purpose of getting their units listed on any stoc) exchange3: %#4GGG: %/4(ha) the grounds on which the securities of a co(pany (ay be delisted fro( any recognised stoc) exchange under sub+section ( ) of section % A3 (hb) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under sub+section (%) of section % A and the fees payable in respect of such appeal3 (hc) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3
%" Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec 0, w0e0f0 %%+0%+%0000 <rior to its substitution, clause (h) read as under , 1(h) the re*uire(ents which shall be co(plied with by public co(panies for the purpose of getting their securities listed on any stoc) exchange32 %# .he word ;and; o(itted by .he Securities Contracts (Regulation) A(end(ent Act, !>", Sec $, w0e0f0 /+0 + !>#0 %/ Substituted for clause (ha) by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 7arlier clause (ha), as a(ended by the Securities =aws (A(end(ent) Act, !!!, read as
under ,1(ha) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3 and2
(hd) the (anner of in*uiry under sub+section ( ) of section %3+I3 (he) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3= and the fees payable in respect of such appeal3: (i) any other (atter which is to be or (ay be prescribed0 %>4(3) 7'ery rule (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule0: 1"954o/er of Se'*ritie! % - E#'h% (e ;o%r- of I -i% to .%6e re(*l%tio !. )1. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 305(%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,%> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 <rior to its substitution, sub+section (3), as a(ended by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!", read as under , 1(3) 7'ery rule (ade under this section shall, as soon as (ay be, after its publication in the Cfficial &aFette, be laid before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e session aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule02 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0 7arlier it was repealed by the Repealing and A(ending Act, !#0, Sec % and 6irst Sch0 w0e0f0 %>+ %+ !#00 30 Substituted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec ", w0e0f0 %>+ 0"+%00/0 <rior to substitution it read as under , 1(%) In particular and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for the (anner in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section02
(a) the (anner, in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of
publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section3 (b) the eligibility criteria and other re*uire(ents under section /A0 < (3) 7'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the regulation or both Iouses agree that the regulation should not be (ade, the regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that regulation0:
DE4OSITORIES ACT, 1998 SECTIONS /@A81(0 : 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS ). Certificate of co((ence(ent of business by depositories /@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS 3. Agree(ent between depository and participant 5. Ser'ices of depository 8. Surrender of certificate of security 7. Registration of transfer of securities with depositories :. Cptions to recei'e security certificate or hold securities with depository 9. Securities in depositories to be in fungible for( 1=. Rights of depositories and beneficial owner 11. Register of beneficial owner 1". <ledge or hypothecation of securities held in a depository 1). 6urnishing of infor(ation and records by depository and issuer 13. Cption to opt out in respect of any security 15. Act > of >! to apply to depositories 18. 9epositories to inde(nify loss in certain cases 17. Rights and obligations of depositories, etc0 /@A81(0 :: EN9UIRM AND INS4ECTION 1:. <ower of 8oard to call for infor(ation and en*uiry 19. <ower of 8oard to gi'e directions in certain cases 19A. <enalty for failure to furnish infor(ation, return, etc0 19;. <enalty for failure to enter into an agree(ent 19C. <enalty for failure to redress in'estorsJ grie'ances
19D. <enalty for delay in de(aterialisation or issue of certificate of securities 19E. <enalty for failure to reconcile records 192. <enalty for failure to co(ply with directions issued by 8oard under section ! of the Act 19G. <enalty for contra'ention where no separate penalty has been pro'ided 19D. <ower to adDudicate 190I. 6actors to be ta)en into account by adDudicating officer 190IA. Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (! 190I;. Re'o+er> of %.o* t! 190E. Crediting su(s realised by way of penalties to Consolidated 6und of India /@A81(0 D 4ENALTM "=. Cffences "1. Cffences by co(panies /@A81(0 D: @ISCELLANEOUS "". CogniFance of offences by courts ""A. Co(position of certain offences "";. <ower to grant i((unity ""C. E!t%,li!h.e t of S$e'i%l Co*rt! ""D. Offe 'e! tri%,le ,> S$e'i%l Co*rt! ""E. A$$e%l % - re+i!io ""2. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""G. Tr% !itio %l 4ro+i!io ! "). Appeals ")A. Appeal to Securities Appellate .ribunal ")A. Appeal to Securities Appellate .ribunal ");. <rocedure and powers of Securities Appellate .ribunal ")C. Right to =egal Representation ")D. =i(itation ")E. Ci'il court not to ha'e Durisdiction ")2. Appeal to Supre(e Court "3. <ower of Central &o'ern(ent to (a)e rules "5. <ower of 8oard to (a)e regulations "8. <ower of depositories to (a)e bye+laws "7. Rules and regulations to be laid before <arlia(ent ":. Application of other laws not barred "9. Re(o'al of difficulties )=. A(end(ents to certain enact(ents )1. Repeal and sa'ing /@(5A9( A?7E9?7E. .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0: DE4OSITORIES ACT, 1998 5"" O2 1998< 51=th A*(*!t, 1998< An Act to provide $or reg lation o$ depositories in sec rities and $or matters connected there%ith or incidental thereto& B( it enacted bF 8arlia"ent in the E$rtF7#eventh ;ear $f the 0e%!blic $f :ndia a# f$ll$.# ,*
/@A81(0 : 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the 9epositories Act, !!#0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the %0th day of Septe(ber, !!"0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 1beneficial owner2 (eans a person whose na(e is recorded as such with a depository3 (b) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 3 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (c) 1bye+laws2 (eans bye+laws (ade by a depository under section %#3 (d) 1Co(pany =aw 8oard2 (eans the 8oard of Co(pany =aw Ad(inistration constituted under section 07 of the Co(panies Act, !"# ( of !"#)3 (e) 1depository2 (eans a co(pany for(ed and registered under the Co(panies Act, !"# ( of !"#), and which has been granted a certificate of registration under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (f) 1issuer2 (eans any person (a)ing an issue of securities3 (g) 1participant2 (eans a person registered as such under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (h) 1prescribed2 (eans prescribed by rules (ade under this Act3 (i) 1record2 includes the records (aintained in the for( of boo)s or stored in a co(puter or in such other for( as (ay be deter(ined by regulations3 (j) 1registered owner2 (eans a depository whose na(e is entered as such in the register of the issuer3 (k) 1regulations2 (eans the regulations (ade by the 8oard3 4(ka) 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (l) 1security2 (eans such security as (ay be specified by the 8oard3 (") 1ser'ice2 (eans any ser'ice connected with recording of allot(ent of securities or transfer of ownership of securities in the record of a depository0 (%) Kords and expressions used herein and not defined but defined in the Co(panies Act, !"# ( of !"#), or the Securities Contracts (Regulation) Act, !"# ($% of !"#), or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), shall ha'e the (eanings respecti'ely assigned to the( in those Acts0 /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS Certifi'%te of 'o..e 'e.e t of ,*!i e!! ,> -e$o!itorie!. ). ( ) Eo depository shall act as a depository unless it obtains a certificate of co((ence(ent of business fro( the 8oard0 (%) A certificate granted under sub+section ( ) shall be in such for( as (ay be specified by the regulations0 (3) .he 8oard shall not grant a certificate under sub+section ( ) unless it is satisfied that the depository has ade*uate syste(s and safeguards to pre'ent (anipulation of records and transactions , 4ro+i-e- that no certificate shall be refused under this section unless the depository concerned has been gi'en a reasonable opportunity of being heard0
Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
/@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS A(ree.e t ,et/ee -e$o!itor> % - $%rti'i$% t. 3. ( ) A depository shall enter into an agree(ent with one or (ore participants as its agent0 (%) 7'ery agree(ent under sub+section ( ) shall be in such for( as (ay be specified by the bye+laws0 Ser+i'e! of -e$o!itor>. 5. Any person, through a participant, (ay enter into an agree(ent, in such for( as (ay be specified by the bye+laws, with any depository for a'ailing its ser'ices0 S*rre -er of 'ertifi'%te of !e'*rit>. 8. ( ) Any person who has entered into an agree(ent under section " shall surrender the certificate of security, for which he see)s to a'ail the ser'ices of a depository, to the issuer in such (anner as (ay be specified by the regulations0 (%) .he issuer, on receipt of certificate of security under sub+section ( ), shall cancel the certificate of security and substitute in its records the na(e of the depository as a registered owner in respect of that security and infor( the depository accordingly0 (3) A depository shall, on receipt of infor(ation under sub+section (%), enter the na(e of the person referred to in sub+section ( ) in its records, as the beneficial owner0 Re(i!tr%tio of tr% !fer of !e'*ritie! /ith -e$o!itor>. 7. ( ) 7'ery depository shall, on receipt of inti(ation fro( a participant, register the transfer of security in the na(e of the transferee0 (%) If a beneficial owner or a transferee of any security see)s to ha'e custody of such security the depository shall infor( the issuer accordingly0 O$tio ! to re'ei+e !e'*rit> 'ertifi'%te or hol- !e'*ritie! /ith -e$o!itor>. :. ( ) 7'ery person subscribing to securities offered by an issuer shall ha'e the option either to recei'e the security certificates or hold securities with a depository0 (%) Khere a person opts to hold a security with a depository, the issuer shall inti(ate such depository the details of allot(ent of the security, and on receipt of such infor(ation the depository shall enter in its records the na(e of the allottee as the beneficial owner of that security0 Se'*ritie! i -e$o!itorie! to ,e i f* (i,le for.. 9. ( ) All securities held by a depository shall be de(aterialised and shall be in a fungible for(0 %4(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#), shall apply to a depository in respect of securities held by it on behalf of the beneficial owners&: Ri(ht! of -e$o!itorie! % - ,e efi'i%l o/ er. 1=. ( ) Eotwithstanding anything contained in any other law for the ti(e being in force, a depository shall be dee(ed to be the registered owner for the purposes of effecting transfer of ownership of security on behalf of a beneficial owner0 (%) Sa'e as otherwise pro'ided in sub+section ( ), the depository as a registered owner shall not ha'e any 'oting rights or any other rights in respect of securities held by it0 (3) .he beneficial owner shall be entitled to all the rights and benefits and be subDected to all the liabilities in respect of his securities held by a depository0 Re(i!ter of ,e efi'i%l o/ er. 11. 7'ery depository shall (aintain a register and an index of beneficial owners in the
(anner pro'ided in sections "0, " and "% of the Co(panies Act, !"# ( of !"#)0 4le-(e or h>$othe'%tio of !e'*ritie! hel- i % -e$o!itor>. 1". ( ) SubDect to such regulations and bye+laws, as (ay be (ade in this behalf, a beneficial owner (ay with the pre'ious appro'al of the depository create a pledge or hypothecation in respect of a security owned by hi( through a depository0 (%) 7'ery beneficial owner shall gi'e inti(ation of such pledge or hypothecation to the depository and such depository shall thereupon (a)e entries in its records accordingly0 (3) Any entry in the records of a depository under sub+section (%) shall be e'idence of a pledge or hypothecation0 2*r i!hi ( of i for.%tio % - re'or-! ,> -e$o!itor> % - i!!*er. 1). ( ) 7'ery depository shall furnish to the issuer infor(ation about the transfer of securities in the na(e of beneficial owners at such inter'als and in such (anner as (ay be specified by the bye+laws0 (%) 7'ery issuer shall (a)e a'ailable to the depository copies of the rele'ant records in respect of securities held by such depository0 O$tio to o$t o*t i re!$e't of % > !e'*rit>.
% Substituted
by the 9epositories Related =aws (A(end(ent) Act, !!/, Sec %%, w0e0f0 "+0 + !!/0 <rior to its substitution sub+section (%) read as under , 1(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#) shall apply to the securities held by a depository on behalf of the beneficial owners02
13. ( ) If a beneficial owner see)s to opt out of a depository in respect of any security he shall infor( the depository accordingly0 (%) .he depository shall on receipt of inti(ation under sub+section ( ) (a)e appropriate entries in its records and shall infor( the issuer0 (3) 7'ery issuer shall, within thirty days of the receipt of inti(ation fro( the depository and on fulfil(ent of such conditions and on pay(ent of such fees as (ay be specified by the regulations, issue the certificate of securities to the beneficial owner or the transferee, as the case (ay be0 A't 1: of 1:91 to %$$l> to -e$o!itorie!. 15. .he 8an)ersJ 8oo)s 7'idence Act, >! shall apply in relation to a depository as if it were a ban) as defined in section % of that Act0 De$o!itorie! to i -e. if> lo!! i 'ert%i '%!e!. 18. ( ) Kithout preDudice to the pro'isions of any other law for the ti(e being in force, any loss caused to the beneficial owner due to the negligence of the depository or the participant, the depository shall inde(nify such beneficial owner0 (%) Khere the loss due to the negligence of the participant under sub+section ( ) is inde(nified by the depository, the depository shall ha'e the right to reco'er the sa(e fro( such participant0 Ri(ht! % - o,li(%tio ! of -e$o!itorie!, et'. 17. ( ) SubDect to the pro'isions of this Act, the rights and obligations of the depositories, participants and the issuers whose securities are dealt with by a depository shall be specified by the regulations0 (%) .he eligibility criteria for ad(ission of securities into the depository shall be specified by the regulations0 /@A81(0 :D EN9UIRM AND INS4ECTION 4o/er of ;o%r- to '%ll for i for.%tio % - e 7*ir>. 1:. ( ) .he 8oard, on being satisfied that it is necessary in the public interest or in the interest of in'estors so to do, (ay, by order in writing,-
(a) call upon any issuer, depository, participant or beneficial owner to furnish in writing such infor(ation relating to the securities held in a depository as it (ay re*uire3 or (b) authorise any person to (a)e an en*uiry or inspection in relation to the affairs of the issuer, beneficial owner, depository or participant, who shall sub(it a report of such en*uiry or inspection to it within such period as (ay be specified in the order0 (%) 7'ery director, (anager, partner, secretary, officer or e(ployee of the depository or issuer or the participant or beneficial owner shall on de(and produce before the person (a)ing the en*uiry or inspection all infor(ation or such records and other docu(ents in his custody ha'ing a bearing on the subDect+(atter of such en*uiry or inspection0 4o/er of ;o%r- to (i+e -ire'tio ! i 'ert%i '%!e!. 19. Sa'e as pro'ided in this Act, if after (a)ing or causing to be (ade an en*uiry or inspection, the 8oard is satisfied that it is necessary(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any depository or participant being conducted in the (anner detri(ental to the interests of in'estors or securities (ar)et, it (ay issue such directions,(a) to any depository or participant or any person associated with the securities (ar)et3 or (b) to any issuer, as (ay be appropriate in the interest of in'estors or the securities (ar)et0 )5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< $44e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 19A. Any person, who is re*uired under this Act or any rules or regulations or bye+laws (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to the 8oard, fails to furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations or bye+laws, fails to file return or furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0
3I $ Inserted
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the Securities =aws (A(end(ent) Act, %00$, Sec0 /, w0r0e0f0 %+ 0+%00$0
4e %lt> for f%il*re to e ter i to % %(ree.e t. 19;. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and is re*uired under this Act or any rules or regulations (ade thereunder, to enter into an agree(ent, fails to enter into such agree(ent, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0
4e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 19C. If any depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such depository or participant or issuer or its agents or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for -el%> i -e.%teri%li!%tio or i!!*e of 'ertifi'%te of !e'*ritie!. 19D. If any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to de(aterialise or issue the certificate of securities on opting out of a depository by the in'estors, within the ti(e specified under this Act or regulations or bye+laws (ade thereunder or abets in delaying the process of de(aterialisation or issue the certificate of securities on opting out of a depository of securities, such issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to re'o 'ile re'or-!. 19E. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to reconcile the records of de(aterialised securities with all the securities issued by the issuer as specified in the regulations, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to 'o.$l> /ith -ire'tio ! i!!*e- ,> ;o%r- * -er !e'tio 19 of the A't. 192. If any person fails to co(ply with the directions issued by the 8oard under section !, within the ti(e specified by it, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 19G. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations or bye+laws (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0 4o/er to %-G*-i'%te. 19D. ( ) 6or the purpose of adDudging under sections !A, !8, !C, !9, !7, !6 and !&, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the
sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. 190I. Khile adDudging the *uantu( of penalty under section !I, the adDudicating officer shall ha'e due regard to the following factors, na(ely,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 55 Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (!. 190IA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 19, !e'tio 19D, %! the '%!e .%> ,e, .%> file % %$$li'%tio i /riti ( to the ;o%r$ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e-ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h
"I
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re !$e'ifie- ,> the ;o%r* -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")A %(%i !t % > or-er $%!!e- ,> the ;o%r- or the %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 85 Re'o+er> of %.o* t!. 190I;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 19 or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6
%''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hilor !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C!
#I
!erte- ,> The Se'*ritie! L%/! (A.e- .e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
.o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")A of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 19, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 19E. All su(s realiFed by way of penalties under this Act shall be credited to the Consolidated 6und of India0: /@A81(0 D 4ENALTM /4Offe 'e!. "=. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws (ade thereunder, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0
/ Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 >, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %0 read as under,1%00 <ffence#0- Khoe'er contran'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or any regulations or bye+laws (ade thereunder shall be punishable with i(prison(ent for a ter( which (ay extend to fi'e years, or with fine or with both02
(%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with
fine, which (ay extend to twenty+fi'e crore rupees, or with both0: Offe 'e! ,> 'o.$% ie!. "1. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n&-6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and (b) 1director2, in relation to a fir(, (eans a partner in the fir(0 /@A81(0 D: @ISCELLANEOUS >4Co( iL% 'e of offe 'e! ,> 'o*rt!. "". ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central
> Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 !, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %% read as under,1%%0 /$gniCance $f $ffence# bF c$!rt#&*( ) Eo Court shall ta)e cogniFance of any offence punishable under this Act or any regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the 8oard0 (%) Eo court inferior to that of a ?etropolitan ?agistrate or a Dudicial ?agistrate of the first class shall try any offence punishable under this Act02
&o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or by any person0 !5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < Co.$o!itio of 'ert%i offe 'e!. ""A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "";. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any
penalty under this Act with respect to the alleged 'iolation , 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity , 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0: 1=5 E!t%,li!h.e t of S$e'i%l Co*rt!. ""C. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>.
! <rior
to o(ission, Sub+section(%) read 1Eo court inferior to that of a Court of Session shall try any offence punishable under this Act02 0 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. ""D. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-. A$$e%l % - Re+i!io ""E. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""2. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197).
(") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erioof ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! ""G. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< A$$e%l!. "). ( ) Any person aggrie'ed by an order of the 8oard (ade 4before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!: under this Act, or the regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor , 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0 (3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed , 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 %4A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")A. ( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!, under this Act, or the regulations (ade thereunder, 34or by an order (ade by an adDudicating officer under this Act: (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 $5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 8oard is recei'ed by the person referred to in sub+section ( ) and it shall be in such for( and be acco(panied by such fee as (ay be prescribed ,
Substituted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 $, w0e0f0 #+ %+ !!! for ;an order of the 8oard (ade;0 % Sections %3A to %36 inserted by the Securities =aws (Second A(end(ent) Act, !!! , Sec0 ", w0e0f0 #+ %+ !!!& 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %0, w0r0e0f0 %+ 0+%00$0 $ 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JNo %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-e ,> the ;o%r- /ith the 'o !e t of the $%rtie!.K
4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0
($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 (") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. ");. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3 (e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte; (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 Ri(ht to le(%l re$re!e t%tio . ")C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or an attorney of any Iigh Court, and
includes a pleader in practice0 Li.it%tio . ")D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 Ci+il 'o*rt ot to h%+e G*ri!-i'tio . ")E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "4A$$e%l to S*$re.e Co*rt. ")2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order ,
" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 % , w0r0e0f0 %+ 0+%00$0 <rior to its substitution, Section %36, as inserted by Securities =aws (Second A(end(ent) Act, !!!, w0e0f0 #+ %+ !!!, read as under,1%360 A%%eal t$ @igh /$!rt&-Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0:: 4o/er of Ce tr%l Go+er .e t to .%6e r*le!. "3. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for carrying out the pro'isions of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,164(a) the (anner of in*uiry under sub+section ( ) of section !I3 (aa) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %33: (b) the for( in which an appeal (ay be preferred under sub+section (3) of section %3 and the fees payable in respect of such appeal 3 (c) the procedure for disposing of an appeal under sub+section ($) of section %33 /4(d) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3A and the fees payable in respect of such appeal0: 4o/er of ;o%r- to .%6e re(*l%tio !. "5. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the 8oard (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for(a) the for( in which record is to be (aintained under clause ( i) of sub+section ( ) of section %3 (b) the for( in which the certificate of co((ence(ent of business shall be issued under
sub+section (%) of section 33 (c) the (anner in which the certificate of security shall be surrendered under sub+section ( ) of section #3 (d) the (anner of creating a pledge or hypothecation in respect of security owned by a beneficial owner under sub+section ( ) of section %3 (e) the conditions and the fees payable with respect to the issue of certificate of securities under sub+section (3) of section $3
# Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %%, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (a) read as under,1(a) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %332 / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 #, w0e0f0 #+ %+ !!!0
(f) the rights and obligations of the depositories, participants and the issuers under subsection ( ) of section /3 (g) the eligibility criteria for ad(ission of securities into the depository under sub+section (%) of section /0 4o/er of -e$o!itorie! to .%6e ,>e0l%/!. "8. ( ) A depository shall, with the pre'ious appro'al of the 8oard, (a)e bye+laws consistent with the pro'isions of this Act and the regulations0 (%) In particular, and without preDudice to the generality of the foregoing power, such byelaws shall pro'ide for(a) the eligibility criteria for ad(ission and re(o'al of securities in the depository3 (b) the conditions subDect to which the securities shall be dealt with3 (c) the eligibility criteria for ad(ission of any person as a participant3 (d) the (anner and procedure for de(aterialisation of securities3 (e) the procedure for transactions within the depository3 (f) the (anner in which securities shall be dealt with or withdrawn fro( a depository3 (g) the procedure for ensuring safeguards to protect the interests of participants and beneficial owners3 (h) the conditions of ad(ission into and withdrawal fro( a participant by a beneficial owner3 (i) the procedure for con'eying infor(ation to the participants and beneficial owners on di'idend declaration, shareholder (eetings and other (atters of interest to the beneficial owners3 (j) the (anner of distribution of di'idends, interest and (onetary benefits recei'ed fro( the co(pany a(ong beneficial owners3 (k) the (anner of creating pledge or hypothecation in respect of securities held with a depository3 (l) inter #e rights and obligations a(ong the depository, issuer, participants, and beneficial owners3 (") the (anner and the periodicity of furnishing infor(ation to the 8oard, issuer and other persons3 (n) the procedure for resol'ing disputes in'ol'ing depository, issuer, co(pany or a beneficial owner3 ($) the procedure for proceeding against the participant co((itting breach of the regulations and pro'isions for suspension and expulsion of participants fro( the depository and cancellation of agree(ents entered with the depository3 (%) the internal control standards including procedure for auditing, re'iewing and (onitoring0
(3) Khere the 8oard considers it expedient so to do, it (ay, by order in writing, direct a depository to (a)e any bye+laws or to a(end or re'o)e any bye+laws already (ade within such period as it (ay specify in this behalf0 ($) If the depository fails or neglects to co(ply with such order within the specified period, the 8oard (ay (a)e the bye+laws or a(end or re'o)e the bye+laws (ade either in the for( specified in the order or with such (odifications thereof as the 8oard thin)s fit0 R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t. "7. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. ":. .he pro'isions of this Act shall be in addition to, and not in derogation of, any other law for the ti(e being in force relating to the holding and transfer of securities0 Re.o+%l of -iffi'*ltie!. "9. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as appear to it to be necessary or expedient for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of a period of two years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 A.e -.e t! to 'ert%i e %'t.e t!. )=. 40e%ealed bF 0e%ealing H A"ending Act' 20010: Re$e%l % - !%+i (. )1. ( ) .he 9epositories (.hird) Crdinance, !!# (Crd0 %> of !!#), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 /@(5A9( 4 ee section 30: A?7E9?7E.S .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0:
SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 SECTIONS !'APT"R I 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions !'APT"R II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA
). 7stablish(ent and incorporation of 8oard 3. ?anage(ent of the 8oard 5. .er( of office and conditions of ser'ice of Chair(an and (e(bers of the 8oard 8. Re(o'al of (e(ber fro( office 7. ?eetings 7A. ?e(ber not to participate in (eetings in certain cases :. Bacancies, etc0, not to in'alidate proceedings of 8oard 9. Cfficers and e(ployees of the 8oard !'APT"R III TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD 1=. .ransfer of assets, liabilities, etc0, of existing Securities and 7xchange 8oard to the 8oard !'APT"R IV 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 11. 6unctions of 8oard 11A. 8oard to regulate or prohibit issue of prospectus, offer docu(ent or ad'ertise(ent soliciting (oney for issue of securities 11AA. Collecti'e in'est(ent sche(e 11;. <ower to issue directions 11C. In'estigation 11D. Cease and desist proceedings !'APT"R V REGISTRATION CERTI2ICATE 1". Registration of stoc) bro)ers, sub+bro)ers, share transfer agents, etc0
%
!'APT"R VA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 1"A. <rohibition of (anipulati'e and decepti'e de'ices, insider trading and substantial ac*uisition of securities or control !'APT"R VI 2INANCE, ACCOUNTS AND AUDIT 1). &rants by the Central &o'ern(ent 13. 6und 15. Accounts and audit !'APT"R VIA 4ENALTIES AND ADEUDICATION 15A. <enalty for failure to furnish infor(ation, return, etc & 15;. <enalty for failure by any person to enter into agree(ent with clients 15C. <enalty for failure to redress in'estorsJ grie'ances 15D. <enalty for certain defaults in case of (utual funds 15E. <enalty for failure to obser'e rules and regulations by an asset (anage(ent co(pany 152. <enalty for default in case of stoc) bro)ers 15G. <enalty for insider trading 15D. <enalty for non+disclosure of ac*uisition of shares and ta)eo'ers 15DA. <enalty for fraudulent and unfair trade practices 15D;. <enalty for contra'ention where no separate penalty has been pro'ided
150I. <ower to adDudicate 15E. 6actors to be ta)en into account by the AdDudicating Cfficer 15EA. Crediting su(s realised by way of penalties to Consolidated 6und of India 15E;. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! !'APT"R VIB ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL 15F. 7stablish(ent of Securities Appellate .ribunals 15L. Co(position of Securities Appellate .ribunal 15@. Qualification for appoint(ent as <residing Cfficer or ?e(ber of Securities Appellate .ribunal
3
15N. .enure of office of <residing Cfficer and other (e(bers of Securities Appellate .ribunal 150O. Salary and allowances and other ter(s and conditions of ser'ice of <residing Cfficers 154. 6illing up of 'acancies 159. Resignation and re(o'al 15R. Crders constituting Appellate .ribunal to be final and not to in'alidate its proceedings 15S. Staff of the Securities Appellate .ribunal 15T. Appeal to the Securities Appellate .ribunal 15U. <rocedure and powers of the Securities Appellate .ribunal 15I. Right to legal representation 15?. =i(itation 15A. <residing Cfficer, (e(bers and staff of Securities Appellate .ribunals to be public ser'ants 15M. Ci'il Court not to ha'e Durisdiction 15N. Appeal to Supre(e Court !'APT"R VII @ISCELLANEOUS 18. <ower of Central &o'ern(ent to issue directions 17. <ower of Central &o'ern(ent to supersede the 8oard 1:. Returns and reports 19. 9elegation "=. Appeals "=A. 8ar of Durisdiction "1. Sa'ings "". ?e(bers, officers and e(ployees of the 8oard to be public ser'ants "). <rotection of action ta)en in good faith "3. Cffences "3A. Co(position of certain offences "3;. <ower to grant i((unity "5. 7xe(ption fro( tax on wealth and inco(e "8. CogniFance of offences by Courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! "7. Cffences by co(panies
":. 4C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!":
$
":A. Re'o+er> of %.o* t! "9. <ower to (a)e rules )=. <ower to (a)e regulations )1. Rules and regulations to be laid before <arlia(ent )". Application of other laws not barred )). 4Repealed by Repealing R A(ending Act, %00 : )3. <ower to re(o'e difficulties )5. Repeal and sa'ing .I7 SCI79H=7 4Repealed by Repealing R A(ending Act, %00 : SECURITIES AND EACDANGE ;OARD O2 INDIA ACT, 199" 515 O2 199"< 53th A$ril, 199"< A A't to $ro+i-e for the e!t%,li!h.e t of % ;o%r- to $rote't the i tere!t! of i +e!tor! i !e'*ritie! % - to $ro.ote the -e+elo$.e t of, % - to re(*l%te, the !e'*ritie! .%r6et % - for .%tter! 'o e'te- there/ith or i 'i-e t%l thereto B( it enacted bF 8arlia"ent in the E$rtF7third ;ear $f the 0e%!blic $f :ndia a# f$ll$.# , CDA4TER I 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities and 7xchange 8oard of India Act, !!%0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the 30th day of Manuary, !!%0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 33 (b) 1Chair(an2 (eans the Chair(an of the 8oard3 4(ba) 1collecti'e in'est(ent sche(e2 (eans any sche(e or arrange(ent which satisfies the conditions specified in section AA3: (c) 1existing Securities and 7xchange 8oard2 (eans the Securities and 7xchange 8oard of India constituted under the Resolution of the &o'ern(ent of India in the 9epart(ent of 7cono(ic Affairs Eo0 ($$) S7L>#, dated the %th day of April, !>>3 (d) 16und2 (eans the 6und constituted under section $3 (e) 1(e(ber2 (eans a (e(ber of the 8oard and includes the Chair(an3 (f) 1notification2 (eans a notification published in the Cfficial &aFette3 (g) 1prescribed2 (eans prescribed by rules (ade under this Act3
Inserted by the Securities =aws (A(end(ent) Act, !!!, w0e0f0 %%+%+%0000
"
(h) 1regulations2 (eans the regulations (ade by the 8oard under this Act3 4(ha) 1Reser'e 8an)2 (eans the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)3: (i) 1securities2 has the (eaning assigned to it in section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#)0 %4(%) Kords and expressions used and not defined in this Act but defined in the Securities Contracts (Regulation) Act, !"# ($% of !"#) 34or the 9epositories Act, !!#:, shall ha'e the (eanings respecti'ely assigned to the( in that Act:0 CDA4TER II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA E!t%,li!h.e t % - i 'or$or%tio of ;o%r-.
). ( ) Kith effect fro( such date as the Central &o'ern(ent (ay, by notification, appoint, there shall be established, for the purposes of this Act, a 8oard by the na(e of the Securities and 7xchange 8oard of India0 (%) .he 8oard shall be a body corporate by the na(e aforesaid, ha'ing perpetual succession and a co((on seal, with power subDect to the pro'isions of this Act, to ac*uire, hold and dispose of property, both (o'able and i((o'able, and to contract, and shall, by the said na(e, sue or be sued0 (3) .he head office of the 8oard shall be at 8o(bay0 ($) .he 8oard (ay establish offices at other places in India0 @% %(e.e t of the ;o%r-. 3. ( ) .he 8oard shall consist of the following (e(bers, na(ely,(a) a Chair(an3 (b) two (e(bers fro( a(ongst the officials of the $4?inistry: of the Central &o'ern(ent dealing with 6inance "4and ad(inistration of the Co(panies Act, !"# ( of !"#):3 (c) one (e(ber fro( a(ongst the officials of #4the Reser'e 8an):3 /4(d) fi'e other (e(bers of who( at least three shall be the whole+ti(e (e(bers,: to be appointed by the Central &o'ern(ent0
Inserted by the Securities =aws (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0 <rior to its substitution, sub+section (%) reads as under, 1(%) Kords and expressions used and not defined in this Act but defined in the Capital Issues (Control) Act, !$/ or the Securities Contracts Regulation Act, !"# shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts02 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 $ Substituted for 1?inistries2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1and law2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act !3$ (% of !3$)2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 / Substituted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, clause (d) read as, 1(d) two other (e(bers20
% Substituted
#
(%) .he general superintendence, direction and (anage(ent of the affairs of the 8oard shall 'est in a 8oard of (e(bers, which (ay exercise all powers and do all acts and things which (ay be exercised or done by the 8oard0 (3) Sa'e as otherwise deter(ined by regulations, the Chair(an shall also ha'e powers of general superintendence and direction of the affairs of the 8oard and (ay also exercise all powers and do all acts and things which (ay be exercised or done by that 8oard0 ($) .he Chair(an and (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be appointed by the Central &o'ern(ent and the (e(bers referred to in clauses ( b) and (c) of that sub+section shall be no(inated by the Central &o'ern(ent and the 4Reser'e 8an): respecti'ely0 (") .he Chair(an and the other (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be persons of ability, integrity and standing who ha'e shown capacity in dealing with proble(s relating to securities (ar)et or ha'e special )nowledge or experience of law, finance, econo(ics, accountancy, ad(inistration or in any other discipline which, in the opinion of the Central &o'ern(ent, shall be useful to the 8oard0 Ter. of offi'e % - 'o -itio ! of !er+i'e of Ch%ir.% % - .e.,er! of the ;o%r-. 5. ( ) .he ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers referred to in clause (d) of sub+section ( ) of section $ shall be such as (ay be prescribed0 (%) Eotwithstanding anything contained in sub+section ( ), the Central &o'ern(ent shall ha'e the right to ter(inate the ser'ices of the Chair(an or a (e(ber appointed under clause ( d) of
sub+section ( ) of section $, at any ti(e before the expiry of the period prescribed under subsection ( ), by gi'ing hi( notice of not less than three (onths in writing or three (onthsJ salary and allowances in lieu thereof, and the Chair(an or a (e(ber, as the case (ay be, shall also ha'e the right to relin*uish his office, at any ti(e before the expiry of the period prescribed under sub+section ( ), by gi'ing to the Central &o'ern(ent notice of not less than three (onths in writing0 Re.o+%l of .e.,er fro. offi'e. 8. %4G G G: .he Central &o'ern(ent shall re(o'e a (e(ber fro( office if he(a) is, or at any ti(e has been, adDudicated as insol'ent3 (b) is of unsound (ind and stands so declared by a co(petent court3 (c) has been con'icted of an offence which, in the opinion of the Central &o'ern(ent, in'ol'es a (oral turpitude3 (d) 34G G G: (e) has, in the opinion of the Central &o'ern(ent, so abused his position as to render his continuation in office detri(ental to the public interest , 4ro+i-e- that no (e(ber shall be re(o'ed under this clause unless he has been gi'en a reasonable opportunity of being heard in the (atter0
Substituted for 1Reser'e 8an) of India2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 )2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 C(itted, by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to o(ission clause (d) read read as, 1(d) is appointed as a director of a co(pany20
% 1(
/
@eeti (!. 7. ( ) .he 8oard shall (eet at such ti(es and places, and shall obser'e such rules of procedure in regard to the transaction of business at its (eetings (including *uoru( at such (eetings) as (ay be pro'ided by regulations0 (%) .he Chair(an or, if for any reason, he is unable to attend a (eeting of the 8oard, any other (e(ber chosen by the (e(bers present fro( a(ongst the(sel'es at the (eeting shall preside at the (eeting0 (3) All *uestions which co(e up before any (eeting of the 8oard shall be decided by a (aDority 'otes of the (e(bers present and 'oting, and, in the e'ent of an e*uality of 'otes, the Chair(an, or in his absence, the person presiding, shall ha'e a second or casting 'ote0 4@e.,er ot to $%rti'i$%te i .eeti (! i 'ert%i '%!e!. 7A. Any (e(ber, who is a director of a co(pany and who as such director has any direct or indirect pecuniary interest in any (atter co(ing up for consideration at a (eeting of the 8oard, shall, as soon as possible after rele'ant circu(stances ha'e co(e to his )nowledge, disclose the nature of his interest at such (eeting and such disclosure shall be recorded in the proceedings of the 8oard, and the (e(ber shall not ta)e any part in any deliberation or decision of the 8oard with respect to that (atter0: I%'% 'ie!, et'., ot to i +%li-%te $ro'ee-i (! of ;o%r-. :. Eo act or proceeding of the 8oard shall be in'alid (erely by reason of(a) any 'acancy in, or any defect in the constitution of, the 8oard3 or (b) any defect in the appoint(ent of a person acting as a (e(ber of the 8oard3 or (c) any irregularity in the procedure of the 8oard not affecting the (erits of the case0 Offi'er! % - e.$lo>ee! of the ;o%r-. 9. ( ) .he 8oard (ay appoint such other officers and e(ployees as it considers necessary for the efficient discharge of its functions under this Act0 (%) .he ter( and other conditions of ser'ice of officers and e(ployees of the 8oard appointed under sub+section ( ) shall be such as (ay be deter(ined by regulations0 CDA4TER III
TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD Tr% !fer of %!!et!, li%,ilitie!, et'., of e#i!ti ( Se'*ritie! % - E#'h% (e ;o%r- to the ;o%r-. 1=. ( ) Cn and fro( the date of establish(ent of the 8oard,(a) any reference to the existing Securities and 7xchange 8oard in any law other than this Act or in any contract or other instru(ent shall be dee(ed as a reference to the 8oard3 (b) all properties and assets, (o'able and i((o'able, of, or belonging to, the existing Securities and 7xchange 8oard, shall 'est in the 8oard3
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
>
(c) all rights and liabilities of the existing Securities and 7xchange 8oard shall be transferred to, and be the rights and liabilities of, the 8oard3 (d) without preDudice to the pro'isions of clause (c), all debts, obligations and liabilities incurred, all contracts entered into and all (atters and things engaged to be done by, with or for the existing Securities and 7xchange 8oard i((ediately before that date, for or in connection with the purpose of the said existing 8oard shall be dee(ed to ha'e been incurred, entered into, or engaged to be done by, with or for, the 8oard3 (e) all su(s of (oney due to the existing Securities and 7xchange 8oard i((ediately before that date shall be dee(ed to be due to the 8oard3 (f) all suits and other legal proceedings instituted or which could ha'e been instituted by or against the existing Securities and 7xchange 8oard i((ediately before that date (ay be continued or (ay be instituted by or against the 8oard3 and (g) e'ery e(ployee holding any office under the existing Securities and 7xchange 8oard i((ediately before that date shall hold his office in the 8oard by the sa(e tenure and upon the sa(e ter(s and conditions of ser'ice as respects re(uneration, lea'e, pro'ident fund, retire(ent and other ter(inal benefits as he would ha'e held such office if the 8oard had not been established and shall continue to do so as an e(ployee of the 8oard or until the expiry of the period of six (onths fro( that date if such e(ployee opts not to be the e(ployee of the 8oard within such period0 (%) Eotwithstanding anything contained in the Industrial 9isputes Act, !$/ ( $ of !$/), or in any other law for the ti(e being in force, absorption of any e(ployee by the 8oard in its regular ser'ice under this section shall not entitle such e(ployee to any co(pensation under that Act or other law and no such clai( shall be entertained by any court, tribunal or other authority0 CDA4TER II 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 2* 'tio ! of ;o%r-. 11. ( ) SubDect to the pro'isions of this Act, it shall be the duty of the 8oard to protect the interests of in'estors in securities and to pro(ote the de'elop(ent of, and to regulate the securities (ar)et, by such (easures as it thin)s fit0 (%) Kithout preDudice to the generality of the foregoing pro'isions, the (easures referred to therein (ay pro'ide for(a) regulating the business in stoc) exchanges and any other securities (ar)ets3 (b) registering and regulating the wor)ing of stoc) bro)ers, sub+bro)ers, share transfer agents, ban)ers to an issue, trustees of trust deeds, registrars to an issue, (erchant ban)ers, underwriters, portfolio (anagers, in'est(ent ad'isers and such other inter(ediaries who (ay be associated with securities (ar)ets in any (anner3 4(ba) registering and regulating the wor)ing of the depositories, %4participants:, custodians of securities, foreign institutional in'estors, credit rating agencies and such other inter(ediaries as the 8oard (ay, by notification, specify in this behalf3: (c) registering and regulating the wor)ing of 4'enture capital funds and collecti'e
in'est(ent sche(es:, including (utual funds3
% Inserted
Inserted by Securities =aws (A(end(ent) Act !!", w0r0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+!+ !!"0
!
(d) pro(oting and regulating self+regulatory organisations3 (e) prohibiting fraudulent and unfair trade practices relating to securities (ar)ets3 (f) pro(oting in'estorsJ education and training of inter(ediaries of securities (ar)ets3 (g) prohibiting insider trading in securities3 (h) regulating substantial ac*uisition of shares and ta)e o'er of co(panies3 (i) calling for infor(ation fro(, underta)ing inspection, conducting in*uiries and audits of the %4stoc) exchanges, (utual funds, other persons associated with the securities (ar)et:, inter(ediaries and self+regulatory organisations in the securities (ar)et3 34(ia) '%lli ( for i for.%tio % - re'or-! fro. % > $er!o i 'l*-i ( % > ,% 6 or % > other %*thorit> or ,o%r- or 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l or St%te A't /hi'h, i the o$i io of the ;o%r-, !h%ll ,e rele+% t to % > i +e!ti(%tio or i 7*ir> ,> the ;o%r- i re!$e't of % > tr% !%'tio i !e'*ritie! 3: $5(i,) '%lli ( for i for.%tio fro., or f*r i!hi ( i for.%tio to, other %*thoritie!, /hether i I -i% or o*t!i-e I -i%, h%+i ( f* 'tio ! !i.il%r to tho!e of the ;o%r-, i the .%tter! rel%ti ( to the $re+e tio or -ete'tio of +iol%tio ! i re!$e't of !e'*ritie! l%/!, !*,Ge't to the $ro+i!io ! of other l%/! for the ti.e ,ei ( i for'e i thi! re(%r-& 4ro+i-e- th%t the ;o%r-, for the $*r$o!e of f*r i!hi ( % > i for.%tio to % > %*thorit> o*t!i-e I -i%, .%> e ter i to % %rr% (e.e t or %(ree.e t or * -er!t% -i ( /ith !*'h %*thorit> /ith the $rior %$$ro+%l of the Ce tr%l Go+er .e tH< (j) perfor(ing such functions and exercising such powers under the pro'isions of "4G G G: the Securities Contracts (Regulation) Act, !"# ($% of !"#), as (ay be delegated to it by the Central &o'ern(ent3 (k) le'ying fees or other charges for carrying out the purposes of this section3 (l) conducting research for the abo'e purposes3 #4(la) calling fro( or furnishing to any such agencies, as (ay be specified by the 8oard, such infor(ation as (ay be considered necessary by it for the efficient discharge of its functions3: (") perfor(ing such other functions as (ay be prescribed0 /4(%A) Kithout preDudice to the pro'isions contained in sub+section (%), the 8oard (ay ta)e (easures to underta)e inspection of any boo), or register, or other docu(ent or record of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard
Substituted for 1collecti'e in'est(ent sche(es2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % Substituted for 1stoc) exchanges and2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 S*,!tit*te- for J'%lli ( for i for.%tio % - re'or- fro. % > ,% 6 or % > other %*thorit> or ,o%ror 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l, St%te or 4ro+i 'i%l A't i re!$e't of % > tr% !%'tio i !e'*ritie! /hi'h i! * -er i +e!ti(%tio or i 7*ir> ,> the ;o%r-K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). E%rlier Se'tio 11(")(i%) /%! i !erte- ,> the SE;I (A.e -.e t) A't, "==" /.e.f. "901=0"=="0 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. =80=)0 199:) " .he words 1the Capital Issues (Control) Act, !$/ (%! of !$/) and2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
0
has reasonable grounds to belie'e that such co(pany has been indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et0: 4(3) Eotwithstanding anything contained in any other law for the ti(e being in force while exercising the powers under %4clause (i) or clause (ia) of sub+section (%) or sub+ section (2A):, the 8oard shall ha'e the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(i) the disco'ery and production of boo)s of account and other docu(ents, at such place and such ti(e as (ay be specified by the 8oard3 (ii) su((oning and enforcing the attendance of persons and exa(ining the( on oath3 (iii) inspection of any boo)s, registers and other docu(ents of any person referred to in section %, at any place3: 34(iv) inspection of any boo), or register, or other docu(ent or record of the co(pany referred to in sub+section (%A)3 (v) issuing co((issions for the exa(ination of witnesses or docu(ents0: $4($) Kithout preDudice to the pro'isions contained in sub+sections ( ), (%), (%A) and (3) and section 8, the 8oard (ay, by an order, for reasons to be recorded in writing, in the interests of in'estors or securities (ar)et, ta)e any of the following (easures, either pending in'estigation or in*uiry or on co(pletion of such in'estigation or in*uiry, na(ely,(a) suspend the trading of any security in a recognised stoc) exchange3 (b) restrain persons fro( accessing the securities (ar)et and prohibit any person associated with securities (ar)et to buy, sell or deal in securities3 (c) suspend any office+bearer of any stoc) exchange or self+regulatory organisation fro( holding such position3 (d) i(pound and retain the proceeds or securities in respect of any transaction which is under in'estigation3 (e) attach, after passing of an order on an application (ade for appro'al by the Mudicial ?agistrate of the first class ha'ing Durisdiction, for a period not exceeding one (onth, one or (ore ban) account or accounts of any inter(ediary or any person associated with the securities (ar)et in any (anner in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder , 4ro+i-e- that only the ban) account or accounts or any transaction entered therein, so far as it relates to the proceeds actually in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder shall be allowed to be attached3 (f) direct any inter(ediary or any person associated with the securities (ar)et in any (anner not to dispose of or alienate an asset for(ing part of any transaction which is under in'estigation , 4ro+i-e- that the 8oard (ay, without preDudice to the pro'isions contained in sub+section (%) or sub+section (%A), ta)e any of the (easures specified in clause ( d) or clause (e) or clause (f), in respect of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard has reasonable grounds to belie'e that such co(pany has been
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1clause (i) of sub+section (%)2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 3 Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 $ Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
% Substituted
indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et , 4ro+i-e- f*rther that the 8oard shall, either before or after passing such orders, gi'e an
opportunity of hearing to such inter(ediaries or persons concerned0: 15(5) The %.o* t -i!(or(e-, $*r!*% t to % -ire'tio i!!*e- * -er !e'tio 11; or !e'tio 1"A of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 or !e'tio 19 of the De$o!itorie! A't, 1998, %! the '%!e .%> ,e, !h%ll ,e 're-ite- to the I +e!tor 4rote'tio % - E-*'%tio 2* e!t%,li!he- ,> the ;o%r- % - !*'h %.o* t !h%ll ,e *tiliLe- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< %4;o%r- to re(*l%te or $rohi,it i!!*e of $ro!$e't*!, offer -o'*.e t or %-+erti!e.e t !oli'iti ( .o e> for i!!*e of !e'*ritie!. 11A. ( ) Kithout preDudice to the pro'isions of the Co(panies Act, !"# ( of !"#), the 8oard (ay, for the protection of in'estors,(a) specify, by regulations(i) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (ii) the (anner in which such (atters shall be disclosed by the co(panies3 (b) by general or special orders(i) prohibit any co(pany fro( issuing prospectus, any offer docu(ent, or ad'ertise(ent soliciting (oney fro( the public for the issue of securities3 (ii) specify the conditions subDect to which the prospectus, such offer docu(ent or ad'ertise(ent, if not prohibited, (ay be issued0 (%) Kithout preDudice to the pro'isions of section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the 8oard (ay specify the re*uire(ents for listing and transfer of securities and other (atters incidental thereto0: 34Colle'ti+e i +e!t.e t !'he.e. 11AA. ( ) Any sche(e or arrange(ent which satisfies the conditions referred to in subsection (%) $5or !*,0!e'tio ("A)< shall be a collecti'e in'est(ent sche(e0 "44ro+i-e- th%t % > $ooli ( of f* -! * -er % > !'he.e or %rr% (e.e t, /hi'h i! ot re(i!tere- /ith the ;o%r- or i! ot 'o+ere- * -er !*,0!e'tio ()), i +ol+i ( %
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 7arlier S0 A was inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" for S0 A0 <rior to its substitution, S0 A read as under,+ 1 A0 ?atters to be disclosed by the co(panies0+ Kithout <reDudice to the <ro'isions of the Co(panies Act , !"# ( of !"#), the board (ay , for the protection of in'estors, specify, by regulations,+ (a) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (b) the (anner in which such (atters, shall be disclosed by the co(panies02 3 Inserted by S78I (A(end(ent) Act !!!, w0e0f0 %%+%+%0000 $I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% Substituted
%
'or$*! %.o* t of o e h* -re- 'rore r*$ee! or .ore !h%ll ,e -ee.e- to ,e % 'olle'ti+e i +e!t.e t !'he.e.< (%) Any sche(e or arrange(ent (ade or offered by any 5$er!o < under which,(i) the contributions, or pay(ents (ade by the in'estors, by whate'er na(e called, are pooled and utiliFed for the purposes of the sche(e or arrange(ent3 (ii) the contributions or pay(ents are (ade to such sche(e or arrange(ent by the in'estors with a 'iew to recei'e profits, inco(e, produce or property, whether (o'able or i((o'able, fro( such sche(e or arrange(ent3 (iii) the property, contribution or in'est(ent for(ing part of sche(e or arrange(ent, whether identifiable or not, is (anaged on behalf of the in'estors3
(iv) the in'estors do not ha'e day+to+day control o'er the (anage(ent and operation of the sche(e or arrange(ent0 "5("A)< A > !'he.e or %rr% (e.e t .%-e or offere- ,> % > $er!o !%ti!f>i ( the 'o -itio ! %! .%> ,e !$e'ifie- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< (3) Eotwithstanding anything contained in sub+section (%) 35or !*,0!e'tio ("A)<, any sche(e or arrange(ent(i) (ade or offered by a co+operati'e society registered under the Co+operati'e Societies Act, ! % (% of ! %) or a society being a society registered or dee(ed to be registered under any law relating to co+operati'e societies for the ti(e being in force in any State3 (ii) under which deposits are accepted by non+ban)ing financial co(panies as defined in clause (f) of section $"+I of the Reser'e 8an) of India Act, !3$ (% of !3$)3 (iii) being a contract of insurance to which the Insurance Act, !3> ($ of !3>), applies3 (iv) pro'iding for any Sche(e, <ension Sche(e or the Insurance Sche(e fra(ed under the 7(ployees <ro'ident 6und and ?iscellaneous <ro'isions Act, !"% ( ! of !"%)3 (v) under which deposits are accepted under section ">A of the Co(panies Act, !"# ( of !"#)3 (vi) under which deposits are accepted by a co(pany declared as a Eidhi or a (utual benefit society under section #%0A of the Co(panies Act, !"# ( of !"#)3 (vii) falling within the (eaning of Chit business as defined in clause ( d) of section % of the Chit 6und Act, !>% ($0 of !>%)3 (viii) under which contributions (ade are in the nature of subscription to a (utual fund3 35(i#) !*'h other !'he.e or %rr% (e.e t /hi'h the Ce tr%l Go+er .e t .%>, i 'o !*lt%tio /ith the ;o%r-, otif>H< shall not be a collecti'e in'est(ent sche(e0: "54o/er to i!!*e -ire'tio !. 11;. Sa'e as otherwise pro'ided in section , if after (a)ing or causing to be (ade an en*uiry, the 8oard is satisfied that it is necessary,S*,!tit*te- for J'o.$% >K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) 3I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
%I
3
(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any inter(ediary or other persons referred to in section % being conducted in a (anner detri(ental to the interest of in'estors or securities (ar)et3 or (iii) to secure the proper (anage(ent of any such inter(ediary or person, it (ay issue such directions,(a) to any person or class of persons referred to in section %, or associated with the securities (ar)et3 or (b) to any co(pany in respect of (atters specified in section A, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 15E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< %4I +e!ti(%tio . 11C. ( ) Khere the 8oard has reasonable ground to belie'e that-
(a) the transactions in securities are being dealt with in a (anner detri(ental to the in'estors or the securities (ar)et3 or (b) any inter(ediary or any person associated with the securities (ar)et has 'iolated any of the pro'isions of this Act or the rules or the regulations (ade or directions issued by the 8oard thereunder, it (ay, at any ti(e by order in writing, direct any person (hereafter in this section referred to as the In'estigating Authority) specified in the order to in'estigate the affairs of such inter(ediary or persons associated with the securities (ar)et and to report thereon to the 8oard0 (%) Kithout preDudice to the pro'isions of sections %3" to %$ of the Co(panies Act, !"# ( of !"#), it shall be the duty of e'ery (anager, (anaging director, officer and other e(ployee of the co(pany and e'ery inter(ediary referred to in section % or e'ery person associated with the securities (ar)et to preser'e and to produce to the In'estigating Authority or any person authorised by it in this behalf, all the boo)s, registers, other docu(ents and record of, or relating to, the co(pany or, as the case (ay be, of or relating to, the inter(ediary or such person, which are in their custody or power0 (3) .he In'estigating Authority (ay re*uire any inter(ediary or any person associated with securities (ar)et in any (anner to furnish such infor(ation to, or produce such boo)s, or registers, or other docu(ents, or record before hi( or any person authorised by it in this behalf as it (ay consider necessary if the furnishing of such infor(ation or the production of such boo)s, or registers, or other docu(ents, or record is rele'ant or necessary for the purposes of its in'estigation0 ($) .he In'estigating Authority (ay )eep in its custody any boo)s, registers, other docu(ents and record produced under sub+section (%) or sub+section (3) for six (onths and thereafter
% Inserted
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
$
shall return the sa(e to any inter(ediary or any person associated with securities (ar)et by who( or on whose behalf the boo)s, registers, other docu(ents and record are produced , 4ro+i-e- that the In'estigating Authority (ay call for any boo), register, other docu(ent and record if they are needed again , 4ro+i-e- f*rther that if the person on whose behalf the boo)s, registers, other docu(ents and record are produced re*uires certified copies of the boo)s, registers, other docu(ents and record produced before the In'estigating Authority, it shall gi'e certified copies of such boo)s, registers, other docu(ents and record to such person or on whose behalf the boo)s, registers, other docu(ents and record were produced0 (") Any person, directed to (a)e an in'estigation under sub+section ( ), (ay exa(ine on oath, any (anager, (anaging director, officer and other e(ployee of any inter(ediary or any person associated with securities (ar)et in any (anner, in relation to the affairs of his business and (ay ad(inister an oath accordingly and for that purpose (ay re*uire any of those persons to appear before it personally0 (#) If any person fails without reasonable cause or refuses(a) to produce to the In'estigating Authority or any person authorised by it in this behalf any boo), register, other docu(ent and record which is his duty under sub+section (%) or sub+section (3) to produce3 or (b) to furnish any infor(ation which is his duty under sub+section (3) to furnish3 or (c) to appear before the In'estigating Authority personally when re*uired to do so under sub+section (") or to answer any *uestion which is put to hi( by the In'estigating Authority in pursuance of that sub+section3 or (d) to sign the notes of any exa(ination referred to in sub+section (/), he shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with
fine, which (ay extend to one crore rupees, or with both, and also with a further fine which (ay extend to fi'e la)h rupees for e'ery day after the first during which the failure or refusal continues0 (/) Eotes of any exa(ination under sub+section (") shall be ta)en down in writing and shall be read o'er to, or by, and signed by, the person exa(ined, and (ay thereafter be used in e'idence against hi(0 4(:) ?here i the 'o*r!e of % i +e!ti(%tio , the I +e!ti(%ti ( A*thorit> h%! re%!o to ,elie+e th%t % > $er!o or e ter$ri!e, %! the '%!e .%> ,e, to /ho. % oti'e * -er !*,!e'tio ()) h%! ,ee i!!*e- or .i(ht ,e i!!*e-, 0 (%) h%! o.itte- or f%ile- to $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! %! re7*irei the oti'eH or (,) /o*l- ot $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! /hi'h !h%ll ,e *!ef*l for, or rele+% t to, the i +e!ti(%tio H or (') /o*l- -e!tro>, .*til%te, %lter, f%l!if> or !e'rete the i for.%tio or -o'*.e t! *!ef*l for, or rele+% t to, the i +e!ti(%tio ,
S*,!tit*te- for JKhere in the course of in'estigation, the In'estigating Authority has reasonable ground to belie'e that the boo)s, registers, other docu(ents and record of, or relating to, any inter(ediary or any person associated with securities (ar)et in any (anner, (ay be destroyed, (utilated, altered, falsified or secreted, the In'estigating Authority (ay (a)e an application to the Mudicial ?agistrate of the first class ha'ing Durisdiction for an order for the seiFure of such boo)s, registers, other docu(ents and record K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
"
the , the Ch%ir.% .%>, %fter ,ei ( !%ti!fie- th%t it i! e'e!!%r> to -o !o, %*thoriLe the I +e!ti(%ti ( A*thorit> or % > other offi'er of the ;o%r- (the offi'er !o %*thoriLe- i %ll '%!e! ,ei ( herei %fter referre- to %! the %*thori!e- offi'er), to0 (i) e ter % - !e%r'h, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft /here !*'h i for.%tio or -o'*.e t! %re e#$e'te- or ,elie+e- to ,e 6e$tH (ii) ,re%6 o$e the lo'6 of % > -oor, ,o#, lo'6er, !%fe, %l.ir%h or other re'e$t%'le for e#er'i!i ( the $o/er! 'o ferre- ,> !*,0'l%*!e (i), /here the 6e>! thereof %re ot %+%il%,leH (iii) !e%r'h % > $er!o /ho h%! (ot o*t of, or i! %,o*t to (et i to, or i! i , the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft, if the %*thoriLe- offi'er h%! re%!o to !*!$e't th%t !*'h $er!o h%! !e'rete- %,o*t hi! $er!o % > !*'h ,oo6! of %''o* t or other -o'*.e t!H (i+) re7*ire % > $er!o /ho i! fo* - to ,e i $o!!e!!io or 'o trol of % > ,oo6! of %''o* t or other -o'*.e t!, .%i t%i e- i the for. of ele'tro i' re'or-, to $ro+i-e the %*thori!e- offi'er the e'e!!%r> f%'ilit> to i !$e't !*'h ,oo6! of %''o* t or other -o'*.e t!. "#planation0 2or the $*r$o!e of thi! !*,0'l%*!e, the e#$re!!io Jele'tro i' re'or-K !h%ll h%+e the .e% i ( %!!i( e- to it i 'l%*!e (t) of !*,0!e'tio (1) of !e'tio " of the I for.%tio Te'h olo(> A't, "===. (+) !eiLe % > !*'h ,oo6! of %''o* t or other -o'*.e t! fo* - %! % re!*lt of !*'h !e%r'hH (+i) $l%'e .%r6! of i-e tifi'%tio o % > ,oo6! of %''o* t or other -o'*.e t! or .%6e or '%*!e to ,e .%-e e#tr%'t! or 'o$ie! therefro.H (+ii) re'or- o o%th the !t%te.e t of % > $er!o /ho i! fo* - to ,e i $o!!e!!io or i 'o trol of the i for.%tio or -o'*.e t! referre- to i !*,0'l%*!e! (i), (iii) % - (i+).< 4(9) The ;o%r- .%> .%6e re(*l%tio ! i rel%tio to % > !e%r'h or !eiL*re * -er thi! !e'tio H % - i $%rti'*l%r, /itho*t $reG*-i'e to the (e er%lit> of the fore(oi ( $o/er, !*'h re(*l%tio ! .%> $ro+i-e for the $ro'e-*re to ,e follo/e- ,> the %*thori!e- offi'er0
(%) for o,t%i i ( i (re!! i to % > ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft to ,e !e%r'he- /here free i (re!! thereto i! ot %+%il%,leH
1 S*,!tit*te-
,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) for the follo/i (& JAfter 'o !i-eri ( the %$$li'%tio % - he%ri ( the I +e!ti(%ti ( A*thorit>, if e'e!!%r>, the @%(i!tr%te .%>, ,> or-er, %*thori!e the I +e!ti(%ti ( A*thorit>O (a) to e ter, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the $l%'e or $l%'e! /here !*'h ,oo6!, re(i!ter!, other -o'*.e t! % - re'or- %re 6e$tH (b) to !e%r'h th%t $l%'e or tho!e $l%'e! i the .% er !$e'ifie- i the or-erH % (c) to !eiLe ,oo6!, re(i!ter!, other -o'*.e t! % - re'or-, it 'o !i-er! e'e!!%r> for the $*r$o!e! of the i +e!ti(%tio & 4ro+i-e- th%t the @%(i!tr%te !h%ll ot %*thori!e !eiL*re of ,oo6!, re(i!ter!, other -o'*.e t! % re'or-, of % > li!te- $*,li' 'o.$% > or % $*,li' 'o.$% > ( ot ,ei ( the i ter.e-i%rie! !$e'ifie* -er !e'tio 1") /hi'h i te -! to (et it! !e'*ritie! li!te- o % > re'o( i!e- !to'6 e#'h% (e * le!! !*'h 'o.$% > i -*l(e! i i !i-er tr%-i ( or .%r6et .% i$*l%tio .K
#
(,) for e !*ri ( !%fe '*!to-> of % > ,oo6! of %''o* t or other -o'*.e t! or %!!et! !eiLe-.< ( 0) .he In'estigating Authority shall )eep in its custody the boo)s, registers, other docu(ents and record seiFed under this section for such period not later than the conclusion of the in'estigation as it considers necessary and thereafter shall return the sa(e to the co(pany or the other body corporate, or, as the case (ay be, to the (anaging director or the (anager or any other person, fro( whose custody or power they were seiFed 5***<, 4ro+i-e- that the In'estigating Authority (ay, before returning such boo)s, registers, other docu(ents and record as aforesaid, place identification (ar)s on the( or any part thereof0 ( ) Sa'e as otherwise pro'ided in this section, e'ery search or seiFure (ade under this section shall be carried out in accordance with the pro'isions of the Code of Cri(inal <rocedure, !/3 (% of !/$) relating to searches or seiFures (ade under that Code0 Ce%!e % - -e!i!t $ro'ee-i (!. 11D. If the 8oard finds, after causing an in*uiry to be (ade, that any person has 'iolated, or is li)ely to 'iolate, any pro'isions of this Act, or any rules or regulations (ade thereunder, it (ay pass an order re*uiring such person to cease and desist fro( co((itting or causing such 'iolation, 4ro+i-e- that the 8oard shall not pass such order in respect of any listed public co(pany or a public co(pany (other than the inter(ediaries specified under section %) which intends to get its securities listed on any recognised stoc) exchange unless the 8oard has reasonable grounds to belie'e that such co(pany has indulged in insider trading or (ar)et (anipulation0: CDA4TER I REGISTRATION CERTI2ICATE Re(i!tr%tio of !to'6 ,ro6er!, !*,0,ro6er!, !h%re tr% !fer %(e t!, et'. 1". ( ) Eo stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et shall buy, sell or deal in securities except under, and in accordance with, the conditions of a certificate of registration obtained fro( the 8oard in accordance with the %4regulations: (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et i((ediately before the establish(ent of the 8oard for which no registration certificate was
necessary prior to such establish(ent, (ay continue to do so for a period of three (onths fro( such establish(ent or, if he has (ade an application for such registration within the said period of three (onths, till the disposal of such application,
The /or-! P% - i for. the @%(i!tr%te of !*'h ret*r P, o.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) % Substituted for 1rules2 by Securities =aw (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0
/
44ro+i-e- f*rther that any certificate of registration, obtained i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", shall be dee(ed to ha'e been obtained fro( the 8oard in accordance with the regulations pro'iding for such registration0 ( A) Eo depository, %4participant,: custodian of securities, foreign institutional in'estor, credit rating agency, or any other inter(ediary associated with the securities (ar)et as the 8oard (ay by notification in this behalf specify, shall buy or sell or deal in securities except under and in accordance with the conditions of a certificate of registration obtained fro( the 8oard in accordance with the regulations (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a depository, 34participant,: custodian of securities, foreign institutional in'estor or credit rating agency i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to buy or sell securities or otherwise deal with the securities (ar)et until such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300 ( 8) Eo person shall sponsor or cause to be sponsored or carry on or caused to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es including (utual funds, unless he obtains a certificate of registration fro( the 8oard in accordance with the regulations, 4ro+i-e- that any person sponsoring or causing to be sponsored, carrying or causing to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es operating in the securities (ar)et i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to operate till such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300:
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0
% Inserted
>
4()%lanati$n7 6or the re(o'al of doubts, it is hereby declared that, for purposes of this section, a collecti'e in'est(ent sche(e or (utual fund shall not be include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(ponent of in'est(ent besides the co(ponent of insurance issued by the insurer0: (%) 7'ery application for registration shall be in such (anner and on pay(ent of such fees as (ay be deter(ined by regulations0 (3) .he 8oard (ay, by order, suspend or cancel a certificate of registration in such (anner as (ay be deter(ined by regulations, 4ro+i-e- that no order under this sub+section shall be (ade unless the person concerned has been gi'en a reasonable opportunity of being heard0 %4CIA<.7R BA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 4rohi,itio of .% i$*l%ti+e % - -e'e$ti+e -e+i'e!, i !i-er tr%-i ( % - !*,!t% ti%l %'7*i!itio of !e'*ritie! or 'o trol.
1"A. Eo person shall directly or indirectly(a) use or e(ploy, in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recogniFed stoc) exchange, any (anipulati'e or decepti'e de'ice or contri'ance in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3
Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, w0r0e0f !+$+ %0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, reads as under, /@A81(0 D: ?ISC7==AE7CHS #0 Balidation+ Eotwithstanding anything contained in any Dudg(ent, decree or order of any court, tribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 Repeal and sa'ings + (1) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (2) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0 % Chapter BA inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
!
(b) e(ploy any de'ice, sche(e or artifice to defraud in connection with issue or dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange3 (c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange, in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (d) engage in insider trading3 (e) deal in securities while in possession of (aterial or non+public infor(ation or co((unicate such (aterial or non+public infor(ation to any other person, in a (anner which is in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (f) ac*uire control of any co(pany or securities (ore than the percentage of e*uity share capital of a co(pany whose securities are listed or proposed to be listed on a recognised stoc) exchange in contra'ention of the regulations (ade under this Act0: CDA4TER II 2INANCE, ACCOUNTS AND AUDIT Gr% t! ,> the Ce tr%l Go+er .e t. 1). .he Central &o'ern(ent (ay, after due appropriation (ade by <arlia(ent by law in this behalf, (a)e to the 8oard grants of such su(s of (oney as that &o'ern(ent (ay thin) fit for being utiliFed for the purposes of this Act0 2* -. 13. ( ) .here shall be constituted a 6und to be called the Securities and 7xchange 8oard of
India &eneral 6und and there shall be credited thereto(a) all grants, fees and charges recei'ed by the 8oard under this Act3 4G G G: (aa) %4G G G: (b) all su(s recei'ed by the 8oard fro( such other sources as (ay be decided upon by the Central &o'ern(ent0 (%) .he 6und shall be applied for (eeting(a) the salaries, allowances and other re(uneration of the (e(bers, officers and other e(ployees of the 8oard3 (b) the expenses of the 8oard in the discharge of its functions under section 3 (c) the expenses on obDects and for purposes authorised by this Act0
.he word 1and2 o(itted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 (aa) o(itted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 It was inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Clause (aa) reads as under,+ 1(aa) all su(s realiFed by way of <enalties under this Act3 and20
% Clause
%0
A''o* t! % - %*-it. 15. ( ) .he 8oard shall (aintain proper accounts and other rele'ant records and prepare an annual state(ent of accounts in such for( as (ay be prescribed by the Central &o'ern(ent in consultation with the Co(ptroller and Auditor+&eneral of India0 (%) .he accounts of the 8oard shall be audited by the Co(ptroller and Auditor+&eneral of India at such inter'als as (ay be specified by hi( and any expenditure incurred in connection with such audit shall be payable by the 8oard to the Co(ptroller and Auditor+&eneral of India0 (3) .he Co(ptroller and Auditor+&eneral of India and any other person appointed by hi( in connection with the audit of the accounts of the 8oard shall ha'e the sa(e rights and pri'ileges and authority in connection with such audit as the Co(ptroller and Auditor+ &eneral generally has in connection with the audit of the &o'ern(ent accounts and, in particular, shall ha'e the right to de(and the production of boo)s, accounts, connected 'ouchers and other docu(ents and papers and to inspect any of the offices of the 8oard0 ($) .he accounts of the 8oard as certified by the Co(ptroller and Auditor+&eneral of India or any other person appointed by hi( in this behalf together with the audit report thereon shall be forwarded annually to the Central &o'ern(ent and that &o'ern(ent shall cause the sa(e to be laid before each Iouse of <arlia(ent0 5CDA4TER IIA 4ENALTIES AND ADEUDICATION 4e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 15A. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder,(a) to furnish any docu(ent, return or report to the 8oard, fails to furnish the sa(e, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations, fails to file return or furnish the sa(e within the ti(e specified therefor in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0
Chapters BI A and BI 8 containing Ss0 "A to "M and "@ to "S respecti'ely, inserted by Securities =aws (A(end(ent) Act, !!" w0e0f0 %"+ + !!"0 % Substituted for 1a penalty not exceeding one la)h and fifty thousand rupees for each such failure2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding fi'e thousand rupees for e'ery day during which such failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for e'ery day during which the failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%
4e %lt> for f%il*re ,> % > $er!o to e ter i to %(ree.e t /ith 'lie t!. 15;. If any person, who is registered as an inter(ediary and is re*uired under this Act or any rules or regulations (ade thereunder to enter into an agree(ent with his client, fails to enter into such agree(ent, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 %54e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 15C. If any listed co(pany or any person who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such co(pany or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 4e %lt> for 'ert%i -ef%*lt! i '%!e of .*t*%l f* -!. 15D. If any person, who is(a) re*uired under this Act or any rules or regulations (ade thereunder to obtain a certificate of registration fro( the 8oard for sponsoring or carrying on any collecti'e in'est(ent sche(e, including (utual funds, sponsors or carries on any collecti'e in'est(ent sche(e, including (utual funds, without obtaining such certificate of registration, he shall be liable to 34a penalty of one la)h rupees for each day during which he sponsors or carries on any such collecti'e in'est(ent sche(e including (utual funds, or one crore rupees, whiche'er is less:3 (b) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, for sponsoring or carrying on any in'est(ent sche(e, fails to co(ply with the ter(s and conditions of certificate of registration, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, fails to (a)e an application for listing of its sche(es as pro'ided for in the regulations
Substituted for 1a penalty not exceeding fi'e la)h rupees for e'ery such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1If any person, who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing to redress the grie'ances of in'estors, fails to redress such grie'ances, he shall be liable to a penalty not exceeding ten thousand rupees for each such failure2, by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding ten thousand rupees for each day during which he carries on any such collecti'e in'est(ent sche(e including (utual funds, or ten la)h rupees whiche'er is higher02 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for each day during which such failure continues or ten la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0
%%
go'erning such listing, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (d) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to despatch
unit certificates of any sche(e in the (anner pro'ided in the regulation go'erning such despatch, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (e) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to refund the application (onies paid by the in'estors within the period specified in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (f) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to in'est (oney collected by such collecti'e in'est(ent sche(es in the (anner or within the period specified in the regulations, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for f%il*re to o,!er+e r*le! % - re(*l%tio ! ,> % %!!et .% %(e.e t 'o.$% >. 15E. Khere any asset (anage(ent co(pany of a (utual fund registered under this Act, fails to co(ply with any of the regulations pro'iding for restrictions on the acti'ities of the asset (anage(ent co(panies, such asset (anage(ent co(pany shall be liable to "4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for -ef%*lt i '%!e of !to'6 ,ro6er!. 152. If any person, who is registered as a stoc) bro)er under this Act,(a) fails to issue contract notes in the for( and (anner specified by the stoc) exchange of which such bro)er is a (e(ber, he shall be liable to a penalty not exceeding fi'e ti(es the a(ount for which the contract note was re*uired to be issued by that bro)er3 (b) fails to deli'er any security or fails to (a)e pay(ent of the a(ount due to the in'estor in the (anner within the period specified in the regulations, he shall be liable to #4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3
Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues or fi'e la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding one thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%3
(c) charges an a(ount of bro)erage which is in excess of the bro)erage specified in the regulations, he shall be liable to 4a penalty of one la)h rupees: or fi'e ti(es the a(ount of bro)erage charged in excess of the specified bro)erage, whiche'er is higher0 4e %lt> for i !i-er tr%-i (. 15G. If any insider who,(i) either on his own behalf or on behalf of any other person, deals in securities of a body corporate listed on any stoc) exchange on the basis of any unpublished price+sensiti'e infor(ation3 or (ii) co((unicates any unpublished price+sensiti'e infor(ation to any person, with or without his re*uest for such infor(ation except as re*uired in the ordinary course of business or under any law3 or
(iii) counsels, or procures for any other person to deal in any securities of any body corporate on the basis of unpublished price+sensiti'e infor(ation, shall be liable to a penalty %4of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of insider trading, whiche'er is higher:0 4e %lt> for o 0-i!'lo!*re of %'7*i!itio of !h%re! % - t%6eo+er!. 15D. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder, fails to,(i) disclose the aggregate of his shareholding in the body corporate before he ac*uires any shares of that body corporate3 or (ii) (a)e a public announce(ent to ac*uire shares at a (ini(u( price3 or 34(iii) (a)e a public offer by sending letter of offer to the shareholders of the concerned co(pany3 or (iv) (a)e pay(ent of consideration to the shareholders who sold their shares pursuant to letter of offer,: he shall be liable to a penalty $4of twenty+fi'e crore rupees or three ti(es the a(ount of profits profits (ade out of such failure, whiche'er is higher:0 554e %lt> for fr%*-*le t % - * f%ir tr%-e $r%'ti'e!. 15DA. If any person indulges in fraudulent and unfair trade practices relating to securities, he shall be liable to a penalty of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of such practices, whiche'er is higher0
Substituted for 1a penalty not exceeding fi'e thousand rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00% 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00% %00% " Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00%0
%$
4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 15D;. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 4o/er to %-G*-i'%te. 150I. ( ) 6or the purpose of adDudging under sections "A, "8, "C, "9, "7, "6, "& 4, "I, "IA and "I8:, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in subsection ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> the %-G*-i'%ti ( offi'er. 15E. Khile adDudging *uantu( of penalty under section "+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade
as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 "5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 15EA. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: )5Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!. 15E;. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 11, !e'tio 11;, !e'tio 11D, !*,0!e'tio ()) of !e'tio 1" or !e'tio 150I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e- -ef%*lt!.
Substituted for 1and "I2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the S78I (A(end(ent) Act, %00%, S0 ! w0e0f0 %!+ 0+%00%0 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
% Inserted
%"
(") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't. ()) The !ettle.e t $ro'ee-i (! * -er thi! !e'tio !h%ll ,e 'o -*'te- i %''or-% 'e /ith the $ro'e-*re !$e'ifie- i the re(*l%tio ! .%-e * -er thi! A't. (3) No %$$e%l !h%ll lie * -er !e'tio 15T %(%i !t % > or-er $%!!e- ,> the ;o%r- or %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio . < CDA4TER II; ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL E!t%,li!h.e t of Se'*ritie! A$$ell%te Tri,* %l!. 15F. ( ) .he Central &o'ern(ent shall by notification, establish one or (ore Appellate .ribunals to be )nown as the Securities Appellate .ribunal to exercise the Durisdiction, powers and authority conferred on such .ribunal by or under this Act 4or any other law for the ti(e being in force:0 (%) .he Central &o'ern(ent shall also specify in the notification referred to in sub+section ( ) the (atters and places in relation to which the Securities Appellate .ribunal (ay exercise Durisdiction0 "5Co.$o!itio of Se'*ritie! A$$ell%te Tri,* %l. 15L. A Securities Appellate .ribunal shall consist of a <residing Cfficer and two other (e(bers, to be appointed, by notification, by the Central &o'ern(ent, 4ro+i-e- that the Securities Appellate .ribunal, consisting of one person only, established before the co((ence(ent of the Securities and 7xchange 8oard of India (A(end(ent) Act, %00%, shall continue to exercise the Durisdiction, powers and authority conferred on it by or under this Act or any other law for the ti(e being in force till two other ?e(bers are appointed under this section0 9*%lifi'%tio for %$$oi t.e t %! 4re!i-i ( Offi'er or @e.,er of Se'*ritie! A$$ell%te Tri,* %l.
Inserted by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for Sections "= and "? by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "= and "? read as under,+ 1 "+=0 Co(position of securities Appellate .ribunal0 5 A Securities Appellate .ribunal shall consist of
% Substituted
one person only (hereinafter referred to as the <residing Cfficer of the Securities Appellate .ribunal) to be appointed, by notification, by the central &o'ern(ent0 "?0 Qualifications for appoint(ent as <residing Cfficer of the Securities Appellate .ribunal0 5 A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he + (a) is, or has been, or is *ualified to be, a Mudge of a Iigh Court3 or (b) has been a (e(ber of the Indian =egal Ser'ice and has held a post in &rade I of that ser'ice for at least three years3 or (c) has held office as the <residing Cfficer of a tribunal for at least three years02
%#
15@. 15( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of the Securities Appellate .ribunal unless he + (a) is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court3 or (b) is a sitting or retired Mudge of a Iigh Court who has co(pleted not less than se'en years of ser'ice as a Mudge in a Iigh Court0 ( A) .he <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0: (%) A person shall not be *ualified for appoint(ent as (e(ber of a Securities Appellate .ribunal unless he is a person of ability, integrity and standing who has shown capacity in dealing with proble(s relating to securities (ar)et and has *ualification and experience of corporate law, securities laws, finance, econo(ics or accountancy, 4ro+i-e- that a (e(ber of the 8oard or any person holding a post at senior (anage(ent le'el e*ui'alent to 7xecuti'e 9irector in the 8oard shall not be appointed as <residing Cfficer or ?e(ber of a Securities Appellate .ribunal during his ser'ice or tenure as such with the 8oard or within two years fro( the date on which he ceases to hold office as such in the 8oard0: %4Te *re of offi'e of 4re!i-i ( Offi'er % - other @e.,er! of Se'*ritie! A$$ell%te Tri,* %l. 15N. .he <residing Cfficer and e'ery other ?e(ber of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office and shall be eligible for re+appoint(ent, 4ro+i-e- that no person shall hold office as the <residing Cfficer of the Securities Appellate .ribunal after he has attained the age of sixty+eight years, 4ro+i-e- f*rther that no person shall hold office as a ?e(ber of the Securities Appellate .ribunal after he has attained the age of sixty+two years0: S%l%r> % - %llo/% 'e! % - other ter.! % - 'o -itio ! of !er+i'e of 4re!i-i ( Offi'er!. 150O. .he salary and allowances payable to and the other ter(s and conditions of ser'ice including pension, gratuity and other retire(ent benefits of the 4<residing Cfficer and other ?e(bers: of a Securities Appellate .ribunal shall be such as (ay be prescribed,
Substituted for sub+section ( ) of Section "? by the S78I (A(end(ent) Crdinance, %0 3 w0e0f0 % 00 0%0 30 <rior to substitution, it read as under,+ ;( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court , 4ro+i-e- that the <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0; % Substituted for Section "E, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "E read as under,+ 1 "E0 .er( of office0+ .he <residing officer of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office or until he attains the age of sixtyfi'e years, whiche'er is earlier02
%/
4ro+i-e- that neither the salary and allowances nor the other ter(s and conditions of ser'ice of the %4<residing Cfficer and other ?e(bers of a Securities Appellate .ribunal: shall be 'aried to their disad'antage after appoint(ent0 2illi ( *$ of +%'% 'ie!. 154. If, for reason other than te(porary absence, any 'acancy occurs in the 34office of the <residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal, then the Central &o'ern(ent shall appoint another person in accordance with the pro'isions of this Act to fill the 'acancy and the proceedings (ay be continued before the Securities Appellate .ribunal fro( the stage at which the 'acancy is filled0 Re!i( %tio % - re.o+%l. 159. ( ) .he $4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal (ay, by notice in writing under his hand addressed to the Central &o'ern(ent, resign his office, 4ro+i-e- that "4the <residing Cfficer or any other ?e(ber: shall, unless he is per(itted by the Central &o'ern(ent to relin*uish his office sooner, continue to hold office, until the expiry of three (onths fro( the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his ter( of office, whiche'er is the earliest0 (%) .he #4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal shall not be re(o'ed fro( his office except by an order by the Central &o'ern(ent on the ground of pro'ed (isbeha'iour or incapacity after an in*uiry (ade by a Mudge of the Supre(e Court, in which the /4<residing Cfficer or any other ?e(ber: concerned has been infor(ed of the charges against hi( and gi'en a reasonable opportunity of being heard in respect of these charges0 (3) .he Central &o'ern(ent (ay, by rules, regulate the procedure for the in'estigation of (isbeha'iour or incapacity of the >4<residing Cfficer or any other ?e(ber:0 Or-er! 'o !tit*ti ( A$$ell%te Tri,* %l to ,e fi %l % - ot to i +%li-%te it! $ro'ee-i (!. 15R. Eo order of the Central &o'ern(ent appointing any person as the !4<residing Cfficer or a ?e(ber: of a Securities Appellate .ribunal shall be called in *uestion in any (anner, and no act or proceeding before a Securities Appellate .ribunal shall be called in *uestion in any (anner on the ground (erely of any defect in the constitution of a Securities Appellate .ribunal0
Substituted for 1<residing Cfficer of a Securities Appellate .ribunal2 by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 / Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 > Substituted for 1aforesaid <residing Cfficer2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 ! Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0
%>
St%ff of the Se'*ritie! A$$ell%te Tri,* %l. 15S. ( ) .he Central &o'ern(ent shall pro'ide the Securities Appellate .ribunal with such officers and e(ployees as that &o'ern(ent (ay thin) fit0 (%) .he officers and e(ployees of the Securities Appellate .ribunal shall discharge their functions under general superintendence of the <residing Cfficer0 (3) .he salaries and allowances and other conditions of ser'ice of the officers and e(ployees of the Securities Appellate .ribunal shall be such as (ay be prescribed0 A$$e%l to the Se'*ritie! A$$ell%te Tri,* %l. 15T. 4( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed,(a) by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws
(Second A(end(ent) Act, !!!, under this Act, or the rules or regulations (ade thereunder3 or (b) by an order (ade by an adDudicating officer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 "5(") ********< (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 348oard or the AdDudicating Cfficer, as the case case (ay be,: is recei'ed by hi( and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 ($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0
Substituted for Sub+sec ( ) R (%) by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, Sub+sections ( ) R (%) were read as under, 1( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by any order (ade by any AdDudicating Cfficer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 (%) Eo appeal shall lie to the Securities Appellate .ribunal fro( an order (ade by an AdDudicating Cfficer with the consent of the parties02 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , o.i!!io , S*,0!e'tio (") re%- %! * -er& J(") No %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-eO (a) ,> the ;o%r- o % - %fter the 'o..e 'e.e t of the Se'*ritie! L%/! (Se'o - A.e -.e t) A't, 1999H (b) ,> % %-G*-i'%ti ( offi'er, /ith the 'o !e t of the $%rtie!.2 3 Substituted for 1a copy of the order (ade by the adDudicating officer2 by S78I (A(end(ent) Act !!!, !!!, w0e0f0 #+ %+ !!!0
%!
(") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 48oard, the: parties to the appeal and to the concerned AdDudicating Cfficer0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of the Se'*ritie! A$$ell%te Tri,* %l. 15U. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act, and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purposes of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3
(e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte 3 (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0), and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 %4Ri(ht to le(%l re$re!e t%tio . 15I. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,Substituted for 1parties2, S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for S0 "B by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, S0 "B read as under,+ 1 "B0 .he appellant (ay either appear in person or authorise one or (ore legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal02
% Substituted
30
(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of subsection ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or any attorney of any Iigh Court, and includes a pleader in practice0: Li.it%tio . 15?. .he pro'isions of the =i(itation Act, !#3 (3# of !#3), shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 54re!i-i ( Offi'er, @e.,er! % - !t%ff of Se'*ritie! A$$ell%te Tri,* %l! to ,e $*,li' !er+% t!. 15A. .he <residing Cfficer, ?e(bers and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0: Ci+il Co*rt ot to h%+e G*ri!-i'tio . 15M. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which an adDudicating officer appointed under this Act or a Securities Appellate .ribunal constituted under this Act is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "5A$$e%l to S*$re.e Co*rt.
Substituted for S0 "A by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, it read as under, + 1 "A0 .he <residing Cfficer and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian penal Code( $" of >#0)20 % Substituted for S0 "S by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution , it
was read as under,+ 1 "S0 Appeal to Iigh Court0+ Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, <ro'ided that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
3
15N. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order , 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the applicant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: CDA4TER III @ISCELLANEOUS 4o/er of Ce tr%l Go+er .e t to i!!*e -ire'tio !. 18. ( ) Kithout preDudice to the foregoing pro'isions of this Act 4or the 9epositories Act, !!#:, the 8oard shall, in exercise of its powers or the perfor(ance of its functions under this Act, be bound by such directions on *uestions of policy as the Central &o'ern(ent (ay gi'e in writing to it fro( ti(e to ti(e , 4ro+i-e- that the 8oard shall, as far as practicable, be gi'en an opportunity to express its 'iews before any direction is gi'en under this sub+section0 (%) .he decision of the Central &o'ern(ent whether a *uestion is one of policy or not shall be final0 4o/er of Ce tr%l Go+er .e t to !*$er!e-e the ;o%r-. 17. ( ) If at any ti(e the Central &o'ern(ent is of opinion(a) that on account of gra'e e(ergency, the 8oard is unable to discharge the functions and duties i(posed on it by or under the pro'isions of this Act3 or (b) that the 8oard has persistently (ade default in co(plying with any direction issued by the Central &o'ern(ent under this Act or in the discharge of the functions and duties i(posed on it by or under the pro'isions of this Act and as a result of such default the financial position of the 8oard or the ad(inistration of the 8oard has deteriorated3 or (c) that circu(stances exist which render it necessary in the public interest so to do, the Central &o'ern(ent (ay, by notification, supersede the 8oard for such period, not exceeding six (onths, as (ay be specified in the notification0 (%) Hpon the publication of a notification under sub+section ( ) superseding the 8oard,(a) all the (e(bers shall, as fro( the date of supersession, 'acate their offices as such3 (b) all the powers, functions and duties which (ay, by or under the pro'isions of this Act, be exercised or discharged by or on behalf of the 8oard, shall until the 8oard is reconstituted under sub+section (3), be exercised and discharged by such person or persons as the Central &o'ern(ent (ay direct3 and (c) all property owned or controlled by the 8oard shall, until the 8oard is reconstituted under sub+section (3), 'est in the Central &o'ern(ent0
Substituted for 1this Act2 by the 9epositories Act !!#, w0r0e0f0 %0+!+ !!"0
3%
(3) Cn the expiration of the period of supersession specified in the notification issued under sub+section ( ), the Central &o'ern(ent (ay reconstitute the 8oard by a fresh appoint(ent
and in such case any person or persons who 'acated their offices under clause ( a) of subsection (%), shall not be dee(ed dis*ualified for appoint(ent , 4ro+i-e- that the Central &o'ern(ent (ay, at any ti(e, before the expiration of the period of supersession, ta)e action under this sub+section0 ($) .he Central &o'ern(ent shall cause a notification issued under sub+section ( ) and a full report of any action ta)en under this section and the circu(stances leading to such action to be laid before each Iouse of <arlia(ent at the earliest0 Ret*r ! % - re$ort!. 1:. ( ) .he 8oard shall furnish to the Central &o'ern(ent at such ti(e and in such for( and (anner as (ay be prescribed or as the Central &o'ern(ent (ay direct, such returns and state(ents and such particulars in regard to any proposed or existing progra((e for the pro(otion and de'elop(ent of the securities (ar)et, as the Central &o'ern(ent (ay, fro( ti(e to ti(e, re*uire0 (%) Kithout preDudice to the pro'isions of sub+section ( ), the 8oard shall, within 4ninety: days after the end of each financial year, sub(it to the Central &o'ern(ent a report in such for(, as (ay be prescribed, gi'ing a true and full account of its acti'ities, policy and progra((es during the pre'ious financial year0 (3) A copy of the report recei'ed under sub+section (%) shall be laid, as soon as (ay be after it is recei'ed, before each Iouse of <arlia(ent0 Dele(%tio . 19. .he 8oard (ay, by general or special order in writing delegate to any (e(ber, officer of the 8oard or any other person subDect to such conditions, if any, as (ay be specified in the order, such of its powers and functions under this Act (except the powers under section %!) as it (ay dee( necessary0 A$$e%l!. "=. ( ) Any person aggrie'ed by an order of the 8oard (ade %4, before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!,: under this Act, or the rules or regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor, 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0
Substituted for 1sixty days2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1an order of the 8oard (ade2 by Securities =aws (Second A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0
% Substituted
33
(3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed, 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 4;%r of G*ri!-i'tio . "=A. Eo order passed by the 8oard %4or the AdDudicating Cfficer: under this Act shall be appealable except as pro'ided in 34section ". or: section %0 and no ci'il court shall ha'e Durisdiction in respect of any (atter which the 8oard $4or the AdDudicating Cfficer: is e(powered by, or under, this Act to pass any order and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any order passed by the 8oard "4or the AdDudicating Cfficer: by, or under, this Act0: S%+i (!.
"1. Eothing in this Act shall exe(pt any person fro( any suit or other proceedings which (ight, apart fro( this Act, be brought against hi(0 @e.,er!, offi'er! % - e.$lo>ee! of the ;o%r- to ,e $*,li' !er+% t!. "". All (e(bers, officers and other e(ployees of the 8oard shall be dee(ed, when acting or purporting to act in pursuance of any of the pro'isions of this Act, to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0 4rote'tio of %'tio t%6e i (oo- f%ith. "). Eo suit, prosecution or other legal proceedings shall lie against the Central &o'ern(ent #4or 8oard: or any officer of the Central &o'ern(ent or any (e(ber, officer or other e(ployee of the 8oard for anything which is in good faith done or intended to be done under this Act or the rules or regulations (ade thereunder0 /4Offe 'e!. "3. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, he shall be punishable with
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 18oard2 by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 3 Substituted for 1Section %02, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 $ Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 " Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Substituted by for S0 %$, Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" && <rior to its substitution S0%$ read as under, 1%$0 <enalty0+ Khoe'er contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both02
% Substituted
3$
i(prison(ent for a ter( which (ay extend to 4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to %4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 34Co.$o!itio of 'ert%i offe 'e!. "3A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "3;. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of the alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation, 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0
(%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0:
Substituted for 1one year, or with fine, or with both2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%, for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both20 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3"
E#e.$tio fro. t%# o /e%lth % - i 'o.e. "5. Eotwithstanding anything contained in the Kealth+tax Act, !"/ (%/ of !"/), the Inco(etax Act, !# ($3 of !# ) or any other enact(ent for the ti(e being in force relating to tax on wealth, inco(e, profits or gains(a) the 8oard3 (b) the existing Securities and 7xchange 8oard fro( the date of its constitution to the date of establish(ent of the 8oard, shall not be liable to pay wealth+tax, inco(e+tax or any other tax in respect of their wealth, inco(e, profits or gains deri'ed0 Co( iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations (ade thereunder, sa'e on a co(plaint (ade by the 8oard 4G G G:0 "5(") *****< )5 E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
.he words 1with the pre'ious sanction of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to the o.i!!io , S*,0!e'tio (") re%- %! * -er& 1(") No 'o*rt i ferior to th%t of "5% Co*rt of Se!!io < !h%ll tr> % > offe 'e $* i!h%,le * -er thi!
A't.2 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3#
A$$e%l % - re+i!io "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e of Cri.i %l 4ro'e-*re, 197) to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< Offe 'e! ,> 'o.$% ie!. "7. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly, 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n , 6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and
3/
(b) 1director2, in relation to a fir(, (eans a partner in the fir(0 4o/er to e#e.$t. ":. 4GGGGGG: "5 Re'o+er> of %.o* t! ":A. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith %
-ire'tio of -i!(or(e.e t or-er i!!*e- * -er !e'tio 11; or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifiefor. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.et%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't.
C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Section %> read as under, 1%>0 8$.er t$ e)e"%t+ If the central go'ern(ent if of the opinion that it is necessary or expedient so to do in public interest, it (ay, by order published in the Cfficial gaFette, exe(pt any person or class of persons buying or selling securities or otherwise dealing with the securities (ar)et fro( the operation of sub+section ! ) of Section %02 % I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
3>
"#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio 15T of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 11;, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% !
% > offi'er of the ;o%r- /ho .%> ,e %*thoriLe-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 4o/er to .%6e r*le!. "9. ( ) .he Central &o'ern(ent (ay, by notification, (a)e rules for carrying out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers under sub+section ( ) of section "3 (b) the additional functions that (ay be perfor(ed by the 8oard under section 3 (c) 4G G G: (d) the (anner in which the accounts of the 8oard shall be (aintained under section "3 %4(da) the (anner of in*uiry under sub+section ( ) of section "+I3 (db) the salaries and allowances and other ter(s and conditions of ser'ice of the 34<residing Cfficers, ?e(bers: and other officers and e(ployees of the Securities Appellate .ribunal under section "+C and sub+section (3) of section "S3 (dc) the procedure for the in'estigation of (isbeha'iour or incapacity of the 4<residing Cfficers, or other ?e(bers: of the Securities Appellate .ribunal under sub+section (3) of section "Q3
Clause (c) o(itted by Securities laws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, clause (c) it read as under, 1(c) the conditions subDect to which registration certificate is to be issued under sub+section ( ) of section %20 % Inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 3 Substituted for 1<residing Cfficers2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3!
(dd) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section ". and the fees payable in respect of such appeal3: (e) the for( and the (anner in which returns and report to be (ade to the Central &o'ern(ent under section >3 (f) any other (atter which is to be, or (ay be, prescribed, or in respect of which pro'ision is to be, or (ay be, (ade by rules0 4o/er to .%6e re(*l%tio !. )=. ( ) .he 8oard (ay, %4GGG: by notification, (a)e regulations consistent with this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ti(es and places of (eetings of the 8oard and the procedure to be followed at such (eetings under sub+section ( ) of section / including *uoru( necessary for the transaction of business3 (b) the ter(s and other conditions of ser'ice of officers and e(ployees of the 8oard under sub+section (%) of section !3 34(c) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto and the (anner in which such (atters shall be disclosed by the co(panies under section A3 35('%) the *tiliL%tio of the %.o* t 're-ite- * -er !*,0!e'tio (5) of !e'tio 11H (',) the f*lfill.e t of other 'o -itio ! rel%ti ( to 'olle'ti+e i +e!t.e t !'he.e * -er !*,0!e'tio ("A) of !e'tio 11AAH ('') the $ro'e-*re to ,e follo/e- ,> the %*thoriLe- offi'er for !e%r'h or !eiL*re * -er !*,0!e'tio (9) of !e'tio 11CH < (d) the conditions subDect to which certificate of registration is to be issued, the a(ount of
fee to be paid for certificate of registration and the (anner of suspension or cancellation of certificate of registration under section %0: 55(-%) the ter.! -eter.i e- ,> the ;o%r- for !ettle.e t of $ro'ee-i (! * -er !*,!e'tio (") % - the $ro'e-*re for 'o -*'ti ( of !ettle.e t $ro'ee-i (! * -er !*,!e'tio ()) of !e'tio 15E;H (-,) % > other .%tter /hi'h i! re7*ire- to ,e, or .%> ,e, !$e'ifie- ,> re(*l%tio ! or i re!$e't of /hi'h $ro+i!io i! to ,e .%-e ,> re(*l%tio !.< R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t.
Substituted for 1<residing Cfficers2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 words 1with the pre'ious appro'al of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 3 Substituted for the existing clause (c) by the Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 <rior to substitution this clause read as under, 1(c) the a(ount of fee to be paid for registration certificate and (anner of suspension or cancellation of registration certificate under sub+section (%) and (3) of section %02 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% .he
$0
)1. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. )". .he pro'isions of this Act shall be in addition to, and not in derogation of, the pro'isions of any other law for the ti(e being in force0 A.e -.e t of 'ert%i e %'t.e t!. )). 40e%ealed bF 0e%ealing H A"ending Act' 2001&: 4o/er to re.o+e -iffi'*ltie!. )3. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order, published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as (ay appear to be necessary for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of fi'e years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 Re$e%l % - !%+i (. )5. ( ) .he Securities and 7xchange 8oard of India Crdinance, !!% (Crd0 " of !!%), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 1@( /@(5A9( 4 ee section 33: A@END@ENT O2 CERTAIN ENACT@ENTS 40e%ealed bF 0e%ealing H A"ending Act' 2001:
*SECURITIES CONTRACTS (REGULATION) RULES, 1957
In exercise of the powers conferred by section 30 of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the Central &o'ern(ent hereby (a)es the following rules, the sa(e ha'ing been pre'iously published as re*uired by sub+section (3) of the said section, na(ely ,Short title. 1. .hese rules (ay be called the Securities Contracts (Regulation) Rules, !"/0 Defi itio !. ". In these rules, unless the context otherwise re*uires,(a) 1for(2 (eans a for( appended to these rules3 (b) 1the Act2 (eans the Securities Contracts (Regulation) Act, !"# ($% of !"#)3 (c) 1&o'ern(ent co(pany2 (eans a co(pany in which not less than fifty+one per cent of the share capital is held by the Central &o'ern(ent or by any State &o'ern(ent or &o'ern(ents or partly by the Central &o'ern(ent and partly by one or (ore State &o'ern(ents ; 4(d) 1public2 (eans persons other than 5 (i) the pro(oter and pro(oter group3 (ii) subsidiaries and associates of the co(pany0 E#$l% %tio & 6or the purpose of this clause the words 1pro(oter2 and 1pro(oter group2 shall ha'e the sa(e (eaning as assigned to the( under the Securities and 7xchange 8oard of India (Issue of Capital and 9isclosure Re*uire(ents) Regulations, %00!3: %4(da) ;public sector co(pany; (eans a body corporate constituted by an Act of <arlia(ent or any State =egislature and includes a go'ern(ent co(pany,: 4(e) 1public shareholding2 (eans e*uity shares of the co(pany held by public and shall exclude shares which are held by custodian against depository receipts issued o'erseas0: A$$li'%tio for re'o( itio . ). An application under section 3 of the Act for recognition of a stoc) exchange shall be (ade to the 34Securities and 7xchange 8oard of India: in 6or( A0
* The!e R*le! h%+e ,ee *$-%te- ,%!e- o the R*le! % - A.e -.e t! %+%il%,le o the /e,!ite of the De$%rt.e t of E'o o.i' Aff%ir!0 htt$&11fi .i . i'.i 1l%/1i -e#.%!$ % - %+%il%,le %.e -.e t otifi'%tio !. Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 % Inserted by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3 Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
2ee! for %$$li'%tio . 3. ( ) .here shall be paid in respect of e'ery application under rule 3 a fee of rupees fi'e hundred0 (%) .he a(ount of the fee shall be deposited in the nearest &o'ern(ent treasury or the nearest branch of the State 8an) of India, 4ro+i-e- that at 8o(bay, Calcutta, ?adras, 9elhi and @anpur, the a(ount shall be deposited in the Reser'e 8an) of India0 (3) .he a(ount of the fee so deposited shall be credited to the receipt head 1A=BI?iscellaneous-Cther fees, fines and forfeitures20 Do'*.e t! to ,e file- %lo ( /ith the %$$li'%tio % - $%rti'*l%r! it !ho*l- 'o t%i . 5. 7'ery application shall be acco(panied by four copies of the rules (including the (e(orandu( and articles of association where the applicant stoc) exchange is an
incorporated body) and bye+laws of the stoc) exchange applying for recognition as specified in section 3 of the Act and the receipt granted by the &o'ern(ent treasury, or as the case (ay be, the State 8an) of India or the Reser'e 8an) of India, in respect of the a(ount of the fee deposited and shall contain clear particulars as to the (atters specified in the Annexure to 6or( A0 $54o/er to .%6e i 7*irie! % - '%ll for i for.%tio . 5A. 8efore granting recognition to a stoc) exchange under section $ of the Act, the "4Securities and 7xchange 8oard of India: (ay (a)e such in*uiries and re*uire such further infor(ation to be furnished, as it dee(s necessary, relating to the infor(ation furnished by the stoc) exchange in the Annexure to its application in 6or( A0: 2or. of re'o( itio . 8. .he recognition granted to a stoc) exchange shall be in 6or( 8 and be subDect to the following conditions, na(ely ,(a) that the recognition unless granted on a per(anent basis, shall be for such period not less than one year as (ay be specified in the recognition3 (b) that the stoc) exchange shall co(ply with such conditions as are or (ay be prescribed or i(posed under the pro'isions of the Act and these rules fro( ti(e to ti(e0
$ Inserted
by &SR 0!# dated $00/0 !#/, w0e0f0 %%00/0 !#/ for 1Central &o'ern(ent2 by the Securities Contracts (Regulation)(A(end(ent )Rules, !!#, w0e0f0 %30 %0 !!#0
" Substituted
Re e/%l of re'o( itio . 7. ( ) .hree (onths before the expiry of the period of recognition, a recognised stoc) exchange desirous of renewal of such recognition (ay (a)e an application to the #4Securities and 7xchange 8oard of India: in 6or( A0 (%) .he pro'isions of rule 3, rule $, rule ", rule "A and rule # shall apply in relation to renewal of recognition as they apply in relation to grant of recognition except that the fee payable in respect of an application for renewal of recognition shall be rupees two hundred0 9*%lifi'%tio ! for .e.,er!hi$ of % re'o( i!e- !to'6 e#'h% (e. :. .he rules relating to ad(ission of (e(bers of a stoc) exchange see)ing recognition shall inter alia pro'ide that , (1) Eo person shall be eligible to be elected as a (e(ber if(a) he is less than twenty+one years of age3 (b) he is not a citiFen of India3 pro'ided that the go'erning body (ay in suitable cases relax this condition with the prior appro'al of the !4Securities and 7xchange 8oard of India:3 (c) he has been adDudged ban)rupt or a recei'ing order in ban)ruptcy has been (ade against hi( or he has been pro'ed to be insol'ent e'en though he has obtained his final discharge3 (d) he has co(pounded with his creditors unless he has paid sixteen annas in the rupee3 (e) he has been con'icted of an offence in'ol'ing fraud or dishonesty3 (f) he is engaged as principal or e(ployee in any business other than that of securities /4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability unless he underta)es on ad(ission to se'er his connection with such business ,
>44ro+i-e-
that no (e(ber (ay conduct business in co((odity deri'ati'es, except by setting up a separate co(pany which shall co(ply with the regulatory re*uire(ents, such as, networth, capital ade*uacy, (argins and exposure nor(s as (ay be specified by the 6orward ?ar)et Co((ission, fro( ti(e to ti(e ,
# Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, w0e0f0 %30 %0 !!#0 / Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 > Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030 <rior to its substitution, the pro'iso as a(ended by Securities Contracts (Regulation) (A(end(ent) Rules, !!# w0e0f0 %30 %0 !!#, read as under, 1<ro'ided that the Securities and 7xchange 8oard of India (ay, for reasons sufficient in the opinion of the said 8oard, per(it a recogniFed stoc) exchange to suspend the enforce(ent of this clause for a specified period on condition that the applicant is not associated with or is a (e(ber of or subscriber to or shareholder or debenture holder in or connected through a partner or e(ployee with any other organisation, institution, association, co(pany or corporation in India where forward business of any )ind whether in goods or co((odities or otherwise is carried on or is not engaged as a principal or e(ployee ion any such business02
4ro+i-e- f*rther that nothing herein shall be applicable to any corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to ()) of the pro'iso to sub+rule ($)0:3 (g) !4GGG: (h) he has been at any ti(e expelled or declared a defaulter by any other stoc) exchange3 (i) he has been pre'iously refused ad(ission to (e(bership unless a period of one year has elapsed since the date of such reDection0 (2) Eo person eligible for ad(ission as a (e(ber under sub+rule ( ) shall be ad(itted as a (e(ber unless ,(a) he has wor)ed for not less than two years as a partner with, or an authorised assistant or authorised cler) or re(isier or apprentice to, a (e(ber3 or (b) he agrees to wor) for a (ini(u( period of two years as a partner or representati'e (e(ber with another (e(ber and to enter into bargains on the floor of the stoc) exchange and not in his own na(e but in the na(e of such other (e(ber 3 or (c) he succeeds to the established business of a deceased or retiring (e(ber who is his father, uncle, brother or any other person who is, in the opinion of the go'erning body, a close relati'e , 4ro+i-e- that the rules of the stoc) exchange (ay authorise the go'erning body to wai'e co(pliance with any of the foregoing conditions if the person see)ing ad(ission is in respect of (eans, position, integrity, )nowledge and experience of business in securities, considered by the go'erning body to be otherwise *ualified for (e(bership0 (3) Eo person who is a (e(ber at the ti(e of application for recognition or subse*uently ad(itted as a (e(ber shall continue as such if(a) he ceases to be a citiFen of India , 4ro+i-e- that nothing herein shall affect those who are not citiFens of India but who were (e(bers at the ti(e of such application or were ad(itted subse*uently under the pro'isions of clause (b) of sub+rule ( ) of this rule, subDect to their co(plying with all other re*uire(ents of this rule3
(b) he is adDudged ban)rupt or a recei'ing order in ban)ruptcy is (ade against hi( or he is pro'ed to be insol'ent3 (c) he is con'icted of an offence in'ol'ing fraud or dishonesty3 (d) 04G G G: (e) 4G G G: (f) he engages either as principal or e(ployee in any business other than that of securities %4or co((odity deri'ati'es: except as a bro)er or agent not in'ol'ing any personal financial liability, pro'ided that! C(itted 0 Ibid0
by &SR 0/0(7) dated "0
0 !>>
Ibid0
% Inserted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(i) the go'erning body (ay, for reasons, to be recorded in writing, per(it a (e(ber to engage hi(self as principal or e(ployee in any such business, if the (e(ber in *uestion ceases to carry on business on the stoc) exchange either as an indi'idual or as a partner in a fir(, (ii) in the case of those (e(bers who were under the rules in force at the ti(e of such application per(itted to engage in any such business and were actually so engaged on the date of such application, a period of three years fro( the date of the grant of recognition shall be allowed for se'ering their connection with any such business, 34(iii) nothing herein shall affect (e(bers of a recognised stoc) exchange which are corporations, bodies corporate, co(panies or institutions referred to in ite(s (a) to (k) of the pro'iso to sub+rule ($)0: (4) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section 3%% of the said Act3 (ii) a (aDority of the directors of such co(pany are shareholders of such co(pany and also (e(bers of that stoc) exchange3 and (iii) the directors of such co(pany, who are (e(bers of that stoc) exchange, ha'e ulti(ate liability in such co(pany , 4ro+i-e- that where the $4Securities and 7xchange 8oard of India: (a)es a reco((endation in this regard, the go'erning body of a stoc) exchange shall, in relaxation of the re*uire(ents of this clause, ad(it as (e(ber the following corporations "4,bodies corporate:, co(panies or institutions, na(ely ,(a) the Industrial 6inance Corporation, established under the Industrial 6inance Corporation Act, !$> ( " of !$>)3 (b) the Industrial 9e'elop(ent 8an) of India, established under the Industrial 9e'elop(ent 8an) Act, !#$ ( > of !#$)3 (c) the =ife Insurance Corporation of India, established under the =ife Insurance Corporation Act, !"# (3 of !"#)3 (d) the &eneral Insurance Corporation of India constituted under the &eneral Insurance Corporation (Eationalisation) Act, !/% ("/ of !/%)3 (e) the Hnit .rust of India, established under the Hnit .rust of India Act, !#3 ("% of !#3)3
3 Substituted, ibid0 <rior to its substitution, sub+clause (iii) read as under, 1(iii) nothing herein shall affect (e(bers of a recogniFed stoc) exchange per(itted under the pro'iso to clause (f) of sub+rule( ) to suspend the enforce(ent of the aforesaid clause, for so long as such suspension is effecti'e, except that no (e(ber of such exchange shall engage in forward business of any )ind whether in goods or co((odities or otherwise and , if actually so engaged on the date of such application , he shall se'er his connection with any such business within a period of three years fro( the date of the grant of recognition02 $ Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# " Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %003, w0e0f0 %>00>0%0030
(f) the Industrial Credit and In'est(ent Corporation of India, a co(pany registered under the Co(panies Act, !"# ( of !"#)3 (g) the subsidiaries of any of the corporations or co(panies specified in (a) to (f) and any subsidiary of the State 8an) of India or any nationalised ban) set up for pro'iding (erchant ban)ing ser'ices, buying and selling securities and other si(ilar acti'ities0 #4(h) any ban) included in the Second Schedule to the Reser'e 8an) of India Act, !3$ (% of !3$)3 (i) the 7xport I(port 8an) of India, established under the 7xport I(port 8an) of India Act, !> (%> of !> )3 (j) the Eational 8an) for Agriculture and Rural 9e'elop(ent, established under the Eational 8an) for Agriculture and Rural 9e'elop(ent Act, !> (# of !> )3 and (k) the Eational Iousing 8an), established under the Eational Iousing 8an) Act, !>/ ("3 of !>/)0: (4A) A co(pany as defined in the Co(panies Act, !"# ( of !"#), shall also be eligible to be elected as a (e(ber of a stoc) exchange if(i) such co(pany is for(ed in co(pliance with the pro'isions of section % of the said Act3 (ii) such co(pany underta)es to co(ply with such financial re*uire(ents and nor(s as (ay be specified by the Securities and 7xchange 8oard of India for the registration of such co(pany under sub+section ( ) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (iii) /4G G G: (iv) the directors of the co(pany are not dis*ualified fro( being (e(bers of a stoc) exchange under >4clause ( ) 4except sub+clause (b) and sub+clause (f) thereof: or clause (3) 4except sub+clause (a) and sub+clause (f) thereof:: and the 9irectors of the co(pany had not held the offices of the 9irectors in any co(pany which had been a (e(ber of the stoc) exchange and had been declared defaulter or expelled by the stoc) exchange3 and (v) not less than two directors of the co(pany are persons who possess a (ini(u( two yearsJ experience , (a) in dealing in securities3 or (b) as portfolio (anagers3 or (c) as in'est(ent consultants0 (5) Khere any (e(ber of a stoc) exchange is a fir(, the pro'isions of sub+rules ( ), (3) and ($), shall, so far as they can, apply to the ad(ission or continuation of any partner in such fir(0
# Inserted, / C(itted
ibid0 by &SR /$! (7), dated %0 00 !!$ > Substituted by &SR /!0(7), dated 0/0 0 !!$
Co tr%'t! ,et/ee .e.,er! of re'o( i!e- !to'6 e#'h% (e. 9. All contracts between the (e(bers of a recognised stoc) exchange shall be confir(ed in writing and shall be enforced in accordance with the rules and bye+laws of the stoc) exchange of which they are (e(bers0 !5No.i ee! of the Se'*ritie! % - E#'h% (e ;o%r- of I -i%< o the (o+er i ( ,o-ie! of re'o( i!e- !to'6 e#'h% (e!. 1=. .he %04Securities and 7xchange 8oard of India: (ay no(inate one or (ore persons not exceeding three in nu(ber, as (e(ber or (e(bers of the go'erning body of e'ery recognised stoc) exchange0 Such (e(ber or (e(bers shall enDoy the sa(e status and powers as other (e(bers of the go'erning body0 O,li(%tio of the (o+er i ( ,o-> to t%6e -i!'i$li %r> %'tio %(%i !t % .e.,er if !o -ire'te- ,> the % 5Se'*ritie! % - E#'h% (e ;o%r- of I -i%<. 11. After recei'ing the report of the result of an en*uiry (ade under clause (b) of subsection (3) of section # of the Act, the % 4Securities and 7xchange 8oard of India: (ay ta)e such action as they dee( proper and, in particular, (ay direct the go'erning body of the stoc) exchange to ta)e such disciplinary action against the offending (e(ber, including fine, expulsion, suspension or any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney, as (ay be specified by the % 4Securities and 7xchange 8oard of India:3 notwithstanding anything to the contrary contained in the rules or bye+laws of the stoc) exchange concerned, the go'erning body shall gi'e effect to the directions of the % 4Securities and 7xchange 8oard of India: in this behalf and shall not in any (anner co((ute, re'o)e or (odify the action ta)en in pursuance of such directions, without the prior appro'al of the % 4Securities and 7xchange 8oard of India:0 .he % 4Securities and 7xchange 8oard of India: (ay, howe'er, either of its own (otion or on the representation of the (e(ber concerned, (odify or withdraw its direction to the go'erning body0 A*-it of %''o* t! of .e.,er!. 1". 7'ery (e(ber shall get his accounts audited by a chartered accountant whene'er such audit is re*uired by the % 4Securities and 7xchange 8oard of India:0 ?ith-r%/%l of re'o( itio . 1). .he written notice referred to in section " of the Act shall be in 6or( C0
! Substituted %0 Ibid0 %
by 60 Eo0 L3/LS7L!$, dated %#0 00 !!$0
Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> re'o( i!e- !to'6 e#'h% (e. 13. 7'ery recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years, (1) ?inute boo)s of the (eetings of(a) (e(bers3 (b) go'erning body3 (c) any standing co((ittee or co((ittees of the go'erning body or of the general body of (e(bers0
(2) Register of (e(bers showing their full na(es and addresses0 Khere any (e(ber of the stoc) exchange is a fir(, full na(es and addresses of all partners shall be shown0 (3) Register of authorised cler)s0 (4) Register of re(isiers of authorised assistants0 (5) Record of security deposits0 (6) ?argin deposits boo)0 (7) =edgers0 (8) Mournals0 (9) Cash boo)0 (10) 8an) pass+boo)0 ;oo6! of %''o* t % - other -o'*.e t! to ,e .%i t%i e- % - $re!er+e- ,> e+er> .e.,er of % re'o( i!e- !to'6 e#'h% (e. 15. ( ) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following boo)s of account and docu(ents for a period of fi'e years , (a) Register of transactions ( a!da boo))0 (b) ClientsJ ledger0 (c) &eneral ledger0 (d) Mournals0 (e) Cash boo)0 (f) 8an) pass+boo)0 (g) 9ocu(ents register showing full particulars of shares and securities recei'ed and deli'ered0 (2) 7'ery (e(ber of a recognised stoc) exchange shall (aintain and preser'e the following docu(ents for a period of two years, (a) ?e(berJs contract boo)s showing details of all contracts entered into by hi( with other (e(bers of the sa(e exchange or counterfoils or duplicates of (e(os of confir(ation issued to such other (e(bers0 (b) Counterfoils or duplicates of contract notes issued to clients0 (c) Kritten consent of clients in respect of contracts entered into as principals0 @% er of i 7*ir> i rel%tio to the %ff%ir! of the (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e or the %ff%ir! of % > .e.,er of the !to'6 e#'h% (e i rel%tio to the !to'6 e#'h% (e. 18. ( )(a) .he person or persons appointed by the %%4Securities and 7xchange 8oard of India: to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act shall hereafter in this rule be referred to as the Nin*uiring authorityJ3 (b) where the in*uiring authority consists of two or (ore persons, one of the( shall be appointed as the chair(an or senior (e(ber thereof3 (c) the in*uiring authority shall hand o'er a state(ent of issues to be in*uired into to the go'erning body or the (e(ber concerned, as the case (ay be, who will be gi'en a reasonable opportunity to state their or his side of the case3 (d) if any witness is called for exa(ination, an opportunity shall be pro'ided to the go'erning body or the (e(ber whose affairs are being in*uired into, as the case (ay be, to cross+exa(ine such witness3 (e) where the in*uiring authority consists of (ore than one person, the 'iews of the (aDority shall be dee(ed to represent the findings of such authority and, in the e'ent of
an e*uality of 'otes, the chair(an or senior (e(ber shall ha'e a casting 'ote3 (f) the in*uiring authority shall sub(it its report in writing to the %%4Securities and 7xchange 8oard of India: within the period specified in the order of appoint(ent3 (g) te(porary absence fro( any hearing or hearings of any (e(ber of the in*uiring authority shall not 'itiate its proceedings0 (%) Khere the %%4Securities and 7xchange 8oard of India: has directed the go'erning body of a stoc) exchange to (a)e an in*uiry under clause (b) of sub+section (3) of section # of the Act, the go'erning body concerned shall appoint one or (ore (e(bers thereof to (a)e the in*uiry and the pro'isions of sub+rule ( ) shall apply "!tati# "!tandi# to such in*uiry0 S*,.i!!io of % *%l re$ort. 17. ( ) 7'ery recognised stoc) exchange shall before the 3 st day of Manuary in each year or within such extended ti(e as the %34Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, allow, furnish the %34Securities and 7xchange 8oard of India: annually with a report about its acti'ities during the preceding calendar year, which shall inter alia contain detailed infor(ation about the following (atters , (a) changes in rules and bye+laws, if any3 (b) changes in the co(position of the go'erning body3 (c) any new sub+co((ittees set up and changes in the co(position of existing ones3
%% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# %3 Ibid0
(d) ad(issions, re+ad(issions, deaths or resignations of (e(bers3 (e) disciplinary action against (e(bers3 (f) arbitration of disputes (nature and nu(ber) between (e(bers and non+(e(bers3 (g) defaults3 (h) action ta)en to co(bat any e(ergency in trade3 (i) securities listed and de+listed3 and (j) securities brought on or re(o'ed fro( the forward list0 (%) 7'ery recognised stoc) exchange shall within one (onth of the date of the holding of its annual general (eeting, furnish the %$4Securities and 7xchange 8oard of India: with a copy of its audited balance+sheet and profit and loss account for its preceding financial year0 S*,.i!!io of $erio-i'%l ret*r !. 17A. 7'ery recognised stoc) exchange shall furnish the %$4Securities and 7xchange 8oard of India: periodical returns relating to(i) the official rates for the securities enlisted thereon3 (ii) the nu(ber of shares deli'ered through the clearing house3 (iii) the (a)ing+up prices3 (iv) the clearing house progra((es3 (v) the nu(ber of securities listed and de+listed during the pre'ious three (onths3 (vi) the nu(ber of securities brought on or re(o'ed fro( the forward list during the pre'ious three (onths3 and (vii) any other (atter as (ay be specified by the %$4Securities and 7xchange 8oard of India:0 @% er of $*,li'%tio of ,>e0l%/! for 'riti'i!.. 1:. .he bye+laws to be (ade, a(ended or re'ised under the Act shall be published for
criticis( in accordance with the pro'isions of section %3 of the &eneral Clauses Act, >!/ both in the &aFette of India and Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate0 Re7*ire.e t! /ith re!$e't to the li!ti ( of !e'*ritie! o % re'o( i!e- !to'6 e#'h% (e. 19. ( ) A public co(pany as defined under the Co(panies Act, !"#, desirous of getting its securities listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars ,
%$ Ibid0
(a) ?e(orandu( and articles of association and, in the case of a debenture issue, a copy of the trust deed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any securities for subscription or sale during the last fi'e years0 (d) Copies of balance+sheets and audited accounts for the last fi'e years, or in the case of new co(panies, for such shorter period for which accounts ha'e been (ade up0 (e) A state(ent showing(i) di'idends and cash bonuses, if any, paid during the last ten years (or such shorter period as the co(pany has been in existence, whether as a pri'ate or public co(pany), (ii) di'idends or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents with or between ,(i) 'endors andLor pro(oters, (ii) underwriters and sub+underwriters, (iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents with(i) (anaging agents and secretaries and treasurers, (ii) selling agents, (iii) (anaging directors and technical directors, (iv) general (anager, sales (anager, (anager or secretary0 (h) Certified copy of e'ery letter, report, balance+sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering securities for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents0 (j) A brief history of the co(pany since its incorporation gi'ing details of its acti'ities including any reorganisation, reconstruction or a(alga(ation, changes in its capital structure, (authorised, issued and subscribed) and debenture borrowings, if any0
(k) <articulars of shares and debentures issued-(i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s including an option for the issue of any )ind of the securities granted to any person0 (") Certified copies of%"4(i) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3: (ii) agree(ents, if any, with the Industrial 6inance Corporation, Industrial Credit and In'est(ent Corporation and si(ilar bodies0 (n) <articulars of shares forfeited0 ($) A list of highest ten holders of each class or )ind of securities of the co(pany as on the date of application along with particulars as to the nu(ber of shares or debentures held by and the address of each such holder0 (%) <articulars of shares or debentures for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0 (%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant co(pany shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer, (ii) that the fully paid shares will be free fro( all lien, while in the case of partly paid shares, the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such shares, (iii) that any a(ount paid+up in ad'ance of calls on any share (ay carry interest but shall not entitle the holder of the share to participate in respect thereof, in a di'idend subse*uently declared, (iv) there will be no forfeiture of unclai(ed di'idends before the clai( beco(es barred by law, (v) that option or right to call of shares shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the securities of a co(pany which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0
%" Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 <rior to its substitution, sub+clause (i), read as under, 1(i) letters of consent of the Controller of Capital Issues02
%#4(b)
(i) At least twenty fi'e per cent0 of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent3 or (ii) At least ten per cent of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares issued by the co(pany was offered and allotted to public in ter(s of an offer docu(ent if the post issue capital of the
co(pany calculated at offer price is (ore than four thousand crore rupees, <ro'ided that the re*uire(ent of post issue capital being (ore than four thousand crore rupees shall not apply to a co(pany whose draft offer docu(ent is pending with the Securities and 7xchange 8oard of India on or before the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, if it satisfies the conditions prescribed in clause (b) of sub+rule % of rule ! of the Securities Contracts (Regulation) Rules, !"# as existed prior to the date of such co((ence(ent, %/4<ro'ided further that the co(pany, referred to in sub clause (ii), shall increase its public shareholding to at least twenty fi'e per cent, within a
%# Substituted
by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, clause (b) as a(ended by the A(end(ent Rules, %00 , w0e0f0 0/00#0%00 , read as under, 1(b) At least 0 per cent of each class or )ind of securities issued by a co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted subDect to the following conditions, (a) (ini(u( %0 la)h securities (excluding reser'ations, fir( allot(ent and pro(otersJ contribution) was offered to the public3 (b) the siFe of the offer to the public, i&e&' the offer price (ultiplied by the nu(ber of securities offered to the public was (ini(u( Rs0 00 crores3 and (c) the issue was (ade only through boo) building (ethod with allocation of #0 per cent of the issue siFe to the *ualified institutional buyers as specified by the Securities and 7xchange 8oard of India, 4ro+i-e- that if a co(pany does not fulfil the conditions, it shall offer at least %" per cent of each class or )ind of securities to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and that applications recei'ed in pursuance of such offer were allotted, 4ro+i-e- f*rther that a recognised stoc) exchange (ay relax any of the conditions with the pre'ious appro'al of the Securities and 7xchange 8oard of India, in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#), and subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*6or the purpose of this clause, it is hereby clarified that where any part of the securities sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental 6ire and &eneral Insurance Co(pany =i(ited and the Hnited 6ire and &eneral Insurance Co(pany =i(ited or Hnit .rust of India, the total subscription to the securities, whether by one or (ore of such bodies, shall not for( part of the 0 per cent or %" per cent of the securities, as the case (ay be, to be offered to the public02 %/ Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 <rior to its substitution, second pro'iso, read as under, 1<ro'ided further that the co(pany, referred in sub+clause (ii), shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of atleast fi'e per
period of three years fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India0: %>4GGG:: %!4(c) Eotwithstanding anything contained in clause (b), a public sector co(pany, shall offer and allot at least ten per cent, of each class or )ind of e*uity shares or debentures con'ertible into e*uity shares to public in ter(s of an offer docu(ent0: (3) A co(pany applying for listing shall, as a condition precedent, underta)e inter alia(a) (i) that letters of allot(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to
that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been posted, (ii) that letters of right will be issued si(ultaneously, (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the securities to which they relate, (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right, (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or di'idend on the securities will be calculated, (b) to issue, when so re*uired, receipts for all securities deposited with it whether for registration, sub+di'ision, exchange or for other purposes 3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of certificates and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (bb) to issue, when so re*uired, consolidation and renewal certificates in deno(inations of the (ar)et unit of trading to split certificates, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3
cent per annu( beginning fro( the date of listing of the securities, in the (anner specified by the Securities and 7xchange 8oard of India,2 %> C(itted, ibid <rior to its o(ission, third pro'iso, read as under, 1<ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase beings its public shareholding to the le'el of twenty fi'e per cent in that year02 %! Inserted, ibid0
(c) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders, and (ii) to 'erify when the co(pany is unable to issue certificates or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (d) on production of the necessary docu(ents by shareholders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or certificate of the Controller of 7state 9uty or si(ilar other docu(ent has been duly exhibited to
and registered by the co(pany3 (e) to issue certificates in respect of shares or debentures lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance certificates within the sa(e period where the transfer is acco(panied by a larger certificate3 (f) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a di'idend or the issue of right or bonus share will be considered3 (g) to reco((end or declare all di'idends andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all di'idends andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (h) to notify the stoc) exchange of any (aterial change in the general character or nature of the co(panyJs business3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (anaging agent or secretaries and treasurers, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued, copies of all other notices and circulars sent to the shareholders including proceedings of ordinary and extraordinary general (eetings of the co(pany and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the shareholders of any new issue of securities whether by way of right, pri'ilege bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited securities or the issue of securities held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of di'idend or issue of right or bonus shares or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s (or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its shareholders or debentureholders) and specifying the purpose or purposes for which the transfer boo)s are to be closed (or the record is to be ta)en)3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority subDect to which the issue is proposed to be (ade ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after each annual general (eeting of at least ten principal holders of each class of security of the co(pany along with particulars as to the nu(ber of shares or debentures held by,
and address of, each such holder3 (+) to grant to shareholders the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e not being less than four wee)s within which to record, exercise, or renounce such rights, pri'ileges and benefits and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3 (r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any securities listed on the exchange, (ii) of the intention to (a)e a drawing of such securities, inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing of the balance) for the drawing, (iii) of the a(ount of securities outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the shareholders to apprise the position of the co(pany and to a'oid the establish(ent of a false (ar)et in the shares of the co(pany3 (t) (t)that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 304($) An application for listing shall be necessary in respect of the following, (a) all new issues of any class or )ind of securities of a co(pany to be offered to the public3 (b) all further issues of any class or )ind of securities of a co(pany if such class or )ind of securities of the co(pany are already listed on a recognised stoc) exchange0: (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the securities of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 3 44ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any security, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and its orders shall be carried out by the stoc) exchange0: 3%4(#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore
or re+ad(it to dealings any securities suspended or withdrawn fro( the list0: 334(#A) 7xcept as otherwise pro'ided in these rules or per(itted by the Securities and 7xchange 8oard of India under sub+rule (/), all re*uire(ents with respect to listing
30 Substituted
by the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its substitution, sub+rule ($), read as under, 1($) A fresh application for listing will be necessary in respect of all new issues desired to be dealt in, pro'ided that, where such new securities are identical in all respects with those already listed, ad(ission to dealings will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new issues0 7xplanation, Shares are identical in all respects only if(a) they are of the sa(e no(inal 'alue and the sa(e a(ount per share has been called up3 (b) they are entitled to di'idend at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the di'idend payable on each share will a(ount to exactly the sa(e su(, net and gross3 and (c) they carry the sa(e rights in all other respects02 3 Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%0000 7arlier, the second pro'iso was a(ended by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 3% Substituted by the Securities Contracts (Regulation) (A(end(ent), %000, w0e0f0 0>00>0%0000 7arlier, subrule (#) was a(ended by the Securities Contracts (Regulation) (A(end(ent), !!#, w0e0f0 %30 %0 !!#0 33 Substituted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!0>0%0 00 <rior to its substitution, sub+rule (#A) as a(ended by the Securities Contracts
prescribed by these rules shall, so far as they (ay be, also apply to a public sector co(pany0: 3$4GGG: (/) .he 3"4Securities and 7xchange 8oard of India: (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect to listing prescribed by these rules0 3#4Co ti *o*! Li!ti ( Re7*ire.e t. 19A. ( ) 7'ery listed co(pany 3/4other than public sector co(pany: shall (aintain public shareholding of at least twenty fi'e per cent0, 3>4<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent, on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall increase its public shareholding to at least twenty fi'e per cent, within a period of three years fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India0 7xplanation, 6or the purposes of this sub+rule, a co(pany whose securities has been listed pursuant to an offer and allot(ent (ade to public in ter(s of sub+clause (ii) of clause (b) of sub+rule (%) of rule !, shall (aintain (ini(u( twenty fi'e per cent, public shareholding fro( the date on which the public shareholding in the co(pany reaches the le'el of twenty fi'e percent in ter(s of said sub+clause0: (%) Khere the public shareholding in a listed co(pany falls below twenty fi'e per cent0 at any ti(e, such co(pany shall bring the public shareholding to twenty fi'e per cent0
(Regulations)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 and &SR % (7) w0e0f0 0!0030 !!", read as under, 1(#A) All the re*uire(ents with respect to listing and continuous listing prescribed by these rules, shall so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature ,2 3$ C(itted by the Securities Contracts (Regulation)(A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 00 <rior to its o(ission, pro'iso, as substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!# and inserted by &SR %! (7) dated %/0030 !!", read as under,
1<ro'ided that a recognised stoc) exchange (ay relax the re*uire(ent of offer to public for subscription of atleast twenty+fi'e percent of the each class or )ind of securities issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as that 8oard (ay issue in this behalf fro( ti(e to ti(e02 3" Substituted for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent), Rules, !!#, w0e0f0 %30 %0 !!#0 3# Inserted by the Securities Contracts (Regulations) (A(end(ent) Rules, %0 0, w0e0f0 0$00#0%0 0 3/ Inserted by the Securities Contracts (Regulations) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 00 3> Substituted, ibid0 <rior to substitution, pro'isos, read as under, 1<ro'ided that any listed co(pany which has public shareholding below twenty fi'e per cent on the co((ence(ent of the Securities Contracts (Regulation) (A(end(ent) Rules, %0 0, shall bring the public shareholding to the le'el of atleast twenty fi'e per cent by increasing its public shareholding to the extent of at least fi'e per cent per annu( beginning fro( the date of such co((ence(ent, in the (anner specified by the Securities and 7xchange 8oard of India, <ro'ided further that the co(pany (ay increase its public shareholding by less than fi'e per cent in a year if such increase brings its public shareholding to the le'el of twenty fi'e per cent in that year02
within a (axi(u( period of twel'e (onths fro( the date of such fall in the (anner specified by the Securities and 7xchange 8oard of India0: 3!4(3) Eotwithstanding anything contained in this rule, e'ery listed public sector co(pany shall (aintain public shareholding of at least ten per cent0, <ro'ided that a listed public sector co(pany+ (a) which has public shareholding below ten per cent, on the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of three years fro( the date of such co((ence(ent3 (b) whose public shareholding reduces below ten per cent, after the date of co((ence(ent of the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0 shall increase its public shareholding to at least ten per cent, in the (anner specified by the Securities and 7xchange 8oard of India, within a period of twel'e (onths fro( the date of such reduction,0: $04Re7*ire.e t! /ith re!$e't to the li!ti ( of * it! or % > other i !tr*.e t of % Colle'ti+e I +e!t.e t S'he.e o % re'o( i!e- !to'6 e#'h% (e. "=. ( ) A Collecti'e In'est(ent ?anage(ent Co(pany (CI?C) which is desirous of getting its any collecti'e in'est(ent sche(e listed on a recognised stoc) exchange, shall apply for the purpose to the stoc) exchange and forward along with its application the following docu(ents and particulars , (a) Certificate of incorporation, (e(orandu( and articles of association of the co(pany and the copy of the trust deed of the sche(e intended to be listed0 (b) Copies of all prospectuses or state(ents in lieu of prospectuses issued by the co(pany at any ti(e0 (c) Copies of offers for sale and circulars or ad'ertise(ents offering any unit or other instru(ent for subscription or sale during the last fi'e years, or in the case of a new co(pany, such shorter period during which the co(pany has been in existence0 (d) Copies of balance sheets and audited accounts for the last fi'e years, or in the case of a new co(pany, for such co(pleted financial year for which accounts ha'e been (ade up0 (e) A state(ent showing,(i) returns and cash bonuses, if any, paid during the last ten years (or such
shorter period as the co(pany has been in existence whether as a pri'ate or public co(pany)3 (ii) returns or interest in arrears, if any0 (f) Certified copies of agree(ents or other docu(ents relating to arrange(ents pertaining to each sche(e of the co(pany with or between,(i) 'endors andLor pro(oters3 (ii) underwriters and sub+underwriters3
3! Inserted $0 Inserted
by the Securities Contracts (Regulation) (Second A(end(ent) Rules, %0 0, w0e0f0 0!00>0%0 0 by the Securities Contracts (Regulation) (A(end(ent) Rules, %000, w0e0f0 0>00>0%000
(iii) bro)ers and sub+bro)ers0 (g) Certified copies of agree(ents pertaining to each sche(e of a co(pany with(i) selling agents and other ser'ice pro'iders3 (ii) (anaging directors and technical directors3 (iii) general (anager, sales (anager, (anager or secretary0 (h) Certified copies of e'ery letter, report, balance sheet, 'aluation contract, court order or other docu(ent, part of which is reproduced or referred to in any prospectus, offer for sale, circular or ad'ertise(ent offering units or any other instru(ents of the sche(e for subscription or sale, during the last fi'e years0 (i) A state(ent containing particulars of the dates of, and parties to all (aterial contracts, agree(ents (including agree(ents for technical ad'ice and collaboration), concessions and si(ilar other docu(ents (except those entered into in the ordinary course of business carried on or intended to be carried on by the co(pany) together with a brief description of the ter(s, subDect+(atter and general nature of the docu(ents pertaining to such sche(e0 (j) A brief history of the Co(pany since its incorporation gi'ing details of its acti'ities including any re+organisation, reconstruction or a(alga(ation, changes in its capital structure (authorised, issued and subscribed) and debenture borrowings, if any, and the perfor(ance of other collecti'e in'est(ent sche(es of the co(pany0 (k) <articulars of units of the sche(e andLor shares, debentures of the co(pany issued (i) for consideration other than cash, whether in whole or part, (ii) at a pre(iu( or discount, or (iii) in pursuance of an option0 (l) A state(ent containing particulars of any co((ission, bro)erage, discount or other special ter(s granted to any person pertaining to such sche(e0 (") Certified copies of(i) certificate of registration granted by the Securities and 7xchange 8oard of India3 (ii) ac)nowledge(ent card or the receipt of filing offer docu(ent with the Securities and 7xchange 8oard of India3 (iii) agree(ents, if any, with any public financial institution as specified in section $A of the Co(panies Act, !"# ( of !"#)0 (n) A list of the highest ten holders of units of each sche(e of the co(pany as on the date of application along with particulars as to the nu(ber of units held by and the address of each such holder0 ($) <articulars of units of the sche(e for which per(ission to deal is applied for , 4ro+i-e- that a recognised stoc) exchange (ay either generally by its bye+laws or in any particular case call for such further particulars or docu(ents as it dee(s proper0
(%) Apart fro( co(plying with such other ter(s and conditions as (ay be laid down by a recognised stoc) exchange, an applicant shall satisfy the stoc) exchange that , (a) Its articles of association pro'ide for the following a(ong others(i) that the co(pany shall use a co((on for( of transfer of units of a particular sche(e3 (ii) that the fully paid units issued under the sche(e will be free fro( all lien, while in the case of partly paid units the co(panyJs lien, if any, will be restricted to (oneys called or payable at a fixed ti(e in respect of such units3 (iii) that any a(ount paid+up in ad'ance of calls on any units (ay carry interest but shall not entitle the holder of the unit to participate in respect thereof, in a return subse*uently declared3 (iv) there will be no forfeiture of unclai(ed returns before the clai( beco(es barred by law3 (v) that option or right to call of units shall not be gi'en to any person except with the sanction of the co(pany in general (eeting , 4ro+i-e- that a recognised stoc) exchange (ay pro'isionally ad(it to dealings the units of a sche(e which underta)es to a(end its articles of association at its next general (eeting so as to fulfil the foregoing re*uire(ents and agrees to act in the (eanti(e strictly in accordance with the pro'isions of this clause0 (b) At least twenty+fi'e per cent of the units or any other instru(ent of a sche(e issued by the co(pany was offered to the public for subscription through ad'ertise(ent in newspapers for a period not less than two days and not (ore than ninety days, and that applications recei'ed in pursuance of such offer were allotted fairly and unconditionally , 4ro+i-e- that a recognised stoc) exchange (ay relax this re*uire(ent, with the pre'ious appro'al of the Securities and 7xchange 8oard of India in respect of a &o'ern(ent co(pany within the (eaning of section # / of the Co(panies Act, !"# ( of !"#) and subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 ()%lanati$n&*Khere any part of the units or any other instru(ents sought to be listed ha'e been or are agreed to be ta)en up by the Central &o'ern(ent, a State &o'ern(ent, de'elop(ent or in'est(ent agency of a State &o'ern(ent, Industrial 9e'elop(ent 8an) of India, Industrial 6inance Corporation of India, Industrial Credit and In'est(ent Corporation of India =i(ited, =ife Insurance Corporation of India, &eneral Insurance Corporation of India and its subsidiaries, na(ely, the Eational Insurance Co(pany =i(ited, the Eew India Assurance Co(pany =i(ited, the Criental Insurance Co(pany =i(ited and the Hnited Insurance Co(pany =i(ited, or Hnit .rust of India, the total subscription to the units or any other instru(ent, whether by one or (ore of such bodies, shall not for( part of the twenty+fi'e per cent of the units or any other instru(ent to be offered to the public0 (3) A co(pany applying for listing of a sche(e shall, as a condition precedent, underta)e, inter alia,(a) (i) that letters of allot(ent of units or any other instru(ent will be issued si(ultaneously and that, in the e'ent of its being i(possible to issue letters of regret at the sa(e ti(e, a notice to that effect will be inserted in the press so that it will appear on the (orning after the letters of allot(ent ha'e been
posted3 (ii) that letters of right will be issued si(ultaneously3 (iii) that letters of allot(ent, acceptance or rights will be serially nu(bered, printed on good *uality paper and, exa(ined and signed by a responsible officer of the co(pany and that whene'er possible, they will contain the distincti'e nu(bers of the units or any other instru(ent to which they relate3 (iv) that letters of allot(ent and renounceable letters of right will contain a pro'iso for splitting and that, when so re*uired by the exchange, the for( of renunciation will be printed on the bac) of or attached to the letters of allot(ent and letters of right3 (v) that letters of allot(ent and letters of right will state how the next pay(ent of interest or return on the units or any other instru(ent will be calculated3 (b) to issue, when so re*uired, receipts for all units and any other instru(ent deposited with it whether for registration, sub+di'ision, exchange or for other purposes3 and not to charge any fees for registration of transfers, for sub+di'ision and consolidation of units and any other instru(ent and for sub+di'ision of letters of allot(ent, renounceable letters of right, and split, consolidation, renewal and transfer receipts into deno(inations of the (ar)et unit of trading3 (c) to issue, when so re*uired, consolidation and renewal units or any other instru(ent in deno(inations of the (ar)et unit of trading, to split units or any other instru(ent, letters of allot(ent, letters of right, and transfer, renewal, consolidation and split receipts into s(aller units, to split call notices, issue duplicates thereof and not re*uire any discharge on call receipts and to accept the discharge of (e(bers of stoc) exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders3 (d) when docu(ents are lodged for sub+di'ision or consolidation or renewal through the clearing house of the exchange , (i) to accept the discharge of an official of the stoc) exchange clearing house on the co(panyJs split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders3 and (ii) to 'erify when the co(pany is unable to issue units or any other instru(ents or split receipt or consolidation receipts or renewal receipts i((ediately on lodge(ent whether the discharge of the registered holders, on the docu(ents lodged for sub+di'ision or consolidation or renewal and their signatures on the relati'e transfers are in order3 (e) on production of the necessary docu(ents by unit holders or by (e(bers of the exchange, to (a)e on transfers an endorse(ent to the effect that the power of attorney or probate or letters of ad(inistration or death certificate or si(ilar other docu(ent has been duly exhibited to and registered by the co(pany3 (f) to issue certificates in respect of units or any other instru(ent lodged for transfer within a period of one (onth of the date of lodge(ent of transfer and to issue balance units or any other instru(ent within the sa(e period where the transfer is acco(panied by a larger unit or any other instru(ent certificate3 (g) to ad'ise the stoc) exchange of the date of the board (eeting at which the declaration or reco((endation of a return or the issue or right or bonus units or
any other instru(ent will be considered3 (h) to reco((end or declare all returns andLor cash bonuses at least fi'e days before the co((ence(ent of the closure of its transfer boo)s or the record date fixed for the purpose and to ad'ise the stoc) exchange in writing of all returns andLor cash bonuses reco((ended or declared i((ediately after a (eeting of the board of the co(pany has been held to finalise the sa(e3 (i) to notify the stoc) exchange of any change(i) in the co(panyJs directorate by death, resignation, re(o'al or otherwise, (ii) of (anaging director, (iii) of auditors appointed to audit the boo)s and account of the co(pany3 (j) to forward to the stoc) exchange copies of statutory and annual reports and audited accounts of such sche(e as soon as issued, including directorsJ report3 (k) to forward to the stoc) exchange as soon as they are issued copies of all other notices and circulars sent to the unitLother instru(ent holders regarding any i(portant de'elop(ent or resolutions passed by the co(pany affecting the perfor(ance of the sche(e and to file with the stoc) exchange certified copies of resolutions of the co(pany as soon as such resolutions beco(e effecti'e3 (l) to notify the stoc) exchange prior to inti(ating the unitLany other instru(ent holders, of any new issue of unitsLother instru(ents whether by way of right, pri'ilege, bonus or otherwise and the (anner in which it is proposed to offer or allot the sa(e3 (") to notify the stoc) exchange in the e'ent of re+issue of any forfeited unitsLother instru(ents or the issue of unitsLother instru(ents held in reser'e for future issue3 (n) to notify the stoc) exchange of any other alteration of unit capital including calls3 ($) to close the transfer boo)s only for the purpose of declaration of returns or issue of right or bonus unitsLany other instru(ents in the sche(e or for such other purposes as the stoc) exchange (ay agree and to gi'e notice to the stoc) exchange as (any days in ad'ance as the exchange (ay fro( ti(e to ti(e reasonably prescribe, stating the dates of closure of its transfer boo)s or, when the transfer boo)s are not to be closed, the date fixed for ta)ing a record of its unitLother instru(ent holders and specifying the purpose or purposes for which the transfer boo)s are to be closed or the record is to be ta)en3 and in the case of a right or bonus issue to so close the transfer boo)s or fix a record date only after the sanctions of the co(petent authority, subDect to which the issue is proposed to be (ade, ha'e been duly obtained, unless the exchange agrees otherwise3 (%) to forward to the stoc) exchange an annual return i((ediately after the preparation of annual accounts of at least ten principal holders of each class of unitsLany other instru(ents of the co(pany along with particulars as to the nu(ber of unitsLany other instru(ent held by, and address of, each such holder3 (+) to grant to unitLany other instru(ent holders of the sche(e the right of renunciation in all cases of issue of rights, pri'ileges and benefits and to allow the( reasonable ti(e, not being less than four wee)s, within which to record, exercise, or renounce such rights, pri'ileges and benefits, and to issue, where necessary, coupons or fractional certificates or pro'ide for the pay(ent of the e*ui'alent of the 'alue of the fractional right in cash unless the co(pany in general (eeting or the stoc) exchange agrees otherwise3
(r) to pro(ptly notify the stoc) exchange(i) of any action which will result in the rede(ption, cancellation or retire(ent in whole or in part of any unitLother instru(ent listed on the exchange3 (ii) of the intention to (a)e a drawing of such unitLother instru(ent inti(ating at the sa(e ti(e the date of the drawing and the period of the closing of the transfer boo)s (or the date of the stri)ing off the balance) for the drawing3 (iii) of the a(ount of unitsLother instru(ents outstanding after any drawing has been (ade3 (#) to inti(ate the stoc) exchange any other infor(ation necessary to enable the unitLany other instru(ent holders to appraise the position of the sche(e and to a'oid the establish(ent of a false (ar)et in the unitsLany other instru(ents of the co(pany3 (t) that in the e'ent of the application for listing being granted, such listing shall be subDect to the rules and bye+laws of the exchange in force fro( ti(e to ti(e and that the co(pany will co(ply within a reasonable ti(e, with such further listing re*uire(ents as (ay be pro(ulgated by the exchange as a general condition for new listings0 ($) A fresh application for listing will be necessary in respect of all new sche(es desired to be dealt in , 4ro+i-e- that, where such new unitsLother instru(ents are identical in all respects with those already listed, ad(ission to dealing will be granted on the co(pany inti(ating to the stoc) exchange particulars of such new sche(es0 ()%lanati$n0-HnitsLany other instru(ents are identical in all respects only if(a) they are issued under the sa(e sche(e3 (b) they are of the sa(e no(inal 'alue and the sa(e a(ount per unitLother instru(ents has been called up3 (c) they are entitled to returns at the sa(e rate and for the sa(e period, so that at the next ensuing distribution, the return payable on each unitLother issue will a(ount to exactly the sa(e su(, net and gross3 and (d) they carry the sa(e rights in all other respects0 (") A recognised stoc) exchange (ay suspend or withdraw ad(ission to dealings in the unitsLother instru(ents of a sche(e of a co(pany or body corporate either for a breach of or non+co(pliance with, any of the conditions of ad(ission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stoc) exchange Dustifies such action , 4ro+i-e-, howe'er, that no such action shall be ta)en by a stoc) exchange without affording to the co(pany or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action , 4ro+i-e- f*rther that where a recognised stoc) exchange has withdrawn ad(ission to dealings in any unitLother instru(ent of a collecti'e in'est(ent sche(e, or where suspension of ad(ission to dealings has continued for a period exceeding three (onths, the co(pany or body corporate concerned (ay prefer an appeal to the Securities Appellate .ribunal constituted under section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate .ribunal) Rules, %000 shall apply to such appeal0 .he Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange an
opportunity of being heard, 'ary or set aside the decision of the stoc) exchange and thereupon the orders of the Securities Appellate .ribunal shall be carried out by the stoc) exchange0 (#) A recognised stoc) exchange (ay, either at its own discretion or shall in accordance with the orders of the Securities Appellate .ribunal under sub+rule (") restore or read(it to dealings any unitsLother instru(ents suspended or withdrawn fro( the list0 (/) All the re*uire(ents with respect to listing prescribed by these rules, shall, so far as they (ay be, also apply to a body corporate constituted by an Act of <arlia(ent or any State =egislature , 4ro+i-e- that a recognised stoc) exchange (ay relax the re*uire(ent of offer to the public for subscription of at least twenty+fi'e per cent of the units or any other instru(ent of a collecti'e in'est(ent sche(e issued in respect of a body corporate referred to in this sub+rule with the pre'ious appro'al of the Securities and 7xchange 8oard of India and also subDect to such instructions as the Securities and 7xchange 8oard of India (ay issue in this behalf fro( ti(e to ti(e0 (>) .he Securities and 7xchange 8oard of India (ay, at its own discretion or on the reco((endation of a recognised stoc) exchange, wai'e or relax the strict enforce(ent of any or all of the re*uire(ents with respect of listing prescribed by these rules0: $ 4Deli!ti ( of !e'*ritie!. "1. A recogniFed stoc) exchange (ay, without preDudice to any other action that (ay be ta)en under the Act or under any other law for the ti(e being in force, delist any securities listed thereon on any of the following grounds in accordance with the regulations (ade by the Securities and 7xchange 8oard of India, na(ely,(a) the co(pany has incurred losses during the preceding three consecuti'e years and it has negati'e networth3 (b) trading in the securities of the co(pany has re(ained suspended for a period of (ore than six (onths3 (c) the securities of the co(pany ha'e re(ained infre*uently traded during the preceding three years3 (d) the co(pany or any of its pro(oters or any of its director has been con'icted for failure to co(ply with any of the pro'isions of the Act or the Securities and 7xchange 8oard of India Act, !!% or the 9epositories Act, !!# (%% of !!#) or rules, regulations, agree(ents (ade thereunder, as the case (ay be and awarded a penalty of not less than rupees one crore or i(prison(ent of not less than three years3 (e) the addresses of the co(pany or any of its pro(oter or any of its directors, are not )nown or false addresses ha'e been furnished or the co(pany has changed its registered office in contra'ention of the pro'isions of the Co(panies Act, !"# ( of !"#)3 or
$
Inserted by the Securities Contracts (Regulation) (A(end(ent) Rules, %00>, w0e0f0 000#0%00!
(f) shareholding of the co(pany held by the public has co(e below the (ini(u( le'el applicable to the co(pany as per the listing agree(ent under the Act and the co(pany has failed to raise public holding to the re*uired le'el within the ti(e specified by the recogniFed stoc) exchange , 4ro+i-e- that no securities shall be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) If the securities is delisted under clause ( ),
(a) the co(pany, pro(oter and director of the co(pany shall be Dointly and se'erally liable to purchase the outstanding securities fro( those holders who wish to sell the( at a fair price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India, under the Act3 and (b) the said securities shall be delisted fro( all recogniFed stoc) exchanges0 (3) A recogniFed stoc) exchange (ay, on the re*uest of the co(pany, delist any securities listed thereon in accordance with the regulations (ade under the Act by Securities and 7xchange 8oard of India, subDect to the following conditions, na(ely ,(a) the securities of the co(pany ha'e been listed for a (ini(u( period of three years on the recogniFed stoc) exchange3 (b) the delisting of such securities has been appro'ed by the two+third of public shareholders3 and (c) the co(pany, pro(oter andLor the director of the co(pany purchase the outstanding securities fro( those holders who wish to sell the( at a price deter(ined in accordance with regulations (ade by Securities and 7xchange 8oard of India under the Act, 4ro+i-e- that the condition at (c) (ay be dispensed with by Securities and 7xchange 8oard of India if the securities re(ain listed at least on the Eational Stoc) 7xchange of India =i(ited or the 8o(bay Stoc) 7xchange =i(ited0: FORM A ( ee Rules 3 and /) A$$li'%tio for re'o( itio 1re e/%l of re'o( itio of % !to'6 e#'h% (e * -er !e'tio ) of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 .o 00000000000000000000000000000000000000 00000000000000000000000000000000000000 !bject,*A%%licati$n f$r rec$gniti$n-rene.al $f rec$gniti$n $f a #t$ck e)change !nder #ecti$n 3 $f the ec!ritie# /$ntract# (0eg!lati$n) Act' 1956& Sir, <ursuant to the $%4Securities and 7xchange 8oard of India: Eotification Eo0 00000000000000000000000000 00000000000000000 dated 000000000000000000000000000000000LCertificate of recognition dated0000000000000000000000000000000KeLI on behalf of 000000000000000000 (na(e and address of stoc) exchange) being a stoc) exchange as defined in section % of the Securities Contracts
$% Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
(Regulation) Act, !"# hereby apply for recognitionLrenewal of recognition for the purposes of the said Act in respect of contracts in securities0 ". 6our copies of the rules, (e(orandu( and articles of association relating in general to the constitution and (anage(ent of the stoc) exchange and four copies of the bye+laws for the regulation and control contracts in securities are enclosed0 ). All the necessary infor(ation re*uired in the Annexure to this 6or( is enclosed0 Any additional infor(ation will be furnished as and when called for by the $34Securities and 7xchange 8oard of India:0 3. KeLI on behalf of the said stoc) exchange hereby underta)e to co(ply with the re*uire(ents of section $ of the said Act and such other conditions and ter(s as (ay be contained in the certificate of recognition or be prescribed or i(posed subse*uently0 5. .reasury Receipt Eo0 000000dated000000for Rs000000000000is attached0
Oours faithfully, Signature of applicant ANNEAURE TO 2OR@ BAC Part I - General 0 Ea(e of the applicant stoc) exchange0 %0 Address0 30 9ate of establish(ent0 $0 Is your exchange a Doint stoc) co(pany (state whether public or pri'ate) registered under the Indian Co(panies Act or an association for profit or otherwise P If it is organised on so(e other basis, this (ay be stated0 "0 &i'e details of your capital structure and attach three copies of the audited balance sheets and profit and loss account of the 7xchange for the preceding three years0 Part II - Membership #0 State the nu(ber of (e(bers at the ti(e of application0 Also specify how (any are inacti'e0 /0 State whether there is any pro'ision, resolution or con'ention for li(iting the nu(ber of (e(bers and whether in pursuance thereof you ha'e fixed a ceiling on the nu(ber of (e(bers that you would ta)e0 >0 9o you insist on any (ini(u( *ualifications and experience before enrolling new (e(bers P If so gi'e details0 !0 State the different classes of (e(bers, if any, the nu(ber thereof and the pri'ileges enDoyed by each class0 Khat is the procedure followed by your exchange for the ad(ission of different classes of new (e(bers P 00 Khat are the rates of your annual subscription in respect of the different classes of (e(bers P 0 9o you collect any security deposit fro( your (e(bers P If so, gi'e details and also state the (anner in which such deposits are utilised and the rate of interest allowed, if any0
$3 Substituted
for 1Central &o'ern(ent2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0
%0 9o you collect any ad(ission or entrance fees fro( your (e(bers or fro( partners of fir(s who are (e(bers P If so, how (uch P 30 9o you insist on your (e(bers and partners of fir(s who are (e(bers di'esting the(sel'es of other acti'ities either as principal or as e(ployee P $0 9o your rules per(it fir(s to beco(e (e(bers P If so, is it incu(bent on (e(bers to see) the appro'al of the go'erning body before ad(itting new partners P State the conditions, if any, laid down in your rules for the ad(ission of such partners0 "0 If your rules do not per(it of fir(s being enrolled as (e(bers, do you per(it indi'idual (e(bers to for( a partnership P State the procedure followed for the recognition of such partnership0 #0 9o you per(it (e(bers to wor) in partnership with non+(e(bers P If so, how far such non+(e(bers subDect to the control of the stoc) exchange P Part III - Governing Body /0 Khat is the present strength of your go'erning body P &i'e details of the constitution, powers of (anage(ent, election and tenure of office of (e(bers of the go'erning body, and the (anner in which its business is transacted0 >0 Are any trade or co((ercial interest represented on your go'erning body P If so,
gi'e details of interests represented0 !0 9o you associate shareholders of in'estors associations with the (anage(ent of your exchange P If so, state the (anner in which it is done0 %00 Are there any &o'ern(ent representati'es on your go'erning body P If so, furnish their na(es0 % 0 9o your rules pro'ide for the direct election by (e(bers of any other bodies or co((ittees, apart fro( the go'erning body P If so, gi'e details of their constitution, tenure, powers and functions0 %%0 9o you ha'e any pro'ision for the appoint(ent of standing or ad h$c subco((ittees of the go'erning body P If so, furnish details of the (ethod of their appoint(ent, ter(s of office, powers and functions0 %30 &i'e the designations, powers and duties of principal office+bearers of your exchange0 Are any of these office+bearers in the pay of the stoc) exchange P If so, gi'e details as to the (ode of their appoint(ent, tenure of office and re(uneration0 Part IV - Trading %$0 9o you ha'e a trading ring P If not, how do you carry on the business P &i'e details0 %"0 State the different )inds of contracts in use on your exchange e&g&' spot, ready and forward0 State the period of deli'ery and pay(ent in each case0 %#0 &i'e details of business hours for each type of contract0 %/0 &i'e details of the scale of bro)erage and other charges, if any, prescribed by your exchange0 %>0 9o you prescribe standard for(s of contract for the use of your (e(bers P Attach three copies of each such contract for(0 %!0 9o you classify your (e(bers into bro)ers and Dobbers P If so, specify the bye+law under which this is done0 300 9o you ha'e a syste( of registration of re(isiers andLor authorised cler)s P If so, gi'e details as to their *ualifications, obligations and rights, etc0 3 0 9o you ha'e any regulations regarding dealings by (e(bers on their own account whether in the nature of 1aravani (day+to+day) or otherwise P 3%0 9o you ha'e any pro'isions for regulating the 'olu(e of business done by any indi'idual (e(ber other than through a syste( of (argins P If so, gi'e details0 330 Khat pro'isions ha'e you (ade for periodical settle(ent of contracts and differences thereunder, the deli'ery of, and pay(ent for securities and the passing of deli'ery orders P 3$0 9o you ha'e a clearing house for the settle(ent of contracts P If so, gi'e details of its organisation and (anage(ent0 3"0 If you ha'e clearing house, what returns do the (e(bers of your exchange sub(it regarding the transactions cleared through such clearing house P 9oes the exchange as) for any regular returns in respect of transactions settled outside the clearing house P Sub(it three copies of for(s used in this connection0 3#0 Iow do you fix, alter or postpone the dates of settle(ent P 3/0 Iow do you deter(ine and declare (a)ing+up prices P 3>0 9o you ha'e any arrange(ents for (a)ing or recording of bargains P 3!0 Ia'e you any arrange(ents for recording and publishing (ar)et rates including opening, closing, highest and lowest rates P $00 Khat pro'isions ha'e you (ade for regulating-(a) the entering into contracts, their
perfor(ance and rescission, including contracts , (i) between (e(bers, (ii) between a (e(ber and his constituent, and (iii) between a (e(ber and a non+(e(ber3 (b) the conse*uences of breach, default or insol'ency on the part of (e(bers whether acting as buyers, sellers or inter(ediaries 3 and (c) 2havala#3 and other (atters relating to conduct of business of (e(bers in the exchange P $ 0 9o you prescribe (argin re*uire(ents P If yes, gi'e details0 $%0 9o you prescribe (axi(u( and (ini(u( prices for securities P If so, how and under what conditions0 $30 9o you pro'ide any safeguards for the pre'ention of Nbulls*ueeFesJ and 3 NbearraidsJ and for (eeting e(ergencies in trade P &i'e details0 $$0 Khat are the (easures adopted by you to regulate or prohibit ad'ertising or issue of circulars by your (e(bers P $"0 Khat are the disciplinary power with the go'erning body to enforce due co(pliance by (e(bers of the rules and bye+laws of the exchange and generally to ensure proper standard of business conduct P $#0 9o you re*uire (e(bers to supply such infor(ation or explanation and to produce such boo)s relating to their business as your go'erning body (ay re*uire P $/0 9o you publish any statistics in regard to business done on the exchange including the transactions settled through the clearing house, if (aintained P In particular, ha'e you e'ol'ed any (achinery for co(puting the 'olu(e of transactions in the different )inds of contracts per(itted on your exchange P &i'e details0 $>0 9o you ha'e any bye+laws contra'ention of which (a)es a contract 'oid P Part V - Miscellaneo s $!0 9o you ha'e any (achinery for arbitration of disputes between (e(bers andLor between (e(bers and their constituents P &i'e details0 "00 Khat are the conditions subDect to which securities are listed for dealings on your exchange P " 0 Khat are your re*uire(ents for ad(itting securities to forward+trading P "%0 9o you ha'e the right to prohibit, withdraw or suspend dealings in a listed security P If so, under what circu(stances is this right exercised P "30 Khat pro'isions ha'e you (ade for the le'y and reco'ery of fees, fines and penalties P FORM B ( ee rules # and /) $$5The Se'*ritie! % - E#'h% (e ;o%r- of I -i%< 4e. 5elhi' the 20&&&&&&&&&&&&& Eo0 000000000000000000000000000000000000.he $"4Securities and 7xchange 8oard of India:, ha'ing considered the application for recognitionLrenewal of recognition (ade under section 3 of the Securities Contracts (Regulation) Act, !"# by000000000000000000000000000000 (na(e and address of exchange) and being satisfied that it would be in the interest of the trade and also in the public interest so to do, hereby grants, in exercise of the powers conferred by section $ of the Securities Contracts (Regulation) Act, !"# recognition to the said exchange under section $ of the said Act for 0000000000000000000 yearLyears ending 0000000000000000000000%0 0000000on a per(anent basis in respect of contracts in securities subDect to the conditions stated herein below or as (ay be prescribed or i(posed hereafter0 Seal of the $#48oard: Signature of Cfficer
Note&-Application for renewal of recognition shall be (ade so as to reach the Central &o'ern(ent not less than three (onths before the expiry of the period0 (.his certificate, will also ha'e to be published as a Eotification in the &aFette of India and also in the Cfficial &aFette of the State in which principal office of the recognised stoc) exchange is situate)0 $/5FORM ! ( ee rule 3) Noti'e to !ho/ '%*!e %(%i !t the /ith-r%/%l of re'o( itio .I7 S7CHRI.I7S AE9 7ACIAE&7 8CAR9 C6 IE9IA 6!"bai' the&&&&&&&&&&& .o 0000000000000000000000000000000000000000000000000000000000000000000000000000000000
$$ Substituted
for 1&o'ern(ent of India, ?inistry of 6inance2 by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#0 $" Substituted for 1Central &o'ern(ent2, ibid0 $# Substituted for 1?inistry2, ibid0 $/ Substituted by the Securities Contracts (Regulation) (A(end(ent) Rules, !!#, w0e0f0 %30 %0 !!#
0000000000000000000000000000000000000000000000000000000000000000000000000000000000 (na(e and address of the exchange) Oou are hereby called upon to show cause on or before 0000000000000000000000000000000000000 at the office of 0000000000000000000000000000000000000000000000000000 ( designation of the officer) why the recognition granted to you under the ?inistry of 6inanceLthe Securities and 7xchange 8oard of India, Eotification Eo0 0000000000000000000000000000 dated 000000000000000000000000000000000000000 and Certificate Eo0 00000000000000000000000000000 dated 000000000000000000000000000000 should not be withdrawn for the reasons gi'en in the annexure to this notice0 8y order and in the na(e of the Securities and 7xchange 8oard of India0 Seal of the Securities and 7xchange 8oard of India0 Notifi'%tio & 4$& 576' dated 217271957&
SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< SECTIONS
80(9:6:4A0; 1. Short title, extent and co((ence(ent ". 9efinitions 0(/<=4: (5 1</> (?/@A4=( ). Application for recognition of stoc) exchanges 3. &rant of recognition to stoc) exchanges0 3A. Corporatisation and de(utualisation of stoc) exchanges 3;. <rocedure for corporatisation and de(utualisation 5. Kithdrawal of recognition 8. <ower of Central &o'ern(ent to call for periodical returns or direct in*uiries to be (ade 7. Annual reports to be furnished to Central &o'ern(ent by stoc) exchanges 7A. <ower of recognised stoc) exchange to (a)e rules restricting 'oting rights, etc :. <ower of Central &o'ern(ent to direct rules to be (ade or to (a)e rules :A. Clearing corporation 9. <ower of recognised stoc) exchanges to (a)e bye+laws 1=. <ower of Securities and 7xchange 8oard of India to (a)e or a(end byelaws of recognised stoc) exchanges 11. <ower of Central &o'ern(ent to supersede go'erning body of a recognised stoc) exchange 1". <ower to suspend business of recognised stoc) exchanges0 1"A. <ower to issue directions 1). Contracts in notified areas illegal in certain circu(stances 1)A. Additional trading floor 13. Contracts in notified areas to be 'oid in certain circu(stances 15. ?e(bers (ay not act as principals in certain circu(stances 18. <ower to prohibit contracts in certain cases 17. =icensing of dealers in securities in certain areas 17A. <ublic issue and listing of securities referred to in sub+clause ( ie) of clause (h) of section % 1:. 7xclusion of spot deli'ery contracts fro( sections 3, $, " and / 1:A. Contracts in deri'ati'e 19. Stoc) exchanges other than recognised stoc) exchanges prohibited "=. <rohibition of options in securities "1. Conditions for listing "1A. 9elisting of securities "". Right of appeal against refusal of stoc) exchanges to list securities of public co(panies ""A. Right of appeal to Securities Appellate .ribunal against refusal of stoc) exchange to list securities of public co(panies "";. <rocedure and powers of Securities Appellate .ribunal ""C. Right to legal representation ""D. =i(itation ""E. Ci'il court not to ha'e Durisdiction
""2. Appeal to Supre(e Court 8(4A91:( A45 80</(5A0( "). <enalties ")A. <enalty for failure to furnish infor(ation, return, etc0 ");. <enalty for failure by any person to enter into an agree(ent with clients ")C. <enalty for failure to redress in'estorsJ grie'ances ")D. <enalty for failure to segregate securities or (oneys of client or clients ")E. <enalty for failure to co(ply with pro'ision of listing conditions or delisting conditions or grounds ")2. <enalty for excess de(aterialisation or deli'ery of unlisted securities ")G. <enalty for failure to furnish periodical returns, etc0 ")D. <enalty for contra'ention where no separate penalty has been pro'ided ")0I. <ower to adDudicate ")E. 6actors to be ta)en into account by adDudicating officer ")EA. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! ")E;. Re'o+er> of %.o* t! ")F. Crediting su(s realised by way of penalties to Consolidated 6und of India ")L. Appeal to Securities Appellate .ribunal ")@. Cffences ")N. Co(position of certain offences ")0O. <ower to grant i((unity "3. Cffences by co(panies "5. Certain offences to be cogniFable "8. CogniFance of offences by courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! 6: /(99A4(<A "7. .itle to di'idends "7A. Right to recei'e inco(e fro( collecti'e in'est(ent sche(e "7;. Right to recei'e inco(e fro( (utual fund ":. Act not to apply in certain cases "9. <rotection of action ta)en in good faith "9A. <ower to delegate )=. <ower to (a)e rules )1. <ower of Securities and 7xchange 8oard of India to (a)e regulations SECURITIES CONTRACTS (REGULATION) ACT, 1958 53" O2 1958< 53th Se$te.,er, 1958< A A't to $re+e t * -e!ir%,le tr% !%'tio ! i !e'*ritie! ,> re(*l%ti ( the ,*!i e!! of -e%li ( therei , 14***: ,> $ro+i-i ( for 'ert%i other .%tter! 'o e'te- there/ith. 87 it enacted by <arlia(ent in the Se'enth Oear of the Republic of India as follows ,
80(9:6:4A0; Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities Contracts (Regulation) Act, !"#0 (%) It extends to the whole of India0
Kords 1by prohibiting options and2 o(itted by the Securities =aws (A(end(ent) Act, !!", Sec0 >, w0e0f0 %"+0 + !!".
(3) It shall co(e into force on such date% as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 Defi itio !. ". In this Act, unless the context otherwise re*uires,(a) 1contract2 (eans a contract for or relating to the purchase or sale of securities3 3 4(aa) 1corporatisation2 (eans the succession of a recognised stoc) exchange, being a body of indi'iduals or a society registered under the Societies Registration Act, >#0 (% of >#0), by another stoc) exchange, being a co(pany incorporated for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities carried on by such indi'iduals or society3 (ab) 1de(utualisation2 (eans the segregation of ownership and (anage(ent fro( the trading rights of the (e(bers of a recognised stoc) exchange in accordance with a sche(e appro'ed by the Securities and 7xchange 8oard of India3: $4"4(ac): 1deri'ati'e2 includes(A) a security deri'ed fro( a debt instru(ent, share, loan, whether secured or unsecured, ris) instru(ent or contract for differences or any other for( of security3 (B) a contract which deri'es its 'alue fro( the prices, or index of prices, of underlying securities3: (b) 1&o'ern(ent security2 (eans a security created and issued, whether before or after the co((ence(ent of this Act, by the Central &o'ern(ent or a State &o'ern(ent for the purpose of raising a public loan and ha'ing one of the for(s specified in clause (2) of section % of the <ublic 9ebt Act, !$$ ( > of !$$)3 (c) 1(e(ber2 (eans a (e(ber of a recognised stoc) exchange3 (d) 1option in securities2 (eans a contract for the purchase or sale of a right to buy or sell, or a right to buy and sell, securities in future, and includes a teji' a "andi' a teji "andi' a galli' a put, a call or a put and call in securities3 (e) 1prescribed2 (eans prescribed by rules (ade under this Act3
% %0+%+
!"/ vide SRC "%>, dated #+0%+ !"/, published in the &aFette of India, 7xtra0, <t0 II, Sec0 3, p0 "$!, dated #+0%+ !"/0 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 $ Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000 " Clause (aa) renu(bered as clause (ac) by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0
(f) 1recognised stoc) exchange2 (eans a stoc) exchange which is for the ti(e
being recognised by the Central &o'ern(ent under section $3 (g) 1rules2, with reference to the rules relating in general to the constitution and (anage(ent of a stoc) exchange, includes, in the case of a stoc) exchange which is an incorporated association, its (e(orandu( and articles of association3 64(ga) 1sche(e2 (eans a sche(e for corporatisation or de(utualisation of a recognised stoc) exchange which (ay pro'ide for(i) the issue of shares for a lawful consideration and pro'ision of trading rights in lieu of (e(bership cards of (e(bers of a recognised stoc) exchange3 (ii) the restrictions on 'oting rights3 (iii) the transfer of property, business, assets, rights, liabilities, recognitions, contracts of the recognised stoc) exchange, legal proceedings by, or against, the recognised stoc) exchange, whether in the na(e of the recognised stoc) exchange or any trustee or otherwise and any per(ission gi'en to, or by, the recognised stoc) exchange3 (iv) the transfer of e(ployees of a recognised stoc) exchange to another recognised stoc) exchange3 (v) any other (atter re*uired for the purpose of, or in connection with, the corporatisation or de(utualisation, as the case (ay be, of the recognised stoc) exchange3: /4>4(gb): 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (h) 1securities2 include(i) shares, scrips, stoc)s, bonds, debentures, debenture stoc) or other (ar)etable securities of a li)e nature in or of any incorporated co(pany or other body corporate3 !4(ia) deri'ati'e3 (ib) units or any other instru(ent issued by any collecti'e in'est(ent sche(e to the in'estors in such sche(es3:
# Inserted / Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (Second A(end(ent) Act, !!!, Sec %, w0e0f0 #+ %+ !!!0 > Clause (ga) renu(bered as clause (gb) by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 ! Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec0 %, w0e0f0 %%+%+%0000
04(ic) security receipt as defined in clause ( Cg) of section % of the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%3: 114(id) units or any other such instru(ent issued to the in'estors under any (utual fund sche(e3: %47xplanation0-6or the re(o'al of doubts, it is hereby declared that ;securities; shall not include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(bined benefit ris) on the life of the persons and in'est(ent by such
persons and issued by an insurer referred to in clause (!) of section % of the Insurance Act, !3> ($ of !3>)3: 35(ie) any certificate or instru(ent (by whate'er na(e called), issued to an in'estor by any issuer being a special purpose distinct entity which possesses any debt or recei'able, including (ortgage debt, assigned to such entity, and ac)nowledging beneficial interest of such in'estor in such debt or recei'able, including (ortgage debt, as the case (ay be3 <
0 Inserted by the Securitisation and Reconstruction of 6inancial Assets and 7nforce(ent of Security Interest Act, %00%, Sec0 $ and Schedule, w0r0e0f0 % +#+%00%0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %, w0e0f0 %+ 0+%00$0 % Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, Sec $, w0r0e0f0 0!+0$+%0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, read as under , ;CIA<.7R BI ?ISC7==AE7CHS #0 Dalidati$n&-Eotwithstanding anything contained in any Dudg(ent, decree or order of any Court, .ribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly, any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 0e%eal and #aving#&*( ) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0; 3 Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec %, w0e0f0 %>+"+ %00/0
$4(ii) &o'ern(ent securities3 (iia) such other instru(ents as (ay be declared by the Central &o'ern(ent to be securities3 and: (iii) rights or interest in securities3 "4(i) 1spot deli'ery contract2 (eans a contract which pro'ides for,(a) actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e
town or locality3 (b) transfer of the securities by the depository fro( the account of a beneficial owner to the account of another beneficial owner when such securities are dealt with by a depository3: #4(j) 1stoc) exchange2 (eans(a) any body of indi'iduals, whether incorporated or not, constituted before corporatisation and de(utualisation under sections $A and $8, or (b) a body corporate incorporated under the Co(panies Act, !"# ( of !"#) whether under a sche(e of corporatisation and de(utualisation or otherwise, for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0: /4I ter$ret%tio of 'ert%i /or-! % - e#$re!!io !. "A. Kords and expressions used herein and not defined in this Act but defined in the Co(panies Act, !"# ( of !"#) or the Securities and 7xchange 8oard of India
$ Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, for sub+clause (ii), w0r0e0f0 30+0 + !!%0 " Substituted by the 9epositories Act, !!#, Sec 30 and Schedule, <t0 III, w0r0e0f0 %0+0!+ !!" . <rior to its substitution, clause (i) read as under , N(i) 1spot deli'ery contract2 (eans a contract which pro'ides for the actual deli'ery of securities and the pay(ent of a price therefor either on the sa(e day as the date of the contract or on the next day, the actual period ta)en for the despatch of the securities or the re(ittance of (oney therefor through the post being excluded fro( the co(putation of the period aforesaid if the parties to the contract do not reside in the sa(e town or locality3J # Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec %, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (j) read as under ,N(j) 1stoc) exchange2 (eans any body of indi'iduals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities0J / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
Act, !!% ( " of !!%) or the 9epositories Act, !!# (%% of !!#) shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts0: 0(/<=4: (5 1</> (?/@A4=( A$$li'%tio for re'o( itio of !to'6 e#'h% (e!. ). ( ) Any stoc) exchange, which is desirous of being recognised for the purposes of this Act, (ay (a)e an application in the prescribed (anner to the Central &o'ern(ent01: (%) 7'ery application under sub+section ( ) shall contain such particulars as (ay be prescribed, and shall be acco(panied by a copy of the bye+laws of the stoc) exchange for the regulation and control of contracts and also a copy of the rules relating in general to the constitution of the stoc) exchange and in particular, to(a) the go'erning body of such stoc) exchange, its constitution and powers of (anage(ent and the (anner in which its business is to be transacted3 (b) the powers and duties of the office bearers of the stoc) exchange3 (c) the ad(ission into the stoc) exchange of 'arious classes of (e(bers, the *ualifications for (e(bership, and the exclusion, suspension, expulsion and
re+ad(ission of (e(bers therefro( or thereinto3 (d) the procedure for the registration of partnerships as (e(bers of the stoc) exchange in cases where the rules pro'ide for such (e(bership3 and the no(ination and appoint(ent of authorised representati'es and cler)s0 Gr% t of re'o( itio to !to'6 e#'h% (e!. 3. ( ) If the Central &o'ern(ent ! is satisfied, after (a)ing such in*uiry as (ay be necessary in this behalf and after obtaining such further infor(ation, if any, as it (ay re*uire,(a) that the rules and bye+laws of a stoc) exchange applying for registration are in confor(ity with such conditions as (ay be prescribed with a 'iew to ensure fair dealing and to protect in'estors3 (b) that the stoc) exchange is willing to co(ply with any other conditions (including conditions as to the nu(ber of (e(bers) which the Central &o'ern(ent, after consultation with the go'erning body of the stoc) exchange and ha'ing regard to the area ser'ed by the stoc) exchange and its standing and the nature of the securities dealt with by it, (ay i(pose for the purpose of carrying out the obDects of this Act3 and
> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 ! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
(c) that it would be in the interest of the trade and also in the public interest to grant recognition to the stoc) exchange3 it (ay grant recognition to the stoc) exchange subDect to the conditions i(posed upon it as aforesaid and in such for( as (ay be prescribed0 (%) .he conditions which the Central &o'ern(ent %0 (ay prescribe under clause (a) of sub+section ( ) for the grant of recognition to the stoc) exchanges (ay include, a(ong other (atters, conditions relating to,(i) the *ualifications for (e(bership of stoc) exchanges3 (ii) the (anner in which contracts shall be entered into and enforced as between (e(bers3 (iii) the representation of the Central &o'ern(ent on each of the stoc) exchange by such nu(ber of persons not exceeding three as the Central &o'ern(ent (ay no(inate in this behalf3 and (iv) the (aintenance of accounts of (e(bers and their audit by chartered accountants whene'er such audit is re*uired by the Central &o'ern(ent0 (3) 7'ery grant of recognition to a stoc) exchange under this section shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office as of the stoc) exchange is situate, and such recognition shall ha'e effect as fro( the date of its publication in the &aFette of India0 % ($) Eo application for the grant of recognition shall be refused except after gi'ing an opportunity to the stoc) exchange concerned to be heard in the (atter3 and the reasons for such refusal shall be co((unicated to the stoc) exchange in writing0 %% (") Eo rules of a recognised stoc) exchange relating to any of the (atters specified in sub+section (%) of section 3 shall be a(ended except with the appro'al of the
Central &o'ern(ent0%3 "35Cor$or%ti!%tio % - -e.*t*%li!%tio of !to'6 e#'h% (e!. 3A. Cn and fro( the appointed date, all recognised stoc) exchanges (if not corporatised and de(utualised before the appointed date) shall be corporatised and de(utualised in accordance with the pro'isions contained in section $8 ,
%0 <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 % <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %% <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %3 <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 %$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
4ro+i-e- that the Securities and 7xchange 8oard of India (ay, if it is satisfied that any recognised stoc) exchange was pre'ented by sufficient cause fro( being corporatised and de(utualised on or after the appointed date, specify another appointed date in respect of that recognised stoc) exchange and such recognised stoc) exchange (ay continue as such before such appointed date0 ()%lanati$n&*6or the purposes of this section, 1appointed date2 (eans the date which the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, appoint and different appointed dates (ay be appointed for different recognised stoc) exchanges0: "554ro'e-*re for 'or$or%ti!%tio % - -e.*t*%li!%tio . 3;. ( ) All recognised stoc) exchanges referred to in section $A shall, within such ti(e as (ay be specified by the Securities and 7xchange 8oard of India, sub(it a sche(e for corporatisation and de(utualisation for its appro'al , 4ro+i-e- that the Securities and 7xchange 8oard of India, (ay, by notification in the Cfficial &aFette, specify na(e of the recognised stoc) exchange, which had already been corporatised and de(utualised, and such stoc) exchange shall not be re*uired to sub(it the sche(e under this section0 (%) Cn receipt of the sche(e referred to in sub+section ( ), the Securities and 7xchange 8oard of India (ay, after (a)ing such en*uiry as (ay be necessary in this behalf and obtaining such further infor(ation, if any, as it (ay re*uire and if it is satisfied that it would be in the interest of the trade and also in the public interest, appro'e the sche(e with or without (odification0 (3) Eo sche(e under sub+section (%) shall be appro'ed by the Securities and 7xchange 8oard of India if the issue of shares for a lawful consideration or pro'ision of trading rights in lieu of (e(bership card of the (e(bers of a recognised stoc) exchange or pay(ent of di'idends to (e(bers ha'e been proposed out of any reser'es or assets of that stoc) exchange0 ($) Khere the sche(e is appro'ed under sub+section (%), the sche(e so appro'ed shall be published i((ediately by(a) the Securities and 7xchange 8oard of India in the Cfficial &aFette3 (b) the recognised stoc) exchange in such two daily newspapers circulating in India, as (ay be specified by the Securities and 7xchange 8oard of India,
and upon such publication, notwithstanding anything to the contrary contained in this Act or any other law for the ti(e being in force or any agree(ent, award, Dudg(ent, decree or other instru(ent for the ti(e being in force, the sche(e shall ha'e effect and be binding on all persons and authorities including all (e(bers, creditors, depositors and e(ployees of the recognised stoc) exchange and on all
%" Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$0
persons ha'ing any contract, right, power, obligation or liability with, against, o'er, to, or in connection with, the recognised stoc) exchange or its (e(bers0 (") Khere the Securities and 7xchange 8oard of India is satisfied that it would not be in the interest of the trade and also in the public interest to appro'e the sche(e under sub+section (%), it (ay, by an order, reDect the sche(e and such order of reDection shall be published by it in the Cfficial &aFette , 4ro+i-e- that the Securities and 7xchange 8oard of India shall gi'e a reasonable opportunity of being heard to all the persons concerned and the recognised stoc) exchange concerned before passing an order reDecting the sche(e0 (#) .he Securities and 7xchange 8oard of India (ay, while appro'ing the sche(e under sub+section (%), by an order in writing, restrict(a) the 'oting rights of the shareholders who are also stoc) bro)ers of the reognised stoc) exchange3 (b) the right of shareholders or a stoc) bro)er of the recognised stoc) exchange to appoint the representati'es on the go'erning board of the stoc) exchange3 (c) the (axi(u( nu(ber of representati'es of the stoc) bro)ers of the recognised stoc) exchange to be appointed on the go'erning board of the recognised stoc) exchange, which shall not exceed one+fourth of the total strength of the go'erning board0 (/) .he order (ade under sub+section (#) shall be published in the Cfficial &aFette and on the publication thereof, the order shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#), or any other law for the ti(e being in force, ha'e full effect0 (>) 7'ery recognised stoc) exchange, in respect of which the sche(e for corporatisation or de(utualisation has been appro'ed under sub+section (%), shall, either by fresh issue of e*uity shares to the public or in any other (anner as (ay be specified by the regulations (ade by the Securities and 7xchange 8oard of India %#, ensure that at least fifty+one per cent of its e*uity share capital is held, within twel'e (onths fro( the date of publication of the order under sub+section (/), by the public other than shareholders ha'ing trading rights , 4ro+i-e- that the Securities and 7xchange 8oard of India (ay, on sufficient cause being shown to it and in the public interest, extend the said period by another twel'e (onths0:
ee Securities Contracts (Regulation) (Stoc) 7xchanges and Clearing Corporations) Regulations, %0 %, w0e0f0 %0+0#+%0 % notified vide &aFette Eotification Eo0 =A9+ ERCL&EL%0 %+ 3L0/L 3"$#, 7xtra0, <t0 III, Section $, dtd %0+0#+%0 %0
%#
?ith-r%/%l of re'o( itio .
5. %/4( ): If the Central &o'ern(ent%> is of opinion that the recognition granted to a stoc) exchange under the pro'isions of this Act should, in the interest of the trade or in the public interest, be withdrawn, the Central &o'ern(ent (ay ser'e on the go'erning body of the stoc) exchange a written notice that the Central &o'ern(ent is considering the withdrawal of the recognition for the reasons stated in the notice and after gi'ing an opportunity to the go'erning body to be heard in the (atter, the Central &o'ern(ent (ay withdraw, by notification in the Cfficial &aFette, the recognition granted to the stoc) exchange , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Central &o'ern(ent (ay, after consultation with the stoc) exchange, (a)e such pro'ision as it dee(s fit in the notification of withdrawal or in any subse*uent notification si(ilarly published for the due perfor(ance of any contracts outstanding on that date0 %!4(%) Khere the recognised stoc) exchange has not been corporatised or de(utualised or it fails to sub(it the sche(e referred to in sub+section ( ) of section $8 within the specified ti(e therefor or the sche(e has been reDected by the Securities and 7xchange 8oard of India under sub+section (") of section $8, the recognition granted to such stoc) exchange under section $, shall, notwithstanding anything to the contrary contained in this Act, stand withdrawn and the Central &o'ern(ent shall publish, by notification in the Cfficial &aFette, such withdrawal of recognition , 4ro+i-e- that no such withdrawal shall affect the 'alidity of any contract entered into or (ade before the date of the notification, and the Securities and 7xchange 8oard of India (ay, after consultation with the stoc) exchange, (a)e such pro'isions as it dee(s fit in the order reDecting the sche(e published in the Cfficial &aFette under sub+section (") of section $80: 4o/er of Ce tr%l Go+er .e t to '%ll for $erio-i'%l ret*r ! or -ire't i 7*irie! to ,e .%-e. 8. ( ) 7'ery recognised stoc) exchange shall furnish to the 304Securities and 7xchange 8oard of India: such periodical returns relating to its affairs as (ay be prescribed0
%/ Section
" renu(bered as sub+section ( ) by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 %> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0 30 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(%) 7'ery recognised stoc) exchange and e'ery (e(ber thereof shall (aintain and preser'e for such periods not exceeding fi'e years such boo)s of account, and other docu(ents as the Central &o'ern(ent, after consultation with the stoc) exchange concerned, (ay prescribe in the interest of the trade or in the public interest, and such boo)s of account, and other docu(ents shall be subDect to inspection at all reasonable ti(es 3 4by the Securities and 7xchange 8oard of India:0 (3) Kithout preDudice to the pro'isions contained in sub+sections ( ) and (%), the
3%4Securities
and 7xchange 8oard of India:, if it is satisfied that it is in the interest of the trade or in the public interest so to do, (ay, by order in writing,(a) call upon a recognised stoc) exchange or any (e(ber thereof to furnish in writing such infor(ation or explanation relating to the affairs of the stoc) exchange or of the (e(ber in relation to the stoc) exchange as the 334Securities and 7xchange 8oard of India: (ay re*uire3 or (b) appoint one or (ore persons to (a)e an in*uiry in the prescribed (anner in relation to the affairs of the go'erning body of a stoc) exchange or the affairs of any of the (e(bers of the stoc) exchange in relation to the stoc) exchange and sub(it a report of the result of such in*uiry to the 3$4Securities and 7xchange 8oard of India: within such ti(e as (ay be specified in the order or, in the case of an in*uiry in relation to the affairs of any of the (e(bers of a stoc) exchange, direct the go'erning body to (a)e the in*uiry and sub(it its report to the 3"4Securities and 7xchange 8oard of India:0 ($) Khere an in*uiry in relation to the affairs of a recognised stoc) exchange or the affairs of any of its (e(bers in relation to the stoc) exchange has been underta)en under sub+section (3),(a) e'ery director, (anager, secretary or other officer of such stoc) exchange3 (b) e'ery (e(ber of such stoc) exchange3 (c) if the (e(ber of the stoc) exchange is a fir(, e'ery partner, (anager, secretary or other officer of the fir(3 and (d) e'ery other person or body of persons who has had dealings in the course of business with any of the persons (entioned in clauses ( a), (b) and (c), whether directly or indirectly3
Substituted for ;by the Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3% Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 33 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 3" Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
3
shall be bound to produce before the authority (a)ing the in*uiry all such boo)s of account, and other docu(ents in his custody or power relating to or ha'ing a bearing on the subDect+(atter of such in*uiry and also to furnish the authorities within such ti(e as (ay be specified with any such state(ent or infor(ation relating thereto as (ay be re*uired of hi(0 )8A *%l re$ort! to ,e f*r i!he- to Ce tr%l Go+er .e t ,> !to'6 e#'h% (e!. 7. 7'ery recognised stoc) exchange shall furnish the Central &o'ern(ent with a copy of the annual report, and such annual report shall contain such particulars as (ay be prescribed0 )754o/er of re'o( i!e- !to'6 e#'h% (e to .%6e r*le! re!tri'ti ( +oti ( ri(ht!, et'. 7A. ( ) A recognised stoc) exchange (ay (a)e rules or a(end any rules (ade by it
to pro'ide for all or any of the following (atters, na(ely ,(a) the restriction of 'oting rights to (e(bers only in respect of any (atter placed before the stoc) exchange at any (eeting3 (b) the regulation of 'oting rights in respect of any (atter placed before the stoc) exchange at any (eeting so that each (e(ber (ay be entitled to ha'e one 'ote only, irrespecti'e of his share of the paid+up e*uity capital of the stoc) exchange3 (c) the restriction on the right of a (e(ber to appoint another person as his proxy to attend and 'ote at a (eeting of the stoc) exchange3 (d) such incidental, conse*uential and supple(entary (atters as (ay be necessary to gi'e effect to any of the (atters specified in clauses ( a), (b) and (c)0 (%) Eo rules of a recognised stoc) exchange (ade or a(ended in relation to any (atter referred to in clauses (a) to (d) of sub+section ( ) shall ha'e effect until they ha'e been appro'ed by the Central &o'ern(ent 3> and published by that &o'ern(ent in the Cfficial &aFette and, in appro'ing the rules so (ade or a(ended, the Central &o'ern(ent (ay (a)e such (odifications therein as it thin)s fit, and on such publication, the rules as appro'ed by the Central &o'ern(ent shall be dee(ed to ha'e been 'alidly (ade, notwithstanding anything to the contrary contained in the Co(panies Act, !"# ( of !"#)0:
3# <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 3/ Inserted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec %, w0e0f0 0>+ %+ !"!0 3> <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0
4o/er of Ce tr%l Go+er .e t )9 to -ire't r*le! to ,e .%-e or to .%6e r*le!. :. ( ) Khere, after consultation with the go'erning bodies of stoc) exchanges generally or with the go'erning body of any stoc) exchange in particular, the Central &o'ern(ent is of opinion that it is necessary or expedient so to do, it (ay, by order in writing together with a state(ent of the reasons therefor, direct recognised stoc) exchanges generally or any recognised stoc) exchange in particular, as the case (ay be, to (a)e any rules or to a(end any rules already (ade in respect of all or any of the (atters specified in sub+section (%) of section 3 within a period of $04two (onths: fro( the date of the order0 (%) If any recognised stoc) exchange fails or neglects to co(ply with any order (ade under sub+section ( ) within the period specified therein, the Central &o'ern(ent (ay (a)e the rules for, or a(end the rules (ade by, the recognised stoc) exchange, either in the for( proposed in the order or with such (odifications thereof as (ay be agreed to between the stoc) exchange and the Central &o'ern(ent0 (3) Khere in pursuance of this section any rules ha'e been (ade or a(ended, the rules so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette or &aFettes of the State or States in which the principal office or offices of the recognised stoc) exchange or exchanges is or are situate, and, on the publication thereof in the &aFette of India, the rules so (ade or a(ended shall, notwithstanding anything to the contrary contained in the Co(panies Act, !"# (
of !"#), or in any other law for the ti(e being in force, ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange or stoc) exchanges, as the case (ay be0 315Cle%ri ( 'or$or%tio . :A. ( ) A recognised stoc) exchange (ay, with the prior appro'al of the Securities and 7xchange 8oard of India, transfer the duties and functions of a clearing house to a clearing corporation, being a co(pany incorporated under the Co(panies Act, !"# ( of !"#), for the purpose of(a) the periodical settle(ent of contracts and differences thereunder3 (b) the deli'ery of, and pay(ent for, securities3 (c) any other (atter incidental to, or connected with, such transfer0 (%) 7'ery clearing corporation shall, for the purpose of transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( ),
3! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 $0 Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec !, w0e0f0 %"+ 0 + !!"0 $ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0
(a)e bye+laws and sub(it the sa(e to the Securities and 7xchange 8oard of India for its appro'al0 (3) .he Securities and 7xchange 8oard of India (ay, on being satisfied that it is in the interest of the trade and also in the public interest to transfer the duties and functions of a clearing house to a clearing corporation, grant appro'al to the byelaws sub(itted to it under sub+section (%) and appro'e the transfer of the duties and functions of a clearing house to a clearing corporation referred to in sub+section ( )0 ($) .he pro'isions of sections $, ", #, /, >, !, 0, and % shall, as far as (ay be, apply to a clearing corporation referred to in sub+section ( ) as they apply in relation to a recognised stoc) exchange0: 4o/er of re'o( i!e- !to'6 e#'h% (e! to .%6e ,>e0l%/!. 9. ( ) Any recognised stoc) exchange (ay, subDect to the pre'ious appro'al of the $%4Securities and 7xchange 8oard of India:, (a)e bye+laws for the regulation and control of contracts0 (%) In particular, and without preDudice to the generality of the foregoing power, such bye+laws (ay pro'ide for , (a) the opening and closing of (ar)ets and the regulation of the hours of trade3 (b) a clearing house for the periodical settle(ent of contracts and differences thereunder, the deli'ery of and pay(ent for securities, the passing on of deli'ery orders and the regulation and (aintenance of such clearing house3 (c) the sub(ission to the $34Securities and 7xchange 8oard of India: by the clearing house as soon as (ay be after each periodical settle(ent of all or any of the following particulars as the $$4Securities and 7xchange 8oard of India: (ay, fro( ti(e to ti(e, re*uire, na(ely ,(i) the total nu(ber of each category of security carried o'er fro( one settle(ent period to another3 (ii) the total nu(ber of each category of security, contracts in respect of
which ha'e been s*uared up during the course of each settle(ent period3 (iii) the total nu(ber of each category of security actually deli'ered at each clearing3
$% Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
(d) the publication by the clearing house of all or any of the particulars sub(itted to the $"4Securities and 7xchange 8oard of India: under clause ( c) subDect to the directions, if any, issued by the $#4Securities and 7xchange 8oard of India: in this behalf3 (e) the regulation or prohibition of blan) transfers3 (f) the nu(ber and classes of contracts in respect of which settle(ents shall be (ade or differences paid through the clearing house3 (g) the regulation, or prohibition of b!dla# or carry+o'er facilities3 (h) the fixing, altering or postponing of days for settle(ents3 (i) the deter(ination and declaration of (ar)et rates, including the opening, closing highest and lowest rates for securities3 (j) the ter(s, conditions and incidents of contracts, including the prescription of (argin re*uire(ents, if any, and conditions relating thereto, and the for(s of contracts in writing3 (k) the regulation of the entering into, (a)ing, perfor(ance, recession and ter(ination, of contracts, including contracts between (e(bers or between a (e(ber and his constituent or between a (e(ber and a person who is not a (e(ber, and the conse*uences of default or insol'ency on the part of a seller or buyer or inter(ediary, the conse*uences of a breach or o(ission by a seller or buyer, and the responsibility of (e(bers who are not parties to such contracts3 (l) the regulation of taravani business including the placing of li(itations thereon3 (") the listing of securities on the stoc) exchange, the inclusion of any security for the purpose of dealings and the suspension or withdrawal of any such securities, and the suspension or prohibition of trading in any specified securities3 (n) the (ethod and procedure for the settle(ent of clai(s or disputes, including settle(ent by arbitration3 ($) the le'y and reco'ery of fees, fines and penalties3 (%) the regulation of the course of business between parties to contracts in any capacity3 (+) the fixing of a scale of bro)erage and other charges3 (r) the (a)ing, co(paring, settling and closing of bargains3 (#) the e(ergencies in trade which (ay arise, whether as a result of pool or syndicated operations or cornering or otherwise, and the exercise of powers in
$" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%,
Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $# Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
such e(ergencies, including the power to fix (axi(u( and (ini(u( prices for securities3 (t) the regulation of dealings by (e(bers for their own account3 (!) the separation of the functions of Dobbers and bro)ers3 (v) the li(itations on the 'olu(e of trade done by any indi'idual (e(ber in exceptional circu(stances3 (.) the obligation of (e(bers to supply such infor(ation or explanation and to produce such docu(ents relating to the business as the go'erning body (ay re*uire0 (3) .he bye+laws (ade under this section (ay(a) specify the bye+laws the contra'ention of which shall (a)e a contract entered into otherwise than in accordance with the bye+laws 'oid under sub+section ( ) of section $3 (b) pro'ide that the contra'ention of any of the bye+laws shall render the (e(ber concerned liable to one or (ore of the following punish(ents, na(ely ,(i) fine, (ii) expulsion fro( (e(bership, (iii) suspension fro( (e(bership for a specified period, (iv) any other penalty of a li)e nature not in'ol'ing the pay(ent of (oney0 ($) Any bye+laws (ade under this section shall be subDect to such conditions in regard to pre'ious publication as (ay be prescribed, and, when appro'ed by the $/4Securities and 7xchange 8oard of India:, shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and shall ha'e effect as fro( the date of its publication in the &aFette of India , 4ro+i-e- that if the $>4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+law should be (ade i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0
$/ Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 $> Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4o/er of 395Se'*ritie! % - E#'h% (e ;o%r- of I -i%< to .%6e or %.e - ,>e0l%/! of re'o( i!e- !to'6 e#'h% (e!. 1=. ( ) .he "04Securities and 7xchange 8oard of India: (ay, either on a re*uest in writing recei'ed by it in this behalf fro( the go'erning body of a recognised stoc) exchange or on its own (otion, if it is satisfied after consultation with the go'erning body of the stoc) exchange that it is necessary or expedient so to do and after recording its reasons for so doing, (a)e bye+laws for all or any of the (atters specified in section ! or a(end any bye+laws (ade by such stoc) exchange under that section0
(%) Khere in pursuance of this section any bye+laws ha'e been (ade or a(ended the bye+laws so (ade or a(ended shall be published in the &aFette of India and also in the Cfficial &aFette of the State in which the principal office of the recognised stoc) exchange is situate, and on the publication thereof in the &aFette of India, the bye+laws so (ade or a(ended shall ha'e effect as if they had been (ade or a(ended by the recognised stoc) exchange concerned0 (3) Eotwithstanding anything contained in this section, where the go'erning body of a recognised stoc) exchange obDects to any bye+laws (ade or a(ended under this section by the " 4Securities and 7xchange 8oard of India: on its own (otion, it (ay, within "%4two (onths: of the publication thereof in the &aFette of India under subsection (%), apply to the "34Securities and 7xchange 8oard of India: for re'ision thereof, and the "$4Securities and 7xchange 8oard of India: (ay, after gi'ing an opportunity to the go'erning body of the stoc) exchange to be heard in the (atter, re'ise the bye+laws so (ade or a(ended, anywhere any bye+laws so (ade or a(ended are re'ised as a result of any action ta)en under this sub+section, the byelaws so re'ised shall be published and shall beco(e effecti'e as pro'ided in subsection (%)0 ($) .he (a)ing or the a(end(ent or re'ision of any bye+laws under this section shall in all cases be subDect to the condition of pre'ious publication ,
$! Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "0 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 " Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "% Substituted for 1six (onths2 by the Securities =aws (A(end(ent) Act, !!", Sec %0, w0e0f0 %"+ 0 + !!"0 "3 Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "$ Substituted for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0
4ro+i-e- that if the ""4Securities and 7xchange 8oard of India: is satisfied in any case that in the interest of the trade or in the public interest any bye+laws should be (ade, a(ended or re'ised i((ediately, it (ay, by order in writing specifying the reasons therefor, dispense with the condition of pre'ious publication0 4o/er of Ce tr%l Go+er .e t 58 to !*$er!e-e (o+er i ( ,o-> of % re'o( i!e!to'6 e#'h% (e. 11. ( ) Kithout preDudice to any other powers 'ested in the Central &o'ern(ent under this Act, where the Central &o'ern(ent is of opinion that the go'erning body of any recognised stoc) exchange should be superseded, then, notwithstanding anything contained in any other law for the ti(e being in force, in the Central &o'ern(ent (ay ser'e on the go'erning body a written notice that the Central &o'ern(ent is considering the supersession of the go'erning body for the reasons specified in the notice and after gi'ing an opportunity to the go'erning body to be
heard in the (atter, it (ay, by notification in the Cfficial &aFette, declare the go'erning body of such stoc) exchange to be superseded, and (ay appoint any person or persons to exercise and perfor( all the powers and duties of the go'erning body, and, where (ore persons than one are appointed, (ay appoint one of such persons to be the chair(an and another to be the 'ice+chair(an thereof0 (%) Cn the publication of a notification in the Cfficial &aFette under sub+section ( ), the following conse*uences shall ensue, na(ely,(a) the (e(bers of the go'erning body which has been superseded shall, as fro( the date of the notification of supersession, cease to hold office as such (e(bers3 (b) the person or persons appointed under sub+section ( ) (ay exercise and perfor( all the powers and duties of the go'erning body which has been superseded3 (c) all such property of the recognised stoc) exchange as the person or persons appointed under sub+section ( ) (ay, by order in writing, specify in this behalf as being necessary for the purpose of enabling hi( or the( to carry on the business of the stoc) exchange, shall 'est in such person or persons0 (3) Eotwithstanding anything to the contrary contained in any law or the rules or bye+laws of the recognised stoc) exchange the go'erning body of which is superseded under sub+section ( ), the person or persons appointed under that subsection shall hold office for such period as (ay be specified in the notification published under that sub+section and the Central &o'ern(ent (ay fro( ti(e to ti(e, by li)e notification, 'ary such period0
"" Substituted
for ;Central &o'ern(ent; by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!%0 "# <owers are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0
($) .he Central &o'ern(ent (ay at any ti(e before the deter(ination of the period of office of any person or persons appointed under this section call upon the recognised stoc) exchange to re+constitute the go'erning body in accordance with its rules and on such re+constitution all the property of the recognised stoc) exchange which has 'ested in, or was in the possession of, the person or persons appointed under sub+section ( ), shall re+'est or 'est, as the case (ay be, in the go'erning body so re+constituted , 4ro+i-e- that until a go'erning body is so re+constituted, the person or persons appointed under sub+section ( ) shall continue to exercise and perfor( their powers and duties0 4o/er57 to !*!$e - ,*!i e!! of re'o( i!e- !to'6 e#'h% (e!. 1". If in the opinion of the Central &o'ern(ent an e(ergency has arisen and for the purpose of (eeting the e(ergency the Central &o'ern(ent considers it expedient so to do, it (ay, by notification in the Cfficial &aFette, for reasons to be set out therein, direct a recognised stoc) exchange to suspend such of its business for such period not exceeding se'en days and subDect to such conditions as (ay be specified in the notification, and, if, in the opinion of the Central &o'ern(ent, the interest of
the trade or the public interest re*uires that the period should be extended, (ay, by li)e notification extend the said period fro( ti(e to ti(e , 4ro+i-e- that where the period of suspension is to be extended beyond the first period, no notification extending the period of suspension shall be issued unless the go'erning body of the ">4recognised stoc) exchange: has been gi'en an opportunity of being heard in the (atter0 "!54o/er to i!!*e -ire'tio !. 1"A. If, after (a)ing or causing to be (ade an in*uiry, the Securities and 7xchange 8oard of India is satisfied that it is necessary(a) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (b) to pre'ent the affairs of any recognised stoc) exchange or clearing corporation, or such other agency or person, pro'iding trading or clearing or settle(ent facility in respect of securities, being conducted in a (anner detri(ental to the interests of in'estors or securities (ar)et3 or (c) to secure the proper (anage(ent of any such stoc) exchange or clearing corporation or agency or person, referred to in clause ( b),
"/ <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 "> Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 "! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0
it (ay issue such directions,(i) to any stoc) exchange or clearing corporation or agency or person referred to in clause (b) or any person or class of persons associated with the securities (ar)et3 or (ii) to any co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 8=5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< /<410A/1 A45 <81:<4 :4 (/A0:1:( Co tr%'t! i otifie- %re%! ille(%l i 'ert%i 'ir'*.!t% 'e!. 1). If the Central &o'ern(ent# is satisfied, ha'ing regard to the nature or the 'olu(e of transactions in securities in any #%4State or States or area: that it is necessary so to do, it (ay, by notification in the Cfficial &aFette, declared this section to apply to such #34State or States or area:, and thereupon e'ery contract in such #$4State or States or area: which is entered into after the date of the notification otherwise than #"4between (e(bers of a recognised stoc) exchange or recognised stoc) exchanges: in such ##4State or States or area: or through or with such (e(ber shall be illegal ,
#0 I #
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 #% Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #3 Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #$ Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 #" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$ for ;between (e(bers of a recognised stoc) exchange; & ## Substituted for 1State or area2 by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0
#/54ro+i-e-
that any contract entered into between (e(bers of two or (ore recognised stoc) exchanges in such State or States or area, shall(i) be subDect to such ter(s and conditions as (ay be stipulated by the respecti'e stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India3 (ii) re*uire prior per(ission fro( the respecti'e stoc) exchanges if so stipulated by the stoc) exchanges with prior appro'al of Securities and 7xchange 8oard of India0: #>4A--itio %l tr%-i ( floor. 1)A. A stoc) exchange (ay establish additional trading floor with the prior appro'al of the Securities and 7xchange 8oard of India in accordance with the ter(s and conditions stipulated by the said 8oard0 ()%lanati$n , 6or the purposes of this section, 1additional trading floor2 (eans a trading ring or trading facility offered by a recognised stoc) exchange outside its area of operation to enable the in'estors to buy and sell securities through such trading floor under the regulatory fra(ewor) of that stoc) exchange0: Co tr%'t! i otifie- %re%! to ,e +oi- i 'ert%i 'ir'*.!t% 'e!. 13. ( ) Any contract entered into in any State or area specified in the notification under section 3 which is in contra'ention of any of the bye+laws specified in that behalf under clause (a) of sub+section (3) of section ! shall be 'oid , (i) as respects the rights of any (e(ber of the recognised stoc) exchange who has entered into such contract in contra'ention of any such bye+law, and also (ii) as respects the rights of any other person who has )nowingly participated in the transaction entailing such contra'ention0 (%) Eothing in sub+section ( ) shall be construed to affect the right of any person other than a (e(ber of the recognised stoc) exchange to enforce any such contract or to reco'er any su( under or in respect of such contract if such person had no )nowledge that the transaction was in contra'ention of any of the bye+laws specified in clause (a) of sub+section (3) of section !0 @e.,er! .%> ot %'t %! $ri 'i$%l! i 'ert%i 'ir'*.!t% 'e!. 15. Eo (e(ber of a recognised stoc) exchange shall in respect of any securities enter into any contract as a principal with any person other than a (e(ber of a recognised stoc) exchange, unless he has secured the consent or authority of such
#/ Inserted #> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec /, w0r0e0f0 %+ 0+%00$0 by the Securities =aws (A(end(ent) Act, !!", Sec % , w0e0f0 %"+0 + !!"0
person and discloses in the note, (e(orandu( or agree(ent of sale or purchase that he is acting as a principal , 4ro+i-e- that where the (e(ber has secured the consent or authority of such person otherwise than in writing he shall secure written confir(ation by such person or such consent or authority within three days fro( the date of the contract , 4ro+i-e- f*rther that no such written consent or authority of such person shall be necessary for closing out any outstanding contract entered into by such person in accordance with the bye+laws, if the (e(ber discloses in the note, (e(orandu( or agree(ent of sale or purchase in respect of such closing out that he is acting as a principal0 4o/er89 to $rohi,it 'o tr%'t! i 'ert%i '%!e!. 18. ( ) If the Central &o'ern(ent is of opinion that it is necessary to pre'ent undesirable speculation in specified securities in any State or area, it (ay, by notification in the Cfficial &aFette, declare that no person in the State or area specified in the notification shall, sa'e with the per(ission of the Central &o'ern(ent, enter into any contract for the sale or purchase of any security specified in the notification except to the extent and in the (anner, if any, specified therein0 (%) All contracts in contra'ention of the pro'isions of sub+section ( ) entered into after the date of notification issued thereunder shall be illegal0 Li'e !i ( of -e%ler! i !e'*ritie! i 'ert%i %re%!. 17. ( ) SubDect to the pro'isions of sub+section (3) and to the other pro'isions contained in this Act, no person shall carry on or purport to carry on, whether on his own behalf or on behalf of any other person, the business of dealing in securities in any State or area to which section 3 has not been declared to apply and to which the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, declare this section to apply, except under the authority of a /04licence granted by the Securities and 7xchange 8oard of India: in this behalf0 (%) Eo notification under sub+section ( ) shall be issued with respect to any State or area unless the Central &o'ern(ent is satisfied, ha'ing regard to the (anner in which securities are being dealt with in such State or area, that it is desirable or
#! <owers
are exercisable by S78I also vide S0 C0 "/3 (7), 9ated 30+0/+ !!%, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 30+0/+ !!%0 <owers are exercisable by R8I also 'ide &o'ern(ent of India Eotification Eo0 >3 (7), 9ated 0 +03+%000 in relation to any contracts in go'ern(ent securities, (oney (ar)et securities etc0 /0 Substituted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% for ;licence granted by the Central &o'ern(ent;0
expedient in the interest of the trade or in the public interest that such dealings should be regulated by a syste( of licensing0 (3) .he restrictions i(posed by sub+section ( ) in relation to dealings in securities shall not apply to the doing of anything by or on behalf of a (e(ber of any recognised stoc) exchange0
7154*,li'
i!!*e % - li!ti ( of !e'*ritie! referre- to i !*,0'l%*!e ( ie) of 'l%*!e (h)
of !e'tio ". 17A. ( ) Kithout preDudice to the pro'isions contained in this Act or any other law for the ti(e being in force, no securities of the nature referred to in sub+clause (ie) of clause (h) of section % shall be offered to the public or listed on any recognised stoc) exchange unless the issuer fulfils such eligibility criteria and co(plies with such other re*uire(ents as (ay be specified by regulations (ade by the Securities and 7xchange 8oard of India0 (%) 7'ery issuer referred to in sub+clause (ie) of clause (h) of section % intending to offer the certificates or instru(ents referred therein to the public shall (a)e an application, before issuing the offer docu(ent to the public, to one or (ore recognised stoc) exchanges for per(ission for such certificates or instru(ents to be listed on the stoc) exchange or each such stoc) exchange0 (3) Khere the per(ission applied for under sub+section (%) for listing has not been granted or refused by the recognised stoc) exchanges or any of the(, the issuer shall forthwith repay all (oneys, if any, recei'ed fro( applicants in pursuance of the offer docu(ent, and if any such (oney is not repaid within eight days after the issuer beco(es liable to repay it, the issuer and e'ery director or trustee thereof, as the case (ay be, who is in default shall, on and fro( the expiry of the eighth day, be Dointly and se'erally liable to repay that (oney with interest at the rate of fifteen per cent per annu(0 7xplanation0-In rec)oning the eighth day after another day, any inter'ening day which is a public holiday under the Eegotiable Instru(ents Act, >> (%# of >> ), shall be disregarded, and if the eighth day (as so rec)oned) is itself such a public holiday, there shall for the said purposes be substituted the first day thereafter which is not a holiday0 ($) All the pro'isions of this Act relating to listing of securities of a public co(pany on a recognised stoc) exchange shall, (utatis (utandis, apply to the listing of the securities of the nature referred to in sub+clause (ie) of clause (h) of section % by the issuer, being a special purpose distinct entity0 <
Inserted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec 3, w0e0f0 %>+0"+ %00/0
/
E#'l*!io of !$ot -eli+er> 'o tr%'t! fro. !e'tio ! 1), 13, 15 % - 17. 1:. ( ) Eothing contained in sections 3, $, " and / shall apply to spot deli'ery contracts0 (%) Eotwithstanding anything contained in sub+section ( ), if the Central &o'ern(ent/% is of opinion that in the interest of the trade or in the public interest it is expedient to regulate and control the business of dealing in spot deli'ery contracts also in any State or area (whether section 3 has been declared to apply to that State or area or not), it (ay, by notification in the Cfficial &aFette, declare that the pro'isions of section / shall also apply to such State or area in respect of spot deli'ery contracts generally or in respect of spot deli'ery contracts for the sale or purchase of such securities as (ay be specified in the notification, and (ay also specify the (anner in which, and the extent to which, the pro'isions of that section
shall so apply0 /34Co tr%'t! i -eri+%ti+e. 1:A. Eotwithstanding anything contained in any other law for the ti(e being in force, contracts in deri'ati'e shall be legal and 'alid if such contracts are(a) traded on a recognised stoc) exchange3 (b) settled on the clearing house of the recognised stoc) exchange, in accordance with the rules and bye+laws of such stoc) exchange0: Sto'6 e#'h% (e! other th% re'o( i!e- !to'6 e#'h% (e! $rohi,ite-. 19. ( ) Eo person shall, except with the per(ission of the Central &o'ern(ent, organise or assist in organising or be a (e(ber of any stoc) exchange (other than a recognised stoc) exchange) for the purpose of assisting in, entering into or perfor(ing any contracts in securities0 (%) .his section shall co(e into force in any State or area on such date as the Central &o'ern(ent (ay, by notification in the Cfficial &aFette, appoint0 4rohi,itio of o$tio ! i !e'*ritie!. "=. 734GGGGG:
/% <owers
are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 /3 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec 3, w0e0f0 %%+%+%0000 /$ C(itted by the Securities =aws (A(end(ent) Act, !!", Sec %%, w0e0f0 %"+0 + !!"0 <rior to o(ission, section %0 read as under , 1%00 8r$hibiti$n $f $%ti$n# in #ec!ritie#&-( ) Eotwithstanding anything contained in this Act or in any other law for the ti(e being in force, all options in securities entered into after the co((ence(ent of this Act shall be illegal0
9: 1:4= <E (/A0:1:( 754GGG: /#4Co -itio ! for li!ti (. "1. Khere securities are listed on the application of any person in any recognised stoc) exchange, such person shall co(ply with the conditions of the listing agree(ent with that stoc) exchange&: 775Deli!ti ( of !e'*ritie!. "1A. ( ) A recognised stoc) exchange (ay delist the securities, after recording the reasons therefor, fro( any recognised stoc) exchange on any of the ground or grounds as (ay be prescribed under this Act , 4ro+i-e- that the securities of a co(pany shall not be delisted unless the co(pany concerned has been gi'en a reasonable opportunity of being heard0 (%) A listed co(pany or an aggrie'ed in'estor (ay file an appeal before the Securities Appellate .ribunal against the decision of the recognised stoc) exchange delisting the securities within fifteen days fro( the date of the decision of the recognised stoc) exchange delisting the securities and the pro'isions of sections %%8 to %%7 of this Act, shall apply, as far as (ay be, to such appeals , 4ro+i-e- that the Securities Appellate .ribunal (ay, if it is satisfied that the co(pany was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding one (onth0:
(%) Any option in securities which has been entered into before such co((ence(ent and which re(ains to be perfor(ed, whether wholly or in part, after such co((ence(ent shall, to that
extent, beco(e 'oid02 /" Kords 18O <H8=IC CC?<AEI7S2 o(itted by the Securities =aws (A(end(ent) Act, !!!, Sec $, w0e0f0 %%+0%+%0000 /# Substituted by the Securities =aws (A(end(ent) Act, !!", Sec 33, w0e0f0 %"+0 + !!" . <rior to substitution, section % read as under , 1% 0 8$.er t$ c$"%el li#ting $f #ec!ritie# bF %!blic c$"%anie#& -Eotwithstanding anything contained in any other law for the ti(e being in force, if the Securities and 7xchange 8oard of India is of opinion, ha'ing regard to the nature of the securities issued by any public co(pany as defined in the Co(panies Act, !"# ( of !"#), or to the dealings in the(, that it is necessary or expedient in the interest of the trade or in the public interest so to do, it (ay re*uire the co(pany, after gi'ing it an opportunity of being heard in the (atter, to co(ply with such re*uire(ents as (ay be prescribed with respect to the listing of its securities on any recognised stoc) exchange02 // Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec >, w0r0e0f0 %+ 0+%00$0
7:5Ri(ht
of %$$e%l %(%i !t ref*!%l of !to'6 e#'h% (e! to li!t !e'*ritie! of $*,li' 'o.$% ie!. 79"". Khere a recognised stoc) exchange acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any public co(pany >04or collecti'e in'est(ent sche(e:, the co(pany > 4or sche(e: shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( ) of section /3 of the Co(panies Act, !"# ( of !"#) (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Central &o'ern(ent (ay, on sufficient cause being shown, allow, appeal to the Central &o'ern(ent against such refusal, o(ission or failure, as the case (ay be, and thereupon the Central &o'ern(ent (ay, after gi'ing the stoc) exchange an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange, or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Central &o'ern(ent sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Central &o'ern(ent: , >%44ro+i-e- that no appeal shall be preferred against refusal, o(ission or failure, as the case (ay be, under this section on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!0: :)5Ri(ht of %$$e%l to Se'*ritie! A$$ell%te Tri,* %l %(%i !t ref*!%l of !to'6 e#'h% (e to li!t !e'*ritie! of $*,li' 'o.$% ie!.
/> Substituted
by .he Co(panies (A(end(ent) Act, !/$ (Act Eo0 $ of !/$), Sec $%, w0e0f0 0 + 0%+ !/"0 /! <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the
&aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 >0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%00003 Substituted by .he Repealing and A(ending Act, !/$ (Act Eo0 "# of !/$), Sec 3 and Sch II, for ;recogniFed association; w0e0f0 %0+ %+ !/$0 > Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec ", w0e0f0 %%+0%+%0000 >% Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec $, w0e0f0 #+ %+ !!!0 >3 Sections %%A, %%8, %%C, %%9, %%7 and %%6 inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!!& 7arlier section %%A was inserted by .he
""A. ( ) Khere a recognised stoc) exchange, acting in pursuance of any power gi'en to it by its bye+laws, refuses to list the securities of any co(pany, the co(pany shall be entitled to be furnished with reasons for such refusal, and (ay,(a) within fifteen days fro( the date on which the reasons for such refusal are furnished to it, or (b) where the stoc) exchange has o(itted or failed to dispose of, within the ti(e specified in sub+section ( A) of section /3 of the Co(panies Act, !"# ( of !"#), (hereafter in this section referred to as the 1specified ti(e2), the application for per(ission for the shares or debentures to be dealt with on the stoc) exchange, within fifteen days fro( the date of expiry of the specified ti(e or within such further period, not exceeding one (onth, as the Securities Appellate .ribunal (ay, on sufficient cause being shown, allow, appeal to the Securities Appellate .ribunal ha'ing Durisdiction in the (atter against such refusal, o(ission or failure, as the case (ay be, and thereupon the Securities Appellate .ribunal (ay, after gi'ing the stoc) exchange, an opportunity of being heard,(i) 'ary or set aside the decision of the stoc) exchange3 or (ii) where the stoc) exchange has o(itted or failed to dispose of the application within the specified ti(e, grant or refuse the per(ission, and where the Securities Appellate .ribunal sets aside the decision of the recognised stoc) exchange or grants the per(ission, the stoc) exchange shall act in confor(ity with the orders of the Securities Appellate .ribunal0 (%) 7'ery appeal under sub+section ( ) shall be in such for( and be acco(panied by such fee as (ay be prescribed0 (3) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 ($) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: :354ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. "";. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of
Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec %, w0e0f0 /+ 0 + !>#, and o(itted by the 9epositories Act, !!#, Sec 30 and Sch0, <t0III, w0r0e0f0 %0+0!+ !!"0 >$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath 3 (b) re*uiring the disco'ery and production of docu(ents 3 (c) recei'ing e'idence on affida'its 3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents 3 (e) re'iewing its decisions 3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte ; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0: :55Ri(ht to le(%l re$re!e t%tio . ""C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of sub+section ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of subsection ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of
>" Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! &
!"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, vakil or an attorney of any Iigh Court, and includes a pleader in practice0: :85Li.it%tio . ""D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0: :75Ci+il 'o*rt ot to h%+e G*ri!-i'tio .
""E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0: ::5A$$e%l to S*$re.e Co*rt. ""2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order, 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: 8(4A91:( A45 80</(5A0( 4e %ltie!. "). ( ) Any person who+
># Inserted >/ Inserted
by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", w0e0f0 #+ %+ !!! & >> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec !, w0r0e0f0 %+ 0+%00$0 7arlier section %%6 as inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec ", read as under,+ 1""2. A$$e%l to Di(h Co*rt.+Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order , 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
(a) without reasonable excuse (the burden of pro'ing which shall be on hi() fails to co(ply with any re*uisition (ade under sub+section ($) of section #3 or (b) enters into any contract in contra'ention of any of the pro'isions contained in section 3 or section #3 or (c) contra'enes the pro'isions contained in >!5section / or section /A<, or section !3 or 90 4(d) enters into any contract in deri'ati'e in contra'ention of section >A or the rules (ade under section 303: (e) owns or )eeps a place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act and )nowingly per(its such place to be used for such purposes3 or (f) (anages, controls, or assists in )eeping any place other than that of a recognised stoc) exchange which is used for the purpose of entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act or at which contracts are recorded or adDusted or rights or liabilities arising out of contracts are adDusted, regulated or enforced in any (anner whatsoe'er3 or (g) not being a (e(ber of a recognised stoc) exchange or his agent authorised as
such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section / wilfully represents to or induces any person to belie'e that contracts can be entered into or perfor(ed under this Act through hi(3 or (h) not being a (e(ber of a recognised stoc) exchange or his agent authorised as such under the rules or bye+laws of such stoc) exchange or not being a dealer in securities licensed under section /, can'asses, ad'ertises or touts in any (anner either for hi(self or on behalf of any other persons for any business connected with contracts in contra'ention of any of the pro'isions of this Act3 or (i) Doins, gathers or assists in gathering at any place other than the place of business specified in the bye+laws of a recognised stoc) exchange any person or persons for (a)ing bids or offers or for entering into or perfor(ing any contracts in contra'ention of any of the pro'isions of this Act3 ! 4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which
>! Inserted
by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec $, w0e0f0 %>+0"+ %00/ for ;section /;0 !0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec #, w0e0f0 %%+0%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 ! Substituted for 1shall, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0
(ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: (%) Any person who enters into any contract in contra'ention of the pro'isions contained in section " !%4or who fails to co(ply with the pro'isions of !34section % or section % A: or with the orders of: or section %% !$4or with the orders of the Securities Appellate .ribunal: !"4shall, without preDudice to any award of penalty by the AdDudicating Cfficer under this Act, on con'iction, be punishable with i(prison(ent for a ter( which (ay extend to ten years or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 9854e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. ")A. Any person, who is re*uired under this Act or any rules (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to a recognised stoc) exchange, fails to furnish the sa(e within the ti(e specified therefor in the listing agree(ent or conditions or bye+laws of the recognised stoc) exchange, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to (aintain boo)s of account or records, as per the listing agree(ent or conditions, or bye+laws of a recognised stoc) exchange, fails to (aintain the sa(e, shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0:
9754e
%lt> for f%il*re ,> % > $er!o to e ter i to % %(ree.e t /ith 'lie t!. ");. If any person, who is re*uired under this Act or any bye+laws of a recognised stoc) exchange (ade thereunder, to enter into an agree(ent with his client, fails to enter into such an agree(ent, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0:
!% Substituted
for 1or who fails to co(ply with the orders of the Securities and 7xchange 8oard of India under section % 2 by the Securities =aws (A(end(ent) Act, !!", Sec %$, w0e0f0 %"+0 + !!"0 <rior to !!", ;Securities and 7xchange 8oard of India under section % or Central &o'ern(ent under section %%; were substituted for ;Central &o'ern(ent under section % or section %%; vide .he Schedule, <art II of Securities and 7xchange 8oard of India Act, !!%, w0e0f0 30+0 + !!%0 !3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !$ Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec #, w0e0f0 #+ %+ !!!0 !" Substituted for 1shall, on con'iction, be punishable with fine which (ay extend to one thousand rupees2 by the Securities =aws (A(end(ent) Act, %00$, Sec 0, w0r0e0f0 %+ 0+%00$0 !# Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$ & !/ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 %+ 0+%00$0
9:54e
%lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. ")C. If any stoc) bro)er or sub+bro)er or a co(pany whose securities are listed or proposed to be listed in a recognised stoc) exchange, after ha'ing been called upon by the Securities and 7xchange 8oard of India or a recognised stoc) exchange in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e stipulated by the Securities and 7xchange 8oard of India or a recognised stoc) exchange, he or it shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 9954e %lt> for f%il*re to !e(re(%te !e'*ritie! or .o e>! of 'lie t or 'lie t!. ")D. If any person, who is registered under section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%) as a stoc) bro)er or sub+bro)er, fails to segregate securities or (oneys of the client or clients or uses the securities or (oneys of a client or clients for self or for any other client, he shall be liable to a penalty not exceeding one crore rupees0: 1==54e %lt> for f%il*re to 'o.$l> /ith $ro+i!io of li!ti ( 'o -itio ! or -eli!ti ( 'o -itio ! or (ro* -!. ")E. If a co(pany or any person (anaging collecti'e in'est(ent sche(e or (utual fund, fails to co(ply with the listing conditions or delisting conditions or grounds or co((its a breach thereof, it or he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0: 1=154e %lt> for e#'e!! -e.%teri%li!%tio or -eli+er> of * li!te- !e'*ritie!. ")2. If any issuer de(aterialises securities (ore than the issued securities of a co(pany or deli'ers in the stoc) exchanges the securities which are not listed in the recognised stoc) exchange or deli'ers securities where no trading per(ission has been gi'en by the recognised stoc) exchange, he shall be liable to a penalty not exceeding twenty+fi'e crore rupees0:
!> Inserted !! Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 00 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec , w0r0e0f0
%+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0 %+ 0+%00$0
1="54e
%lt> for f%il*re to f*r i!h $erio-i'%l ret*r !, et'. ")G. If a recognised stoc) exchange fails or neglects to furnish periodical returns to the Securities and 7xchange 8oard of India or fails or neglects to (a)e or a(end its rules or bye+laws as directed by the Securities and 7xchange 8oard of India or fails to co(ply with directions issued by the Securities and 7xchange 8oard of India, such recognised stoc) exchange shall be liable to a penalty which (ay extend to twenty+fi'e crore rupees0: 1=)54e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. ")D. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or articles or bye+ laws or the regulations of the recognised stoc) exchange or directions issued by the Securities and 7xchange 8oard of India for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 1=354o/er to %-G*-i'%te. ")0I. ( ) 6or the purpose of adDudging under sections %3A, %38, %3C, %39, %37, %36, %3& and %3I, the Securities and 7xchange 8oard of India shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0: 1=552%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. ")E. Khile adDudging the *uantu( of penalty under section %3+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3
0% Inserted 03 Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec 0$ Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0" Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 , w0r0e0f0 , w0r0e0f0 , w0r0e0f0
%+ %+ %+ %+
0+%00$0 0+%00$0 0+%00$0 0+%00$0
(b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0: 1=85 Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!.
")EA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 1"A or !e'tio ")0I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%tefor the %lle(e- -ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re %! !$e'ifie,> the ;o%r- * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")L %(%i !t % > or-er $%!!e- ,> the ;o%ror %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 1=75Re'o+er> of %.o* t!. ")E;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 1"A or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H
0# I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30"==7) 0/ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %!
.%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - ThirS'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")L of thi! A't. (") The re'o+er> offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ())Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 0'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 1"A, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1),(") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 1=:5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. ")F. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: 1=95A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")L. ( ) Any person aggrie'ed, by the order or decision of the recogniFed stoc) exchange or the adDudicating officer or any order (ade by the Securities and 7xchange 8oard of India under section $8, (ay prefer an appeal before the Securities Appellate .ribunal and the pro'isions of sections %%8, %%C, %%9 and %%7 of this Act, shall apply, as far as (ay be, to such appeals0 (%) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order or decision is recei'ed by the
appellant and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 (3) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 ($) .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the parties to the appeal and to the concerned adDudicating officer0 (") .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0: 11=5Offe 'e!. ")@. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws
0> Inserted
by the Securities =aws (A(end(ent) Act, %00$, Sec 0! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec 0 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
(ade thereunder, for which no punish(ent is pro'ided elsewhere in this Act, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0: 1115Co.$o!itio of 'ert%i offe 'e!. ")N. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0: 11"54o/er to (r% t i..* it>. ")0O. ( ) .he Central &o'ern(ent (ay, on reco((endation by the Securities and 7xchange 8oard of India, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation,
4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that the reco((endation of the Securities and 7xchange 8oard of India under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under
% Inserted
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec by the Securities =aws (A(end(ent) Act, %00$, Sec
, w0r0e0f0 %+ 0+%00$0 , w0r0e0f0 %+ 0+%00$0
this Act to which such person would ha'e been liable, had not such i((unity been granted0: Offe 'e! ,> 'o.$% ie!. "3. ( ) Khere an offence has been co((itted by a co(pany, e'ery person who, at the ti(e when the offence was co((itted, was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence, and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any gross negligence on the part of any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer of the co(pany, shall also be dee(ed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n0-6or the purpose of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals, and 34(b) 1director2, in relation to(i) a fir(, (eans a partner in the fir(3 (ii) any association of persons or a body of indi'iduals, (eans any (e(ber controlling the affairs thereof0: $4(3) .he pro'isions of this section shall be in addition to, and not in derogation of, the pro'isions of section %%A0: Cert%i offe 'e! to ,e 'o( iL%,le. "5. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, >!> (" of >!>) ", any offence punishable under #4GGG: section %3 shall be dee(ed to be a
cogniFable offence within the (eaning of that Code0
3 Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec /, w0e0f0 %%+%+%0000 <rior to its substitution, sub+clause (b) read as under, N(b) 1director2, in relation to a fir(, (eans a partner in the fir(0J $ Inserted by .he Securities Contracts (Regulation) A(end(ent Act, !>" (Act Eo0 $0 of !>"), Sec 3, w0e0f0 /+0 + !>#0
iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central &o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or a recognised stoc) exchange or by any person0 >5(")********< 1195E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
ee now the Code of Cri(inal <rocedure, !/3 (% of !/$) 1sub+section ( ) of2 o(itted by the Securities =aws (A(end(ent) Act, %00$, w0e0f0 %+ 0+%00$0 / Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec 3, w0r0e0f0 %+ 0+%00$ & <rior to its substitution section %# read as under ,1%#0 G!ri#dicti$n t$ trF $ffence# !nder thi# Act&-Eo court inferior to that of a presidency (agistrate or a (agistrate of the first class shall ta)e cogniFance of or try any offence punishable under this Act02 > O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JEo court inferior to that of a Court of Session shall try any offence punishable under this Act .K ! I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
" # Kords
/4Co(
A$$e%l % - Re+i!io . "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt. "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel% $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io !. "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< 6: /(99A4(<A Title to -i+i-e -!. "7. ( ) It shall be lawful for the holder of any security whose na(e appears on the boo)s of the co(pany issuing the said security to recei'e and retain any di'idend declared by the co(pany in respect thereof for any year, notwithstanding that the said security has already been transferred by hi( for consideration, unless the transferee who clai(s the di'idend fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the co(pany with the co(pany for being registered in his na(e within fifteen days of the date on which the di'idend beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the di'idend3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security and other docu(ents relating to
the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a co(pany to pay any di'idend which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the co(pany as the holder of the security in respect of which the di'idend has beco(e due3 or (b) the right of the transferee of any security to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security in the na(e of the transferee0 %04Ri(ht to re'ei+e i 'o.e fro. 'olle'ti+e i +e!t.e t !'he.e. "7A. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, whose na(e appears on the boo)s of the collecti'e in'est(ent sche(e issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e declared by the collecti'e in'est(ent sche(e in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e fro( the transfer or has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the collecti'e in'est(ent sche(e with the collecti'e in'est(ent sche(e for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the collecti'e in'est(ent sche(e beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%0 Inserted by the Securities =aws (A(end(ent) Act, !!!, Sec >, w0e0f0 %%+%+%0000 7arlier clause (d) was o(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the collecti'e in'est(ent sche(e3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a collecti'e in'est(ent sche(e to pay any inco(e fro( units or other instru(ents issued by the collecti'e in'est(ent sche(e which has beco(e due to any person whose na(e is for the ti(e being registered in the boo)s of the collecti'e in'est(ent sche(e as the holder of the security being
units or other instru(ents issued by the collecti'e in'est(ent sche(e in respect of which the inco(e in respect of units or other instru(ents issued by the collecti'e sche(e has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the collecti'e in'est(ent sche(e, to enforce against the transferor or any other person his rights, if any, in relation to the transfer in any case where the co(pany has refused to register the transfer of the security being units or other instru(ents issued by the collecti'e in'est(ent sche(e in the na(e of the transferee0: % 4Ri(ht to re'ei+e i 'o.e fro. .*t*%l f* -. "7;. ( ) It shall be lawful for the holder of any securities, being units or other instru(ents issued by any (utual fund, whose na(e appears on the boo)s of the (utual fund issuing the said security to recei'e and retain any inco(e in respect of units or other instru(ents issued by the (utual fund declared by the (utual fund in respect thereof for any year, notwithstanding that the said security, being units or other instru(ents issued by the (utual fund, has already been transferred by hi( for consideration, unless the transferee who clai(s the inco(e in respect of units or other instru(ents issued by the (utual fund fro( the transferor has lodged the security and all other docu(ents relating to the transfer which (ay be re*uired by the (utual fund with the (utual fund for being registered in his na(e within fifteen days of the date on which the inco(e in respect of units or other instru(ents issued by the (utual fund beca(e due0 ()%lanati$n&-.he period specified in this section shall be extended%
Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec $, w0r0e0f0 %+ 0+%00$0
(i) in case of death of the transferee, by the actual period ta)en by his legal representati'e to establish his clai( to the inco(e in respect of units or other instru(ent issued by the (utual fund3 (ii) in case of loss of the transfer deed by theft or any other cause beyond the control of transferee, by the actual period ta)en for the replace(ent thereof3 and (iii) in case of delay in the lodging of any security, being units or other instru(ents issued by the (utual fund, and other docu(ents relating to the transfer due to causes connected with the post, by the actual period of the delay0 (%) Eothing contained in sub+section ( ) shall affect(a) the right of a (utual fund to pay any inco(e fro( units or other instru(ents issued by the (utual fund which has beco(e due to any person, whose na(e is for the ti(e being registered in the boo)s of the (utual fund as the holder of the security being units or other instru(ents issued by the (utual fund in respect of which the inco(e in respect of units or other instru(ents issued by the (utual fund has beco(e due3 or (b) the right of transferee of any security, being units or other instru(ents issued by the (utual fund, to enforce against the transferor or any other person, his rights, if any, in relation to the transfer in any case where the (utual fund has refused to register the transfer of the security being units or other instru(ents issued by the (utual fund in the na(e of the transferee0:
1""5A't
ot to %$$l> i 'ert%i '%!e!. ":. ( ) .he pro'isions of this Act shall not apply to(a) the &o'ern(ent, the Reser'e 8an) of India, any local authority or any corporation set up by a special law or any person who has effected any transaction with or through the agency of any such authority as is referred to in this clause3 (b) any con'ertible bond or share warrant or any option or right in relation thereto, in so far as it entitles the person in whose fa'our any of the foregoing has been issued to obtain at his option fro( the co(pany or other body corporate, issuing the sa(e or fro( any of its shareholders or duly appointed agentsJ shares of the co(pany or other body corporate, whether by con'ersion of the bond or warrant or otherwise, on the basis of the price agreed upon when the sa(e was issued0 (%) Kithout preDudice to the pro'isions contained in sub+section ( ), if the Central &o'ern(ent %3 is satisfied that in the interests of trade and co((erce or the
%% Substituted by Securities Contracts (Regulation) A(end(ent Act, !"! (Act Eo0 $! of !"!), Sec 3, w0e0f0 0>+ %+ !"!0
econo(ic de'elop(ent of the country it is necessary or expedient so to do, it (ay, by notification in the Cfficial &aFette, specify any class of contracts as contracts to which this Act or any pro'ision contained therein shall not apply, and also the conditions, li(itations or restrictions, if any, subDect to which it shall not so apply0: 4rote'tio of %'tio t%6e i (oo- f%ith. "9. Eo suit, prosecution or other legal proceeding whatsoe'er shall lie in any court against the go'erning body or any (e(ber, office bearer or ser'ant of any recognised stoc) exchange or against any person or persons appointed under subsection ( ) of section for anything which is in good faith done or intended to be done in pursuance of this Act or of any rules or bye+laws (ade thereunder0 %$44o/er to -ele(%te. "9A. .he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers (except the power under section 30) exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India or the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)0: 4o/er to .%6e r*le!. )=. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for the purpose of carrying into effect the obDects of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for,(a) the (anner in which applications (ay be (ade, the particulars which they should contain and the le'y of a fee in respect of such applications 3 (b) the (anner in which any in*uiry for the purpose of recognising any stoc) exchange (ay be (ade, the conditions which (ay be i(posed for the grant of such recognition, including conditions as to the ad(ission of (e(bers if the
%3 <owers are exercisable by S78I also vide S0 C0 #/% (7), 9ated 3+0!+ !!$, published in the &aFette of India, 7xtra0, <t0 II, Section 3 (ii), 9ated 3+0!+ !!$0 %$ Inserted by Securities and 7xchange 8oard of India Act, !!%, Sec 33 and Schedule, <t II, w0r0e0f0 30+0 + !!% and Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec !, w0e0f0 %%+0%+%0000 <rior to its substitution, section %!A read as under , 1%!A0 8$.er t$ delegate&*.he Central &o'ern(ent (ay, by order published in the Cfficial &aFette, direct that the powers exercisable by it under any pro'ision of this Act shall, in relation to such (atters and subDect to such conditions, if any, as (ay be specified in the order, be exercisable also by the Securities and 7xchange 8oard of India02
stoc) exchange concerned is to be the only recognised stoc) exchange in the area3 and the for( in which such recognition shall be granted3 (c) the particulars which should be contained in the periodical returns and annual reports to be furnished to the Central &o'ern(ent3 (d) the docu(ents which should be (aintained and preser'ed under section # and the periods for which they should be preser'ed3 (e) the (anner in which any in*uiry by the go'erning body of a stoc) exchange shall be (ade under section #3 (f) the (anner in which the bye+laws to be (ade or a(ended under this Act shall before being so (ade or a(ended be published for criticis(3 (g) the (anner in which applications (ay be (ade by dealers in securities for licences under section /, the fee payable in respect thereof and the period of such licences, the conditions subDect to which licences (ay be granted, including conditions relating to the for(s which (ay be used in (a)ing contracts, the docu(ents to be (aintained by licensed dealers and the furnishing of periodical infor(ation to such authority as (ay be specified and the re'ocation of licences for breach of conditions3 %"4(h) the re*uire(ents which shall be co(plied with(A) by public co(panies for the purpose of getting their securities listed on any stoc) exchange3 (B) by collecti'e in'est(ent sche(e for the purpose of getting their units listed on any stoc) exchange3: %#4GGG: %/4(ha) the grounds on which the securities of a co(pany (ay be delisted fro( any recognised stoc) exchange under sub+section ( ) of section % A3 (hb) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under sub+section (%) of section % A and the fees payable in respect of such appeal3 (hc) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3
%" Substituted by the Securities =aws (A(end(ent) Act, !!!, Sec 0, w0e0f0 %%+0%+%0000 <rior to its substitution, clause (h) read as under , 1(h) the re*uire(ents which shall be co(plied with by public co(panies for the purpose of getting their securities listed on any stoc) exchange32 %# .he word ;and; o(itted by .he Securities Contracts (Regulation) A(end(ent Act, !>", Sec $, w0e0f0 /+0 + !>#0 %/ Substituted for clause (ha) by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 7arlier clause (ha), as a(ended by the Securities =aws (A(end(ent) Act, !!!, read as
under ,1(ha) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %%A and the fees payable in respect of such appeal3 and2
(hd) the (anner of in*uiry under sub+section ( ) of section %3+I3 (he) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3= and the fees payable in respect of such appeal3: (i) any other (atter which is to be or (ay be prescribed0 %>4(3) 7'ery rule (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule0: 1"954o/er of Se'*ritie! % - E#'h% (e ;o%r- of I -i% to .%6e re(*l%tio !. )1. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the Securities and 7xchange 8oard of India (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 305(%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,%> Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec ", w0r0e0f0 %+ 0+%00$0 <rior to its substitution, sub+section (3), as a(ended by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!", read as under , 1(3) 7'ery rule (ade under this section shall, as soon as (ay be, after its publication in the Cfficial &aFette, be laid before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e session aforesaid, both Iouses agree in (a)ing any (odification in the rule or both Iouses agree that the rule should not be (ade, the rule shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule02 %! Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec #, w0r0e0f0 %+ 0+%00$0 7arlier it was repealed by the Repealing and A(ending Act, !#0, Sec % and 6irst Sch0 w0e0f0 %>+ %+ !#00 30 Substituted by the Securities Contracts (Regulation) A(end(ent Act, %00/, Sec ", w0e0f0 %>+ 0"+%00/0 <rior to substitution it read as under , 1(%) In particular and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for the (anner in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section02
(a) the (anner, in which at least fifty+one per cent of e*uity share capital of a recognised stoc) exchange is held within twel'e (onths fro( the date of
publication of the order under sub+section (/) of section $8 by the public other than the shareholders ha'ing trading rights under sub+section (>) of that section3 (b) the eligibility criteria and other re*uire(ents under section /A0 < (3) 7'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the regulation or both Iouses agree that the regulation should not be (ade, the regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that regulation0:
DE4OSITORIES ACT, 1998 SECTIONS /@A81(0 : 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS ). Certificate of co((ence(ent of business by depositories /@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS 3. Agree(ent between depository and participant 5. Ser'ices of depository 8. Surrender of certificate of security 7. Registration of transfer of securities with depositories :. Cptions to recei'e security certificate or hold securities with depository 9. Securities in depositories to be in fungible for( 1=. Rights of depositories and beneficial owner 11. Register of beneficial owner 1". <ledge or hypothecation of securities held in a depository 1). 6urnishing of infor(ation and records by depository and issuer 13. Cption to opt out in respect of any security 15. Act > of >! to apply to depositories 18. 9epositories to inde(nify loss in certain cases 17. Rights and obligations of depositories, etc0 /@A81(0 :: EN9UIRM AND INS4ECTION 1:. <ower of 8oard to call for infor(ation and en*uiry 19. <ower of 8oard to gi'e directions in certain cases 19A. <enalty for failure to furnish infor(ation, return, etc0 19;. <enalty for failure to enter into an agree(ent 19C. <enalty for failure to redress in'estorsJ grie'ances
19D. <enalty for delay in de(aterialisation or issue of certificate of securities 19E. <enalty for failure to reconcile records 192. <enalty for failure to co(ply with directions issued by 8oard under section ! of the Act 19G. <enalty for contra'ention where no separate penalty has been pro'ided 19D. <ower to adDudicate 190I. 6actors to be ta)en into account by adDudicating officer 190IA. Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (! 190I;. Re'o+er> of %.o* t! 190E. Crediting su(s realised by way of penalties to Consolidated 6und of India /@A81(0 D 4ENALTM "=. Cffences "1. Cffences by co(panies /@A81(0 D: @ISCELLANEOUS "". CogniFance of offences by courts ""A. Co(position of certain offences "";. <ower to grant i((unity ""C. E!t%,li!h.e t of S$e'i%l Co*rt! ""D. Offe 'e! tri%,le ,> S$e'i%l Co*rt! ""E. A$$e%l % - re+i!io ""2. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""G. Tr% !itio %l 4ro+i!io ! "). Appeals ")A. Appeal to Securities Appellate .ribunal ")A. Appeal to Securities Appellate .ribunal ");. <rocedure and powers of Securities Appellate .ribunal ")C. Right to =egal Representation ")D. =i(itation ")E. Ci'il court not to ha'e Durisdiction ")2. Appeal to Supre(e Court "3. <ower of Central &o'ern(ent to (a)e rules "5. <ower of 8oard to (a)e regulations "8. <ower of depositories to (a)e bye+laws "7. Rules and regulations to be laid before <arlia(ent ":. Application of other laws not barred "9. Re(o'al of difficulties )=. A(end(ents to certain enact(ents )1. Repeal and sa'ing /@(5A9( A?7E9?7E. .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0: DE4OSITORIES ACT, 1998 5"" O2 1998< 51=th A*(*!t, 1998< An Act to provide $or reg lation o$ depositories in sec rities and $or matters connected there%ith or incidental thereto& B( it enacted bF 8arlia"ent in the E$rtF7#eventh ;ear $f the 0e%!blic $f :ndia a# f$ll$.# ,*
/@A81(0 : 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the 9epositories Act, !!#0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the %0th day of Septe(ber, !!"0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 1beneficial owner2 (eans a person whose na(e is recorded as such with a depository3 (b) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 3 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (c) 1bye+laws2 (eans bye+laws (ade by a depository under section %#3 (d) 1Co(pany =aw 8oard2 (eans the 8oard of Co(pany =aw Ad(inistration constituted under section 07 of the Co(panies Act, !"# ( of !"#)3 (e) 1depository2 (eans a co(pany for(ed and registered under the Co(panies Act, !"# ( of !"#), and which has been granted a certificate of registration under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (f) 1issuer2 (eans any person (a)ing an issue of securities3 (g) 1participant2 (eans a person registered as such under sub+section ( A) of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3 (h) 1prescribed2 (eans prescribed by rules (ade under this Act3 (i) 1record2 includes the records (aintained in the for( of boo)s or stored in a co(puter or in such other for( as (ay be deter(ined by regulations3 (j) 1registered owner2 (eans a depository whose na(e is entered as such in the register of the issuer3 (k) 1regulations2 (eans the regulations (ade by the 8oard3 4(ka) 1Securities Appellate .ribunal2 (eans a Securities Appellate .ribunal established under sub+section ( ) of section "@ of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%)3: (l) 1security2 (eans such security as (ay be specified by the 8oard3 (") 1ser'ice2 (eans any ser'ice connected with recording of allot(ent of securities or transfer of ownership of securities in the record of a depository0 (%) Kords and expressions used herein and not defined but defined in the Co(panies Act, !"# ( of !"#), or the Securities Contracts (Regulation) Act, !"# ($% of !"#), or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), shall ha'e the (eanings respecti'ely assigned to the( in those Acts0 /@A81(0 :: CERTI2ICATE O2 CO@@ENCE@ENT O2 ;USINESS Certifi'%te of 'o..e 'e.e t of ,*!i e!! ,> -e$o!itorie!. ). ( ) Eo depository shall act as a depository unless it obtains a certificate of co((ence(ent of business fro( the 8oard0 (%) A certificate granted under sub+section ( ) shall be in such for( as (ay be specified by the regulations0 (3) .he 8oard shall not grant a certificate under sub+section ( ) unless it is satisfied that the depository has ade*uate syste(s and safeguards to pre'ent (anipulation of records and transactions , 4ro+i-e- that no certificate shall be refused under this section unless the depository concerned has been gi'en a reasonable opportunity of being heard0
Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec 3, w0e0f0 #+ %+ !!!0
/@A81(0 ::: RIGDTS AND O;LIGATIONS O2 DE4OSITORIES, 4ARTICI4ANTS, ISSUERS AND ;ENE2ICIAL O?NERS A(ree.e t ,et/ee -e$o!itor> % - $%rti'i$% t. 3. ( ) A depository shall enter into an agree(ent with one or (ore participants as its agent0 (%) 7'ery agree(ent under sub+section ( ) shall be in such for( as (ay be specified by the bye+laws0 Ser+i'e! of -e$o!itor>. 5. Any person, through a participant, (ay enter into an agree(ent, in such for( as (ay be specified by the bye+laws, with any depository for a'ailing its ser'ices0 S*rre -er of 'ertifi'%te of !e'*rit>. 8. ( ) Any person who has entered into an agree(ent under section " shall surrender the certificate of security, for which he see)s to a'ail the ser'ices of a depository, to the issuer in such (anner as (ay be specified by the regulations0 (%) .he issuer, on receipt of certificate of security under sub+section ( ), shall cancel the certificate of security and substitute in its records the na(e of the depository as a registered owner in respect of that security and infor( the depository accordingly0 (3) A depository shall, on receipt of infor(ation under sub+section (%), enter the na(e of the person referred to in sub+section ( ) in its records, as the beneficial owner0 Re(i!tr%tio of tr% !fer of !e'*ritie! /ith -e$o!itor>. 7. ( ) 7'ery depository shall, on receipt of inti(ation fro( a participant, register the transfer of security in the na(e of the transferee0 (%) If a beneficial owner or a transferee of any security see)s to ha'e custody of such security the depository shall infor( the issuer accordingly0 O$tio ! to re'ei+e !e'*rit> 'ertifi'%te or hol- !e'*ritie! /ith -e$o!itor>. :. ( ) 7'ery person subscribing to securities offered by an issuer shall ha'e the option either to recei'e the security certificates or hold securities with a depository0 (%) Khere a person opts to hold a security with a depository, the issuer shall inti(ate such depository the details of allot(ent of the security, and on receipt of such infor(ation the depository shall enter in its records the na(e of the allottee as the beneficial owner of that security0 Se'*ritie! i -e$o!itorie! to ,e i f* (i,le for.. 9. ( ) All securities held by a depository shall be de(aterialised and shall be in a fungible for(0 %4(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#), shall apply to a depository in respect of securities held by it on behalf of the beneficial owners&: Ri(ht! of -e$o!itorie! % - ,e efi'i%l o/ er. 1=. ( ) Eotwithstanding anything contained in any other law for the ti(e being in force, a depository shall be dee(ed to be the registered owner for the purposes of effecting transfer of ownership of security on behalf of a beneficial owner0 (%) Sa'e as otherwise pro'ided in sub+section ( ), the depository as a registered owner shall not ha'e any 'oting rights or any other rights in respect of securities held by it0 (3) .he beneficial owner shall be entitled to all the rights and benefits and be subDected to all the liabilities in respect of his securities held by a depository0 Re(i!ter of ,e efi'i%l o/ er. 11. 7'ery depository shall (aintain a register and an index of beneficial owners in the
(anner pro'ided in sections "0, " and "% of the Co(panies Act, !"# ( of !"#)0 4le-(e or h>$othe'%tio of !e'*ritie! hel- i % -e$o!itor>. 1". ( ) SubDect to such regulations and bye+laws, as (ay be (ade in this behalf, a beneficial owner (ay with the pre'ious appro'al of the depository create a pledge or hypothecation in respect of a security owned by hi( through a depository0 (%) 7'ery beneficial owner shall gi'e inti(ation of such pledge or hypothecation to the depository and such depository shall thereupon (a)e entries in its records accordingly0 (3) Any entry in the records of a depository under sub+section (%) shall be e'idence of a pledge or hypothecation0 2*r i!hi ( of i for.%tio % - re'or-! ,> -e$o!itor> % - i!!*er. 1). ( ) 7'ery depository shall furnish to the issuer infor(ation about the transfer of securities in the na(e of beneficial owners at such inter'als and in such (anner as (ay be specified by the bye+laws0 (%) 7'ery issuer shall (a)e a'ailable to the depository copies of the rele'ant records in respect of securities held by such depository0 O$tio to o$t o*t i re!$e't of % > !e'*rit>.
% Substituted
by the 9epositories Related =aws (A(end(ent) Act, !!/, Sec %%, w0e0f0 "+0 + !!/0 <rior to its substitution sub+section (%) read as under , 1(%) Eothing contained in sections "3, "3A, "38, >/8, >/C and 3/% of the Co(panies Act, !"# ( of !"#) shall apply to the securities held by a depository on behalf of the beneficial owners02
13. ( ) If a beneficial owner see)s to opt out of a depository in respect of any security he shall infor( the depository accordingly0 (%) .he depository shall on receipt of inti(ation under sub+section ( ) (a)e appropriate entries in its records and shall infor( the issuer0 (3) 7'ery issuer shall, within thirty days of the receipt of inti(ation fro( the depository and on fulfil(ent of such conditions and on pay(ent of such fees as (ay be specified by the regulations, issue the certificate of securities to the beneficial owner or the transferee, as the case (ay be0 A't 1: of 1:91 to %$$l> to -e$o!itorie!. 15. .he 8an)ersJ 8oo)s 7'idence Act, >! shall apply in relation to a depository as if it were a ban) as defined in section % of that Act0 De$o!itorie! to i -e. if> lo!! i 'ert%i '%!e!. 18. ( ) Kithout preDudice to the pro'isions of any other law for the ti(e being in force, any loss caused to the beneficial owner due to the negligence of the depository or the participant, the depository shall inde(nify such beneficial owner0 (%) Khere the loss due to the negligence of the participant under sub+section ( ) is inde(nified by the depository, the depository shall ha'e the right to reco'er the sa(e fro( such participant0 Ri(ht! % - o,li(%tio ! of -e$o!itorie!, et'. 17. ( ) SubDect to the pro'isions of this Act, the rights and obligations of the depositories, participants and the issuers whose securities are dealt with by a depository shall be specified by the regulations0 (%) .he eligibility criteria for ad(ission of securities into the depository shall be specified by the regulations0 /@A81(0 :D EN9UIRM AND INS4ECTION 4o/er of ;o%r- to '%ll for i for.%tio % - e 7*ir>. 1:. ( ) .he 8oard, on being satisfied that it is necessary in the public interest or in the interest of in'estors so to do, (ay, by order in writing,-
(a) call upon any issuer, depository, participant or beneficial owner to furnish in writing such infor(ation relating to the securities held in a depository as it (ay re*uire3 or (b) authorise any person to (a)e an en*uiry or inspection in relation to the affairs of the issuer, beneficial owner, depository or participant, who shall sub(it a report of such en*uiry or inspection to it within such period as (ay be specified in the order0 (%) 7'ery director, (anager, partner, secretary, officer or e(ployee of the depository or issuer or the participant or beneficial owner shall on de(and produce before the person (a)ing the en*uiry or inspection all infor(ation or such records and other docu(ents in his custody ha'ing a bearing on the subDect+(atter of such en*uiry or inspection0 4o/er of ;o%r- to (i+e -ire'tio ! i 'ert%i '%!e!. 19. Sa'e as pro'ided in this Act, if after (a)ing or causing to be (ade an en*uiry or inspection, the 8oard is satisfied that it is necessary(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any depository or participant being conducted in the (anner detri(ental to the interests of in'estors or securities (ar)et, it (ay issue such directions,(a) to any depository or participant or any person associated with the securities (ar)et3 or (b) to any issuer, as (ay be appropriate in the interest of in'estors or the securities (ar)et0 )5E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< $44e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 19A. Any person, who is re*uired under this Act or any rules or regulations or bye+laws (ade thereunder,(a) to furnish any infor(ation, docu(ent, boo)s, returns or report to the 8oard, fails to furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for each such failure3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations or bye+laws, fails to file return or furnish the sa(e within the ti(e specified therefor, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0
3I $ Inserted
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the Securities =aws (A(end(ent) Act, %00$, Sec0 /, w0r0e0f0 %+ 0+%00$0
4e %lt> for f%il*re to e ter i to % %(ree.e t. 19;. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), and is re*uired under this Act or any rules or regulations (ade thereunder, to enter into an agree(ent, fails to enter into such agree(ent, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less for e'ery such failure0
4e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 19C. If any depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of the in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such depository or participant or issuer or its agents or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for -el%> i -e.%teri%li!%tio or i!!*e of 'ertifi'%te of !e'*ritie!. 19D. If any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to de(aterialise or issue the certificate of securities on opting out of a depository by the in'estors, within the ti(e specified under this Act or regulations or bye+laws (ade thereunder or abets in delaying the process of de(aterialisation or issue the certificate of securities on opting out of a depository of securities, such issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to re'o 'ile re'or-!. 19E. If a depository or participant or any issuer or its agent or any person, who is registered as an inter(ediary under the pro'isions of section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), fails to reconcile the records of de(aterialised securities with all the securities issued by the issuer as specified in the regulations, such depository or participant or issuer or its agent or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for f%il*re to 'o.$l> /ith -ire'tio ! i!!*e- ,> ;o%r- * -er !e'tio 19 of the A't. 192. If any person fails to co(ply with the directions issued by the 8oard under section !, within the ti(e specified by it, he shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0 4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 19G. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations or bye+laws (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0 4o/er to %-G*-i'%te. 19D. ( ) 6or the purpose of adDudging under sections !A, !8, !C, !9, !7, !6 and !&, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief of the Securities and 7xchange 8oard of India to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry, the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent, which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the
sections specified in sub+section ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> %-G*-i'%ti ( offi'er. 190I. Khile adDudging the *uantu( of penalty under section !I, the adDudicating officer shall ha'e due regard to the following factors, na(ely,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 55 Settle.e t of A-.i i!tr%ti+e Ci+il 4ro'ee-i (!. 190IA. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 19, !e'tio 19D, %! the '%!e .%> ,e, .%> file % %$$li'%tio i /riti ( to the ;o%r$ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e-ef%*lt!. (") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h
"I
!erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199". ()) 2or the $*r$o!e of !ettle.e t * -er thi! !e'tio , the $ro'e-*re !$e'ifie- ,> the ;o%r* -er the Se'*ritie! % - E#'h% (e ;o%r- of I -i% A't, 199" !h%ll %$$l>. (3) No %$$e%l !h%ll lie * -er !e'tio ")A %(%i !t % > or-er $%!!e- ,> the ;o%r- or the %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio .< 85 Re'o+er> of %.o* t!. 190I;. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % -ire'tio of -i!(or(e.e t or-er i!!*e- * -er Se'tio 19 or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifie- for. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.e0t%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6
%''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hilor !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C!
#I
!erte- ,> The Se'*ritie! L%/! (A.e- .e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
.o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't. "#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio ")A of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 19, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e! of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% ! % > offi'er of the ;o%r- /ho .%> ,e %*thori!e-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 19E. All su(s realiFed by way of penalties under this Act shall be credited to the Consolidated 6und of India0: /@A81(0 D 4ENALTM /4Offe 'e!. "=. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations or bye+laws (ade thereunder, he shall be punishable with i(prison(ent for a ter( which (ay extend to ten years, or with fine, which (ay extend to twenty+fi'e crore rupees, or with both0
/ Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 >, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %0 read as under,1%00 <ffence#0- Khoe'er contran'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or any regulations or bye+laws (ade thereunder shall be punishable with i(prison(ent for a ter( which (ay extend to fi'e years, or with fine or with both02
(%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to ten years, or with
fine, which (ay extend to twenty+fi'e crore rupees, or with both0: Offe 'e! ,> 'o.$% ie!. "1. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly , 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n&-6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and (b) 1director2, in relation to a fir(, (eans a partner in the fir(0 /@A81(0 D: @ISCELLANEOUS >4Co( iL% 'e of offe 'e! ,> 'o*rt!. "". ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the Central
> Substituted
by the Securities =aws (A(end(ent) Act, %00$, Sec0 !, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, section %% read as under,1%%0 /$gniCance $f $ffence# bF c$!rt#&*( ) Eo Court shall ta)e cogniFance of any offence punishable under this Act or any regulations or bye+laws (ade thereunder, sa'e on a co(plaint (ade by the 8oard0 (%) Eo court inferior to that of a ?etropolitan ?agistrate or a Dudicial ?agistrate of the first class shall try any offence punishable under this Act02
&o'ern(ent or State &o'ern(ent or the Securities and 7xchange 8oard of India or by any person0 !5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < Co.$o!itio of 'ert%i offe 'e!. ""A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "";. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any
penalty under this Act with respect to the alleged 'iolation , 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity , 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0 (%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0: 1=5 E!t%,li!h.e t of S$e'i%l Co*rt!. ""C. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>.
! <rior
to o(ission, Sub+section(%) read 1Eo court inferior to that of a Court of Session shall try any offence punishable under this Act02 0 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
(") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt!. ""D. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-. A$$e%l % - Re+i!io ""E. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt ""2. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197).
(") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erioof ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! ""G. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< A$$e%l!. "). ( ) Any person aggrie'ed by an order of the 8oard (ade 4before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!: under this Act, or the regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor , 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0 (3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed , 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 %4A$$e%l to Se'*ritie! A$$ell%te Tri,* %l. ")A. ( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!, under this Act, or the regulations (ade thereunder, 34or by an order (ade by an adDudicating officer under this Act: (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 $5(") O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). < (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 8oard is recei'ed by the person referred to in sub+section ( ) and it shall be in such for( and be acco(panied by such fee as (ay be prescribed ,
Substituted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 $, w0e0f0 #+ %+ !!! for ;an order of the 8oard (ade;0 % Sections %3A to %36 inserted by the Securities =aws (Second A(end(ent) Act, !!! , Sec0 ", w0e0f0 #+ %+ !!!& 3 Inserted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %0, w0r0e0f0 %+ 0+%00$0 $ 4rior to o.i!!io , S*,0!e'tio (") re%- %! * -er& JNo %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-e ,> the ;o%r- /ith the 'o !e t of the $%rtie!.K
4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0
($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0 (") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 8oard and parties to the appeal0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of Se'*ritie! A$$ell%te Tri,* %l. ");. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purpose of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3 (e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte; (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte; and (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0) and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 Ri(ht to le(%l re$re!e t%tio . ")C. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of sub+section ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or an attorney of any Iigh Court, and
includes a pleader in practice0 Li.it%tio . ")D. .he pro'isions of the =i(itation Act, !#3 (3# of !#3) shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 Ci+il 'o*rt ot to h%+e G*ri!-i'tio . ")E. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which a Securities Appellate .ribunal is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "4A$$e%l to S*$re.e Co*rt. ")2. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order ,
" Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 % , w0r0e0f0 %+ 0+%00$0 <rior to its substitution, Section %36, as inserted by Securities =aws (Second A(end(ent) Act, !!!, w0e0f0 #+ %+ !!!, read as under,1%360 A%%eal t$ @igh /$!rt&-Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, 4ro+i-e- that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0:: 4o/er of Ce tr%l Go+er .e t to .%6e r*le!. "3. ( ) .he Central &o'ern(ent (ay, by notification in the Cfficial &aFette, (a)e rules for carrying out the pro'isions of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,164(a) the (anner of in*uiry under sub+section ( ) of section !I3 (aa) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %33: (b) the for( in which an appeal (ay be preferred under sub+section (3) of section %3 and the fees payable in respect of such appeal 3 (c) the procedure for disposing of an appeal under sub+section ($) of section %33 /4(d) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section %3A and the fees payable in respect of such appeal0: 4o/er of ;o%r- to .%6e re(*l%tio !. "5. ( ) Kithout preDudice to the pro'isions contained in section 30 of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), the 8oard (ay, by notification in the Cfficial &aFette, (a)e regulations consistent with the pro'isions of this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for(a) the for( in which record is to be (aintained under clause ( i) of sub+section ( ) of section %3 (b) the for( in which the certificate of co((ence(ent of business shall be issued under
sub+section (%) of section 33 (c) the (anner in which the certificate of security shall be surrendered under sub+section ( ) of section #3 (d) the (anner of creating a pledge or hypothecation in respect of security owned by a beneficial owner under sub+section ( ) of section %3 (e) the conditions and the fees payable with respect to the issue of certificate of securities under sub+section (3) of section $3
# Substituted by the Securities =aws (A(end(ent) Act, %00$, Sec0 %%, w0r0e0f0 %+ 0+%00$0 <rior to its substitution, clause (a) read as under,1(a) the ti(e within which an appeal (ay be preferred under sub+section ( ) of section %332 / Inserted by the Securities =aws (Second A(end(ent) Act, !!!, Sec0 #, w0e0f0 #+ %+ !!!0
(f) the rights and obligations of the depositories, participants and the issuers under subsection ( ) of section /3 (g) the eligibility criteria for ad(ission of securities into the depository under sub+section (%) of section /0 4o/er of -e$o!itorie! to .%6e ,>e0l%/!. "8. ( ) A depository shall, with the pre'ious appro'al of the 8oard, (a)e bye+laws consistent with the pro'isions of this Act and the regulations0 (%) In particular, and without preDudice to the generality of the foregoing power, such byelaws shall pro'ide for(a) the eligibility criteria for ad(ission and re(o'al of securities in the depository3 (b) the conditions subDect to which the securities shall be dealt with3 (c) the eligibility criteria for ad(ission of any person as a participant3 (d) the (anner and procedure for de(aterialisation of securities3 (e) the procedure for transactions within the depository3 (f) the (anner in which securities shall be dealt with or withdrawn fro( a depository3 (g) the procedure for ensuring safeguards to protect the interests of participants and beneficial owners3 (h) the conditions of ad(ission into and withdrawal fro( a participant by a beneficial owner3 (i) the procedure for con'eying infor(ation to the participants and beneficial owners on di'idend declaration, shareholder (eetings and other (atters of interest to the beneficial owners3 (j) the (anner of distribution of di'idends, interest and (onetary benefits recei'ed fro( the co(pany a(ong beneficial owners3 (k) the (anner of creating pledge or hypothecation in respect of securities held with a depository3 (l) inter #e rights and obligations a(ong the depository, issuer, participants, and beneficial owners3 (") the (anner and the periodicity of furnishing infor(ation to the 8oard, issuer and other persons3 (n) the procedure for resol'ing disputes in'ol'ing depository, issuer, co(pany or a beneficial owner3 ($) the procedure for proceeding against the participant co((itting breach of the regulations and pro'isions for suspension and expulsion of participants fro( the depository and cancellation of agree(ents entered with the depository3 (%) the internal control standards including procedure for auditing, re'iewing and (onitoring0
(3) Khere the 8oard considers it expedient so to do, it (ay, by order in writing, direct a depository to (a)e any bye+laws or to a(end or re'o)e any bye+laws already (ade within such period as it (ay specify in this behalf0 ($) If the depository fails or neglects to co(ply with such order within the specified period, the 8oard (ay (a)e the bye+laws or a(end or re'o)e the bye+laws (ade either in the for( specified in the order or with such (odifications thereof as the 8oard thin)s fit0 R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t. "7. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. ":. .he pro'isions of this Act shall be in addition to, and not in derogation of, any other law for the ti(e being in force relating to the holding and transfer of securities0 Re.o+%l of -iffi'*ltie!. "9. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as appear to it to be necessary or expedient for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of a period of two years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 A.e -.e t! to 'ert%i e %'t.e t!. )=. 40e%ealed bF 0e%ealing H A"ending Act' 20010: Re$e%l % - !%+i (. )1. ( ) .he 9epositories (.hird) Crdinance, !!# (Crd0 %> of !!#), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 /@(5A9( 4 ee section 30: A?7E9?7E.S .C C7R.AIE 7EAC.?7E.S 40e%ealed bF 0e%ealing H A"ending Act' 2001 0:
SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 SECTIONS !'APT"R I 4RELI@INARM 1. Short title, extent and co((ence(ent ". 9efinitions !'APT"R II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA
). 7stablish(ent and incorporation of 8oard 3. ?anage(ent of the 8oard 5. .er( of office and conditions of ser'ice of Chair(an and (e(bers of the 8oard 8. Re(o'al of (e(ber fro( office 7. ?eetings 7A. ?e(ber not to participate in (eetings in certain cases :. Bacancies, etc0, not to in'alidate proceedings of 8oard 9. Cfficers and e(ployees of the 8oard !'APT"R III TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD 1=. .ransfer of assets, liabilities, etc0, of existing Securities and 7xchange 8oard to the 8oard !'APT"R IV 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 11. 6unctions of 8oard 11A. 8oard to regulate or prohibit issue of prospectus, offer docu(ent or ad'ertise(ent soliciting (oney for issue of securities 11AA. Collecti'e in'est(ent sche(e 11;. <ower to issue directions 11C. In'estigation 11D. Cease and desist proceedings !'APT"R V REGISTRATION CERTI2ICATE 1". Registration of stoc) bro)ers, sub+bro)ers, share transfer agents, etc0
%
!'APT"R VA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 1"A. <rohibition of (anipulati'e and decepti'e de'ices, insider trading and substantial ac*uisition of securities or control !'APT"R VI 2INANCE, ACCOUNTS AND AUDIT 1). &rants by the Central &o'ern(ent 13. 6und 15. Accounts and audit !'APT"R VIA 4ENALTIES AND ADEUDICATION 15A. <enalty for failure to furnish infor(ation, return, etc & 15;. <enalty for failure by any person to enter into agree(ent with clients 15C. <enalty for failure to redress in'estorsJ grie'ances 15D. <enalty for certain defaults in case of (utual funds 15E. <enalty for failure to obser'e rules and regulations by an asset (anage(ent co(pany 152. <enalty for default in case of stoc) bro)ers 15G. <enalty for insider trading 15D. <enalty for non+disclosure of ac*uisition of shares and ta)eo'ers 15DA. <enalty for fraudulent and unfair trade practices 15D;. <enalty for contra'ention where no separate penalty has been pro'ided
150I. <ower to adDudicate 15E. 6actors to be ta)en into account by the AdDudicating Cfficer 15EA. Crediting su(s realised by way of penalties to Consolidated 6und of India 15E;. Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (! !'APT"R VIB ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL 15F. 7stablish(ent of Securities Appellate .ribunals 15L. Co(position of Securities Appellate .ribunal 15@. Qualification for appoint(ent as <residing Cfficer or ?e(ber of Securities Appellate .ribunal
3
15N. .enure of office of <residing Cfficer and other (e(bers of Securities Appellate .ribunal 150O. Salary and allowances and other ter(s and conditions of ser'ice of <residing Cfficers 154. 6illing up of 'acancies 159. Resignation and re(o'al 15R. Crders constituting Appellate .ribunal to be final and not to in'alidate its proceedings 15S. Staff of the Securities Appellate .ribunal 15T. Appeal to the Securities Appellate .ribunal 15U. <rocedure and powers of the Securities Appellate .ribunal 15I. Right to legal representation 15?. =i(itation 15A. <residing Cfficer, (e(bers and staff of Securities Appellate .ribunals to be public ser'ants 15M. Ci'il Court not to ha'e Durisdiction 15N. Appeal to Supre(e Court !'APT"R VII @ISCELLANEOUS 18. <ower of Central &o'ern(ent to issue directions 17. <ower of Central &o'ern(ent to supersede the 8oard 1:. Returns and reports 19. 9elegation "=. Appeals "=A. 8ar of Durisdiction "1. Sa'ings "". ?e(bers, officers and e(ployees of the 8oard to be public ser'ants "). <rotection of action ta)en in good faith "3. Cffences "3A. Co(position of certain offences "3;. <ower to grant i((unity "5. 7xe(ption fro( tax on wealth and inco(e "8. CogniFance of offences by Courts "8A. E!t%,li!h.e t of S$e'i%l Co*rt! "8;. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8C. A$$e%l % - re+i!io "8D. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8E. Tr% !itio %l 4ro+i!io ! "7. Cffences by co(panies
":. 4C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!":
$
":A. Re'o+er> of %.o* t! "9. <ower to (a)e rules )=. <ower to (a)e regulations )1. Rules and regulations to be laid before <arlia(ent )". Application of other laws not barred )). 4Repealed by Repealing R A(ending Act, %00 : )3. <ower to re(o'e difficulties )5. Repeal and sa'ing .I7 SCI79H=7 4Repealed by Repealing R A(ending Act, %00 : SECURITIES AND EACDANGE ;OARD O2 INDIA ACT, 199" 515 O2 199"< 53th A$ril, 199"< A A't to $ro+i-e for the e!t%,li!h.e t of % ;o%r- to $rote't the i tere!t! of i +e!tor! i !e'*ritie! % - to $ro.ote the -e+elo$.e t of, % - to re(*l%te, the !e'*ritie! .%r6et % - for .%tter! 'o e'te- there/ith or i 'i-e t%l thereto B( it enacted bF 8arlia"ent in the E$rtF7third ;ear $f the 0e%!blic $f :ndia a# f$ll$.# , CDA4TER I 4RELI@INARM Short title, e#te t % - 'o..e 'e.e t. 1. ( ) .his Act (ay be called the Securities and 7xchange 8oard of India Act, !!%0 (%) It extends to the whole of India0 (3) It shall be dee(ed to ha'e co(e into force on the 30th day of Manuary, !!%0 Defi itio !. ". ( ) In this Act, unless the context otherwise re*uires,(a) 18oard2 (eans the Securities and 7xchange 8oard of India established under section 33 (b) 1Chair(an2 (eans the Chair(an of the 8oard3 4(ba) 1collecti'e in'est(ent sche(e2 (eans any sche(e or arrange(ent which satisfies the conditions specified in section AA3: (c) 1existing Securities and 7xchange 8oard2 (eans the Securities and 7xchange 8oard of India constituted under the Resolution of the &o'ern(ent of India in the 9epart(ent of 7cono(ic Affairs Eo0 ($$) S7L>#, dated the %th day of April, !>>3 (d) 16und2 (eans the 6und constituted under section $3 (e) 1(e(ber2 (eans a (e(ber of the 8oard and includes the Chair(an3 (f) 1notification2 (eans a notification published in the Cfficial &aFette3 (g) 1prescribed2 (eans prescribed by rules (ade under this Act3
Inserted by the Securities =aws (A(end(ent) Act, !!!, w0e0f0 %%+%+%0000
"
(h) 1regulations2 (eans the regulations (ade by the 8oard under this Act3 4(ha) 1Reser'e 8an)2 (eans the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act, !3$ (% of !3$)3: (i) 1securities2 has the (eaning assigned to it in section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#)0 %4(%) Kords and expressions used and not defined in this Act but defined in the Securities Contracts (Regulation) Act, !"# ($% of !"#) 34or the 9epositories Act, !!#:, shall ha'e the (eanings respecti'ely assigned to the( in that Act:0 CDA4TER II ESTA;LISD@ENT O2 TDE SECURITIES AND EACDANGE ;OARD O2 INDIA E!t%,li!h.e t % - i 'or$or%tio of ;o%r-.
). ( ) Kith effect fro( such date as the Central &o'ern(ent (ay, by notification, appoint, there shall be established, for the purposes of this Act, a 8oard by the na(e of the Securities and 7xchange 8oard of India0 (%) .he 8oard shall be a body corporate by the na(e aforesaid, ha'ing perpetual succession and a co((on seal, with power subDect to the pro'isions of this Act, to ac*uire, hold and dispose of property, both (o'able and i((o'able, and to contract, and shall, by the said na(e, sue or be sued0 (3) .he head office of the 8oard shall be at 8o(bay0 ($) .he 8oard (ay establish offices at other places in India0 @% %(e.e t of the ;o%r-. 3. ( ) .he 8oard shall consist of the following (e(bers, na(ely,(a) a Chair(an3 (b) two (e(bers fro( a(ongst the officials of the $4?inistry: of the Central &o'ern(ent dealing with 6inance "4and ad(inistration of the Co(panies Act, !"# ( of !"#):3 (c) one (e(ber fro( a(ongst the officials of #4the Reser'e 8an):3 /4(d) fi'e other (e(bers of who( at least three shall be the whole+ti(e (e(bers,: to be appointed by the Central &o'ern(ent0
Inserted by the Securities =aws (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+0 + !!"0 <rior to its substitution, sub+section (%) reads as under, 1(%) Kords and expressions used and not defined in this Act but defined in the Capital Issues (Control) Act, !$/ or the Securities Contracts Regulation Act, !"# shall ha'e the sa(e (eanings respecti'ely assigned to the( in those Acts02 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 $ Substituted for 1?inistries2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1and law2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1the Reser'e 8an) of India constituted under section 3 of the Reser'e 8an) of India Act !3$ (% of !3$)2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 / Substituted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, clause (d) read as, 1(d) two other (e(bers20
% Substituted
#
(%) .he general superintendence, direction and (anage(ent of the affairs of the 8oard shall 'est in a 8oard of (e(bers, which (ay exercise all powers and do all acts and things which (ay be exercised or done by the 8oard0 (3) Sa'e as otherwise deter(ined by regulations, the Chair(an shall also ha'e powers of general superintendence and direction of the affairs of the 8oard and (ay also exercise all powers and do all acts and things which (ay be exercised or done by that 8oard0 ($) .he Chair(an and (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be appointed by the Central &o'ern(ent and the (e(bers referred to in clauses ( b) and (c) of that sub+section shall be no(inated by the Central &o'ern(ent and the 4Reser'e 8an): respecti'ely0 (") .he Chair(an and the other (e(bers referred to in clauses ( a) and (d) of sub+section ( ) shall be persons of ability, integrity and standing who ha'e shown capacity in dealing with proble(s relating to securities (ar)et or ha'e special )nowledge or experience of law, finance, econo(ics, accountancy, ad(inistration or in any other discipline which, in the opinion of the Central &o'ern(ent, shall be useful to the 8oard0 Ter. of offi'e % - 'o -itio ! of !er+i'e of Ch%ir.% % - .e.,er! of the ;o%r-. 5. ( ) .he ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers referred to in clause (d) of sub+section ( ) of section $ shall be such as (ay be prescribed0 (%) Eotwithstanding anything contained in sub+section ( ), the Central &o'ern(ent shall ha'e the right to ter(inate the ser'ices of the Chair(an or a (e(ber appointed under clause ( d) of
sub+section ( ) of section $, at any ti(e before the expiry of the period prescribed under subsection ( ), by gi'ing hi( notice of not less than three (onths in writing or three (onthsJ salary and allowances in lieu thereof, and the Chair(an or a (e(ber, as the case (ay be, shall also ha'e the right to relin*uish his office, at any ti(e before the expiry of the period prescribed under sub+section ( ), by gi'ing to the Central &o'ern(ent notice of not less than three (onths in writing0 Re.o+%l of .e.,er fro. offi'e. 8. %4G G G: .he Central &o'ern(ent shall re(o'e a (e(ber fro( office if he(a) is, or at any ti(e has been, adDudicated as insol'ent3 (b) is of unsound (ind and stands so declared by a co(petent court3 (c) has been con'icted of an offence which, in the opinion of the Central &o'ern(ent, in'ol'es a (oral turpitude3 (d) 34G G G: (e) has, in the opinion of the Central &o'ern(ent, so abused his position as to render his continuation in office detri(ental to the public interest , 4ro+i-e- that no (e(ber shall be re(o'ed under this clause unless he has been gi'en a reasonable opportunity of being heard in the (atter0
Substituted for 1Reser'e 8an) of India2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 )2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 C(itted, by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to o(ission clause (d) read read as, 1(d) is appointed as a director of a co(pany20
% 1(
/
@eeti (!. 7. ( ) .he 8oard shall (eet at such ti(es and places, and shall obser'e such rules of procedure in regard to the transaction of business at its (eetings (including *uoru( at such (eetings) as (ay be pro'ided by regulations0 (%) .he Chair(an or, if for any reason, he is unable to attend a (eeting of the 8oard, any other (e(ber chosen by the (e(bers present fro( a(ongst the(sel'es at the (eeting shall preside at the (eeting0 (3) All *uestions which co(e up before any (eeting of the 8oard shall be decided by a (aDority 'otes of the (e(bers present and 'oting, and, in the e'ent of an e*uality of 'otes, the Chair(an, or in his absence, the person presiding, shall ha'e a second or casting 'ote0 4@e.,er ot to $%rti'i$%te i .eeti (! i 'ert%i '%!e!. 7A. Any (e(ber, who is a director of a co(pany and who as such director has any direct or indirect pecuniary interest in any (atter co(ing up for consideration at a (eeting of the 8oard, shall, as soon as possible after rele'ant circu(stances ha'e co(e to his )nowledge, disclose the nature of his interest at such (eeting and such disclosure shall be recorded in the proceedings of the 8oard, and the (e(ber shall not ta)e any part in any deliberation or decision of the 8oard with respect to that (atter0: I%'% 'ie!, et'., ot to i +%li-%te $ro'ee-i (! of ;o%r-. :. Eo act or proceeding of the 8oard shall be in'alid (erely by reason of(a) any 'acancy in, or any defect in the constitution of, the 8oard3 or (b) any defect in the appoint(ent of a person acting as a (e(ber of the 8oard3 or (c) any irregularity in the procedure of the 8oard not affecting the (erits of the case0 Offi'er! % - e.$lo>ee! of the ;o%r-. 9. ( ) .he 8oard (ay appoint such other officers and e(ployees as it considers necessary for the efficient discharge of its functions under this Act0 (%) .he ter( and other conditions of ser'ice of officers and e(ployees of the 8oard appointed under sub+section ( ) shall be such as (ay be deter(ined by regulations0 CDA4TER III
TRANS2ER O2 ASSETS, LIA;ILITIES, ETC., O2 TDE EAISTING SECURITIES AND EACDANGE ;OARD TO TDE ;OARD Tr% !fer of %!!et!, li%,ilitie!, et'., of e#i!ti ( Se'*ritie! % - E#'h% (e ;o%r- to the ;o%r-. 1=. ( ) Cn and fro( the date of establish(ent of the 8oard,(a) any reference to the existing Securities and 7xchange 8oard in any law other than this Act or in any contract or other instru(ent shall be dee(ed as a reference to the 8oard3 (b) all properties and assets, (o'able and i((o'able, of, or belonging to, the existing Securities and 7xchange 8oard, shall 'est in the 8oard3
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
>
(c) all rights and liabilities of the existing Securities and 7xchange 8oard shall be transferred to, and be the rights and liabilities of, the 8oard3 (d) without preDudice to the pro'isions of clause (c), all debts, obligations and liabilities incurred, all contracts entered into and all (atters and things engaged to be done by, with or for the existing Securities and 7xchange 8oard i((ediately before that date, for or in connection with the purpose of the said existing 8oard shall be dee(ed to ha'e been incurred, entered into, or engaged to be done by, with or for, the 8oard3 (e) all su(s of (oney due to the existing Securities and 7xchange 8oard i((ediately before that date shall be dee(ed to be due to the 8oard3 (f) all suits and other legal proceedings instituted or which could ha'e been instituted by or against the existing Securities and 7xchange 8oard i((ediately before that date (ay be continued or (ay be instituted by or against the 8oard3 and (g) e'ery e(ployee holding any office under the existing Securities and 7xchange 8oard i((ediately before that date shall hold his office in the 8oard by the sa(e tenure and upon the sa(e ter(s and conditions of ser'ice as respects re(uneration, lea'e, pro'ident fund, retire(ent and other ter(inal benefits as he would ha'e held such office if the 8oard had not been established and shall continue to do so as an e(ployee of the 8oard or until the expiry of the period of six (onths fro( that date if such e(ployee opts not to be the e(ployee of the 8oard within such period0 (%) Eotwithstanding anything contained in the Industrial 9isputes Act, !$/ ( $ of !$/), or in any other law for the ti(e being in force, absorption of any e(ployee by the 8oard in its regular ser'ice under this section shall not entitle such e(ployee to any co(pensation under that Act or other law and no such clai( shall be entertained by any court, tribunal or other authority0 CDA4TER II 4O?ERS AND 2UNCTIONS O2 TDE ;OARD 2* 'tio ! of ;o%r-. 11. ( ) SubDect to the pro'isions of this Act, it shall be the duty of the 8oard to protect the interests of in'estors in securities and to pro(ote the de'elop(ent of, and to regulate the securities (ar)et, by such (easures as it thin)s fit0 (%) Kithout preDudice to the generality of the foregoing pro'isions, the (easures referred to therein (ay pro'ide for(a) regulating the business in stoc) exchanges and any other securities (ar)ets3 (b) registering and regulating the wor)ing of stoc) bro)ers, sub+bro)ers, share transfer agents, ban)ers to an issue, trustees of trust deeds, registrars to an issue, (erchant ban)ers, underwriters, portfolio (anagers, in'est(ent ad'isers and such other inter(ediaries who (ay be associated with securities (ar)ets in any (anner3 4(ba) registering and regulating the wor)ing of the depositories, %4participants:, custodians of securities, foreign institutional in'estors, credit rating agencies and such other inter(ediaries as the 8oard (ay, by notification, specify in this behalf3: (c) registering and regulating the wor)ing of 4'enture capital funds and collecti'e
in'est(ent sche(es:, including (utual funds3
% Inserted
Inserted by Securities =aws (A(end(ent) Act !!", w0r0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+!+ !!"0
!
(d) pro(oting and regulating self+regulatory organisations3 (e) prohibiting fraudulent and unfair trade practices relating to securities (ar)ets3 (f) pro(oting in'estorsJ education and training of inter(ediaries of securities (ar)ets3 (g) prohibiting insider trading in securities3 (h) regulating substantial ac*uisition of shares and ta)e o'er of co(panies3 (i) calling for infor(ation fro(, underta)ing inspection, conducting in*uiries and audits of the %4stoc) exchanges, (utual funds, other persons associated with the securities (ar)et:, inter(ediaries and self+regulatory organisations in the securities (ar)et3 34(ia) '%lli ( for i for.%tio % - re'or-! fro. % > $er!o i 'l*-i ( % > ,% 6 or % > other %*thorit> or ,o%r- or 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l or St%te A't /hi'h, i the o$i io of the ;o%r-, !h%ll ,e rele+% t to % > i +e!ti(%tio or i 7*ir> ,> the ;o%r- i re!$e't of % > tr% !%'tio i !e'*ritie! 3: $5(i,) '%lli ( for i for.%tio fro., or f*r i!hi ( i for.%tio to, other %*thoritie!, /hether i I -i% or o*t!i-e I -i%, h%+i ( f* 'tio ! !i.il%r to tho!e of the ;o%r-, i the .%tter! rel%ti ( to the $re+e tio or -ete'tio of +iol%tio ! i re!$e't of !e'*ritie! l%/!, !*,Ge't to the $ro+i!io ! of other l%/! for the ti.e ,ei ( i for'e i thi! re(%r-& 4ro+i-e- th%t the ;o%r-, for the $*r$o!e of f*r i!hi ( % > i for.%tio to % > %*thorit> o*t!i-e I -i%, .%> e ter i to % %rr% (e.e t or %(ree.e t or * -er!t% -i ( /ith !*'h %*thorit> /ith the $rior %$$ro+%l of the Ce tr%l Go+er .e tH< (j) perfor(ing such functions and exercising such powers under the pro'isions of "4G G G: the Securities Contracts (Regulation) Act, !"# ($% of !"#), as (ay be delegated to it by the Central &o'ern(ent3 (k) le'ying fees or other charges for carrying out the purposes of this section3 (l) conducting research for the abo'e purposes3 #4(la) calling fro( or furnishing to any such agencies, as (ay be specified by the 8oard, such infor(ation as (ay be considered necessary by it for the efficient discharge of its functions3: (") perfor(ing such other functions as (ay be prescribed0 /4(%A) Kithout preDudice to the pro'isions contained in sub+section (%), the 8oard (ay ta)e (easures to underta)e inspection of any boo), or register, or other docu(ent or record of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard
Substituted for 1collecti'e in'est(ent sche(es2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % Substituted for 1stoc) exchanges and2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 3 S*,!tit*te- for J'%lli ( for i for.%tio % - re'or- fro. % > ,% 6 or % > other %*thorit> or ,o%ror 'or$or%tio e!t%,li!he- or 'o !tit*te- ,> or * -er % > Ce tr%l, St%te or 4ro+i 'i%l A't i re!$e't of % > tr% !%'tio i !e'*ritie! /hi'h i! * -er i +e!ti(%tio or i 7*ir> ,> the ;o%r-K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). E%rlier Se'tio 11(")(i%) /%! i !erte- ,> the SE;I (A.e -.e t) A't, "==" /.e.f. "901=0"=="0 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. =80=)0 199:) " .he words 1the Capital Issues (Control) Act, !$/ (%! of !$/) and2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
0
has reasonable grounds to belie'e that such co(pany has been indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et0: 4(3) Eotwithstanding anything contained in any other law for the ti(e being in force while exercising the powers under %4clause (i) or clause (ia) of sub+section (%) or sub+ section (2A):, the 8oard shall ha'e the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(i) the disco'ery and production of boo)s of account and other docu(ents, at such place and such ti(e as (ay be specified by the 8oard3 (ii) su((oning and enforcing the attendance of persons and exa(ining the( on oath3 (iii) inspection of any boo)s, registers and other docu(ents of any person referred to in section %, at any place3: 34(iv) inspection of any boo), or register, or other docu(ent or record of the co(pany referred to in sub+section (%A)3 (v) issuing co((issions for the exa(ination of witnesses or docu(ents0: $4($) Kithout preDudice to the pro'isions contained in sub+sections ( ), (%), (%A) and (3) and section 8, the 8oard (ay, by an order, for reasons to be recorded in writing, in the interests of in'estors or securities (ar)et, ta)e any of the following (easures, either pending in'estigation or in*uiry or on co(pletion of such in'estigation or in*uiry, na(ely,(a) suspend the trading of any security in a recognised stoc) exchange3 (b) restrain persons fro( accessing the securities (ar)et and prohibit any person associated with securities (ar)et to buy, sell or deal in securities3 (c) suspend any office+bearer of any stoc) exchange or self+regulatory organisation fro( holding such position3 (d) i(pound and retain the proceeds or securities in respect of any transaction which is under in'estigation3 (e) attach, after passing of an order on an application (ade for appro'al by the Mudicial ?agistrate of the first class ha'ing Durisdiction, for a period not exceeding one (onth, one or (ore ban) account or accounts of any inter(ediary or any person associated with the securities (ar)et in any (anner in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder , 4ro+i-e- that only the ban) account or accounts or any transaction entered therein, so far as it relates to the proceeds actually in'ol'ed in 'iolation of any of the pro'isions of this Act, or the rules or the regulations (ade thereunder shall be allowed to be attached3 (f) direct any inter(ediary or any person associated with the securities (ar)et in any (anner not to dispose of or alienate an asset for(ing part of any transaction which is under in'estigation , 4ro+i-e- that the 8oard (ay, without preDudice to the pro'isions contained in sub+section (%) or sub+section (%A), ta)e any of the (easures specified in clause ( d) or clause (e) or clause (f), in respect of any listed public co(pany or a public co(pany (not being inter(ediaries referred to in section %) which intends to get its securities listed on any recognised stoc) exchange where the 8oard has reasonable grounds to belie'e that such co(pany has been
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1clause (i) of sub+section (%)2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 3 Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0 $ Inserted by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%0
% Substituted
indulging in insider trading or fraudulent and unfair trade practices relating to securities (ar)et , 4ro+i-e- f*rther that the 8oard shall, either before or after passing such orders, gi'e an
opportunity of hearing to such inter(ediaries or persons concerned0: 15(5) The %.o* t -i!(or(e-, $*r!*% t to % -ire'tio i!!*e- * -er !e'tio 11; or !e'tio 1"A of the Se'*ritie! Co tr%'t! (Re(*l%tio ) A't, 1958 or !e'tio 19 of the De$o!itorie! A't, 1998, %! the '%!e .%> ,e, !h%ll ,e 're-ite- to the I +e!tor 4rote'tio % - E-*'%tio 2* e!t%,li!he- ,> the ;o%r- % - !*'h %.o* t !h%ll ,e *tiliLe- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< %4;o%r- to re(*l%te or $rohi,it i!!*e of $ro!$e't*!, offer -o'*.e t or %-+erti!e.e t !oli'iti ( .o e> for i!!*e of !e'*ritie!. 11A. ( ) Kithout preDudice to the pro'isions of the Co(panies Act, !"# ( of !"#), the 8oard (ay, for the protection of in'estors,(a) specify, by regulations(i) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (ii) the (anner in which such (atters shall be disclosed by the co(panies3 (b) by general or special orders(i) prohibit any co(pany fro( issuing prospectus, any offer docu(ent, or ad'ertise(ent soliciting (oney fro( the public for the issue of securities3 (ii) specify the conditions subDect to which the prospectus, such offer docu(ent or ad'ertise(ent, if not prohibited, (ay be issued0 (%) Kithout preDudice to the pro'isions of section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#), the 8oard (ay specify the re*uire(ents for listing and transfer of securities and other (atters incidental thereto0: 34Colle'ti+e i +e!t.e t !'he.e. 11AA. ( ) Any sche(e or arrange(ent which satisfies the conditions referred to in subsection (%) $5or !*,0!e'tio ("A)< shall be a collecti'e in'est(ent sche(e0 "44ro+i-e- th%t % > $ooli ( of f* -! * -er % > !'he.e or %rr% (e.e t, /hi'h i! ot re(i!tere- /ith the ;o%r- or i! ot 'o+ere- * -er !*,0!e'tio ()), i +ol+i ( %
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 7arlier S0 A was inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" for S0 A0 <rior to its substitution, S0 A read as under,+ 1 A0 ?atters to be disclosed by the co(panies0+ Kithout <reDudice to the <ro'isions of the Co(panies Act , !"# ( of !"#), the board (ay , for the protection of in'estors, specify, by regulations,+ (a) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto3 and (b) the (anner in which such (atters, shall be disclosed by the co(panies02 3 Inserted by S78I (A(end(ent) Act !!!, w0e0f0 %%+%+%0000 $I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% Substituted
%
'or$*! %.o* t of o e h* -re- 'rore r*$ee! or .ore !h%ll ,e -ee.e- to ,e % 'olle'ti+e i +e!t.e t !'he.e.< (%) Any sche(e or arrange(ent (ade or offered by any 5$er!o < under which,(i) the contributions, or pay(ents (ade by the in'estors, by whate'er na(e called, are pooled and utiliFed for the purposes of the sche(e or arrange(ent3 (ii) the contributions or pay(ents are (ade to such sche(e or arrange(ent by the in'estors with a 'iew to recei'e profits, inco(e, produce or property, whether (o'able or i((o'able, fro( such sche(e or arrange(ent3 (iii) the property, contribution or in'est(ent for(ing part of sche(e or arrange(ent, whether identifiable or not, is (anaged on behalf of the in'estors3
(iv) the in'estors do not ha'e day+to+day control o'er the (anage(ent and operation of the sche(e or arrange(ent0 "5("A)< A > !'he.e or %rr% (e.e t .%-e or offere- ,> % > $er!o !%ti!f>i ( the 'o -itio ! %! .%> ,e !$e'ifie- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't.< (3) Eotwithstanding anything contained in sub+section (%) 35or !*,0!e'tio ("A)<, any sche(e or arrange(ent(i) (ade or offered by a co+operati'e society registered under the Co+operati'e Societies Act, ! % (% of ! %) or a society being a society registered or dee(ed to be registered under any law relating to co+operati'e societies for the ti(e being in force in any State3 (ii) under which deposits are accepted by non+ban)ing financial co(panies as defined in clause (f) of section $"+I of the Reser'e 8an) of India Act, !3$ (% of !3$)3 (iii) being a contract of insurance to which the Insurance Act, !3> ($ of !3>), applies3 (iv) pro'iding for any Sche(e, <ension Sche(e or the Insurance Sche(e fra(ed under the 7(ployees <ro'ident 6und and ?iscellaneous <ro'isions Act, !"% ( ! of !"%)3 (v) under which deposits are accepted under section ">A of the Co(panies Act, !"# ( of !"#)3 (vi) under which deposits are accepted by a co(pany declared as a Eidhi or a (utual benefit society under section #%0A of the Co(panies Act, !"# ( of !"#)3 (vii) falling within the (eaning of Chit business as defined in clause ( d) of section % of the Chit 6und Act, !>% ($0 of !>%)3 (viii) under which contributions (ade are in the nature of subscription to a (utual fund3 35(i#) !*'h other !'he.e or %rr% (e.e t /hi'h the Ce tr%l Go+er .e t .%>, i 'o !*lt%tio /ith the ;o%r-, otif>H< shall not be a collecti'e in'est(ent sche(e0: "54o/er to i!!*e -ire'tio !. 11;. Sa'e as otherwise pro'ided in section , if after (a)ing or causing to be (ade an en*uiry, the 8oard is satisfied that it is necessary,S*,!tit*te- for J'o.$% >K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) 3I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0
%I
3
(i) in the interest of in'estors, or orderly de'elop(ent of securities (ar)et3 or (ii) to pre'ent the affairs of any inter(ediary or other persons referred to in section % being conducted in a (anner detri(ental to the interest of in'estors or securities (ar)et3 or (iii) to secure the proper (anage(ent of any such inter(ediary or person, it (ay issue such directions,(a) to any person or class of persons referred to in section %, or associated with the securities (ar)et3 or (b) to any co(pany in respect of (atters specified in section A, as (ay be appropriate in the interests of in'estors in securities and the securities (ar)et0: 15E#$l% %tio 0 2or the re.o+%l of -o*,t!, it i! here,> -e'l%re- th%t the $o/er to i!!*e -ire'tio ! * -er thi! !e'tio !h%ll i 'l*-e % - %l/%>! ,e -ee.e- to h%+e ,ee i 'l*-e- the $o/er to -ire't % > $er!o , /ho .%-e $rofit or %+erte- lo!! ,> i -*l(i ( i % > tr% !%'tio or %'ti+it> i 'o tr%+e tio of the $ro+i!io ! of thi! A't or re(*l%tio ! .%-e there* -er, to -i!(or(e % %.o* t e7*i+%le t to the /ro (f*l (%i .%-e or lo!! %+erte- ,> !*'h 'o tr%+e tio .< %4I +e!ti(%tio . 11C. ( ) Khere the 8oard has reasonable ground to belie'e that-
(a) the transactions in securities are being dealt with in a (anner detri(ental to the in'estors or the securities (ar)et3 or (b) any inter(ediary or any person associated with the securities (ar)et has 'iolated any of the pro'isions of this Act or the rules or the regulations (ade or directions issued by the 8oard thereunder, it (ay, at any ti(e by order in writing, direct any person (hereafter in this section referred to as the In'estigating Authority) specified in the order to in'estigate the affairs of such inter(ediary or persons associated with the securities (ar)et and to report thereon to the 8oard0 (%) Kithout preDudice to the pro'isions of sections %3" to %$ of the Co(panies Act, !"# ( of !"#), it shall be the duty of e'ery (anager, (anaging director, officer and other e(ployee of the co(pany and e'ery inter(ediary referred to in section % or e'ery person associated with the securities (ar)et to preser'e and to produce to the In'estigating Authority or any person authorised by it in this behalf, all the boo)s, registers, other docu(ents and record of, or relating to, the co(pany or, as the case (ay be, of or relating to, the inter(ediary or such person, which are in their custody or power0 (3) .he In'estigating Authority (ay re*uire any inter(ediary or any person associated with securities (ar)et in any (anner to furnish such infor(ation to, or produce such boo)s, or registers, or other docu(ents, or record before hi( or any person authorised by it in this behalf as it (ay consider necessary if the furnishing of such infor(ation or the production of such boo)s, or registers, or other docu(ents, or record is rele'ant or necessary for the purposes of its in'estigation0 ($) .he In'estigating Authority (ay )eep in its custody any boo)s, registers, other docu(ents and record produced under sub+section (%) or sub+section (3) for six (onths and thereafter
% Inserted
I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) by S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
$
shall return the sa(e to any inter(ediary or any person associated with securities (ar)et by who( or on whose behalf the boo)s, registers, other docu(ents and record are produced , 4ro+i-e- that the In'estigating Authority (ay call for any boo), register, other docu(ent and record if they are needed again , 4ro+i-e- f*rther that if the person on whose behalf the boo)s, registers, other docu(ents and record are produced re*uires certified copies of the boo)s, registers, other docu(ents and record produced before the In'estigating Authority, it shall gi'e certified copies of such boo)s, registers, other docu(ents and record to such person or on whose behalf the boo)s, registers, other docu(ents and record were produced0 (") Any person, directed to (a)e an in'estigation under sub+section ( ), (ay exa(ine on oath, any (anager, (anaging director, officer and other e(ployee of any inter(ediary or any person associated with securities (ar)et in any (anner, in relation to the affairs of his business and (ay ad(inister an oath accordingly and for that purpose (ay re*uire any of those persons to appear before it personally0 (#) If any person fails without reasonable cause or refuses(a) to produce to the In'estigating Authority or any person authorised by it in this behalf any boo), register, other docu(ent and record which is his duty under sub+section (%) or sub+section (3) to produce3 or (b) to furnish any infor(ation which is his duty under sub+section (3) to furnish3 or (c) to appear before the In'estigating Authority personally when re*uired to do so under sub+section (") or to answer any *uestion which is put to hi( by the In'estigating Authority in pursuance of that sub+section3 or (d) to sign the notes of any exa(ination referred to in sub+section (/), he shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with
fine, which (ay extend to one crore rupees, or with both, and also with a further fine which (ay extend to fi'e la)h rupees for e'ery day after the first during which the failure or refusal continues0 (/) Eotes of any exa(ination under sub+section (") shall be ta)en down in writing and shall be read o'er to, or by, and signed by, the person exa(ined, and (ay thereafter be used in e'idence against hi(0 4(:) ?here i the 'o*r!e of % i +e!ti(%tio , the I +e!ti(%ti ( A*thorit> h%! re%!o to ,elie+e th%t % > $er!o or e ter$ri!e, %! the '%!e .%> ,e, to /ho. % oti'e * -er !*,!e'tio ()) h%! ,ee i!!*e- or .i(ht ,e i!!*e-, 0 (%) h%! o.itte- or f%ile- to $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! %! re7*irei the oti'eH or (,) /o*l- ot $ro+i-e the i for.%tio or $ro-*'e -o'*.e t! /hi'h !h%ll ,e *!ef*l for, or rele+% t to, the i +e!ti(%tio H or (') /o*l- -e!tro>, .*til%te, %lter, f%l!if> or !e'rete the i for.%tio or -o'*.e t! *!ef*l for, or rele+% t to, the i +e!ti(%tio ,
S*,!tit*te- for JKhere in the course of in'estigation, the In'estigating Authority has reasonable ground to belie'e that the boo)s, registers, other docu(ents and record of, or relating to, any inter(ediary or any person associated with securities (ar)et in any (anner, (ay be destroyed, (utilated, altered, falsified or secreted, the In'estigating Authority (ay (a)e an application to the Mudicial ?agistrate of the first class ha'ing Durisdiction for an order for the seiFure of such boo)s, registers, other docu(ents and record K ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
"
the , the Ch%ir.% .%>, %fter ,ei ( !%ti!fie- th%t it i! e'e!!%r> to -o !o, %*thoriLe the I +e!ti(%ti ( A*thorit> or % > other offi'er of the ;o%r- (the offi'er !o %*thoriLe- i %ll '%!e! ,ei ( herei %fter referre- to %! the %*thori!e- offi'er), to0 (i) e ter % - !e%r'h, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft /here !*'h i for.%tio or -o'*.e t! %re e#$e'te- or ,elie+e- to ,e 6e$tH (ii) ,re%6 o$e the lo'6 of % > -oor, ,o#, lo'6er, !%fe, %l.ir%h or other re'e$t%'le for e#er'i!i ( the $o/er! 'o ferre- ,> !*,0'l%*!e (i), /here the 6e>! thereof %re ot %+%il%,leH (iii) !e%r'h % > $er!o /ho h%! (ot o*t of, or i! %,o*t to (et i to, or i! i , the ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft, if the %*thoriLe- offi'er h%! re%!o to !*!$e't th%t !*'h $er!o h%! !e'rete- %,o*t hi! $er!o % > !*'h ,oo6! of %''o* t or other -o'*.e t!H (i+) re7*ire % > $er!o /ho i! fo* - to ,e i $o!!e!!io or 'o trol of % > ,oo6! of %''o* t or other -o'*.e t!, .%i t%i e- i the for. of ele'tro i' re'or-, to $ro+i-e the %*thori!e- offi'er the e'e!!%r> f%'ilit> to i !$e't !*'h ,oo6! of %''o* t or other -o'*.e t!. "#planation0 2or the $*r$o!e of thi! !*,0'l%*!e, the e#$re!!io Jele'tro i' re'or-K !h%ll h%+e the .e% i ( %!!i( e- to it i 'l%*!e (t) of !*,0!e'tio (1) of !e'tio " of the I for.%tio Te'h olo(> A't, "===. (+) !eiLe % > !*'h ,oo6! of %''o* t or other -o'*.e t! fo* - %! % re!*lt of !*'h !e%r'hH (+i) $l%'e .%r6! of i-e tifi'%tio o % > ,oo6! of %''o* t or other -o'*.e t! or .%6e or '%*!e to ,e .%-e e#tr%'t! or 'o$ie! therefro.H (+ii) re'or- o o%th the !t%te.e t of % > $er!o /ho i! fo* - to ,e i $o!!e!!io or i 'o trol of the i for.%tio or -o'*.e t! referre- to i !*,0'l%*!e! (i), (iii) % - (i+).< 4(9) The ;o%r- .%> .%6e re(*l%tio ! i rel%tio to % > !e%r'h or !eiL*re * -er thi! !e'tio H % - i $%rti'*l%r, /itho*t $reG*-i'e to the (e er%lit> of the fore(oi ( $o/er, !*'h re(*l%tio ! .%> $ro+i-e for the $ro'e-*re to ,e follo/e- ,> the %*thori!e- offi'er0
(%) for o,t%i i ( i (re!! i to % > ,*il-i (, $l%'e, +e!!el, +ehi'le or %ir'r%ft to ,e !e%r'he- /here free i (re!! thereto i! ot %+%il%,leH
1 S*,!tit*te-
,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) for the follo/i (& JAfter 'o !i-eri ( the %$$li'%tio % - he%ri ( the I +e!ti(%ti ( A*thorit>, if e'e!!%r>, the @%(i!tr%te .%>, ,> or-er, %*thori!e the I +e!ti(%ti ( A*thorit>O (a) to e ter, /ith !*'h %!!i!t% 'e, %! .%> ,e re7*ire-, the $l%'e or $l%'e! /here !*'h ,oo6!, re(i!ter!, other -o'*.e t! % - re'or- %re 6e$tH (b) to !e%r'h th%t $l%'e or tho!e $l%'e! i the .% er !$e'ifie- i the or-erH % (c) to !eiLe ,oo6!, re(i!ter!, other -o'*.e t! % - re'or-, it 'o !i-er! e'e!!%r> for the $*r$o!e! of the i +e!ti(%tio & 4ro+i-e- th%t the @%(i!tr%te !h%ll ot %*thori!e !eiL*re of ,oo6!, re(i!ter!, other -o'*.e t! % re'or-, of % > li!te- $*,li' 'o.$% > or % $*,li' 'o.$% > ( ot ,ei ( the i ter.e-i%rie! !$e'ifie* -er !e'tio 1") /hi'h i te -! to (et it! !e'*ritie! li!te- o % > re'o( i!e- !to'6 e#'h% (e * le!! !*'h 'o.$% > i -*l(e! i i !i-er tr%-i ( or .%r6et .% i$*l%tio .K
#
(,) for e !*ri ( !%fe '*!to-> of % > ,oo6! of %''o* t or other -o'*.e t! or %!!et! !eiLe-.< ( 0) .he In'estigating Authority shall )eep in its custody the boo)s, registers, other docu(ents and record seiFed under this section for such period not later than the conclusion of the in'estigation as it considers necessary and thereafter shall return the sa(e to the co(pany or the other body corporate, or, as the case (ay be, to the (anaging director or the (anager or any other person, fro( whose custody or power they were seiFed 5***<, 4ro+i-e- that the In'estigating Authority (ay, before returning such boo)s, registers, other docu(ents and record as aforesaid, place identification (ar)s on the( or any part thereof0 ( ) Sa'e as otherwise pro'ided in this section, e'ery search or seiFure (ade under this section shall be carried out in accordance with the pro'isions of the Code of Cri(inal <rocedure, !/3 (% of !/$) relating to searches or seiFures (ade under that Code0 Ce%!e % - -e!i!t $ro'ee-i (!. 11D. If the 8oard finds, after causing an in*uiry to be (ade, that any person has 'iolated, or is li)ely to 'iolate, any pro'isions of this Act, or any rules or regulations (ade thereunder, it (ay pass an order re*uiring such person to cease and desist fro( co((itting or causing such 'iolation, 4ro+i-e- that the 8oard shall not pass such order in respect of any listed public co(pany or a public co(pany (other than the inter(ediaries specified under section %) which intends to get its securities listed on any recognised stoc) exchange unless the 8oard has reasonable grounds to belie'e that such co(pany has indulged in insider trading or (ar)et (anipulation0: CDA4TER I REGISTRATION CERTI2ICATE Re(i!tr%tio of !to'6 ,ro6er!, !*,0,ro6er!, !h%re tr% !fer %(e t!, et'. 1". ( ) Eo stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et shall buy, sell or deal in securities except under, and in accordance with, the conditions of a certificate of registration obtained fro( the 8oard in accordance with the %4regulations: (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a stoc) bro)er, sub+bro)er, share transfer agent, ban)er to an issue, trustee of trust deed, registrar to an issue, (erchant ban)er, underwriter, portfolio (anager, in'est(ent ad'iser and such other inter(ediary who (ay be associated with securities (ar)et i((ediately before the establish(ent of the 8oard for which no registration certificate was
necessary prior to such establish(ent, (ay continue to do so for a period of three (onths fro( such establish(ent or, if he has (ade an application for such registration within the said period of three (onths, till the disposal of such application,
The /or-! P% - i for. the @%(i!tr%te of !*'h ret*r P, o.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) % Substituted for 1rules2 by Securities =aw (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0
/
44ro+i-e- f*rther that any certificate of registration, obtained i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", shall be dee(ed to ha'e been obtained fro( the 8oard in accordance with the regulations pro'iding for such registration0 ( A) Eo depository, %4participant,: custodian of securities, foreign institutional in'estor, credit rating agency, or any other inter(ediary associated with the securities (ar)et as the 8oard (ay by notification in this behalf specify, shall buy or sell or deal in securities except under and in accordance with the conditions of a certificate of registration obtained fro( the 8oard in accordance with the regulations (ade under this Act, 4ro+i-e- that a person buying or selling securities or otherwise dealing with the securities (ar)et as a depository, 34participant,: custodian of securities, foreign institutional in'estor or credit rating agency i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to buy or sell securities or otherwise deal with the securities (ar)et until such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300 ( 8) Eo person shall sponsor or cause to be sponsored or carry on or caused to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es including (utual funds, unless he obtains a certificate of registration fro( the 8oard in accordance with the regulations, 4ro+i-e- that any person sponsoring or causing to be sponsored, carrying or causing to be carried on any 'enture capital funds or collecti'e in'est(ent sche(es operating in the securities (ar)et i((ediately before the co((ence(ent of the Securities =aws (A(end(ent) Act, !!", for which no certificate of registration was re*uired prior to such co((ence(ent, (ay continue to operate till such ti(e regulations are (ade under clause ( d) of sub+section (%) of section 300:
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0 3 Inserted by the 9epositories Act, !!#, w0r0e0f0 %0+0!+ !!"0
% Inserted
>
4()%lanati$n7 6or the re(o'al of doubts, it is hereby declared that, for purposes of this section, a collecti'e in'est(ent sche(e or (utual fund shall not be include any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, which pro'ides a co(ponent of in'est(ent besides the co(ponent of insurance issued by the insurer0: (%) 7'ery application for registration shall be in such (anner and on pay(ent of such fees as (ay be deter(ined by regulations0 (3) .he 8oard (ay, by order, suspend or cancel a certificate of registration in such (anner as (ay be deter(ined by regulations, 4ro+i-e- that no order under this sub+section shall be (ade unless the person concerned has been gi'en a reasonable opportunity of being heard0 %4CIA<.7R BA 4RODI;ITION O2 @ANI4ULATIIE AND DECE4TIIE DEIICES, INSIDER TRADING AND SU;STANTIAL AC9UISITION O2 SECURITIES OR CONTROL 4rohi,itio of .% i$*l%ti+e % - -e'e$ti+e -e+i'e!, i !i-er tr%-i ( % - !*,!t% ti%l %'7*i!itio of !e'*ritie! or 'o trol.
1"A. Eo person shall directly or indirectly(a) use or e(ploy, in connection with the issue, purchase or sale of any securities listed or proposed to be listed on a recogniFed stoc) exchange, any (anipulati'e or decepti'e de'ice or contri'ance in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3
Inserted by the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, w0r0e0f !+$+ %0 00 Chapter BI of the Securities and Insurance =aws (A(end(ent and Balidation) Act, %0 0, reads as under, /@A81(0 D: ?ISC7==AE7CHS #0 Balidation+ Eotwithstanding anything contained in any Dudg(ent, decree or order of any court, tribunal or other authority, the pro'isions of section % of the Insurance Act, !3> ($ of !3>) or section % of the Securities Contracts (Regulation) Act, !"# ($% of !"#) or section % of the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by this Act, shall ha'e and shall be dee(ed to always ha'e effect for all purposes as if the pro'isions of the said Acts, as a(ended by this Act, had been in force at all (aterial ti(es and accordingly any unit lin)ed insurance policy or scrips or any such instru(ent or unit, by whate'er na(e called, issued or purported to ha'e been issued at any ti(e before the !th day of April, %0 0, shall be dee(ed and always dee(ed to ha'e been 'alidly issued and shall not be called in *uestion in any court of law or other authority solely on the ground that it was issued without a certificate of registration under any law for the ti(e being in force or without following any procedure under any law for the ti(e being in force, by an insurer or any other person0 /0 Repeal and sa'ings + (1) .he Securities and Insurance =aws (A(end(ent and Balidation) Crdinance, %0 0 (Crd0 3 of %0 0) is hereby repealed0 (2) Eotwithstanding such repeal, anything done or any action ta)en under the Reser'e 8an) of India Act, !3$ (% of !3$) or the Insurance Act, !3> ($ of !3>) or the Securities Contracts (Regulation) Act, !"# ($% of !"#) or the Securities and 7xchange 8oard of India Act, !!% ( " of !!%), as a(ended by the said Crdinance, shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of those Acts, as a(ended by this Act0 % Chapter BA inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
!
(b) e(ploy any de'ice, sche(e or artifice to defraud in connection with issue or dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange3 (c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any person, in connection with the issue, dealing in securities which are listed or proposed to be listed on a recognised stoc) exchange, in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (d) engage in insider trading3 (e) deal in securities while in possession of (aterial or non+public infor(ation or co((unicate such (aterial or non+public infor(ation to any other person, in a (anner which is in contra'ention of the pro'isions of this Act or the rules or the regulations (ade thereunder3 (f) ac*uire control of any co(pany or securities (ore than the percentage of e*uity share capital of a co(pany whose securities are listed or proposed to be listed on a recognised stoc) exchange in contra'ention of the regulations (ade under this Act0: CDA4TER II 2INANCE, ACCOUNTS AND AUDIT Gr% t! ,> the Ce tr%l Go+er .e t. 1). .he Central &o'ern(ent (ay, after due appropriation (ade by <arlia(ent by law in this behalf, (a)e to the 8oard grants of such su(s of (oney as that &o'ern(ent (ay thin) fit for being utiliFed for the purposes of this Act0 2* -. 13. ( ) .here shall be constituted a 6und to be called the Securities and 7xchange 8oard of
India &eneral 6und and there shall be credited thereto(a) all grants, fees and charges recei'ed by the 8oard under this Act3 4G G G: (aa) %4G G G: (b) all su(s recei'ed by the 8oard fro( such other sources as (ay be decided upon by the Central &o'ern(ent0 (%) .he 6und shall be applied for (eeting(a) the salaries, allowances and other re(uneration of the (e(bers, officers and other e(ployees of the 8oard3 (b) the expenses of the 8oard in the discharge of its functions under section 3 (c) the expenses on obDects and for purposes authorised by this Act0
.he word 1and2 o(itted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 (aa) o(itted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 It was inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Clause (aa) reads as under,+ 1(aa) all su(s realiFed by way of <enalties under this Act3 and20
% Clause
%0
A''o* t! % - %*-it. 15. ( ) .he 8oard shall (aintain proper accounts and other rele'ant records and prepare an annual state(ent of accounts in such for( as (ay be prescribed by the Central &o'ern(ent in consultation with the Co(ptroller and Auditor+&eneral of India0 (%) .he accounts of the 8oard shall be audited by the Co(ptroller and Auditor+&eneral of India at such inter'als as (ay be specified by hi( and any expenditure incurred in connection with such audit shall be payable by the 8oard to the Co(ptroller and Auditor+&eneral of India0 (3) .he Co(ptroller and Auditor+&eneral of India and any other person appointed by hi( in connection with the audit of the accounts of the 8oard shall ha'e the sa(e rights and pri'ileges and authority in connection with such audit as the Co(ptroller and Auditor+ &eneral generally has in connection with the audit of the &o'ern(ent accounts and, in particular, shall ha'e the right to de(and the production of boo)s, accounts, connected 'ouchers and other docu(ents and papers and to inspect any of the offices of the 8oard0 ($) .he accounts of the 8oard as certified by the Co(ptroller and Auditor+&eneral of India or any other person appointed by hi( in this behalf together with the audit report thereon shall be forwarded annually to the Central &o'ern(ent and that &o'ern(ent shall cause the sa(e to be laid before each Iouse of <arlia(ent0 5CDA4TER IIA 4ENALTIES AND ADEUDICATION 4e %lt> for f%il*re to f*r i!h i for.%tio , ret*r , et'. 15A. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder,(a) to furnish any docu(ent, return or report to the 8oard, fails to furnish the sa(e, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (b) to file any return or furnish any infor(ation, boo)s or other docu(ents within the ti(e specified therefor in the regulations, fails to file return or furnish the sa(e within the ti(e specified therefor in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) to (aintain boo)s of account or records, fails to (aintain the sa(e, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0
Chapters BI A and BI 8 containing Ss0 "A to "M and "@ to "S respecti'ely, inserted by Securities =aws (A(end(ent) Act, !!" w0e0f0 %"+ + !!"0 % Substituted for 1a penalty not exceeding one la)h and fifty thousand rupees for each such failure2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding fi'e thousand rupees for e'ery day during which such failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for e'ery day during which the failure continues2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%
4e %lt> for f%il*re ,> % > $er!o to e ter i to %(ree.e t /ith 'lie t!. 15;. If any person, who is registered as an inter(ediary and is re*uired under this Act or any rules or regulations (ade thereunder to enter into an agree(ent with his client, fails to enter into such agree(ent, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 %54e %lt> for f%il*re to re-re!! i +e!tor!C (rie+% 'e!. 15C. If any listed co(pany or any person who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing, to redress the grie'ances of in'estors, fails to redress such grie'ances within the ti(e specified by the 8oard, such co(pany or inter(ediary shall be liable to a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less0: 4e %lt> for 'ert%i -ef%*lt! i '%!e of .*t*%l f* -!. 15D. If any person, who is(a) re*uired under this Act or any rules or regulations (ade thereunder to obtain a certificate of registration fro( the 8oard for sponsoring or carrying on any collecti'e in'est(ent sche(e, including (utual funds, sponsors or carries on any collecti'e in'est(ent sche(e, including (utual funds, without obtaining such certificate of registration, he shall be liable to 34a penalty of one la)h rupees for each day during which he sponsors or carries on any such collecti'e in'est(ent sche(e including (utual funds, or one crore rupees, whiche'er is less:3 (b) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, for sponsoring or carrying on any in'est(ent sche(e, fails to co(ply with the ter(s and conditions of certificate of registration, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (c) registered with the 8oard as a collecti'e in'est(ent sche(e, including (utual funds, fails to (a)e an application for listing of its sche(es as pro'ided for in the regulations
Substituted for 1a penalty not exceeding fi'e la)h rupees for e'ery such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1If any person, who is registered as an inter(ediary, after ha'ing been called upon by the 8oard in writing to redress the grie'ances of in'estors, fails to redress such grie'ances, he shall be liable to a penalty not exceeding ten thousand rupees for each such failure2, by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding ten thousand rupees for each day during which he carries on any such collecti'e in'est(ent sche(e including (utual funds, or ten la)h rupees whiche'er is higher02 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding ten thousand rupees for each day during which such failure continues or ten la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0
%%
go'erning such listing, he shall be liable to 4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (d) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to despatch
unit certificates of any sche(e in the (anner pro'ided in the regulation go'erning such despatch, he shall be liable to %4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (e) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to refund the application (onies paid by the in'estors within the period specified in the regulations, he shall be liable to 34a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3 (f) registered as a collecti'e in'est(ent sche(e, including (utual funds, fails to in'est (oney collected by such collecti'e in'est(ent sche(es in the (anner or within the period specified in the regulations, he shall be liable to $4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for f%il*re to o,!er+e r*le! % - re(*l%tio ! ,> % %!!et .% %(e.e t 'o.$% >. 15E. Khere any asset (anage(ent co(pany of a (utual fund registered under this Act, fails to co(ply with any of the regulations pro'iding for restrictions on the acti'ities of the asset (anage(ent co(panies, such asset (anage(ent co(pany shall be liable to "4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:0 4e %lt> for -ef%*lt i '%!e of !to'6 ,ro6er!. 152. If any person, who is registered as a stoc) bro)er under this Act,(a) fails to issue contract notes in the for( and (anner specified by the stoc) exchange of which such bro)er is a (e(ber, he shall be liable to a penalty not exceeding fi'e ti(es the a(ount for which the contract note was re*uired to be issued by that bro)er3 (b) fails to deli'er any security or fails to (a)e pay(ent of the a(ount due to the in'estor in the (anner within the period specified in the regulations, he shall be liable to #4a penalty of one la)h rupees for each day during which such failure continues or one crore rupees, whiche'er is less:3
Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues or fi'e la)h rupees, whiche'er is higher2 by the S78I (A(end(ent) Act , %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1a penalty not exceeding one thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1a penalty not exceeding fi'e la)h rupees for each such failure2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1a penalty not exceeding fi'e thousand rupees for each day during which such failure continues2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
%3
(c) charges an a(ount of bro)erage which is in excess of the bro)erage specified in the regulations, he shall be liable to 4a penalty of one la)h rupees: or fi'e ti(es the a(ount of bro)erage charged in excess of the specified bro)erage, whiche'er is higher0 4e %lt> for i !i-er tr%-i (. 15G. If any insider who,(i) either on his own behalf or on behalf of any other person, deals in securities of a body corporate listed on any stoc) exchange on the basis of any unpublished price+sensiti'e infor(ation3 or (ii) co((unicates any unpublished price+sensiti'e infor(ation to any person, with or without his re*uest for such infor(ation except as re*uired in the ordinary course of business or under any law3 or
(iii) counsels, or procures for any other person to deal in any securities of any body corporate on the basis of unpublished price+sensiti'e infor(ation, shall be liable to a penalty %4of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of insider trading, whiche'er is higher:0 4e %lt> for o 0-i!'lo!*re of %'7*i!itio of !h%re! % - t%6eo+er!. 15D. If any person, who is re*uired under this Act or any rules or regulations (ade thereunder, fails to,(i) disclose the aggregate of his shareholding in the body corporate before he ac*uires any shares of that body corporate3 or (ii) (a)e a public announce(ent to ac*uire shares at a (ini(u( price3 or 34(iii) (a)e a public offer by sending letter of offer to the shareholders of the concerned co(pany3 or (iv) (a)e pay(ent of consideration to the shareholders who sold their shares pursuant to letter of offer,: he shall be liable to a penalty $4of twenty+fi'e crore rupees or three ti(es the a(ount of profits profits (ade out of such failure, whiche'er is higher:0 554e %lt> for fr%*-*le t % - * f%ir tr%-e $r%'ti'e!. 15DA. If any person indulges in fraudulent and unfair trade practices relating to securities, he shall be liable to a penalty of twenty+fi'e crore rupees or three ti(es the a(ount of profits (ade out of such practices, whiche'er is higher0
Substituted for 1a penalty not exceeding fi'e thousand rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00% 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1not exceeding fi'e la)h rupees2 by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00% %00% " Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0%!+ 0+%00%0
%$
4e %lt> for 'o tr%+e tio /here o !e$%r%te $e %lt> h%! ,ee $ro+i-e-. 15D;. Khoe'er fails to co(ply with any pro'ision of this Act, the rules or the regulations (ade or directions issued by the 8oard thereunder for which no separate penalty has been pro'ided, shall be liable to a penalty which (ay extend to one crore rupees0: 4o/er to %-G*-i'%te. 150I. ( ) 6or the purpose of adDudging under sections "A, "8, "C, "9, "7, "6, "& 4, "I, "IA and "I8:, the 8oard shall appoint any officer not below the ran) of a 9i'ision Chief to be an adDudicating officer for holding an in*uiry in the prescribed (anner after gi'ing any person concerned a reasonable opportunity of being heard for the purpose of i(posing any penalty0 (%) Khile holding an in*uiry the adDudicating officer shall ha'e power to su((on and enforce the attendance of any person ac*uainted with the facts and circu(stances of the case to gi'e e'idence or to produce any docu(ent which in the opinion of the adDudicating officer, (ay be useful for or rele'ant to the subDect+(atter of the in*uiry and if, on such in*uiry, he is satisfied that the person has failed to co(ply with the pro'isions of any of the sections specified in subsection ( ), he (ay i(pose such penalty as he thin)s fit in accordance with the pro'isions of any of those sections0 2%'tor! to ,e t%6e i to %''o* t ,> the %-G*-i'%ti ( offi'er. 15E. Khile adDudging *uantu( of penalty under section "+I, the adDudicating officer shall ha'e due regard to the following factors, na(ely ,(a) the a(ount of disproportionate gain or unfair ad'antage, where'er *uantifiable, (ade
as a result of the default3 (b) the a(ount of loss caused to an in'estor or group of in'estors as a result of the default3 (c) the repetiti'e nature of the default0 "5Cre-iti ( !*.! re%li!e- ,> /%> of $e %ltie! to Co !oli-%te- 2* - of I -i%. 15EA. All su(s realised by way of penalties under this Act shall be credited to the Consolidated 6und of India0: )5Settle.e t of %-.i i!tr%ti+e % - 'i+il $ro'ee-i (!. 15E;. (1) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, % > $er!o , %(%i !t /ho. % > $ro'ee-i (! h%+e ,ee i iti%te- or .%> ,e i iti%te- * -er !e'tio 11, !e'tio 11;, !e'tio 11D, !*,0!e'tio ()) of !e'tio 1" or !e'tio 150I, .%> file % %$$li'%tio i /riti ( to the ;o%r- $ro$o!i ( for !ettle.e t of the $ro'ee-i (! i iti%te- or to ,e i iti%te- for the %lle(e- -ef%*lt!.
Substituted for 1and "I2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 by the S78I (A(end(ent) Act, %00%, S0 ! w0e0f0 %!+ 0+%00%0 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) (/.r.e.f. "=0=30 "==7)
% Inserted
%"
(") The ;o%r- .%>, %fter t%6i ( i to 'o !i-er%tio the %t*re, (r%+it> % - i.$%'t of -ef%*lt!, %(ree to the $ro$o!%l for !ettle.e t, o $%>.e t of !*'h !*. ,> the -ef%*lter or o !*'h other ter.! %! .%> ,e -eter.i e- ,> the ;o%r- i %''or-% 'e /ith the re(*l%tio ! .%-e * -er thi! A't. ()) The !ettle.e t $ro'ee-i (! * -er thi! !e'tio !h%ll ,e 'o -*'te- i %''or-% 'e /ith the $ro'e-*re !$e'ifie- i the re(*l%tio ! .%-e * -er thi! A't. (3) No %$$e%l !h%ll lie * -er !e'tio 15T %(%i !t % > or-er $%!!e- ,> the ;o%r- or %-G*-i'%ti ( offi'er, %! the '%!e .%> ,e, * -er thi! !e'tio . < CDA4TER II; ESTA;LISD@ENT, EURISDICTION, AUTDORITM AND 4ROCEDURE O2 A44ELLATE TRI;UNAL E!t%,li!h.e t of Se'*ritie! A$$ell%te Tri,* %l!. 15F. ( ) .he Central &o'ern(ent shall by notification, establish one or (ore Appellate .ribunals to be )nown as the Securities Appellate .ribunal to exercise the Durisdiction, powers and authority conferred on such .ribunal by or under this Act 4or any other law for the ti(e being in force:0 (%) .he Central &o'ern(ent shall also specify in the notification referred to in sub+section ( ) the (atters and places in relation to which the Securities Appellate .ribunal (ay exercise Durisdiction0 "5Co.$o!itio of Se'*ritie! A$$ell%te Tri,* %l. 15L. A Securities Appellate .ribunal shall consist of a <residing Cfficer and two other (e(bers, to be appointed, by notification, by the Central &o'ern(ent, 4ro+i-e- that the Securities Appellate .ribunal, consisting of one person only, established before the co((ence(ent of the Securities and 7xchange 8oard of India (A(end(ent) Act, %00%, shall continue to exercise the Durisdiction, powers and authority conferred on it by or under this Act or any other law for the ti(e being in force till two other ?e(bers are appointed under this section0 9*%lifi'%tio for %$$oi t.e t %! 4re!i-i ( Offi'er or @e.,er of Se'*ritie! A$$ell%te Tri,* %l.
Inserted by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for Sections "= and "? by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "= and "? read as under,+ 1 "+=0 Co(position of securities Appellate .ribunal0 5 A Securities Appellate .ribunal shall consist of
% Substituted
one person only (hereinafter referred to as the <residing Cfficer of the Securities Appellate .ribunal) to be appointed, by notification, by the central &o'ern(ent0 "?0 Qualifications for appoint(ent as <residing Cfficer of the Securities Appellate .ribunal0 5 A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he + (a) is, or has been, or is *ualified to be, a Mudge of a Iigh Court3 or (b) has been a (e(ber of the Indian =egal Ser'ice and has held a post in &rade I of that ser'ice for at least three years3 or (c) has held office as the <residing Cfficer of a tribunal for at least three years02
%#
15@. 15( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of the Securities Appellate .ribunal unless he + (a) is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court3 or (b) is a sitting or retired Mudge of a Iigh Court who has co(pleted not less than se'en years of ser'ice as a Mudge in a Iigh Court0 ( A) .he <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0: (%) A person shall not be *ualified for appoint(ent as (e(ber of a Securities Appellate .ribunal unless he is a person of ability, integrity and standing who has shown capacity in dealing with proble(s relating to securities (ar)et and has *ualification and experience of corporate law, securities laws, finance, econo(ics or accountancy, 4ro+i-e- that a (e(ber of the 8oard or any person holding a post at senior (anage(ent le'el e*ui'alent to 7xecuti'e 9irector in the 8oard shall not be appointed as <residing Cfficer or ?e(ber of a Securities Appellate .ribunal during his ser'ice or tenure as such with the 8oard or within two years fro( the date on which he ceases to hold office as such in the 8oard0: %4Te *re of offi'e of 4re!i-i ( Offi'er % - other @e.,er! of Se'*ritie! A$$ell%te Tri,* %l. 15N. .he <residing Cfficer and e'ery other ?e(ber of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office and shall be eligible for re+appoint(ent, 4ro+i-e- that no person shall hold office as the <residing Cfficer of the Securities Appellate .ribunal after he has attained the age of sixty+eight years, 4ro+i-e- f*rther that no person shall hold office as a ?e(ber of the Securities Appellate .ribunal after he has attained the age of sixty+two years0: S%l%r> % - %llo/% 'e! % - other ter.! % - 'o -itio ! of !er+i'e of 4re!i-i ( Offi'er!. 150O. .he salary and allowances payable to and the other ter(s and conditions of ser'ice including pension, gratuity and other retire(ent benefits of the 4<residing Cfficer and other ?e(bers: of a Securities Appellate .ribunal shall be such as (ay be prescribed,
Substituted for sub+section ( ) of Section "? by the S78I (A(end(ent) Crdinance, %0 3 w0e0f0 % 00 0%0 30 <rior to substitution, it read as under,+ ;( ) A person shall not be *ualified for appoint(ent as the <residing Cfficer of a Securities Appellate .ribunal unless he is a sitting or retired Mudge of the Supre(e Court or a sitting or retired Chief Mustice of a Iigh Court , 4ro+i-e- that the <residing Cfficer of the Securities Appellate .ribunal shall be appointed by the Central &o'ern(ent in consultation with the Chief Mustice of India or his no(inee0; % Substituted for Section "E, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to their substitution, Section "E read as under,+ 1 "E0 .er( of office0+ .he <residing officer of a Securities Appellate .ribunal shall hold office for a ter( of fi'e years fro( the date on which he enters upon his office or until he attains the age of sixtyfi'e years, whiche'er is earlier02
%/
4ro+i-e- that neither the salary and allowances nor the other ter(s and conditions of ser'ice of the %4<residing Cfficer and other ?e(bers of a Securities Appellate .ribunal: shall be 'aried to their disad'antage after appoint(ent0 2illi ( *$ of +%'% 'ie!. 154. If, for reason other than te(porary absence, any 'acancy occurs in the 34office of the <residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal, then the Central &o'ern(ent shall appoint another person in accordance with the pro'isions of this Act to fill the 'acancy and the proceedings (ay be continued before the Securities Appellate .ribunal fro( the stage at which the 'acancy is filled0 Re!i( %tio % - re.o+%l. 159. ( ) .he $4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal (ay, by notice in writing under his hand addressed to the Central &o'ern(ent, resign his office, 4ro+i-e- that "4the <residing Cfficer or any other ?e(ber: shall, unless he is per(itted by the Central &o'ern(ent to relin*uish his office sooner, continue to hold office, until the expiry of three (onths fro( the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his ter( of office, whiche'er is the earliest0 (%) .he #4<residing Cfficer or any other ?e(ber: of a Securities Appellate .ribunal shall not be re(o'ed fro( his office except by an order by the Central &o'ern(ent on the ground of pro'ed (isbeha'iour or incapacity after an in*uiry (ade by a Mudge of the Supre(e Court, in which the /4<residing Cfficer or any other ?e(ber: concerned has been infor(ed of the charges against hi( and gi'en a reasonable opportunity of being heard in respect of these charges0 (3) .he Central &o'ern(ent (ay, by rules, regulate the procedure for the in'estigation of (isbeha'iour or incapacity of the >4<residing Cfficer or any other ?e(ber:0 Or-er! 'o !tit*ti ( A$$ell%te Tri,* %l to ,e fi %l % - ot to i +%li-%te it! $ro'ee-i (!. 15R. Eo order of the Central &o'ern(ent appointing any person as the !4<residing Cfficer or a ?e(ber: of a Securities Appellate .ribunal shall be called in *uestion in any (anner, and no act or proceeding before a Securities Appellate .ribunal shall be called in *uestion in any (anner on the ground (erely of any defect in the constitution of a Securities Appellate .ribunal0
Substituted for 1<residing Cfficer of a Securities Appellate .ribunal2 by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 % Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 3 Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 $ Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 " Substituted for 1said <residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 # Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 / Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0 > Substituted for 1aforesaid <residing Cfficer2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 ! Substituted for 1<residing Cfficer2, by the S78I (A(end(ent) Act %00%, w0e0f0 %!+ 0+%00%0
%>
St%ff of the Se'*ritie! A$$ell%te Tri,* %l. 15S. ( ) .he Central &o'ern(ent shall pro'ide the Securities Appellate .ribunal with such officers and e(ployees as that &o'ern(ent (ay thin) fit0 (%) .he officers and e(ployees of the Securities Appellate .ribunal shall discharge their functions under general superintendence of the <residing Cfficer0 (3) .he salaries and allowances and other conditions of ser'ice of the officers and e(ployees of the Securities Appellate .ribunal shall be such as (ay be prescribed0 A$$e%l to the Se'*ritie! A$$ell%te Tri,* %l. 15T. 4( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed,(a) by an order of the 8oard (ade, on and after the co((ence(ent of the Securities =aws
(Second A(end(ent) Act, !!!, under this Act, or the rules or regulations (ade thereunder3 or (b) by an order (ade by an adDudicating officer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 "5(") ********< (3) 7'ery appeal under sub+section ( ) shall be filed within a period of forty+fi'e days fro( the date on which a copy of the order (ade by the 348oard or the AdDudicating Cfficer, as the case case (ay be,: is recei'ed by hi( and it shall be in such for( and be acco(panied by such fee as (ay be prescribed , 4ro+i-e- that the Securities Appellate .ribunal (ay entertain an appeal after the expiry of the said period of forty+fi'e days if it is satisfied that there was sufficient cause for not filing it within that period0 ($) Cn receipt of an appeal under sub+section ( ), the Securities Appellate .ribunal (ay, after gi'ing the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thin)s fit, confir(ing, (odifying or setting aside the order appealed against0
Substituted for Sub+sec ( ) R (%) by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, Sub+sections ( ) R (%) were read as under, 1( ) Sa'e as pro'ided in sub+section (%), any person aggrie'ed by any order (ade by any AdDudicating Cfficer under this Act, (ay prefer an appeal to a Securities Appellate .ribunal ha'ing Durisdiction in the (atter0 (%) Eo appeal shall lie to the Securities Appellate .ribunal fro( an order (ade by an AdDudicating Cfficer with the consent of the parties02 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to o.i!!io , o.i!!io , S*,0!e'tio (") re%- %! * -er& J(") No %$$e%l !h%ll lie to the Se'*ritie! A$$ell%te Tri,* %l fro. % or-er .%-eO (a) ,> the ;o%r- o % - %fter the 'o..e 'e.e t of the Se'*ritie! L%/! (Se'o - A.e -.e t) A't, 1999H (b) ,> % %-G*-i'%ti ( offi'er, /ith the 'o !e t of the $%rtie!.2 3 Substituted for 1a copy of the order (ade by the adDudicating officer2 by S78I (A(end(ent) Act !!!, !!!, w0e0f0 #+ %+ !!!0
%!
(") .he Securities Appellate .ribunal shall send a copy of e'ery order (ade by it to the 48oard, the: parties to the appeal and to the concerned AdDudicating Cfficer0 (#) .he appeal filed before the Securities Appellate .ribunal under sub+section ( ) shall be dealt with by it as expeditiously as possible and endea'our shall be (ade by it to dispose of the appeal finally within six (onths fro( the date of receipt of the appeal0 4ro'e-*re % - $o/er! of the Se'*ritie! A$$ell%te Tri,* %l. 15U. ( ) .he Securities Appellate .ribunal shall not be bound by the procedure laid down by the Code of Ci'il <rocedure, !0> (" of !0>), but shall be guided by the principles of natural Dustice and, subDect to the other pro'isions of this Act, and of any rules, the Securities Appellate .ribunal shall ha'e powers to regulate their own procedure including the places at which they shall ha'e their sittings0 (%) .he Securities Appellate .ribunal shall ha'e, for the purposes of discharging their functions under this Act, the sa(e powers as are 'ested in a ci'il court under the Code of Ci'il <rocedure, !0> (" of !0>), while trying a suit, in respect of the following (atters, na(ely ,(a) su((oning and enforcing the attendance of any person and exa(ining hi( on oath3 (b) re*uiring the disco'ery and production of docu(ents3 (c) recei'ing e'idence on affida'its3 (d) issuing co((issions for the exa(ination of witnesses or docu(ents3
(e) re'iewing its decisions3 (f) dis(issing an application for default or deciding it e) %arte 3 (g) setting aside any order of dis(issal of any application for default or any order passed by it e) %arte 3 (h) any other (atter which (ay be prescribed0 (3) 7'ery proceeding before the Securities Appellate .ribunal shall be dee(ed to be a Dudicial proceeding within the (eaning of sections !3 and %%>, and for the purposes of section !# of the Indian <enal Code ($" of >#0), and the Securities Appellate .ribunal shall be dee(ed to be a ci'il court for all the purposes of section !" and Chapter AABI of the Code of Cri(inal <rocedure, !/3 (% of !/$)0 %4Ri(ht to le(%l re$re!e t%tio . 15I. .he appellant (ay either appear in person or authorise one or (ore chartered accountants or co(pany secretaries or cost accountants or legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal0 ()%lanati$n&*6or the purposes of this section,Substituted for 1parties2, S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 for S0 "B by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 <rior to their substitution, S0 "B read as under,+ 1 "B0 .he appellant (ay either appear in person or authorise one or (ore legal practitioners or any of its officers to present his or its case before the Securities Appellate .ribunal02
% Substituted
30
(a) 1chartered accountant2 (eans a chartered accountant as defined in clause ( b) of subsection ( ) of section % of the Chartered Accountants Act, !$! (3> of !$!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (b) 1co(pany secretary2 (eans a co(pany secretary as defined in clause ( c) of subsection ( ) of section % of the Co(pany Secretaries Act, !>0 ("# of !>0) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (c) 1cost accountant2 (eans a cost accountant as defined in clause ( b) of sub+section ( ) of section % of the Cost and Kor)s Accountants Act, !"! (%3 of !"!) and who has obtained a certificate of practice under sub+section ( ) of section # of that Act3 (d) 1legal practitioner2 (eans an ad'ocate, 'a)il or any attorney of any Iigh Court, and includes a pleader in practice0: Li.it%tio . 15?. .he pro'isions of the =i(itation Act, !#3 (3# of !#3), shall, as far as (ay be, apply to an appeal (ade to a Securities Appellate .ribunal0 54re!i-i ( Offi'er, @e.,er! % - !t%ff of Se'*ritie! A$$ell%te Tri,* %l! to ,e $*,li' !er+% t!. 15A. .he <residing Cfficer, ?e(bers and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0: Ci+il Co*rt ot to h%+e G*ri!-i'tio . 15M. Eo ci'il court shall ha'e Durisdiction to entertain any suit or proceeding in respect of any (atter which an adDudicating officer appointed under this Act or a Securities Appellate .ribunal constituted under this Act is e(powered by or under this Act to deter(ine and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any power conferred by or under this Act0 "5A$$e%l to S*$re.e Co*rt.
Substituted for S0 "A by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution, it read as under, + 1 "A0 .he <residing Cfficer and other officers and e(ployees of a Securities Appellate .ribunal shall be dee(ed to be public ser'ants within the (eaning of section % of the Indian penal Code( $" of >#0)20 % Substituted for S0 "S by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 <rior to its substitution , it
was read as under,+ 1 "S0 Appeal to Iigh Court0+ Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Iigh Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of fact or law arising out of such order, <ro'ided that the Iigh Court (ay, if it is satisfied that the appellant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days02
3
15N. Any person aggrie'ed by any decision or order of the Securities Appellate .ribunal (ay file an appeal to the Supre(e Court within sixty days fro( the date of co((unication of the decision or order of the Securities Appellate .ribunal to hi( on any *uestion of law arising out of such order , 4ro+i-e- that the Supre(e Court (ay, if it is satisfied that the applicant was pre'ented by sufficient cause fro( filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days0: CDA4TER III @ISCELLANEOUS 4o/er of Ce tr%l Go+er .e t to i!!*e -ire'tio !. 18. ( ) Kithout preDudice to the foregoing pro'isions of this Act 4or the 9epositories Act, !!#:, the 8oard shall, in exercise of its powers or the perfor(ance of its functions under this Act, be bound by such directions on *uestions of policy as the Central &o'ern(ent (ay gi'e in writing to it fro( ti(e to ti(e , 4ro+i-e- that the 8oard shall, as far as practicable, be gi'en an opportunity to express its 'iews before any direction is gi'en under this sub+section0 (%) .he decision of the Central &o'ern(ent whether a *uestion is one of policy or not shall be final0 4o/er of Ce tr%l Go+er .e t to !*$er!e-e the ;o%r-. 17. ( ) If at any ti(e the Central &o'ern(ent is of opinion(a) that on account of gra'e e(ergency, the 8oard is unable to discharge the functions and duties i(posed on it by or under the pro'isions of this Act3 or (b) that the 8oard has persistently (ade default in co(plying with any direction issued by the Central &o'ern(ent under this Act or in the discharge of the functions and duties i(posed on it by or under the pro'isions of this Act and as a result of such default the financial position of the 8oard or the ad(inistration of the 8oard has deteriorated3 or (c) that circu(stances exist which render it necessary in the public interest so to do, the Central &o'ern(ent (ay, by notification, supersede the 8oard for such period, not exceeding six (onths, as (ay be specified in the notification0 (%) Hpon the publication of a notification under sub+section ( ) superseding the 8oard,(a) all the (e(bers shall, as fro( the date of supersession, 'acate their offices as such3 (b) all the powers, functions and duties which (ay, by or under the pro'isions of this Act, be exercised or discharged by or on behalf of the 8oard, shall until the 8oard is reconstituted under sub+section (3), be exercised and discharged by such person or persons as the Central &o'ern(ent (ay direct3 and (c) all property owned or controlled by the 8oard shall, until the 8oard is reconstituted under sub+section (3), 'est in the Central &o'ern(ent0
Substituted for 1this Act2 by the 9epositories Act !!#, w0r0e0f0 %0+!+ !!"0
3%
(3) Cn the expiration of the period of supersession specified in the notification issued under sub+section ( ), the Central &o'ern(ent (ay reconstitute the 8oard by a fresh appoint(ent
and in such case any person or persons who 'acated their offices under clause ( a) of subsection (%), shall not be dee(ed dis*ualified for appoint(ent , 4ro+i-e- that the Central &o'ern(ent (ay, at any ti(e, before the expiration of the period of supersession, ta)e action under this sub+section0 ($) .he Central &o'ern(ent shall cause a notification issued under sub+section ( ) and a full report of any action ta)en under this section and the circu(stances leading to such action to be laid before each Iouse of <arlia(ent at the earliest0 Ret*r ! % - re$ort!. 1:. ( ) .he 8oard shall furnish to the Central &o'ern(ent at such ti(e and in such for( and (anner as (ay be prescribed or as the Central &o'ern(ent (ay direct, such returns and state(ents and such particulars in regard to any proposed or existing progra((e for the pro(otion and de'elop(ent of the securities (ar)et, as the Central &o'ern(ent (ay, fro( ti(e to ti(e, re*uire0 (%) Kithout preDudice to the pro'isions of sub+section ( ), the 8oard shall, within 4ninety: days after the end of each financial year, sub(it to the Central &o'ern(ent a report in such for(, as (ay be prescribed, gi'ing a true and full account of its acti'ities, policy and progra((es during the pre'ious financial year0 (3) A copy of the report recei'ed under sub+section (%) shall be laid, as soon as (ay be after it is recei'ed, before each Iouse of <arlia(ent0 Dele(%tio . 19. .he 8oard (ay, by general or special order in writing delegate to any (e(ber, officer of the 8oard or any other person subDect to such conditions, if any, as (ay be specified in the order, such of its powers and functions under this Act (except the powers under section %!) as it (ay dee( necessary0 A$$e%l!. "=. ( ) Any person aggrie'ed by an order of the 8oard (ade %4, before the co((ence(ent of the Securities =aws (Second A(end(ent) Act, !!!,: under this Act, or the rules or regulations (ade thereunder (ay prefer an appeal to the Central &o'ern(ent within such ti(e as (ay be prescribed0 (%) Eo appeal shall be ad(itted if it is preferred after the expiry of the period prescribed therefor, 4ro+i-e- that an appeal (ay be ad(itted after the expiry of the period prescribed therefor if the appellant satisfies the Central &o'ern(ent that he had sufficient cause for not preferring the appeal within the prescribed period0
Substituted for 1sixty days2 by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 1an order of the 8oard (ade2 by Securities =aws (Second A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0
% Substituted
33
(3) 7'ery appeal (ade under this section shall be (ade in such for( and shall be acco(panied by a copy of the order appealed against and by such fees as (ay be prescribed0 ($) .he procedure for disposing of an appeal shall be such as (ay be prescribed, 4ro+i-e- that before disposing of an appeal, the appellant shall be gi'en a reasonable opportunity of being heard0 4;%r of G*ri!-i'tio . "=A. Eo order passed by the 8oard %4or the AdDudicating Cfficer: under this Act shall be appealable except as pro'ided in 34section ". or: section %0 and no ci'il court shall ha'e Durisdiction in respect of any (atter which the 8oard $4or the AdDudicating Cfficer: is e(powered by, or under, this Act to pass any order and no inDunction shall be granted by any court or other authority in respect of any action ta)en or to be ta)en in pursuance of any order passed by the 8oard "4or the AdDudicating Cfficer: by, or under, this Act0: S%+i (!.
"1. Eothing in this Act shall exe(pt any person fro( any suit or other proceedings which (ight, apart fro( this Act, be brought against hi(0 @e.,er!, offi'er! % - e.$lo>ee! of the ;o%r- to ,e $*,li' !er+% t!. "". All (e(bers, officers and other e(ployees of the 8oard shall be dee(ed, when acting or purporting to act in pursuance of any of the pro'isions of this Act, to be public ser'ants within the (eaning of section % of the Indian <enal Code ($" of >#0)0 4rote'tio of %'tio t%6e i (oo- f%ith. "). Eo suit, prosecution or other legal proceedings shall lie against the Central &o'ern(ent #4or 8oard: or any officer of the Central &o'ern(ent or any (e(ber, officer or other e(ployee of the 8oard for anything which is in good faith done or intended to be done under this Act or the rules or regulations (ade thereunder0 /4Offe 'e!. "3. ( ) Kithout preDudice to any award of penalty by the adDudicating officer under this Act, if any person contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, he shall be punishable with
Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 for 18oard2 by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 3 Substituted for 1Section %02, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 $ Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 " Substituted for 18oard2, by the S78I (A(end(ent) Act !!!, w0e0f0 #+ %+ !!!0 # Inserted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 / Substituted by for S0 %$, Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!" && <rior to its substitution S0%$ read as under, 1%$0 <enalty0+ Khoe'er contra'enes or atte(pts to contra'ene or abets the contra'ention of the pro'isions of this Act or of any rules or regulations (ade thereunder, shall be punishable with i(prison(ent for a ter( which (ay extend to one year, or with fine, or with both02
% Substituted
3$
i(prison(ent for a ter( which (ay extend to 4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 (%) If any person fails to pay the penalty i(posed by the adDudicating officer or fails to co(ply with any of his directions or orders, he shall be punishable with i(prison(ent for a ter( which shall not be less than one (onth but which (ay extend to %4ten years, or with fine, which (ay extend to twenty+fi'e crore rupees or with both:0 34Co.$o!itio of 'ert%i offe 'e!. "3A. Eotwithstanding anything contained in the Code of Cri(inal <rocedure, !/3 (% of !/$), any offence punishable under this Act, not being an offence punishable with i(prison(ent only, or with i(prison(ent and also with fine, (ay either before or after the institution of any proceeding, be co(pounded by a Securities Appellate .ribunal or a court before which such proceedings are pending0 4o/er to (r% t i..* it>. "3;. ( ) .he Central &o'ern(ent (ay, on reco((endation by the 8oard, if the Central &o'ern(ent is satisfied, that any person, who is alleged to ha'e 'iolated any of the pro'isions of this Act or the rules or the regulations (ade thereunder, has (ade a full and true disclosure in respect of the alleged 'iolation, grant to such person, subDect to such conditions as it (ay thin) fit to i(pose, i((unity fro( prosecution for any offence under this Act, or the rules or the regulations (ade thereunder or also fro( the i(position of any penalty under this Act with respect to the alleged 'iolation, 4ro+i-e- that no such i((unity shall be granted by the Central &o'ern(ent in cases where the proceedings for the prosecution for any such offence ha'e been instituted before the date of receipt of application for grant of such i((unity, 4ro+i-e- f*rther that reco((endation of the 8oard under this sub+section shall not be binding upon the Central &o'ern(ent0
(%) An i((unity granted to a person under sub+section ( ) (ay, at any ti(e, be withdrawn by the Central &o'ern(ent, if it is satisfied that such person had, in the course of the proceedings, not co(plied with the condition on which the i((unity was granted or had gi'en false e'idence, and thereupon such person (ay be tried for the offence with respect to which the i((unity was granted or for any other offence of which he appears to ha'e been guilty in connection with the contra'ention and shall also beco(e liable to the i(position of any penalty under this Act to which such person would ha'e been liable, had not such i((unity been granted0:
Substituted for 1one year, or with fine, or with both2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+ %00%0 % Substituted for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both2 by the S78I (A(end(ent) Act, %00% w0e0f0 %!+ 0+%00%, for 1three years or with fine which shall not be less than two thousand rupees but which (ay extend to ten thousand rupees or with both20 3 Inserted by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
3"
E#e.$tio fro. t%# o /e%lth % - i 'o.e. "5. Eotwithstanding anything contained in the Kealth+tax Act, !"/ (%/ of !"/), the Inco(etax Act, !# ($3 of !# ) or any other enact(ent for the ti(e being in force relating to tax on wealth, inco(e, profits or gains(a) the 8oard3 (b) the existing Securities and 7xchange 8oard fro( the date of its constitution to the date of establish(ent of the 8oard, shall not be liable to pay wealth+tax, inco(e+tax or any other tax in respect of their wealth, inco(e, profits or gains deri'ed0 Co( iL% 'e of offe 'e! ,> 'o*rt!. "8. ( ) Eo court shall ta)e cogniFance of any offence punishable under this Act or any rules or regulations (ade thereunder, sa'e on a co(plaint (ade by the 8oard 4G G G:0 "5(") *****< )5 E!t%,li!h.e t of S$e'i%l Co*rt!. "8A. (1) The Ce tr%l Go+er .e t .%>, for the $*r$o!e of $ro+i-i ( !$ee-> tri%l of offe 'e! * -er thi! A't, ,> otifi'%tio , e!t%,li!h or -e!i( %te %! .% > S$e'i%l Co*rt! %! .%> ,e e'e!!%r>. (") A S$e'i%l Co*rt !h%ll 'o !i!t of % !i (le G*-(e /ho !h%ll ,e %$$oi te- ,> the Ce tr%l Go+er .e t /ith the 'o '*rre 'e of the Chief E*!ti'e of the Di(h Co*rt /ithi /ho!e G*ri!-i'tio the G*-(e to ,e %$$oi te- i! /or6i (. ()) A $er!o !h%ll ot ,e 7*%lifie- for %$$oi t.e t %! % G*-(e of % S$e'i%l Co*rt * le!! he i!, i..e-i%tel> ,efore !*'h %$$oi t.e t, hol-i ( the offi'e of % Se!!io ! E*-(e or % A--itio %l Se!!io ! E*-(e, %! the '%!e .%> ,e. Offe 'e! tri%,le ,> S$e'i%l Co*rt! "8;. Not/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197), %ll offe 'e! * -er thi! A't 'o..itte- $rior to the -%te of 'o..e 'e.e t of the Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) or o or %fter the -%te of !*'h 'o..e 'e.e t, !h%ll ,e t%6e 'o( iL% 'e of % - tri%,le ,> the S$e'i%l Co*rt e!t%,li!he- for the %re% i /hi'h the offe 'e i! 'o..itte- or /here there %re .ore S$e'i%l Co*rt! th% o e for !*'h %re%, ,> !*'h o e of the. %! .%> ,e !$e'ifie- i thi! ,eh%lf ,> the Di(h Co*rt 'o 'er e-.
.he words 1with the pre'ious sanction of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 % O.itte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1). 4rior to the o.i!!io , S*,0!e'tio (") re%- %! * -er& 1(") No 'o*rt i ferior to th%t of "5% Co*rt of Se!!io < !h%ll tr> % > offe 'e $* i!h%,le * -er thi!
A't.2 3 I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
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A$$e%l % - re+i!io "8C. The Di(h Co*rt .%> e#er'i!e, !o f%r %! .%> ,e %$$li'%,le, %ll the $o/er! 'o ferre- ,> Ch%$ter! AAIA % - AAA of the Co-e of Cri.i %l 4ro'e-*re, 197) o % Di(h Co*rt, %! if % S$e'i%l Co*rt /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt /ere % Co*rt of Se!!io tr>i ( '%!e! /ithi the lo'%l li.it! of the G*ri!-i'tio of the Di(h Co*rt. A$$li'%tio of Co-e to $ro'ee-i (! ,efore S$e'i%l Co*rt "8D. (1) S%+e %! other/i!e $ro+i-e- i thi! A't, the $ro+i!io ! of the Co-e of Cri.i %l 4ro'e-*re, 197) !h%ll %$$l> to the $ro'ee-i (! ,efore % S$e'i%l Co*rt % - for the $*r$o!e! of the !%i- $ro+i!io !, the S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % Co*rt of Se!!io % - the $er!o 'o -*'ti ( $ro!e'*tio ,efore % S$e'i%l Co*rt !h%ll ,e -ee.e- to ,e % 4*,li' 4ro!e'*tor /ithi the .e% i ( of 'l%*!e (*) of !e'tio " of the Co-e of Cri.i %l 4ro'e-*re, 197). (") The $er!o 'o -*'ti ( $ro!e'*tio referre- to i !*,0!e'tio (1) !ho*l- h%+e ,ee i $r%'ti'e %! % A-+o'%te for ot le!! th% !e+e >e%r! or !ho*l- h%+e hel- % $o!t, for % $erio- of ot le!! th% !e+e >e%r!, * -er the U io or % St%te re7*iri ( !$e'i%l 6 o/le-(e of l%/. Tr% !itio %l $ro+i!io ! "8E. A > offe 'e 'o..itte- * -er thi! A't, /hi'h i! tri%,le ,> % S$e'i%l Co*rt !h%ll, * til % S$e'i%l Co*rt i! e!t%,li!he-, ,e trie- ,> % Co*rt of Se!!io e#er'i!i ( G*ri!-i'tio o+er the %re%, ot/ith!t% -i ( % >thi ( 'o t%i e- i the Co-e of Cri.i %l 4ro'e-*re, 197)& 4ro+i-e- th%t othi ( 'o t%i e- i thi! !e'tio !h%ll %ffe't the $o/er! of the Di(h Co*rt, * -er !e'tio 3=7 of the Co-e of Cri.i %l 4ro'e-*re, 197) to tr% !fer % > '%!e or 'l%!! of '%!e! t%6e 'o( iL% 'e ,> % Co*rt of Se!!io * -er thi! Se'tio .< Offe 'e! ,> 'o.$% ie!. "7. ( ) Khere an offence under this Act has been co((itted by a co(pany, e'ery person who at the ti(e the offence was co((itted was in charge of, and was responsible to, the co(pany for the conduct of the business of the co(pany, as well as the co(pany, shall be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly, 4ro+i-e- that nothing contained in this sub+section shall render any such person liable to any punish(ent pro'ided in this Act, if he pro'es that the offence was co((itted without his )nowledge or that he had exercised all due diligence to pre'ent the co((ission of such offence0 (%) Eotwithstanding anything contained in sub+section ( ), where an offence under this Act has been co((itted by a co(pany and it is pro'ed that the offence has been co((itted with the consent or conni'ance of, or is attributable to any neglect on the part of, any director, (anager, secretary or other officer of the co(pany, such director, (anager, secretary or other officer shall also be dee(ed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly0 ()%lanati$n , 6or the purposes of this section,(a) 1co(pany2 (eans any body corporate and includes a fir( or other association of indi'iduals3 and
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(b) 1director2, in relation to a fir(, (eans a partner in the fir(0 4o/er to e#e.$t. ":. 4GGGGGG: "5 Re'o+er> of %.o* t! ":A. (1) If % $er!o f%il! to $%> the $e %lt> i.$o!e- ,> the %-G*-i'%ti ( offi'er or f%il! to 'o.$l> /ith % > -ire'tio of the ;o%r- for ref* - of .o ie! or f%il! to 'o.$l> /ith %
-ire'tio of -i!(or(e.e t or-er i!!*e- * -er !e'tio 11; or f%il! to $%> % > fee! -*e to the ;o%r-, the Re'o+er> Offi'er .%> -r%/ *$ * -er hi! !i( %t*re % !t%te.e t i the !$e'ifiefor. !$e'if>i ( the %.o* t -*e fro. the $er!o (!*'h !t%te.e t ,ei ( here%fter i thi! Ch%$ter referre- to %! 'ertifi'%te) % - !h%ll $ro'ee- to re'o+er fro. !*'h $er!o the %.o* t !$e'ifie- i the 'ertifi'%te ,> o e or .ore of the follo/i ( .o-e!, %.el>&0 (%) %tt%'h.e t % - !%le of the $er!o C! .o+%,le $ro$ert>H (,) %tt%'h.e t of the $er!o C! ,% 6 %''o* t!H (') %tt%'h.e t % - !%le of the $er!o C! i..o+%,le $ro$ert>H (-) %rre!t of the $er!o % - hi! -ete tio i $ri!o H (e) %$$oi ti ( % re'ei+er for the .% %(e.e t of the $er!o C! .o+%,le % i..o+%,le $ro$ertie!, % - for thi! $*r$o!e, the $ro+i!io ! of !e'tio ""1 to ""7, "":A, ""9, ")1, ")", the Se'o % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198", %! i for'e fro. ti.e to ti.e, i !o f%r %! .%> ,e, %$$l> /ith e'e!!%r> .o-ifi'%tio ! %! if the !%i- $ro+i!io ! % - the r*le! there* -er /ere the $ro+i!io ! of thi! A't % - referre- to the %.o* t -*e * -er thi! A't i !te%- of to i 'o.et%# * -er the I 'o.e0t%# A't, 1981. "#planation 10 2or the $*r$o!e of thi! !*,0!e'tio , the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !h%ll i 'l*-e % > $ro$ert> or .o ie! hel- i ,% 6 %''o* t! /hi'h h%! ,ee tr% !ferre- -ire'tl> or i -ire'tl> o or %fter the -%te /he the %.o* t !$e'ifie- i 'ertifi'%te h%- ,e'o.e -*e, ,> the $er!o to hi! !$o*!e or .i or 'hil- or !o C! /ife or !o C! .i or 'hil-, other/i!e th% for %-e7*%te 'o !i-er%tio , % - /hi'h i! hel- ,>, or !t% -! i the %.e of, % > of the $er!o ! %fore!%i-H % - !o f%r %! the .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! !o tr% !ferre- to hi! .i or 'hil- or hi! !o C! .i or 'hil- i! 'o 'er e-, it !h%ll, e+e %fter the -%te of %tt%i .e t of .%Gorit> ,> !*'h .i or 'hil- or !o C! .i or 'hil-, %! the '%!e .%> ,e, 'o ti *e to ,e i 'l*-e- i the $er!o C! .o+%,le or i..o+%,le $ro$ert> or .o ie! hel- i ,% 6 %''o* t! for re'o+eri ( % > %.o* t -*e fro. the $er!o * -er thi! A't.
C(itted by the Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, Section %> read as under, 1%>0 8$.er t$ e)e"%t+ If the central go'ern(ent if of the opinion that it is necessary or expedient so to do in public interest, it (ay, by order published in the Cfficial gaFette, exe(pt any person or class of persons buying or selling securities or otherwise dealing with the securities (ar)et fro( the operation of sub+section ! ) of Section %02 % I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
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"#planation "0 A > refere 'e * -er the $ro+i!io ! of the Se'o - % - Thir- S'he-*le! to the I 'o.e0t%# A't, 1981 % - the I 'o.e0t%# (Certifi'%te 4ro'ee-i (!) R*le!, 198" to the %!!e!!ee !h%ll ,e 'o !tr*e- %! % refere 'e to the $er!o !$e'ifie- i the 'ertifi'%te. "#planation )0 A > refere 'e to %$$e%l i Ch%$ter AIIID % - the Se'o - S'he-*le to the I 'o.e0t%# A't, 1981, !h%ll ,e 'o !tr*e- %! % refere 'e to %$$e%l ,efore the Se'*ritie! A$$ell%te Tri,* %l * -er Se'tio 15T of thi! A't. (") The Re'o+er> Offi'er !h%ll ,e e.$o/ere- to !ee6 the %!!i!t% 'e of the lo'%l -i!tri't %-.i i!tr%tio /hile e#er'i!i ( the $o/er! * -er !*,0!e'tio (1). ()) Not/ith!t% -i ( % >thi ( 'o t%i e- i % > other l%/ for the ti.e ,ei ( i for'e, the re'o+er> of %.o* t! ,> % Re'o+er> Offi'er * -er !*,0!e'tio (1), $*r!*% t to o 'o.$li% 'e /ith % > -ire'tio i!!*e- ,> the ;o%r- * -er !e'tio 11;, !h%ll h%+e $re'e-e 'e o+er % > other 'l%i. %(%i !t !*'h $er!o . (3) 2or the $*r$o!e of !*,0!e'tio ! (1), (") % - ()), the e#$re!!io JRe'o+er> Offi'erK .e% !
% > offi'er of the ;o%r- /ho .%> ,e %*thoriLe-, ,> (e er%l or !$e'i%l or-er i /riti (, to e#er'i!e the $o/er! of % Re'o+er> Offi'er.< 4o/er to .%6e r*le!. "9. ( ) .he Central &o'ern(ent (ay, by notification, (a)e rules for carrying out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such rules (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ter( of office and other conditions of ser'ice of the Chair(an and the (e(bers under sub+section ( ) of section "3 (b) the additional functions that (ay be perfor(ed by the 8oard under section 3 (c) 4G G G: (d) the (anner in which the accounts of the 8oard shall be (aintained under section "3 %4(da) the (anner of in*uiry under sub+section ( ) of section "+I3 (db) the salaries and allowances and other ter(s and conditions of ser'ice of the 34<residing Cfficers, ?e(bers: and other officers and e(ployees of the Securities Appellate .ribunal under section "+C and sub+section (3) of section "S3 (dc) the procedure for the in'estigation of (isbeha'iour or incapacity of the 4<residing Cfficers, or other ?e(bers: of the Securities Appellate .ribunal under sub+section (3) of section "Q3
Clause (c) o(itted by Securities laws (A(end(ent) Act !!", w0e0f0 %"+ + !!"0 <rior to its o(ission, clause (c) it read as under, 1(c) the conditions subDect to which registration certificate is to be issued under sub+section ( ) of section %20 % Inserted by Securities =aws (A(end(ent) Act, !!", w0e0f0 %"+ + !!"0 3 Substituted for 1<residing Cfficers2 by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0
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(dd) the for( in which an appeal (ay be filed before the Securities Appellate .ribunal under section ". and the fees payable in respect of such appeal3: (e) the for( and the (anner in which returns and report to be (ade to the Central &o'ern(ent under section >3 (f) any other (atter which is to be, or (ay be, prescribed, or in respect of which pro'ision is to be, or (ay be, (ade by rules0 4o/er to .%6e re(*l%tio !. )=. ( ) .he 8oard (ay, %4GGG: by notification, (a)e regulations consistent with this Act and the rules (ade thereunder to carry out the purposes of this Act0 (%) In particular, and without preDudice to the generality of the foregoing power, such regulations (ay pro'ide for all or any of the following (atters, na(ely ,(a) the ti(es and places of (eetings of the 8oard and the procedure to be followed at such (eetings under sub+section ( ) of section / including *uoru( necessary for the transaction of business3 (b) the ter(s and other conditions of ser'ice of officers and e(ployees of the 8oard under sub+section (%) of section !3 34(c) the (atters relating to issue of capital, transfer of securities and other (atters incidental thereto and the (anner in which such (atters shall be disclosed by the co(panies under section A3 35('%) the *tiliL%tio of the %.o* t 're-ite- * -er !*,0!e'tio (5) of !e'tio 11H (',) the f*lfill.e t of other 'o -itio ! rel%ti ( to 'olle'ti+e i +e!t.e t !'he.e * -er !*,0!e'tio ("A) of !e'tio 11AAH ('') the $ro'e-*re to ,e follo/e- ,> the %*thoriLe- offi'er for !e%r'h or !eiL*re * -er !*,0!e'tio (9) of !e'tio 11CH < (d) the conditions subDect to which certificate of registration is to be issued, the a(ount of
fee to be paid for certificate of registration and the (anner of suspension or cancellation of certificate of registration under section %0: 55(-%) the ter.! -eter.i e- ,> the ;o%r- for !ettle.e t of $ro'ee-i (! * -er !*,!e'tio (") % - the $ro'e-*re for 'o -*'ti ( of !ettle.e t $ro'ee-i (! * -er !*,!e'tio ()) of !e'tio 15E;H (-,) % > other .%tter /hi'h i! re7*ire- to ,e, or .%> ,e, !$e'ifie- ,> re(*l%tio ! or i re!$e't of /hi'h $ro+i!io i! to ,e .%-e ,> re(*l%tio !.< R*le! % - re(*l%tio ! to ,e l%i- ,efore 4%rli%.e t.
Substituted for 1<residing Cfficers2, by the S78I (A(end(ent) Act, %00%, w0e0f0 %!+ 0+%00%0 words 1with the pre'ious appro'al of the Central &o'ern(ent2 o(itted by Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 3 Substituted for the existing clause (c) by the Securities =aws (A(end(ent) Act !!" w0e0f0 %"+ + !!"0 <rior to substitution this clause read as under, 1(c) the a(ount of fee to be paid for registration certificate and (anner of suspension or cancellation of registration certificate under sub+section (%) and (3) of section %02 $ I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1) " I !erte- ,> The Se'*ritie! L%/! (A.e -.e t) Or-i % 'e, "=1) /.e.f. 1:0=70"=1)
% .he
$0
)1. 7'ery rule and e'ery regulation (ade under this Act shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent, while it is in session, for a total period of thirty days which (ay be co(prised in one session or in two or (ore successi'e sessions, and if, before the expiry of the session i((ediately following the session or the successi'e sessions aforesaid, both Iouses agree in (a)ing any (odification in the rule or regulation or both Iouses agree that the rule or regulation should not be (ade, the rule or regulation shall thereafter ha'e effect only in such (odified for( or be of no effect, as the case (ay be3 so, howe'er, that any such (odification or annul(ent shall be without preDudice to the 'alidity of anything pre'iously done under that rule or regulation0 A$$li'%tio of other l%/! ot ,%rre-. )". .he pro'isions of this Act shall be in addition to, and not in derogation of, the pro'isions of any other law for the ti(e being in force0 A.e -.e t of 'ert%i e %'t.e t!. )). 40e%ealed bF 0e%ealing H A"ending Act' 2001&: 4o/er to re.o+e -iffi'*ltie!. )3. ( ) If any difficulty arises in gi'ing effect to the pro'isions of this Act, the Central &o'ern(ent (ay, by order, published in the Cfficial &aFette, (a)e such pro'isions not inconsistent with the pro'isions of this Act as (ay appear to be necessary for re(o'ing the difficulty , 4ro+i-e- that no order shall be (ade under this section after the expiry of fi'e years fro( the co((ence(ent of this Act0 (%) 7'ery order (ade under this section shall be laid, as soon as (ay be after it is (ade, before each Iouse of <arlia(ent0 Re$e%l % - !%+i (. )5. ( ) .he Securities and 7xchange 8oard of India Crdinance, !!% (Crd0 " of !!%), is hereby repealed0 (%) Eotwithstanding such repeal, anything done or any action ta)en under the said Crdinance shall be dee(ed to ha'e been done or ta)en under the corresponding pro'isions of this Act0 1@( /@(5A9( 4 ee section 33: A@END@ENT O2 CERTAIN ENACT@ENTS 40e%ealed bF 0e%ealing H A"ending Act' 2001:
